Fragrant Prosperity Holdings Limited

Annual Report (ESEF) • Aug 12, 2025

213800WZ5CZJXHTI7U71-2025-03-31-0-en.xhtml 213800WZ5CZJXHTI7U712024-04-012025-03-31213800WZ5CZJXHTI7U712023-04-012024-03-31213800WZ5CZJXHTI7U712025-03-31213800WZ5CZJXHTI7U712024-03-31213800WZ5CZJXHTI7U712023-03-31213800WZ5CZJXHTI7U712023-03-31ifrs-full:IssuedCapitalMember213800WZ5CZJXHTI7U712023-04-012024-03-31ifrs-full:IssuedCapitalMember213800WZ5CZJXHTI7U712024-03-31ifrs-full:IssuedCapitalMember213800WZ5CZJXHTI7U712024-04-012025-03-31ifrs-full:IssuedCapitalMember213800WZ5CZJXHTI7U712025-03-31ifrs-full:IssuedCapitalMember213800WZ5CZJXHTI7U712023-03-31ifrs-full:ReserveOfEquityComponentOfConvertibleInstrumentsMember213800WZ5CZJXHTI7U712023-04-012024-03-31ifrs-full:ReserveOfEquityComponentOfConvertibleInstrumentsMember213800WZ5CZJXHTI7U712024-03-31ifrs-full:ReserveOfEquityComponentOfConvertibleInstrumentsMember213800WZ5CZJXHTI7U712024-04-012025-03-31ifrs-full:ReserveOfEquityComponentOfConvertibleInstrumentsMember213800WZ5CZJXHTI7U712025-03-31ifrs-full:ReserveOfEquityComponentOfConvertibleInstrumentsMember213800WZ5CZJXHTI7U712023-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800WZ5CZJXHTI7U712023-04-012024-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800WZ5CZJXHTI7U712024-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800WZ5CZJXHTI7U712024-04-012025-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800WZ5CZJXHTI7U712025-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800WZ5CZJXHTI7U712023-03-31ifrs-full:RetainedEarningsMember213800WZ5CZJXHTI7U712023-04-012024-03-31ifrs-full:RetainedEarningsMember213800WZ5CZJXHTI7U712024-03-31ifrs-full:RetainedEarningsMember213800WZ5CZJXHTI7U712024-04-012025-03-31ifrs-full:RetainedEarningsMember213800WZ5CZJXHTI7U712025-03-31ifrs-full:RetainedEarningsMemberiso4217:GBPiso4217:GBPxbrli:shares FRAGRANT PROSPERITY HOLDINGS LIMITED ANNUAL REPORT AND ACCOUNTS For the financial year ended 31 March 2025 Company Number: 1905051 FRAGRANT PROSPERITY HOLDINGS LIMITED ANNUAL REPORT AND ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 CONTENTS PAGE Officers and professional advisors 1 Chairman’s statement 2 Strategic report 3 Directors’ report 6 Independent auditor’s report to members 12 Statement of comprehensive income 16 Statement of financial position 17 Statement of cash flows 18 Statement of changes in equity 19 Notes to the financial statements 20 FRAGRANT PROSPERITY HOLDINGS LIMITED OFFICERS AND PROFESSIONAL ADVISORS 1 Directors Simon James Retter Richard Samuel Mahesh s/o Pulandaran Daniel Reshef Registered Office Vistra Corporate Services Centre Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin Islands Auditors RPG Crouch Chapman LLP 40 Gracechurch Street London EC3V 0BT Bankers OCBC Bank 65 Chulia Street OCBC Centre Singapore 049513 Legal advisers to the Company as to the British Virgin Islands law Harney Westwood & Riegels Singapore LLP 20 Collyer Quay #21-02 Singapore 049319 Legal advisers to the Company as to English law Hill Dickinson LLP The Broadgate Tower 20 Primrose St London EC2A 2EW FRAGRANT PROSPERITY HOLDINGS LIMITED CHAIRMAN’S STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 2 I have pleasure in presenting the financial statements of Fragrant Prosperity Holdings Limited (the “Company” or “FPP”) for the financial year ended 31 March 2025. The Board continued to review a number of potential acquisition opportunities across the sector but none of which met the necessary criteria for selection as at the end of the year. It is expected that with the potential improvement in the market conditions for raising capital and undertaking reverse takeovers in the UK along with the changes to the UK listing regime recently announced by the FCA that the Company will have improved prospects for identifying a potential target. The last 2 years have been difficult across the public capital markets globally, but specifically the UK and with limited cash available it has been challenging to consummate potential deals. The Company has therefore undertaken a recapitalisation of the balance sheet and a capital raise post period end to improve the position for consummating any potential acquisitions. During the financial year, the Company reported a net loss of £182,934 (2024: £111,877) which represents ongoing administrative expenses and due diligence costs regarding the identification of potential targets. As at 31 March 2025, the Company had cash in bank balance of £67,879 (2024: £109,688). The Board would provide further updates to shareholders in due course. Chairman 30 July 2025 FRAGRANT PROSPERITY HOLDINGS LIMITED STRATEGIC REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 3 Introduction The Company was incorporated on 28 January 2016 in the British Virgin Islands, as a company limited by shares under the BVI Business Companies Act, 2004. The registered office of the Company is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Its issued share capital, consisting of Ordinary Shares, are currently admitted to a Standard Listing on the Official List in accordance with Chapter 14 of the Listing Rules and to trading on the London Stock Exchange's main market for listed securities. On 12 December 2017 the company changed its name from Vale International Group Ltd to Fragrant Prosperity Holdings Ltd. Principle activities The Company’s nature of operations is to act as a special purpose acquisition company. Principal risks and uncertainties Currently the principal risks relate to the completion of the Acquisition, and whether, if unsuccessful, the Company could find sufficient suitable investments to ensure compliance with the requirements of its continued listing on the standard market. An explanation of the Company’s financial risk management objectives, policies and strategies is set out in note 8. Section 172 Statement The Directors of the Company act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarized as follows: “A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its stakeholders as a whole, and in doing so have regard (amongst other matters) to: (a) the likely consequences of any decision in the long term; (b) the interests of the company's employees; (c) the need to foster the company's business relationships with suppliers, customers and others; (d) the impact of the company's operations on the community and the environment; (e) the desirability of the company maintaining a reputation for high standards of business conduct; and (f) the need to act fairly as between stakeholders of the Company” As part of their induction, all Directors are briefed on their duties and they can access professional advice on these, either from the Company Secretary or, if they judge it necessary, from an independent adviser. The Directors fulfil their duties partly through a governance framework that delegates day-to-day decision-making