Bay Capital PLC

213800F59868OZQU6E562022-01-012022-12-31iso4217:GBP213800F59868OZQU6E562021-03-312021-12-31iso4217:GBPxbrli:shares213800F59868OZQU6E562022-12-31213800F59868OZQU6E562021-12-31213800F59868OZQU6E562021-03-31ifrs-full:IssuedCapitalMember213800F59868OZQU6E562021-03-31ifrs-full:SharePremiumMember213800F59868OZQU6E562021-03-31ifrs-full:CapitalRedemptionReserveMember213800F59868OZQU6E562021-03-31ifrs-full:ReserveOfSharebasedPaymentsMember213800F59868OZQU6E562021-03-31ifrs-full:RetainedEarningsMember213800F59868OZQU6E562021-03-31213800F59868OZQU6E562021-03-312021-12-31ifrs-full:IssuedCapitalMember213800F59868OZQU6E562021-03-312021-12-31ifrs-full:SharePremiumMember213800F59868OZQU6E562021-03-312021-12-31ifrs-full:CapitalRedemptionReserveMember213800F59868OZQU6E562021-03-312021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember213800F59868OZQU6E562021-03-312021-12-31ifrs-full:RetainedEarningsMember213800F59868OZQU6E562021-12-31ifrs-full:IssuedCapitalMember213800F59868OZQU6E562021-12-31ifrs-full:SharePremiumMember213800F59868OZQU6E562021-12-31ifrs-full:CapitalRedemptionReserveMember213800F59868OZQU6E562021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember213800F59868OZQU6E562021-12-31ifrs-full:RetainedEarningsMember213800F59868OZQU6E562022-01-012022-12-31ifrs-full:IssuedCapitalMember213800F59868OZQU6E562022-01-012022-12-31ifrs-full:SharePremiumMember213800F59868OZQU6E562022-01-012022-12-31ifrs-full:CapitalRedemptionReserveMember213800F59868OZQU6E562022-01-012022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember213800F59868OZQU6E562022-01-012022-12-31ifrs-full:RetainedEarningsMember213800F59868OZQU6E562022-12-31ifrs-full:IssuedCapitalMember213800F59868OZQU6E562022-12-31ifrs-full:SharePremiumMember213800F59868OZQU6E562022-12-31ifrs-full:CapitalRedemptionReserveMember213800F59868OZQU6E562022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember213800F59868OZQU6E562022-12-31ifrs-full:RetainedEarningsMember 265715 Bay Capital AR cover 265715 Bay Capital AR pp01-pp18 265715 Bay Capital AR pp19-pp22 265715 Bay Capital AR pp23-pp32 265715 Bay Capital AR pp33-p35 265715 Bay Capital AR pp36-end ANNUAL REPORT AND ACCOUNTS for the year ended 31 December 2022 Incorporated and registered in Jersey under the Companies (Jersey) Law 1991 with registered number 134743 BAY CAPITAL PLC1 Contents of the Financial Statements Company Information 2 Chairman’s Statement 3 Report of the Directors 4 Statement of Directors’ Responsibilities 12 Independent Auditor’s Report 13 Consolidated Statement of Comprehensive Income 19 Consolidated Statement of Financial Position 20 Consolidated Statement of Changes in Equity 21 Consolidated Statement of Cash Flows 22 Notes forming part of the Consolidated Financial Statements 23 Company Proﬁt and Loss 33 Company Balance Sheet 34 Company Statement of Changes in Equity 35 Notes forming part of the Company Financial Statements 36 2BAY CAPITAL PLC Company Information DIRECTORS, SECRETARY AND ADVISERS Directors Peter Tom CBE, Chairman David Williams, Non-Executive Director Company Secretary JTC (Jersey) Limited 28 Esplanade, St Helier Jersey JE2 3QA Registered Ofﬁce 28 Esplanade, St Helier Jersey JE2 3QA Registered Number 134743 Independent Auditor MHA MacIntyre Hudson Building 4, Foundation Park, Roxborough Way Maidenhead SL6 3UD Solicitors to the Company (UK) Mayer Brown International LLP 201 Bishopsgate London EC2M 3AF Solicitors to the Company (Jersey) Ogier (Jersey) LLP 44 Esplanade, St Helier Jersey JE4 9WG Principal Banker Butterﬁeld Bank (Jersey) Limited St Paul's Gate, New St, St Helier Jersey JE4 5PU Registrar Link Market Services (Jersey) Limited 12 Castle Street, St Helier Jersey JE2 3RT Strategic Adviser Tessera Investment Management Limited 12 Hay Hill London W1J 8NR BAY CAPITAL PLC3 Chairman’s Statement I am pleased to present the ﬁnancial results for Bay Capital Plc ("Bay", or the "Company") and its subsidiary (together the "Group") for the year ended 31 December 2022. Since establishing the Company on the Standard List of the Main Market of the London Stock Exchange in 2021, we have remained focused on implementing our strategy and continue to assess investment and acquisition opportunities where we believe there to be sustainable growth potential either organically or through acquisition. These will typically be fundamentally sound assets, where tangible opportunities exist to drive strategic, operational and performance improvements. Continuing macroeconomic and geopolitical uncertainty has undoubtedly fed into business conﬁdence and a general slowdown in corporate activity, however with this comes opportunity, allied with a renewed market focus on high quality, asset backed cash generative companies. We therefore remain extremely positive about the prospects of our sectors of focus across industrials, construction and business services sectors, and look forward to updating shareholders in due course. We also thank our shareholders for their continued support while we diligently continue to source and evaluate a number of exciting propositions that if secured, we believe have the potential to create shareholder value. Peter Tom CBE Chairman 27 April 2023 4BAY CAPITAL PLC Report of the Directors The Directors of the Company present their report for the year ended 31 December 2022. PRINCIPAL ACTIVITY AND BUSINESS REVIEW For the ﬁnancial year ended 31 December 2022, the Group and Company’s principal activity were that of a holding group and company respectively. The Group and Company have actively pursued their strategy through the sourcing and assessment of acquisition and investment opportunities in the industrial, construction and business services sectors, together with software and technology companies which service those industries. RESULTS During the year, Bay recorded a loss of £251,321 (2021: loss of £309,084) and the loss per share was 0.36p (2021: loss per share of 1.13p), reflecting moderate monthly operating expenses of the Group. The Group and Company had cash reserves at the end of the year of £6,458,073 (2021: £6,720,238). DIVIDENDS At this point in the Company’s development, it does not anticipate declaring any dividends in the foreseeable future. As such, the Directors do not recommend the payment of a dividend for the year. FUTURE DEVELOPMENTS The Directors expect to continue to execute the Group’s strategy in sourcing and assessing acquisition and investment opportunities across its stated sectors of focus. KEY PERFORMANCE INDICATORS The Board continues to focus on maximising shareholder value by sourcing, assessing and where in the interest of shareholders to do so, investing in and acquiring growing businesses within the industrial, construction and business services sectors. Following completion of the Company’s inaugural transaction, the Board will be in a position to identify and develop its key performance indicators for on-going monitoring and management. GOING CONCERN The Directors, having made due and careful enquiry, are of the opinion that the Group and Company have adequate working capital to execute their operations over the next 12months. The Group and Company’s unaudited cash balance as at 21 April 2023 was £6,400,318, and excluding the consummation of any investment or acquisition which will likely require speciﬁc funding, have adequate resources available to fund the on-going forecasted operating expenses for at least twelve months following approval of the ﬁnancial statements. The Directors, therefore, have made an informed judgement, at the time of approving the ﬁnancial statements, that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in preparing the annual ﬁnancial statements (see Note 2). RISK MANAGEMENT In order to execute the Group’s strategy, the Company and its subsidiaries will be exposed to both ﬁnancial and non-ﬁnancial risks. The Board has overall responsibility for the Group’s risk management and it is the Board’s role to consider whether those risks identiﬁed by management are acceptable within the Group’s strategy and risk appetite. The Board therefore periodically reviews the principal risks and considers how effective and appropriate the controls that management has in place to mitigate the risk exposure are and will make recommendations to management accordingly. BAY CAPITAL PLC5 Report of the Directors continued As the Company had not completed its ﬁrst investment or acquisition in the period, it has limited ﬁnancial statements and/or historical ﬁnancial data, and limited trading history. As such, the Company during the period was subject to the risks and uncertainties associated with an early-stage acquisition company, including the risk that the Company will not achieve its investment objectives and that the value of an investment could decline and may result in the partial or complete loss of capital invested. The past performance of investee companies or assets managed by the Directors will not necessarily be a guide to future business, results of operations, ﬁnancial condition or prospects