to employees of the Company and details of this can be found in our Governance section of the Directors Report. FRAGRANT PROSPERITY HOLDINGS LTD STRATEGIC REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 4 The following paragraphs summarise how the Directors fulfil their duties: Risk Management The Company is currently undertaking due diligence and working towards executing an acquisition of a target. It is therefore vital that we effectively identify, evaluate, manage and mitigate the risks we face, and that we continue to evolve our approach to risk management. For details of our principal risks and uncertainties and how we manage our risk environment, please see page 3. Our People Our Company is committed to being a responsible business. Our behaviour is aligned with the expectations of our people, clients, investors, communities and society as a whole. We must also ensure we share common values that inform and guide our behaviour so we achieve our goals in the right way. The only employees are currently the Directors of the company, who strive to adhere to the highest ethical standards. Shareholders The Board is committed to openly engaging with our shareholders, as we recognize the importance of continuing effective dialogue. It is important to us that shareholders understand our strategy and objectives, so these must be explained clearly, feedback heard and any issues or questions raised properly considered. Our board members, especially Simon Retter, holds a series of shareholders meetings several times a year on the back of financial and operational reporting. Community and Environment The Company’s approach is to use our strengths to create positive change for the people and communities with which we interact. We want to leverage our expertise and enable colleagues to support the communities around us. Corporate governance As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. Although the Company does not comply with the UK Corporate Governance Code, the Company intends to adopt corporate governance procedures as are appropriate for the size and nature of the Company and the size and composition of the Board. These corporate governance procedures have been selected with due regard to the provision of the UK Corporate Governance Code insofar as is appropriate. A description of these procedure is set out below: • until an Acquisition is made, the Company will not have nominations, remuneration, audit or risk committees. The Board as a whole will instead review its size, structure and composition, the scale and structure of the Directors’ fees (taking into account the interests of Shareholders and the performance of the Company), take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company’s financial statements and take responsibility for any formal announcements on the Company’s financial performance. Following the Acquisition, the Board intends to put in place nomination, remuneration, audit and risk committees; FRAGRANT PROSPERITY HOLDINGS LTD STRATEGIC REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 5 • the Board has adopted a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities shall comply with the share dealing code since the date of Admission; and • Following the Acquisition and subject to eligibility, the Directors may, in future, seek to transfer the Company from a Standard Listing to either a Premium Listing or other appropriate listing venue, based on the track record of the company or business it acquires, subject to fulfilling the relevant eligibility criteria at the time. However, in addition to or in lieu of a Premium Listing, the Company may determine to seek a listing on another stock exchange. Following such a Premium Listing, the Company would comply with the continuing obligations contained within the Listing Rules and the Disclosure and Transparency Rules in the same manner as any other company with a Premium Listing. The Company has not chosen to apply a particular corporate governance code, as the directors consider that the most widely recognised codes are not appropriate for companies with limited board resources. The Directors are responsible for internal control in the Company and for reviewing its effectiveness. Due to the size of the Company, all key decisions are made by the Board in full. The Directors have reviewed the effectiveness of the Company’s systems during the period under review and consider that there have been no material losses, contingencies or uncertainties due to the weakness in the controls. The Board will be responsible for taking all proper and reasonable steps to ensure compliance with the Model Code by the Directors. Emissions, Environmental & Social matters The Company currently is not responsible for any emissions other than indirectly through travel for undertaking due diligence on target businesses. It is therefore not practical to quantify the total emissions of the Company. Likewise, as the nature of the Company is an acquisition company, it is the opinion of the Directors that it has no direct social, community and human rights issues are environmental matters on which it should disclose information. Presently all of the Directors of the Company are male, the Directors are actively seeking to balance the board with some female representation although this would likely occur upon a change in the board composition upon the completion of an acquisition. Key Performance Indicators Given the company has no operating business, the key performance indicators are those set out in the financial review above, being loss for the year, cash position and net liabilities. Business Review During the financial year, the Company reported a net loss of £182,934 (2024: £111,877) which represents ongoing administrative expenses and due diligence costs regarding the identification of potential targets. As at 31 March 2025, the Company had cash in bank balance of £67,879 (2024: £109,688) and net liabilities of £831,674 (2024: £648,740). Simon Retter Director FRAGRANT PROSPERITY HOLDINGS LIMITED DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 6 Directors’ report The Directors present their report together with the audited financial statements, for the financial year ended 31 March 2025. Company objective and future developments The Company was formed to undertake an acquisition of a target company or business. The Company does not have any specific acquisition under consideration and does not expect to engage in substantive negotiations with any target company or business in the immediate future. The Directors believe that their network, and the Company’s cash resources and profile following Admission, mean that the Company will target an Acquisition where the target company has a value of up to £100 million. The Company expects that consideration for the Acquisition will primarily be