of the Company. In order to mitigate against these risks, the Directors will continue to undertake thorough due diligence on investment opportunities and acquisition targets, to a level considered reasonable and appropriate by the Company on a case-by-case basis, including the potential commissioning of third-party specialist reports as appropriate. Following completion of any investment or acquisition, it is intended that any investments or assets will be managed by the Directors and assisted by the Company’s professional advisers. Financial Risk Management The Directors consider the Group to be exposed to the following ﬁnancial risks: a. Price risk: the price paid for securities is subject to market movement that will have an impact on the operations of the Group; b. Cash flow interest rate risk: the Group has signiﬁcant cash balances which exposed it to movement in the market interest rates; and c. Liquidity risk: the Group manages its cash requirements through detailed forecasting and planning for amount and timing of payments and receipts of interest income, to ensure cash resources are available when required. Given the relatively small size and operation of the Group in the year, the Directors have not delegated the responsibility of risk monitoring to a sub-committee of the Board, but closely monitor the risks on a periodic basis. The Directors consider their exposure in the ﬁnancial year to have been low. Refer to Note 14 for assessment of the risks arising from ﬁnancial instruments. Non-ﬁnancial Risk Management The non-ﬁnancial risk factors for the year ended 31 December 2022 did not materially change from those set out in Bay’s Prospectus dated 27 September 2021. GREENHOUSE GAS EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY As the Company has not completed its ﬁrst acquisition and has only two Directors, limited travel and no premises, the Directors do not consider any disclosure under the Task Force on Climate-related Financial Disclosures is required at this juncture, however the Company will continue to review this position as it executes its investment and acquisition strategy. POLITICAL CONTRIBUTIONS The Company has made no political contributions during the year. CHARITABLE DONATIONS The Company has made no charitable donations during the year. POST BALANCE SHEET EVENTS There have been no signiﬁcant post balance sheet events. See Note 20. 6BAY CAPITAL PLC Report of the Directors continued SHARE CAPITAL Details of the Company’s share capital is set out in Note 15. The Company’s share capital consists of one class of ordinary share, which does not carry rights to ﬁxed income. As at 31 December 2022, there were 70,000,000 ordinary shares of 1p par value each in issue. SIGNIFICANT SHAREHOLDERS As at 21 April 2023, the Company had been advised of the following notiﬁable interests (whether directly or indirectly held) in voting rights. Name Shareholding Percentage JIM Nominees Limited 16,759,802 23.9% Hermco Property Limited 15,000,000 21.4% David Williams 14,250,000 20.4% Huntress (CI) Nominees Limited 6,107,150 8.7% * Nominee entity holding indirect and direct interests of Peter Tom CBE, Chairman of the Company As at 21 April 2023, the Directors in aggregate held 29,250,000 ordinary shares, which represents 41.8 per cent. of the Company’s issued share capital. COMPANY DIRECTORS The Directors during the year and summaries of their experience are set out below. Peter Tom CBE Non-Executive Chairman Peter is one of the aggregates industry’s longest serving and most experienced executives, holding high-proﬁle executive and non-executive roles serving publicly listed and private organisations in the industry, sport and the not-for-proﬁt sector. He most recently served as Executive Chairman of Breedon Group, (AIM: BREE) the UK’s largest independent aggregates business, which he co-founded with David Williams (a Director of the Company) and Simon Vivian in 2008. Under Peter’s leadership, Breedon grew from a £13 million AIM-listed cash shell into a business worth £1.5 billion, leading the consolidation of the UK aggregates industry. Prior to establishing Breedon, Peter was the Chief Executive Ofﬁcer and latterly Non-Executive Chairman of Aggregate Industries, which he developed into a leading international building materials group before negotiating its sale to Holcim for £1.8 billion in 2005. His early career was spent at Bardon Hill Quarries, where he rose to become Chief Executive of the Bardon Group plc in 1985. He went on to lead Bardon’s merger with Evered plc in 1991 and the enlarged group’s subsequent merger with CAMAS in 1997 to form Aggregate Industries plc. In 2006, Peter was awarded a CBE for services to Business and Sport. He holds Honorary Degrees from both Leicester and De Montfort University and is Chairman of Leicester Rugby Football Club, (Leicester Tigers) a role he has held for more than 20 years following a playing career comprising 130 appearances for the club as a lock forward between 1963 and 1968. David Williams Non-Executive Director David has signiﬁcant experience in investment markets, serving as Chairman in executive and non-executive capacities for a number of public and private companies. He has overseen the development of these companies, raising in excess of £1 billion of capital to support both organic and acquisitive growth initiatives. David was the original founder of Marwyn Capital LLP, the award-winning investment management company. David was also formerly Chairman of Entertainment One Ltd. (LSE: ETO), Zetar plc, and Waste Recycling Group Plc, and Non-Executive director of Breedon Group plc (AIM: BREE). He currently serves as Non-Executive Chairman of the AIM-quoted cyber security business, Shearwater Group plc (AIM: SWG) and Main Market listed Acceler8 Ventures Plc (LSE: AC8) and Red Capital Plc (LSE: REDC). BAY CAPITAL PLC7 Report of the Directors continued The Directors who held ofﬁce during the year and their beneﬁcial interest in the share capital of the Company at 31 December 2022 were as follows: 31 December 2022 Hermco Property Limited 15,000,000 David Williams 14,250,000 29,250,000 * Peter Tom’s shareholding is held via Hermco Property Limited DIRECTORS’ REMUNERATION The Chairman and Non-Executive Director are each entitled to fees of £30,000 and £20,000 per annum for their respective roles within the Company, as per their service agreements entered into on 14 September 2021. There are no other beneﬁts paid to Directors outside of their service fees, save for ordinary course reimbursable expenses properly incurred in the performing of their duties as Directors. The Company does not operate a pension scheme. 31 December Beneﬁts 2022 Salary in kind Total Director £ £ £ Peter Tom CBE 30,000 – 30,000 David Williams 20,000 – 20,000 50,000 – 50,000 * Peter Tom’s fees are paid through Rise Rocks Limited, a company wholly owned by Peter Tom CBE In addition to the Director fees outlined above, the Directors are also participants in the Subco Incentive Scheme and holders of warrants as detailed below. SUBCO INCENTIVE SCHEME The Directors believe that the success of the Company will depend to a high degree on the future performance of key employees and advisers in executing and supporting the Company’s growth strategy. The Company has therefore established equity-based incentive arrangements which are, and will continue to be, an important means of retaining, attracting and motivating key employees, consultants and advisers, and also for aligning the interests of the Directors with those of shareholders. On 14 September 2021, the Group created a new Subco Incentive Scheme within its wholly owned subsidiary Bay Capital Subco Limited. Under the terms of the Subco Incentive Scheme, scheme participants are only rewarded if a predetermined level of shareholder value is created over a three to ﬁve year period or upon a change of control of the Company or Subco (whichever occurs ﬁrst), calculated on a formula basis by reference to the growth in market capitalisation of the Company, following adjustments for the issue of any new ordinary shares and taking into account dividends and capital returns ("Shareholder Value"), realised by the exercise by the beneﬁciaries of a put option in respect of their shares in Subco and satisﬁed either in cash or by the issue of new ordinary shares at the election of the Company. Under these arrangements in place, participants are entitled up to 15 per cent. of the Shareholder Value created, subject to such Shareholder Value having increased by at least 10 per cent. per annum compounded over a period of between three and ﬁve years from admission, or following a change of control of the Company or Subco. In order to implement the Subco Incentive Scheme, the Company as sole shareholder of Subco, approved the creation of a new share class in Subco (the "B Shares"). At the same time the Subco’s existing ordinary shares were redesignated A Shares. The B Shares do not have voting or dividend rights. 8BAY CAPITAL PLC Report of the Directors continued On 14 September 2021, Hermco Property Limited (a company controlled by Peter Tom, Chairman of the Company), David Williams, a Non-Executive Director of the Company, and Kathleen Long and Anthony Morris, Directors of Tessera Investment Management Limited, became the ﬁrst participants in the Subco Incentive Scheme ("Founder Participants"), and as such, the proportion of Shareholder Value attaching to the Subco Incentive Scheme is 11 per cent. of a total cap of 15 per cent. The Founder Participants and their respective holdings are outlined below. Participant Subco B shares held Hermco Property Limited 50,000 David Williams 40,000 Kathleen Long 10,000 Anthony Morris 10,000 110,000 * Nominee entity holding indirect and direct interests of Peter Tom CBE, Chairman of the Company WARRANTS On 13 September 2021, the Company constituted 70,000,000 warrants on the terms of an instrument under which the Company issued 30,000,000 warrants to certain existing shareholders of the Company including the Directors, and a further 40,000,000 warrants on admission of the Company to the Main Market of the London Stock Exchange. The warrants are exercisable at any time from the date of completion of the inaugural transaction (an investment or acquisition) made by the Company where the consideration for such transaction is at least £10 million at a price of £0.10 per ordinary share. These warrants can be exercised through application to the Company. The warrants will not be listed on the London Stock Exchange or any other publicly traded market. The Directors’ respective warrant holdings are detailed below. Participant Date of grant Exercise price No. of ordinary shares to which the grant relates Hermco Property Limited* 13 September 2021 £0.10 15,000,000 David Williams 13 September 2021 £0.10 14,250,000 29,250,000 * Nominee entity holding indirect and direct interests of Peter Tom CBE, Chairman of the Company CORPORATE GOVERNANCE As a Jersey company and a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code 2018. Furthermore, there is no applicable regime of corporate governance to which the directors of a Jersey company must adhere over and above the general ﬁduciary duties and duties of care, skill and diligence imposed on such directors under Jersey law. Notwithstanding this, the Directors are committed to maintaining high standards of corporate governance and will be responsible for carrying out the Company’s objectives and implementing its business strategy. All investment, acquisition, divestment and other strategic decisions are considered and determined by the Board. At present, the Board reviews investment and acquisition opportunities on an as required basis, and meets regularly with its Strategic Advisor to discuss possible inorganic growth opportunities, as well as monitor deal flow and investment and acquisitions in progress, and review the Company’s strategy to ensure that it remains BAY CAPITAL PLC9 Report of the Directors continued aligned to the delivery of shareholder value. Those investment and acquisition opportunities that are assessed by the Board (with support from its Strategic Advisor) are considered in light of the investment and acquisition criteria as detailed in the Company’s Prospectus. In addition, as part of the investment and acquisition screening process, the Company will augment Board and Strategic Advisor capability on a case by case basis as required with industry and operating partner input, where deep domain expertise can be accessed. The Board provides leadership within a framework of prudent and effective controls. The Board has established the corporate governance values of the Company and has overall responsibility for setting the Company’s strategic aims, deﬁning the business plan and strategy and managing the ﬁnancial and operational resources of the Company. In this regard, the Board, so far as is practicable given the Company’s size and stage of its development, has voluntarily adopted the QCA Code as its chosen corporate governance framework. There are certain provisions of the QCA Code which the Company will not currently adhere to, and their adoption will be delayed until such time as the Directors believe it is appropriate to do so. It is anticipated that this will occur concurrently with the Company’s ﬁrst material investment or acquisition. Following such an acquisition, the Company will seek to develop its corporate governance position, and will address key differences to the QCA Code. Speciﬁcally, it is anticipated this will include: i. the augmentation of the Board with suitably qualiﬁed additional executive and non-executive directors including independents; ii. the implementation of audit, remuneration and nomination committees with appropriate terms of reference; iii. a formalised annual evaluation and review process covering the Board and Committees, including succession planning; iv. the publication of KPIs; v. the development of a corporate and social responsibility policy; and vi. an enhanced risk management and governance framework tailored to the operating assets and strategic direction of the enlarged entity. ROLE OF THE BOARD The Board is responsible for the management of the business of the Group, setting the strategic direction of the Group and establishing the policies of the Group. It is the Directors’ responsibility to oversee the ﬁnancial position of the Group and monitor the business and affairs of the Group, on behalf of the shareholders, to whom they are accountable. The primary duty of the Directors is to act in the best interests of the Group and Company at all times. The Board also addresses issues relating to internal control and the Group’s approach to risk management and has formally adopted an anti-corruption and bribery policy. The Group does not have a separate investing committee and therefore the Board as a whole will be responsible for sourcing acquisitions and ensuring that opportunities conform with the Group’s strategy. The Group holds four formal Board meetings a year, with unscheduled meetings as matters arise which require the attention of the Board. Formal Board meetings are timed to link to key events in the Group's corporate calendar. Outside the scheduled and unscheduled meetings of the Board, the Directors maintain frequent contact with each other to keep them fully briefed on the Group's operations. INTERNAL CONTROLS The Board acknowledges its responsibility for establishing and monitoring the Group’s systems of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group’s systems are designed to provide the Directors with reasonable assurance that problems can be identiﬁed on a timely basis and dealt with appropriately. 10BAY CAPITAL PLC Report of the Directors continued The Group maintains an appropriate process for ﬁnancial reporting. The annual budget is reviewed and approved by the Board before being formally adopted. Other key procedures that have been established and which are designed to provide effective control are as follows: Management structure – The Board meets regularly on a formal and informal basis to discuss all issues affecting the Group. Investment appraisal – The Group has a robust framework for investment appraisal and approval is required by the Board, where appropriate. Share dealing and inside information – the Company has adopted a share dealing code regulating trading and conﬁdentiality of inside information for the Directors and other persons discharging managerial responsibilities (and their persons closely associated) which contains provisions appropriate for a company whose shares are admitted to trading on the Ofﬁcial List (particularly relating to dealing during closed periods which will be in line with the Market Abuse Regulation). The Company takes all reasonable steps to ensure compliance by the Directors and any relevant employees with the terms of that share dealing code. The Board reviews the effectiveness of the systems of internal control and considers the major business risks and the control environment. No signiﬁcant deﬁciencies have come to light during the period and no weaknesses in internal ﬁnancial control have resulted in any material losses, or contingencies which would require disclosure, as recommended by the guidance for Directors on reporting on internal ﬁnancial control. The Directors are focused on careful management of the Group’s cash and ﬁnancial resources through Board level approvals. At such time that the Group completes an acquisition, the Directors anticipate that the Group’s ﬁnancial position and prospects procedures regime will be updated and expanded as necessary to cater for the nature of the Group’s business following completion of its inaugural investment or acquisition. BOARD EVALUATION In the year, the Board evaluation process was limited to an ongoing informal evaluation of the performance of the Board by each Director. This will be replaced by a formal, annual evaluation process once the Group has completed its ﬁrst acquisition. EXTERNAL