satisfied by issue of new Shares to a vendor (or vendors), but that some cash may also be payable by the Company. Any funds not used in connection with the Acquisition will be used for future acquisitions, internal or external growth and expansion, and working capital in relation to the acquired company or business. Following completion of the Acquisition, the objective of the Company will be to operate the acquired business and implement an operating strategy with a view to generating value for its Shareholders through operational improvements as well as potentially through additional complementary acquisitions following the Acquisition. Following the Acquisition, the Company intends to seek re-admission of the enlarged group to listing on the Official List and trading on the London Stock Exchange or admission to another stock exchange. The Company’s efforts in identifying a prospective target company or business will not be limited to a particular industry or geographic region. However, given the experience of the Directors, the Company expects to focus on acquiring a company or business in the technology sector in particular focussing on technology and/or intellectual property that is used in the financial services industry with either all or a substantial portion of its operations in Europe or Asia. The Directors’ initial search will focus on businesses based in or with operations in Hong Kong, Malaysia, or the United Kingdom. Key events At the year end the Company had cash of £67,879 and continues to keep administrative costs to a minimum so that the majority of funds can be dedicated to the review of and potentially investment in, suitable projects. Post year end the company has raised significant cash to continue its activities, further details on the cash raised can be found in note 15. Results and dividends The results for the year are set out in the Statement of Comprehensive Income on page 16. The Directors do not recommend the payment of a dividend on the ordinary shares. Directors The Directors of the Company during the year were: Mahesh s/o Pulandaran Simon James Retter Richard Samuel FRAGRANT PROSPERITY HOLDINGS LTD DIRECTORS REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 7 Daniel Reshef Director’s interest Mahesh s/o Pulandaran holds 1 share of the Company Substantial shareholders The Company has been notified or is aware of the following interests of 3 per cent or more in its issued share capital as at 29 July 2025: Shareholder Number of Ordinary Shares % of Share Capital James Brearly Nominees Limited 48,432,503 19.0% Vidacos Nominees Ltd 38,667,514 15.2% Hargreaves Lansdown Nominees Limited 34,046,993 13.4% Interactive Investor Services 24,932,230 9.8% HSDL Nominees Limited 24,877,390 9.8% Peel Hunt Partnership Ltd 21,388,746 8.4% Barclays Direct Investing 19,572,435 7.7% Capital and returns management The Directors believe that, following an acquisition, further equity capital raisings may be required by the Company for working capital purposes as the Company pursues its objectives. The amount of any such additional equity to be raised, which could be substantial, will depend on the nature of the acquisition opportunities which arise and the form of consideration the Company uses to make the acquisition and cannot be determined at this time. The Company expects that any returns for Shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy. Dividend policy The Company is primarily seeking to achieve capital growth for its Shareholders. It is the Board’s intention during the current phase of the Company’s development to retain future distributable profits from the business, to the extent any are generated. As a holding company, the Company will be dependent on dividends paid to it by its subsidiaries. The Board does not anticipate declaring any dividends in the foreseeable future but may recommend dividends at some future date after the completion of the Acquisition and depending upon the generation of sustainable profits and the Company’s financial position. The Board can give no assurance that it will pay any dividends in the future, nor, if a dividend is paid, what the amount of such dividend will be. The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws. FRAGRANT PROSPERITY HOLDINGS LTD DIRECTORS REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 8 Responsibility Statement The directors are responsible for preparing the annual report and the non-statutory financial statements. The directors are required to prepare financial statements for the Company in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom. International Accounting Standard 1 requires that financial statements present fairly for each financial period the Company’s financial position, financial performance and cash flows. This requires the faithful representation of transactions, other events and conditions in accordance with the definitions and recognition criteria for the assets, liabilities, income and expenses set out in the International Accounting Standards Board’s “Framework for the Preparation and Presentation of Financial Statements”. In virtually all circumstances, a fair representation will be achieved by compliance with all IFRS as adopted by the United Kingdom. Directors are also required to: - select suitable accounting policies and then apply them consistently; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and - provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the United Kingdom is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Company. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The maintenance and integrity of the Fragrant Prosperity Holdings Ltd website (https://fragrantprosperity.com/) is the responsibility of the Directors; work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in the British Virgin Islands governing the preparation and dissemination of the financial statements and the other information included in annual reports may differ from legislation in other jurisdictions. The Directors are responsible for preparing the Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority (‘DTR’) and with International Financial Reporting Standards as adopted by the United Kingdom. The directors confirm, to the best of their knowledge that: • the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and • the Chairman’s Statement and Directors’ Report include a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces. FRAGRANT PROSPERITY HOLDINGS LTD DIRECTORS REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 9 Auditors and disclosure of information The directors confirm that: • there is no relevant audit information of which the Company’s non-statutory auditor is unaware; and • each Director has taken all the necessary steps he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s non- statutory auditor is aware of that