ADVISERS The Board accessed the following external advisers during the year and post the year end: Mayer Brown International LLP and Ogier (Jersey) LLP – legal Tessera Investment Management Limited – capital markets and M&A JTC Plc – company secretarial, governance and regulatory ﬁlings CONFLICTS 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 has satisﬁed itself that there are no conflicts of interest where the Directors have appointments on the Boards of, or relationships with, companies outside the Company. Furthermore, the Board requires Directors to declare all appointments and other situations which could result in a possible conflict of interest, and therefore believes it has a robust framework to deal with any conflict of interest should it arise. BAY CAPITAL PLC11 Report of the Directors continued RELATIONS WITH SHAREHOLDERS The Chairman is the Group’s principal spokesperson with investors, fund managers, the media and other interested parties. As well as the Annual General Meeting with shareholders, the other Directors may give formal presentations at investor road shows following the announcement of interim and full year results. Notice of this year’s Annual General Meeting will shortly be sent to shareholders. DISCLOSURE OF INFORMATION TO THE INDEPENDENT AUDITOR So far as the Directors are aware, there is no relevant audit information of which the Group and Company’s independent auditor is 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 Group and Company’s independent auditor is aware of that information. The Directors conﬁrm to the best of their knowledge that: l 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 Group and Company and the undertakings included in the consolidation taken as whole; l the Chairman’s Statement and Report of the Directors includes a fair review of the development and performance of the business and the position of the Group and Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and l the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group and Company’s position and performance, business model and strategy. INDEPENDENT AUDITOR The independent auditor, MHA MacIntyre Hudson, will be proposed for re-appointment at the forthcoming Annual General Meeting. ON BEHALF OF THE BOARD David Williams Non-Executive Director 27 April 2023 12BAY CAPITAL PLC The Directors are responsible for preparing the Directors' report and the ﬁnancial statements in accordance with applicable law and regulations. Jersey Company law requires the directors to prepare ﬁnancial statements for each ﬁnancial year. Under that law the directors have elected to prepare the ﬁnancial statements in accordance with International Financial Reporting Standards as adopted by the United Kingdom ("IFRS"). 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 Company and of the proﬁt or loss of the Group for that year. In preparing these ﬁnancial statements, the Directors are required to: l select suitable accounting policies and then apply them consistently; l make judgements and estimates that are reasonable and prudent; l state whether the Group ﬁnancial statements have been prepared in accordance with IFRS as adopted by the United Kingdom; l state whether the Company ﬁnancial statements have been prepared in accordance with FRS 101 “Reduced Disclosure Framework"; and l 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 proper accounting records that are sufﬁcient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the ﬁnancial position of the Group and Company and enable them to ensure that the ﬁnancial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The maintenance and integrity of the Group’s website is the responsibility of the Directors. The work carried out by the independent auditors does not involve the consideration of these matters and, accordingly, the independent auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in Jersey governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions. Statement of Directors’ Responsibilities BAY CAPITAL PLC13 Independent Auditor’s Report to the Members of Bay Capital Plc For the purpose of this report, the terms “we” and “our” denote MHA MacIntyre Hudson in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Bay Capital Plc. For the purposes of the table on page 15 that sets out the key audit matters and how our audit addressed the key audit matters, the terms “we” and “our” refer to MHA MacIntyre Hudson. The Group ﬁnancial statements, as deﬁned below, consolidate the accounts of Bay Capital Plc and its subsidiary (the “Group”). The “Parent Company” is deﬁned as Bay Capital Plc, as an individual entity. The relevant legislation governing the Parent Company is Companies (Jersey) Law 1991. Opinion We have audited the ﬁnancial statements of Bay Capital Plc for the year ended 31 December 2022. The ﬁnancial statements that we have audited comprise: l the Consolidated Statement of Comprehensive Income l the Consolidated Statement of Financial Position l the Consolidated Statement of Changes in Equity l the Consolidated Statement of Cash Flows l Notes 1 to 21 to the consolidated ﬁnancial statements, including signiﬁcant accounting policies l the Company Proﬁt and Loss l the Company Balance Sheet l the Company Statement of Changes in Equity and l Notes 1 to 11 to the company ﬁnancial statements, including signiﬁcant accounting policies. The ﬁnancial reporting framework that has been applied in the preparation of the Group ﬁnancial statements is applicable law and International Financial Reporting Standards adopted by the United Kingdom (‘IFRS’). The ﬁnancial reporting framework that has been applied in the preparation of the Parent Company ﬁnancial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice). In our opinion the ﬁnancial statements: l give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2022 and of the Group’s loss for the year then ended; l the Group ﬁnancial statements have been properly prepared in accordance with IFRS; l the Parent Company ﬁnancial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and l have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991. Our opinion is consistent with our reporting to the Audit Committee. 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 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 ethical responsibilities in accordance 14BAY CAPITAL PLC with those 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 basis of accounting in the preparation of the ﬁnancial statements is appropriate. Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of accounting included: l The consideration of inherent risks to the Group’s and the Parent Company’s operations and speciﬁcally their business model of searching for suitable acquisition targets. l The evaluation of how those risks might impact on the available ﬁnancial resources. l Liquidity considerations including examination of cash flow projections at Group and Parent Company level. l The evaluation of the base case scenarios and stress scenarios, in respect of the Group and the Parent Company, and the respective sensitivities and rationale. l Viability assessments at Group and Parent Company levels, including consideration of reserve levels and business plans. 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 Group’s and Parent 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. Overview of our audit approach Scope Our audit was scoped by obtaining an understanding of the Group, including the Parent Company, and its environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the ﬁnancial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement. We undertook full scope audits on the complete ﬁnancial information of 1 component and speciﬁed audit procedures on particular aspects and balances on 1 component. Materiality 2022 2021 Group £320.3k £333.4k 5% (2021: 5%) of net assets Parent Company £320.3k £333.4k 5% (2021: 5%) of net assets Key audit matters Recurring l Management override of controls (Group and Parent Company) Independent Auditor’s Report to the Members of Bay Capital Plc continued BAY CAPITAL PLC15 Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, 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) that we identiﬁed. These matters included those matters 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. Management override of controls Key audit matter Management is in a unique position to perpetrate fraud because of management’s description ability to manipulate accounting records and prepare fraudulent ﬁnancial statements by overriding controls that otherwise appear to be operating effectively. Due to the unpredictable way in which such override could occur, this is deemed a key audit matter for this engagement. Our audit procedures included: Controls testing – Given the current nature of the business and the associated accounting records, there are very few transactions and/or journals. As such, we evaluated the design and implementation of key controls around bank payments and receipts, as well as considerations relating to ﬁnancial reporting. We performed detailed reviews and testing of journal entries made, particularly those considered to rely on greater levels of judgement, such as year-end estimations. We tested the basis of accounting estimates of a subjective nature, such as year-end accruals, to understand the judgments made and assessed the adequacy of disclosures for compliance with the accounting standards and regulatory considerations. The results of our testing were satisfactory, and we considered that entries made into the accounting system and subsequent disclosure made into the ﬁnancial statements were deemed to have an appropriate supporting basis. Our application of materiality Our deﬁnition of materiality considers the value of error or omission on the ﬁnancial statements that, individually or in aggregate, would change or influence the economic decision of a reasonably knowledgeable user of those ﬁnancial statements. 