information. Going Concern During the year the Company worked hard to keep its administrative costs to a minimum in order to preserve capital whilst seeking to identify potential targets to acquire. Due to the limited cash balance as at the period end the Company is in the process of seeking additional funding in order to purse its strategy of making an acquisition to seek re-admission of the enlarged group to listing on the Official List and trading on the London Stock Exchange or admission to another stock exchange. Any potential additional funding could include the capitalisation of any convertible loan notes or other debts on the balance sheet. Following the period end the Company successfully raised £1,000,000 by way of issuing new shares in the company as well as converting certain convertible loan notes into equity. This positions the group well to execute its strategy, but given the nature of being a company without any revenue it remains reliant on its existing cash resources as well as any additional funding secured to finance itself. Climate risk management The Board oversees and has ultimate responsibility for the Company’s sustainability initiatives, disclosures, and reporting. This includes, but is not limited to, climate risks and opportunities. As a shell company, the Company is exempt from providing the disclosures required by the Taskforce on Climate- related Financial Disclosures (“TCFD”). However, this section provides an overview of the Company’s approach to managing the very limited climate risks it currently faces. The executive management team have day-to-day responsibility for assessing and managing climate- related risks and opportunities. We are committed to minimising the Company’s impact on the environment. As it is presently constituted, the Company’s environmental impact is minimal and climate-related risks and opportunities are extremely limited until it acquires another business. At present, the Company has no operating investments, and its only employees are the directors. These employees perform largely information-based roles, and they all work from home as the Company no longer maintains business premises. The only environmental impact currently is from business travel, which has been extremely limited in the past two years and is expected to continue to be lower than previously as a result of the post- pandemic shift towards virtual tools. The Company’s overall environmental impact is therefore minimal The Company’s approach is therefore to seek to maintain lean working arrangements, use technology to minimise business travel and encourage employees to recycle, minimise energy wastage, and do their part to ensure that the Company acts responsibly. If the Company continues to operate as it is presently constituted it is therefore difficult to identify any climate related risks in the short, medium or long term FRAGRANT PROSPERITY HOLDINGS LTD DIRECTORS REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 10 that could significantly impact the business. For this reason, the Company does not presently feel it is appropriate or necessary to apply metrics or targets to assess climate related risks beyond the Greenhouse gas reporting presented below. Clearly, the Company does not intend to continue operating in its present form indefinitely, we intend to make acquisitions that will profoundly change the scale and climate-related risk profile of the business and the process for identifying and managing them. It is not possible to reach any sensible conclusions today about which risks the Company may be exposed to in the) future without knowing what businesses it will acquire. While it is not possible to know today what climate related risks it will inherent, the Company is conscious that such risks and opportunities will exist in any potential acquisition and considers that the most important objective is to ensure these are properly understood in the due diligence phase of any transaction so appropriate decisions can be taken on risk mitigation tools. The Company’s Board have concluded that the most appropriate way to address this is to ensure that climate-related risks are specifically scoped in when undertaking due diligence on acquisition targets. Greenhouse gas emissions Considering the non-material environmental impacts of the Company’s business as described in this report, management takes the view that greenhouse gas emissions are the most important metric to track and against which future targets may be set. We have compiled our greenhouse gas (“GHG”) emissions in accordance with the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (“SECR”). Calculations follow the GHG Protocol Corporate Accounting and Reporting Standard (revised edition). The GHG reporting period aligns with the financial statements and boundaries are defined using the financial control approach. GHG emissions are broken down into three categories; reporting is required only on scope 1 and 2: Scope 1 emissions: Direct emissions from sources owned or controlled by the Company. Scope 2 emissions: Indirect emissions attributable to the Company due to its consumption of purchased electricity. Scope 3 emissions: Other indirect emissions associated with activities that support or supply the Company’s operations. The Company has no Scope 1 emissions. The Company’s Scope 2 and Scope 3 emissions for the year to 31 March 2025 or the prior period. No further energy and carbon information is disclosed as the Company is exempt on the grounds of being a low energy user within the meaning of SECR. At the present time, the Company does not consider it appropriate to set emissions reduction targets, particularly given the low levels of emissions already achieved. The Company does not currently hold any investments. When investments are held, the Company will keep under review whether it would be appropriate to support investee companies in tracking metrics and setting targets. FRAGRANT PROSPERITY HOLDINGS LTD DIRECTORS REPORT (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 11 Events after the reporting date Events after the reporting date have been disclosed in note 15 to the financial statements. This responsibility statement was approved by the Board of Directors on 30 July 2025 and is signed on its behalf by; Simon Retter Director INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY HOLDINGS LTD 12 Opinion We have audited the financial statements of Fragrant Prosperity Holdings Ltd (the ‘company’) for the year ended 31 March 2025 which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, the statement of changes in equity and the 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. In our opinion the financial statements: • give a true and fair view of the state of the company’s affairs as at 31 March 2025, and of its loss for the year then ended; and • have been properly prepared in accordance with UK adopted International Financial Reporting Standards (IFRSs). 