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. Materiality is used in planning the scope of our work, executing that work and evaluating the results. Materiality in respect of the Group was set at £320,300 (2021: £333,425) which was determined on the basis of 5% (2021: 5%) of the Group’s net assets. Materiality in respect of the Parent Company was set £320,300 (2021: £333,425), determined on the basis of 5% (2021: 5%) of the Parent Company’s net assets. Net assets was deemed to be the appropriate benchmark for the calculation of materiality as this is a key area of the ﬁnancial statements because this is the metric by which the performance and risk exposure of the Group and Parent Company is principally assessed. This is also the metric against which users assess the ability of the Group and Parent Company to continue in its search for suitable acquisition targets. How the scope of our audit responded to the key audit matter Key observations communicated to the Group’s Audit Committee Independent Auditor’s Report to the Members of Bay Capital Plc continued 16BAY CAPITAL PLC Independent Auditor’s Report to the Members of Bay Capital Plc continued Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the ﬁnancial statements as a whole. Performance materiality for the Group was set at £224,200 (2021: £233,400) and at £224,200 (2021: £233,400) for the Parent Company which represents 70% (2021: 70%) of the above materiality levels. The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems and controls and the level of misstatements arising in previous audits. We agreed to report any corrected or uncorrected adjustments exceeding £16,000 in respect of the Group and Parent Company respectively to the Board of Directors as well as differences below this threshold that in our view warranted reporting on qualitative grounds. Overview of the scope of the Group and Parent Company audits Our assessment of audit risk, evaluation of materiality and our determination of performance materiality sets our audit scope for each company within the Group. Taken together, this enables us to form an opinion on the consolidated ﬁnancial statements. This assessment takes into account the size, risk proﬁle, organisation / distribution and effectiveness of group-wide controls, changes in the business environment and other factors such as recent internal audit results when assessing the level of work to be performed at each component. In assessing the risk of material misstatement to the consolidated ﬁnancial statements, and to ensure we had adequate quantitative and qualitative coverage of signiﬁcant accounts in the consolidated ﬁnancial statements, we identiﬁed that the Group consisted of two entities. Full scope audits – We performed full scope audits on both entities within the Group. The control environment We evaluated the design and implementation of those internal controls of the Group, including the Parent Company, which are relevant to our audit, such as those relating to the ﬁnancial reporting cycle. Reporting on 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. 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. BAY CAPITAL PLC17 In preparing the 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 Parent Company or to cease operations, or have no realistic alternative but to do so. Adequacy of explanations received and accounting records Under the Companies (Jersey) Law, 1991 we are required to report to you if, in our opinion: l we have not received all the information and explanations we require for our audit; or l proper accounting records have not been kept by the Parent Company, or proper returns adequate for our audit have not been received from branches not visited by us; or l the Parent Company’s ﬁnancial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these ﬁnancial statements. A further description of our responsibilities for the ﬁnancial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. These audit procedures were designed to provide reasonable assurance that the ﬁnancial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difﬁcult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the ﬁnancial statements, the less likely we would become aware of it. Identifying and assessing potential risks arising from irregularities, including fraud The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following: l We considered the nature of the industry and sector the control environment, business performance including remuneration policies and the Group’s, including the Parent Company’s, own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the directors, we obtained an understanding of the legal and regulatory frameworks applicable to the Group focusing on laws and regulations that could reasonably be expected to have a direct material effect on the ﬁnancial statements. l We enquired of the directors and management concerning the Group’s and the Parent Company’s policies and procedures relating to: – identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance; – detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and Independent Auditor’s Report to the Members of Bay Capital Plc continued 18BAY CAPITAL PLC – the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. l We assessed the susceptibility of the ﬁnancial statements to material misstatement, including how fraud might occur by evaluating management’s incentives and opportunities for manipulation of the ﬁnancial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls. Audit response to risks identiﬁed In respect of the above procedures: l we corroborated the results of our enquiries through our review of the minutes of the Group’s and the Parent Company’s board meetings; l audit procedures performed by the engagement team in connection with the risks identiﬁed included: – reviewing ﬁnancial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations expected to have a direct impact on the ﬁnancial statements; – testing journal entries, including those posted to unusual account combinations; – evaluating the business rationale of signiﬁcant transactions, and reviewing accounting estimates for bias; – enquiry of management around actual and potential litigation and claims; and l we communicated relevant laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Other requirements We were appointed by the Directors on 28 June 2022. The period of total uninterrupted engagement including previous renewals and reappointments of the ﬁrm is 2 years. We did not provide any non-audit services which are prohibited by the FRC’s Ethical Standard to the Group or the Parent Company, and we remain independent of the Group and the Parent Company in conducting our audit. Use of our report This report is made solely to the Company’s members in accordance with Article 113A of the Companies (Jersey) Law 1991. 