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 responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. In our evaluation of the directors' conclusions, we considered the risks associated with the company's business model, including effects arising from macro-economic uncertainties and analysed how those risks might affect the company's resources or ability to continue operations over the period of at least twelve months from the data when the financial statements are authorised for issue. In accordance with the above we have nothing to report in these respects. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made. The absence of reference to a material uncertainty in this auditor's report is not a guarantee that the company will continue in operation. Our approach to the audit In planning our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY HOLDINGS LTD 13 We tailored the scope of our audit to ensure that we performed sufficient work to be able to issue 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 controls, and the industry in which they operate. Key audit matters Key audit matters are those that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current year 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. Our application of materiality We apply the concept of materiality both in planning and performing our audit and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. We consider net assets to be the most significant determinant of the Company’s financial performance used by the users of the financial statements. We have based materiality on 4% of net assets for the Company. Overall materiality for the Company was therefore set at £33,300. Key audit matter How our work addressed this matter Management override Management is typically in a unique position to perpetrate fraud because of its ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Our audit work included, but was not restricted to: • Journals testing, including completeness of journal review, reviewing journals posted during and after the year end for any activity that is not in line with our knowledge; • Reviewing management estimations, judgements and application of accounting policies for undue bias in the financial statements; • Reviewing unadjusted audit differences for indications of bias of a deliberate misstatement; and • Applying professional scepticism in our audit procedures. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY HOLDINGS LTD 14 An overview of the scope of our audit Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into accounts size, risk profile, the organisation of the Company and the internal control environment when assessing the level of work to be performed. Based on our assessment of the accounting process, the industry in which the company operates and the control environment, it was appropriate to undertake an entirely substantive audit approach. Our substantive audit procedures included testing of total expenditure, total assets, liabilities and equity. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Matters on which we are required to report by exception In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors’ report. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor 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 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY HOLDINGS LTD 15 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 legal and regulatory frameworks within which the Company operates focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. • We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases. 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 is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Other matters that we are required to address We were appointed on 3 June 2025 and this is the first year of our engagement as auditors for the Company. We confirm that we are independent of the Company and have not provided any prohibited non-audit services, as defined by the Ethical Standard issued by the Financial Report Council. Our audit report is consistent with our additional report to the Audit Committee and Board of Directors explaining the results of our audit. Use of our report This report is made solely to the company’s members, as a body. 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. Mohammad Sakib ACA (Senior Statutory Auditor) For and on behalf of RPG Crouch Chapman LLP Chartered Accountants Statutory Auditors 40 Gracechurch Street London EC3V 0BT Date: FRAGRANT PROSPERITY HOLDINGS LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 16 Year ended 31 March 2025 Year ended 31 March 2024 Notes £ £ Other operating expenses (151,321) (82,281) Interest charge (31,613) (29,596) OPERATING LOSS BEFORE TAXATION (182,934) (111,877) Income tax expense 3 - - LOSS FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (182,934) (111,877) OTHER COMPREHENSIVE INCOME Other comprehensive income - - TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (182,934) (111,877) Basic and diluted loss per share (pence) 5 (0.29) (0.18) The notes to the financial statements form an integral part of these financial statements. FRAGRANT PROSPERITY HOLDINGS LTD STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2025 17 The notes to the financial statements form an integral part of these financial statements. This report was approved by the board and authorised for issue on and signed on its behalf by; ………………… Simon Retter Director 30 July 2025 As at 31 March 2025 As at 31 March 2024 Notes £ £ CURRENT ASSETS Cash and cash equivalents 67,879 109,688 Prepayments 25,663 15,750 TOTAL ASSETS 93,542 125,438 CURRENT LIABILITIES Trade Creditors 10 (224,277) (158,952) Accruals (133,479) (79,279) Convertible loan note 10 (567,560) (535,947) TOTAL LIABILITIES (925,216) (774,178) NET ASSETS (831,674) (648,740) EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY Share capital Retained earnings Share based payment reserve Convertible loan note Reserve 6 1,492,146 (2,375,363) - 51,543 1,492,146 (2,217,106) 24,677 51,543 TOTAL EQUITY (831,674) (648,740) FRAGRANT PROSPERITY HOLDINGS LTD STATEMENT OF CASHFLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 18 Year ended 31 March 2025 Year ended 31 March 2024 £ £ Loss before tax (182,934) (111,877) Interest charge 31,613 29,596 Share based payment - Cash flow from operating activities (151,321) (82,281) Changes in working capital Movement in other payables 119,425 (3,426) Movement in prepayments and other debtor (9,913) - Net cash outflow from operating activities (41,809) (85,707) Issue of equity - - Issue costs - - Repayment of convertible loan note - - Issue of convertible loan note - - Net cash flow from financing activities - - Net decrease in