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 for our audit work, for this report, or for the opinions we have formed. As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these ﬁnancial statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report ﬁled on the National Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard ((‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual ﬁnancial report has been prepared using the single electronic format speciﬁed in the ESEF RTS. Jason Mitchell MBA BSc FCA (Senior Statutory Auditor) for and on behalf of MHA MacIntyre Hudson, Statutory Auditor Maidenhead, United Kingdom 27 April 2023 Independent Auditor’s Report to the Members of Bay Capital Plc continued BAY CAPITAL PLC19 9 month Year ended period ended 31 December 2022 31 December 2021 Note £ £ Administrative expenses (253,635) (309,084) Operating loss 6 (253,635) (309,084) Interest receivable 2,314 – Loss on ordinary activities before taxation (251,321) (309,084) Taxation charge 7 – – Loss and total comprehensive loss for the year/period (251,321) (309,084) Loss per share (pence) Basic and diluted 8 (0.36p) (1.13p) All activities in both the current and the prior period relate to continuing operations. The notes on pages 23 to 32 form part of these consolidated ﬁnancial statements. Consolidated Statement of Comprehensive Income For the year ended 31 December 2022 20BAY CAPITAL PLC 31 December 31 December 31 December 31 December 2022 2022 2021 2021 Note £ £ £ £ Current assets Cash and cash equivalents 11 6,458,073 6,720,238 Trade and other receivables 12 8,022 2,322 Total current assets 6,466,095 6,722,560 Total assets 6,466,095 6,722,560 Current liabilities Trade and other payables 13 53,522 69,645 Total current liabilities 53,522 69,645 Total liabilities 53,522 69,645 Total net assets 6,412,573 6,652,915 Equity Issued share capital 15 700,000 700,000 Share premium 16 6,258,748 6,258,748 Capital redemption reserve 16 2 2 Share-based payment reserve 18 14,228 3,249 Retained deﬁcit 16 (560,405) (309,084) Total equity 6,412,573 6,652,915 The consolidated ﬁnancial statements were approved and authorised for issue by the Board on 27 April 2023 and were signed on its behalf by: David Williams Non-Executive Director The notes on pages 23 to 32 form part of these consolidated ﬁnancial statements. Consolidated Statement of Financial Position As at 31 December 2022 BAY CAPITAL PLC21 Share- Capital based Share Share redemption payment Retained capital premium reserve reserve deﬁcit Total Note £ £ £ £ £ £ Balance at incorporation date 2 – – – – 2 Loss for the period – – – – (309,084) (309,084) Transactions with owners in their capacity as owners: Issue of new ordinary shares 15 699,998 6,298,748 2 – – 6,998,748 Ordinary share issue costs – (40,000) – – – (40,000) Share-based payment 18 – – – 3,249 – 3,249 At 31 December 2021 700,000 6,258,748 2 3,249 (309,084) 6,652,915 Loss for the year – – – – (251,321) (251,321) Transactions with owners in their capacity as owners: Share-based payment 18 – – – 10,979 – 10,979 At 31 December 2022 700,000 6,258,748 2 14,228 (560,405) 6,412,573 The notes on pages 23 to 32 form part of these consolidated ﬁnancial statements. Consolidated Statement of Changes in Equity For the year ended 31 December 2022 22BAY CAPITAL PLC 9 month Year ended period ended 31 December 2022 31 December 2021 £ £ Operating activities Loss before taxation (251,321) (309,084) Adjustments for: Share-based payment charge 10,979 3,249 Operating cash flows before changes in working capital (240,342) (305,835) Increase in trade and other receivables (5,700) (2,322) (Decrease)/increase in trade and other payables (16,123) 69,645 Net cash outflows from operating activities (262,165) (238,512) Financing activities Issue of ordinary shares – 6,998,750 Ordinary share issue costs – (40,000) Net cash inflows from ﬁnancing activities – 6,958,750 Net (decrease)/increase in cash and cash equivalents (262,165) 6,720,238 Cash and cash equivalents at beginning of the year/period 6,720,238 – Cash and cash equivalents at end of the year/period 6,458,073 6,720,238 The notes on pages 23 to 32 form part of these consolidated ﬁnancial statements. Consolidated Statement of Cash Flows For the year ended 31 December 2022 1 General information The Company was incorporated in the prior period on 31 March 2021 as Bay Capital Limited, a private limited company under the laws of Jersey with registered number 134743. On 8 September 2021 the Company was re-registered as an unlisted public limited company and its name was changed to Bay Capital Plc. On 30 September 2021 the Company shares were admitted to trading onto the Main Market of the London Stock Exchange. The Company is the parent company of Bay Capital Subco Limited (a private limited company under the laws of Jersey with registered number 134744). The address of its registered ofﬁce is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey. The Group has been incorporated for the purpose of identifying suitable acquisition opportunities in accordance with the Group's investment and acquisition strategy with a view to creating shareholder value. The Group will retain a flexible investment and acquisition strategy which will, subject to appropriate levels of due diligence, enable it to deploy capital in target companies by way of minority or majority investments, or full acquisitions where it is in the interests of shareholders to do so. This will include transactions with target companies located in the UK and internationally. 2 Accounting policies The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in theses consolidated ﬁnancial statements. The principal policies adopted in the preparation of the consolidated ﬁnancial statements are as follows: (a) Basis of preparation These consolidated ﬁnancial statements have been prepared in accordance with the requirements of International Financial Reporting Standards as adopted by the United Kingdom (“IFRS”) and the requirements of the Companies (Jersey) Law 1991. The consolidated ﬁnancial statements are prepared on the historical cost basis. The comparative ﬁgures presented cover the nine-month period from incorporation on 31 March 2021 to 31 December 2021. (b) Basis of consolidation The consolidated ﬁnancial statements present the results of the Company and its subsidiaries (the “Group”) as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full. Where the Group has control over a Company, it is classiﬁed as a subsidiary. The Group controls a Company if all three of the following elements are present: power over the Company, exposure to variable returns from the Company, and the ability of the Group to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. The consolidated ﬁnancial statements incorporate the results of business combinations using the acquisition method. In the consolidated statement of ﬁnancial position, the acquiree’s identiﬁable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The acquisition related costs are included in the consolidated statement of comprehensive income on an accruals basis. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. (c) Functional and presentational currency The Group’s functional and presentational currency for these ﬁnancial statements is the pound sterling. BAY CAPITAL PLC23 Notes forming part of the Consolidated Financial Statements For the year ended 31 December 2022 24BAY CAPITAL PLC (d) Going concern The Directors, having made due and careful enquiry, are of the opinion that the Group has adequate working capital to execute its operations over the next 12 months. The Group’s unaudited cash balance as at 21 April 2023 was £6,400,318, and excluding the consummation of any investment or acquisition which will likely require speciﬁc funding, has adequate resources available to fund the on-going forecasted operating expenses for at least twelve months following approval of the ﬁnancial statements. The Directors, therefore, have made an informed judgement, at the time of approving the ﬁnancial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in preparing the annual ﬁnancial statements. (e) Employee beneﬁts Short-term beneﬁts Short-term employee beneﬁt obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or proﬁt-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (f) Taxation Tax on the proﬁt or loss for the year 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 which case it is recognised in other comprehensive income or equity respectively. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable proﬁt other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates and laws enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable proﬁts will be available against which the temporary difference can be utilised. (g) Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits with an original maturity of three months or less from inception, held for meeting short term commitments. (h) Financial assets and liabilities The Group’s ﬁnancial assets and liabilities comprise cash and cash equivalents and accruals. Financial assets are stated at amortised cost less provision for expected credit losses. Financial liabilities are stated at amortised cost. (i) Share-based payments The Group operates an equity-settled share-based payment plan. The fair value of the employee services received in exchange for the grant of options is recognised as an expense over the vesting period, based on the Group’s estimate of awards that will eventually vest, with a corresponding increase in equity as a share-based payment reserve. This plan includes market-based vesting conditions for which the fair value at grant date reflects and are therefore not subsequently revisited. The fair value is determined using a binomial model. Notes forming part of the Consolidated Financial Statements continued (j) Warrants Warrants issued as part of share issues have been determined as equity instruments under IAS 32. Since the fair value of the shares issued at the same time as the warrants is equal to the price paid, these warrants, by deduction, are considered to have been issued at fair value. (k) Accounting standards issued The following amendments to standards were issued and adopted in the year, with no material impact on the ﬁnancial statements (all effective for annual periods beginning on or after 1 January 2022): l Reference to the Conceptual Framework - Amendments to IFRS 3 l Onerous Contracts - Cost of Fulﬁlling a Contract - Amendments to IAS 37 l Annual Improvements to IFRS Standards 2018-2020 There were no other new accounting standards issued that have been adopted in the year. (l) Standards in issue but not yet effective At the date of authorisation of these ﬁnancial statements there were amendments to standards which were in issue, but which were not yet effective, and which have not been applied. The principal ones are detailed below. The Directors do not expect the adoption of these amendments to standards to have a material impact on the ﬁnancial statements. Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) l The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporal differences e.g. leases and decommissioning liabilities. l For such transactions, the associated deferred tax assets and liabilities will need to be recognised from the beginning of the earliest comparative period presented, with any cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date. l For all other transactions, the amendments apply to transactions that occur after the beginning of the earliest period presented. l The amendments are effective for ﬁnancial years beginning on or after 1 January 2023 and are endorsed by the UK Endorsement Board (“UKEB”). Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) l The amendments to IAS 1 require companies to disclose their material accounting policy information rather than their signiﬁcant accounting policies. The amendments to IFRS Practice Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures. l The amendments are effective for ﬁnancial years beginning on or after 1 January 2023 and are endorsed by the UKEB. Deﬁnition of Accounting Estimates (Amendments to IAS 8) l The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. That distinction is important because changes in accounting estimates are applied prospectively only to future transactions and other future events, but changes in accounting policies are generally also applied retrospectively to past transactions and other past events. l The amendments are effective for ﬁnancial years beginning on or after 1 January 2023 and are endorsed by the UKEB. BAY CAPITAL PLC25 Notes forming part of the Consolidated Financial Statements continued 26BAY CAPITAL PLC Non-Current Liabilities with Covenants (Amendments to IAS 1) l The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classiﬁcation of debt as current or non-current at the reporting date. l The amendments require a company to disclose more information regarding loan covenants in the notes to the ﬁnancial statements and require identiﬁcation of which loans are affected by covenants. l The amendments are effective for ﬁnancial years beginning on or after 1 January 2024 and are not yet endorsed by the UKEB. Classiﬁcation of Liabilities as Current or Non-current (Amendments to IAS 1) l The amendments, as issued in 2020, aim to clarify the requirements on determining whether a liability is current or non-current, and apply for annual reporting periods beginning on or after 1 January 2023. l The International Accounting Standards Board (“IASB”) has subsequently proposed further amendments to IAS 1 and the deferral of the effective date of the 2020 amendments to no earlier than 1 January 2024. The amendments are not yet endorsed by the UKEB. IFRS 17 Insurance Contracts l IFRS 17 replaces IFRS 4 and sets out substantial requirements for the accounting of insurance contracts along with detailed disclosure. l The Group and Company are not insurers and have not previously entered into contracts that fall within the scope of IFRS 4 to be treated as insurance contracts. Therefore, this standard is not deemed to be relevant to the Group at this time and is not expected to have a signiﬁcant impact on the Group’s consolidated ﬁnancial statements. l The new standard is effective for ﬁnancial years beginning on or after 1 January 2023 has been endorsed by the UKEB. Lease liability in a sale and leaseback transaction (Amendments to IFRS 16) l The amendments to IFRS 16 change the basis of calculation of a gain or loss arising on a sale and leaseback transaction to better reflect in terms of economic substance, the lessee’s retained ownership interest. l The Group and Company do not currently hold any sale and leaseback arrangements. Therefore, these amendments are not deemed to be relevant to the Group at this time and are not expected to have a signiﬁcant impact on the Group’s consolidated ﬁnancial statements. l The amendments are effective for ﬁnancial years beginning on or after 1 January 2023 and are not yet endorsed by the UKEB. 3 Accounting estimates and judgements In preparing the consolidated ﬁnancial statements, the Directors have to make judgments on how to apply the Group's accounting policies and make estimates about the future. The Directors do not consider there to be any critical estimates or judgments that have been made in arriving at the amounts recognised in the consolidated ﬁnancial statements with the exception of the valuation of share-based payments. Please see Note 18 for further details. Notes forming part of the Consolidated Financial Statements continued BAY CAPITAL PLC27 4 Employees Staff costs, including Directors, consist of: 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ Wages and salaries 50,000 7,500 50,000 7,500 9 month Year ended period ended 31 December 31 December 2022 2021 Number Number The average number of employees, including Directors, during the year was: 2 2 5 Directors’ remuneration The Company Directors are considered the only key management personnel and their remuneration was as follows: 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ Directors’ emoluments 50,000 7,500 50,000 7,500 The Chairman’s fees are paid through Rise Rocks Limited, a Company wholly owned by the Chairman. 6 Operating proﬁt/(loss) 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ This has been arrived at after charging: Professional services 151,392 127,644 Listing expenses – 103,899 Fees payable to the Company’s independent auditor for the audit of the parent and consolidated accounts 22,000 22,000 7 Taxation 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ Jersey corporation tax Corporation tax on loss for the year – – Total taxation on loss on ordinary activities – – Notes forming part of the Consolidated Financial Statements continued 28BAY CAPITAL PLC Deferred tax assets are recognised to the extent that it is probable that taxable proﬁts will be available against which the deductible temporary differences and carry forward tax losses/credits can be utilised. Accordingly, the Group has not recognised deferred tax assets in respect of deductible temporary differences and carry forward tax losses as at 31 December 2022 and 31 December 2021 respectively, as it is not probable at year end that relevant taxable proﬁts will be available in future based on the current activities of the Group as a holding group. There are no expiry dates on these tax losses as at the year end. The unrecognised deferred tax asset is summarised below: Tax losses and unrecognised deferred tax asset carried forward 2022 2021 £ £ Cumulative temporary differences and carry forward tax losses 560,405 309,084 Unrecognised deferred tax asset on above at 10% (based on the enacted tax rate at the date of signing the ﬁnancial statements) 56,041 30,908 8 Earnings per share Earnings per share is calculated by dividing the loss after tax for the year by the weighted average number of shares in issue for the year, these ﬁgures being as follows: 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ Loss used in basic and diluted EPS, being loss after tax (251,321) (309,084) Adjustments: Share-based payment charge 10,979 3,249 Adjusted earnings used in adjusted EPS (240,342) (305,835) The Subco Incentive Scheme share options (Note 18) have not been included in the diluted EPS on the basis that they are anti-dilutive, however they may become dilutive in future periods. 9 month Year ended period ended 31 December 31 December 2022 2021 Number Number Weighted average number of ordinary shares of 1p each used as the denominator in calculating basic and diluted EPS 70,000,000 27,345,455 Earnings/(loss) per share Basic and diluted (0.36p) (1.13p) Adjusted – basic and diluted (0.34p) (1.12p) 9 Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) 9 month Year ended period ended 31 December 31 December 2022 2021 £ £ Loss before tax (251,321) (309,084) EBITDA loss (251,321) (309,084) Share-based payment charge 10,979 3,249 Adjusted EBITDA loss (240,342) (305,835) Notes forming part of the Consolidated Financial Statements continued BAY CAPITAL PLC29 10 Subsidiaries The Company directly owns the ordinary share capital of its subsidiary undertakings as set out below: Proportion of Proportion of A ordinary B ordinary Nature Country of shares held shares held Subsidiary of business incorporation by Company by Company Bay Capital Subco Limited Intermediate holding Jersey, Channel 100 per cent. 0 per cent. company Islands The address of the registered ofﬁce of Bay Capital Subco Limited (the "Subco") is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey. The Subco was incorporated on 31 March 2021. The A ordinary shares have full voting rights, full rights to participate in a dividend and full rights to participate in a distribution of capital. The B ordinary shares have been issued pursuant to the Company’s Subco Incentive Scheme. 