cash and cash equivalents (41,809) (85,707) Cash and cash equivalents at beginning of period 109,688 195,395 Cash and cash equivalents at end of period 67,879 109,688 The notes to the financial statements form an integral part of these financial statements. FRAGRANT PROSPERITY HOLDINGS LTD STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 19 Share capital Convertible Loan Note Reserve Share Based Payment Reserve Retained earnings Total £ £ £ £ £ As at 31 March 2023 1,492,146 51,543 24,677 (2,105,229) (536,863) Issue of equity - - - - - Issues of equity costs - - - - - Derecognition of Convertible Loan - - - - - Recognition of Convertible Loan - - - - - Loss for the year - - - (111,877) (111,877) Share based payment charge - - - - - Total comprehensive loss for the year - - - (111,877) (111,877) As at 31 March 2024 1,492,146 51,543 24,677 (2,217,106) (648,740) Issue of equity - - - - - Issues of equity costs - - - - - Derecognition of Convertible Loan - - - - - Recognition of Convertible Loan - - - - - Loss for the year - - - (182,934) (182,934) Cancelation of Share based payment charge - - (24,677) 24,677 - Total comprehensive loss for the year - - (24,677) (158,257) (182,934) As at 31 March 2025 1,492,146 51,543 - (2,375,363) (831,674) The notes to the financial statements form an integral part of these financial statements. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 20 1. GENERAL INFORMATION The Company was incorporated in the British Virgin Islands on 28 January 2016 as an exempted company with limited liability. The Company’s Ordinary shares are currently admitted to a standard listing on the Official List and to trading on the London Stock Exchange. On the 12 December 2017 the company changed its name from Vale International Group Ltd to Fragrant Prosperity Holdings Ltd. The Company’s nature of operations is to act as a special purpose acquisition company. 2. ACCOUNTING POLICIES The Board has reviewed the accounting policies set out below and considers them to be the most appropriate to the Company’s business activities. Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom and IFRIC interpretations applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value. The financial information of the Company is presented in British Pound Sterling (“£”) which is the Company’s functional and presentational currency. Standards and interpretations issued but not yet applied At the date of authorisation of this financial information, the Directors have reviewed the Standards in issue by the International Accounting Standards Board (“IASB”) and IFRIC, which are effective for accounting periods beginning on or after the stated effective date. In their view, none of these standards would have a material impact on the financial reporting of the Company. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 21 Going concern Until such time as the Company makes a significant investment it will meet its day to day working capital requirements from its existing cash reserves and by raising new equity finance. In the year ended 31 March 2025 the Company recorded a loss after tax of £182,934 (2024: £111,877 ) and a net cash outflow from operating activities of £41,809 (2024: £85,707). The directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of the financial statements which assume that no significant investment activity is undertaken unless sufficient funding is in place. The Company had cash of £67,879 at 31 March 2025 which the directors believe is insufficient to undertake the required steps to make an investment and fulfil its investment mandate and at the year end the Company was therefore seeking to raise additional capital to proceed with its strategy. Post year end the Company agreed the refinancing of certain debts on the balance sheet as well raising £1,000,000 of new equity to provide working capital in order for the Company strategy to be executed. During the year the Company incurred predominantly ongoing administrative costs, as well as some minor expenditure on legal and other associated costs related to the identification of potential targets. As the company has no revenue it is reliant on its existing cash resources to fund any ongoing expenditure. Should a potential target be identified and significant expenses incurred in the course of undertaking due diligence then the Company might be in a position that its cash resources are depleted and any potential deal may or may not complete. Should any potential deal fail and significant expenses be incurred then the Company might be required to raise additional capital to continue its strategy. Cash and cash equivalents The Company considers any cash on short-term deposits and other short term investments to be cash equivalents. Trade Creditors Trade creditors (being obligations to pay for goods or services acquired in the ordinary course of business are recognised when the company becomes party to the contractual provision of the suppliers invoice and are initially recorded at fair value, which is generally the invoiced amount. Accruals Accruals represent liabilities for goods or services received by the Company during the reporting period for which payment has not yet been made or invoiced by the supplier. Accruals are recognised when the Company has a present obligation as a result of a past event and are measured at the best estimate of the amount required to settle the obligation. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 Prepayments Prepayments represent payments made by the Company for goods and services that have not yet been received or consumed at the end of the reporting period. Prepayments are recognised when the company makes a payment in advance for goods or services and are initially recognised at the amount paid in advance representing the fair value of consideration given. Taxation The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Deferred income tax is provided for using the liability method on temporary timing differences at the reporting date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised in full for all temporary differences. Deferred income tax assets are recognised for all deductible temporary differences carried forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and carry- forward of unused tax credits and unused losses can be utilised. The carrying amount of deferred income tax assets is assessed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that is probable that future taxable profits will allow the deferred income tax asset to be recovered. Financial instruments Financial assets and financial liabilities are recognised on the statement of financial position when the company becomes a party to the contractual provisions of the instrument. Financial assets Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re- evaluates this classification at every reporting date. As at the reporting date, the Group did not have any financial assets subsequently measured at fair value. 22 FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 Operating segments The directors are of the opinion that the business of the Company comprises a single activity, that of an investment company. Consequently, all activities relate to this segment. Convertible Loan Notes Initial Recognition Upon issuance, convertible loan notes are recognised in accordance with IAS 32 and IFRS 9. The instrument is split into its liability and equity components based on the following approach: • Liability Component: The fair value of the liability component is determined first by discounting the contractual stream of future cash flows (interest and principal) at the market interest rate for a similar debt instrument without the conversion option. This represents the present value of the issuer’s obligation. • Equity Component: The equity component, representing the conversion option, is calculated as the residual amount, i.e., the difference between the total proceeds received from the issuance of the convertible loan note and the fair value of the liability component. Subsequent Measurement Liability Component: The liability component is subsequently measured at amortised cost using the effective interest method. Interest expense is recognised in profit or loss based on the effective interest rate, which reflects the true economic cost of the borrowing. Equity Component: The equity component is not remeasured after initial recognition, as it represents the residual value of the conversion option classified as equity. Derecognition and Conversion At Maturity (No Conversion): If the conversion option is not exercised, the liability component is derecognised upon repayment of the principal and accrued interest. Any related transaction costs or fees are recognized in profit or loss. Upon Conversion: If the conversion option is exercised, the carrying amount of the liability component and the equity component are derecognised. The issuance of equity instruments is recognised in equity (e.g., share capital and share premium) at the carrying amount of the derecognised components, with no gain or loss recognised on conversion. Critical accounting estimates and judgements The preparation of financial statements in compliance with IFRS as adopted for use by the United Kingdom requires the use of certain critical accounting estimates or judgements. The directors do not consider there to be any key estimation uncertainty. In respect of critical judgements, the only key judgement is the adoption of going concern on the basis for preparing the financial statements, details of which are set out in note 2. 23 FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 24 Share based payments The Company operates equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of employee services received in exchange for the grant of share options are recognised as an expense. The total expense to be apportioned over the vesting period is determined by reference to the fair value of the options granted: • including any market performance conditions; • excluding the impact of any service and non-market performance vesting conditions; and • including the impact of any non-vesting conditions. Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the Company revises its estimate of the number of options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in profit or loss, with a corresponding adjustment to equity. When options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium. The fair value of goods or services received in exchange for shares is recognised as an expense. 3. INCOME TAX EXPENSE The Company is regarded as resident for the tax purposes in British Virgin Islands. No tax is applicable to the Company for the year ended 31 March 2025 and 2024. Consequently no deferred tax is recognised as all timing differences are permanent. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 25 4. LOSS BEFORE TAXATION The loss before income tax is stated after charging: Year ended 31 March 2025 Year ended 31 March 2024 £ £ Staff costs (note 6) 25,000 23,500 Auditors’ remuneration: Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 20,000 14,000 5. LOSS PER SHARE Basic loss per ordinary share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. There are currently no dilutive potential ordinary shares. Loss per share attributed to ordinary shareholders Year ended 31 March 2025 Year ended 31 March 2024 Loss for the period (£) (182,934) (126,237) Weighted average number of shares (Unit) 62,213,386 62,213,386 Loss per share (pence) (0.29) (0.20) 6. SHARE CAPITAL Number of shares £ Balance at 31 March 2023, 2024 and 2025 62,213,386 1,492,146 Ordinary shares have no par value and carry equal rights on control, dividends and upon liquidation. There are no shares issued and reserved for share options. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 26 7. STAFF COSTS Year ended 31 March 2025 Year ended 31 March 2024 £ £ Staff costs - - Director fees 25,000 25,000 25,000 25,000 The average numbers of person employed by the Company (including directors) during the reporting period was 1 (2024: 1). 8. CAPITAL MANAGEMENT POLICY The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the Company consists of equity attributable to equity holders of the Company, comprising issued share capital and reserves. 9. FINANCIAL RISK MANAGEMENT The Company uses a limited number of financial instruments, comprising cash and other payables, which arise directly from operations. The Company does not trade in financial instruments. Financial risk factors The Company’s activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. a) Currency risk The Company does not operate internationally and its exposure to foreign exchange risk is limited to the transactions and balances that are denominated in currencies other than Pounds Sterling. b) Credit risk The Company does not have any major concentrations of credit risk related to any individual customer or counterparty. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group has taken necessary steps and precautions in minimising the credit risk by lodging cash and cash equivalents only with reputable licensed banks. c) Liquidity risk FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 Prudent liquidity risk management implies maintaining sufficient cash and the Company ensures it has adequate resource to discharge all its liabilities. The directors have considered the liquidity risk as part of their going concern assessment. (See note 2). At the date of approval of the financial statements there was a material uncertainty in relation to liquidity risk. d) Cash flow interest rate risk The Company has no significant interest-bearing liabilities and assets. The Company monitors the interest rate on its interest bearing assets closely to ensure favourable rates are secured. Fair values Management assessed that the fair values of cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. 27 10. FINANCIAL INSTRUMENTS The Company’s principal financial instruments comprise cash and cash equivalents and other payable. The Company’s accounting policies and method adopted, including the criteria for recognition, the basis on which income and expenses are recognised in respect of each class of financial assets, financial liability and equity instrument are set out in Note 2. The Company do not use financial instruments for speculative purposes. The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows: As at 31 March 2025 As at 31 March 2024 £ £ Financial assets Loans and receivables Cash and cash equivalents 67,879 109,688 -------------------------- -------------------------- Total financial assets 67,879 109,688 ================== ================== Financial liabilities measured at amortised cost Other payables 224,177 158,952 Convertible loan note 567,560 535,947 -------------------------- -------------------------- Total financial liabilities 791,737 694,899 ================== ================== The Company currently has convertible loan notes (“CLNs” with a principle amount of £515,000 that have either matured as at the end of the year or subsequent to the year end. Following the year end the Company repaid a CLN with a face value of £125, 000 and successfully negotiated a stand still for the remaining loan notes in order to complete an equity raise of £1,000,000 and convert the CLN’s into equity. This was all successfully completed in July 2025. For more details see note 14. FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 28 There are no financial assets that are either past due or impaired. 11. RELATED PARTY TRANSACTIONS Key management are considered to be the directors and the key management personnel compensation as follow: Year ended 31 March 2025 Year ended 31 March 2024 £ £ Simon James Retter - - Richard Samuel - - Mahesh Pulandaran - - - - In 2025 £25,000 of fees were incurred to Stonedale Management & Investments Ltd a company controlled by Simon Retter regarding work undertaken on the administration of the company as well as potential target identification. In 2024 this was £25,000. No pension contributions were made on behalf of the Directors by the Company. No share options were granted to or exercised by a Director in the reporting period. During the reporting period, other than those noted above the Company did not enter into any material transactions with related parties. As at reporting date, the there was an amount of £90,479 accrued due the directors. 12. CONTROL The Directors consider there is no ultimate controlling party. 13. DESCRIPTION OF RESERVES Retained Earnings comprises accumulated gains and losses incurred to date. Convertible Loan Note reserve comprises the fair value of the equity component of the convertible loan notes held by the Company. 14. SHARE BASED PAYMENTS The company has issued options to a third party with a fixed strike price which are valued using the Black Scholes methodology as well as options that have a nil strike price and an anti dilute clause which results in a variable number of shares being issued. The number of options outstanding at the period ends as well as the inputs to the Black Scholes valuation is set out below: FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 Fixed price options Year ended 31 March 2025 Year ended 31 March 2024 £ £ Number in issue at the beginning of period 17,500,000 17,500,000 Weighted average strike price 2p 2p Exercised during the year - - Lapsed during the year 17,500,000 - - 17,500,000 Black Scholes inputs Share price on date of issue 1.38p 1.38p Exercise price 2p 2p Risk Free rate 2.83% 2.83% Expected volatility 30% 30% Option life 3yr 3yr Expected dividends Nil nil Fair value of option determined 0.15p 0.15p The share options were issued when the shares were suspended from trading and so an assumption was made as to potential future volatility based upon the movement in share prices in similar companies and was not based on historic volatility. Nil strike price Year ended 31 March 2025 Year ended 31 March 2024 £ £ Number in issue at the beginning of period 5,000,000 5,000,000 Weighted average strike price - - Exercised during the year - - Lapsed during the year 2,500,000 - 2,500,000* 5,000,000 The nil strike priced options were not valued using the Black Scholes model, instead the fair value of the options issued was determined as the value of shares to be issued at any given share price under the terms of the agreement. Due to the inclusion of an antidilution clause the number of shares is to be amended in order to grant the holder a predetermined monetary value of shares, initially calculated at 2pence per share. The 2,500,000 at the year end therefore had a fair value of £50,000. * The remaining nil strike price options lapsed after the period end without being exercised. 29 15. SUBSEQUENT EVENTS On the 16 th April 2025 the Company issued £125,000 of new convertible loan notes convertible at a 10% discount to any future fund raise requiring a prospectus to be issued and carrying FRAGRANT PROSPERITY HOLDINGS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025 interest at 5%. Each share issued under this CLN carried a warrant exercisable at the conversion price. On 16 th April 2025 the Company agreed with certain convertible loan note holders representing £400,000 of the £515,000 outstanding to enter into a standstill arrangement with all past accrued interest to be waived and no applicable future interest should conversion happen prior to the end of the stand still period. Repayment of 75% of the original principle amount advanced and automatic conversion into equity of sums owed under the loan note at the placing price upon Qualifying Fundraise of a minimum of £250,000 On 23 rd April 2025 the Company issued 12,438,455 new ordinary shares at a price of 0.6 pence per share raising gross proceeds of £74,631. In addition warrants over 6,219,228 new ordinary shares at a price of 0.8 pence per share. On 21 st May 2025 the Company raised £1,000,000 gross by way of issuing 111,111,111 new ordinary shares in the Company at a price of 0.9 pence per share, subject to the publication of a prospectus. In addition warrants over 6,666,666 new ordinary shares were issued at a price of 0.9 pence per share. On 24 th June 2025 the Company published a prospectus covering the conversion of the various CLN’s as well a directors accrued fees and the shares issued under the fundraise agreed on the 21 st May 2025. As part of the refinancing of the balance sheet this prospectus covered the issuance of a total of 179,881,590 new ordinary shares. 30