11 Cash and cash equivalents 2022 2021 £ £ Cash and cash equivalents 6,458,073 6,720,238 6,458,073 6,720,238 12 Trade and other receivables 2022 2021 £ £ Prepayments 8,022 2,322 8,022 2,322 13 Trade and other payables 2022 2021 Current trade and other payables £ £ Accruals 53,522 69,645 53,522 69,645 14 Financial instruments The Group’s ﬁnancial assets and liabilities mainly comprise cash, and trade and other payables. The carrying value of all ﬁnancial assets and liabilities equals fair value given their short term in nature. Financial assets measured at amortised cost 2022 2021 £ £ Current ﬁnancial assets Cash and cash equivalents 6,458,073 6,720,238 6,458,073 6,720,238 Notes forming part of the Consolidated Financial Statements continued Financial liabilities measured at amortised cost 2022 202 1 £ £ Current ﬁnancial liabilities Accruals 53,522 69,645 53,522 69,645 Credit risk The Group's credit risk is wholly attributable to its cash balance. All cash balances are held at a reputable bank in Jersey. The credit risk from its cash and cash equivalents is deemed to be low due to the nature and size of the balances held. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its ﬁnancial obligations as they fall due. The Group’s approach to liquidity risk is to ensure that sufﬁcient liquidity is available to meet foreseeable requirements and to invest funds securely and proﬁtably. The following table details the contractual maturity of ﬁnancial liabilities based on the dates the liabilities are due to be settled: Financial liabilities: Less More than 1 year 2 to 5 Years than 5 years Total £ £ £ £ Accruals 53,522 – – 53,522 At 31 December 2022 53,522 – – 53,522 15 Share capital Allotted, called up and fully paid 2022 2021 2022 2021 Number Number £ £ Ordinary shares of 1p each: 70,000,000 70,000,000 700,000 700,000 At 31 December 70,000,000 70,000,000 700,000 700,000 On incorporation on 31 March 2021, the Company had an authorised share capital of £10,000.00 divided into 10,000 ordinary shares of par value of £1 each, of which one ordinary share was issued to each of the Founders. The two ordinary shares were each issued for consideration of £1.00 per share. On 19 August 2021, the Company sub-divided its share capital. Pursuant to the sub-division, the two ordinary shares of £1.00 each in the issued share capital of the Company were split into 200 ordinary shares. Following the sub-division, 180 ordinary shares were re-designated as deferred shares of par value £0.01 each. Following the sub-division and re-designation, the issued share capital of the Company was comprised of 20 ordinary shares and 180 deferred shares, and the Company had an authorised share capital of £10,000 divided into 999,800 ordinary shares of par value £0.01 each and 200 deferred shares of a par value £0.01 each. The deferred shares were redeemed and subsequently cancelled, with a capital redemption reserve created of equivalent value as per Note 16. On 19 August 2021, in accordance with article 5B of the Articles, the Company redeemed for nil consideration the deferred shares. Any amounts standing to the credit of any nominal or share premium account relating to deferred shares that were redeemed were credited to a capital reserve of the Company and are available for use in accordance with the Companies Law. 30BAY CAPITAL PLC Notes forming part of the Consolidated Financial Statements continued On 25 August 2021, the Company increased its authorised share capital to £700,000 and issued and allotted 29,999,980 ordinary shares at a price of £0.10 per ordinary share to the certain shareholders and investors, for aggregate consideration of £2,999,998 in cash. Immediately following this issue an allotment, the issued share capital of the Company was comprised of 30,000,000 ordinary shares. Pursuant to the IPO placing, 40,000,000 ordinary shares were issued and allotted at a price of £0.10 per ordinary share to certain new investors, for aggregate consideration of £4,000,000 in cash. Warrants with the right to subscribe for further ordinary shares in the Company were issued for every ordinary share subscribed for. Immediately following this issue and allotment, the Company’s issued share capital increased to 70,000,000 ordinary shares. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of the Company. 16 Reserves Share premium and retained earnings represent balances conventionally attributed to those descriptions. The transaction costs relating to the issue of shares was deducted from share premium. Capital redemption reserve includes amounts in relation to deferred shared capital. The Group having no regulatory capital or similar requirements, its primary capital management focus is on maximising earnings per share and therefore shareholder return. The Directors have proposed that there will be no ﬁnal dividend in respect of 2022 (2021: £Nil). 17 Share Incentive Plan On 14 September 2021, the Group created a Subco Incentive Scheme within its wholly owned subsidiary Bay Capital Subco Limited ("Subco"). Under the terms of the Subco Incentive Scheme, scheme participants are only rewarded if a predetermined level of shareholder value is created over a three to ﬁve year period or upon a change of control of the Company or Subco (whichever occurs ﬁrst), calculated on a formula basis by reference to the growth in market capitalisation of the Company, following adjustments for the issue of any new Ordinary shares and taking into account dividends and capital returns ("Shareholder Value"), realised by the exercise by the beneﬁciaries of a put option in respect of their shares in Subco and satisﬁed either in cash or by the issue of new ordinary shares at the election of the Company. Under these arrangements in place, participants are entitled to up to a share of 15 percent of the Shareholder Value created, subject to such Shareholder Value having increased by at least 10 percent. per annum compounded over a period of between three and ﬁve years from admission or following a change of control of the Company or Subco. 18 Share-based payments The Subco Incentive Scheme detailed in Note 17 is an equity-settled share option plan which allows employees and advisors of the Group to sell their B shares to the Company in exchange for a cash payment or for shares in the Company (at the Company’s election) if certain conditions are met. These conditions include good and bad leaver provisions and that growth in Shareholder Value of 10 percent compound per annum is delivered over a three to ﬁve year period for the scheme to vest. This second condition is therefore a market condition which has been taken into account in the measurement at grant date of the fair value of the options. The weighted average exercise price of the outstanding B share options is £0.10 which have a weighted average contractual life of 3 years 9 months. 110,000 B share options were issued in the nine-month period to 31 December 2021, all of which were outstanding at the current year end. No B share options were exercised in the current or prior period. No B share options have expired during the current or prior period. BAY CAPITAL PLC31 Notes forming part of the Consolidated Financial Statements continued Notes forming part of the Consolidated Financial Statements The Group recognised £10,979 (2021: £3,249) of expenditure statement of total comprehensive income in relation to equity-settled share-based payments in the year. The fair value of options granted during the period was determined by applying a binominal model. The expense is apportioned over the vesting period of the option and is based on the number which are expected to vest and the fair value of these options at the date of grant. The inputs into the binomial model in respect of options granted in the prior period are as follows: Opening share price 10.0p Expected volatility of share price 16.67% Expected life of options 5 years Risk-free rate 0.73% Target increase in share price per annum 10% Fair value of options 50.342p Expected volatility was estimated by reference to the average 5-year volatility of the FTSE SmallCap Index. The target increase in Shareholder Value is laid out in the Articles of Association of the Subco and represents the compounded target annual increase in market capitalisation (adjusted for capital raises and dividends) that needs to be met between the third and ﬁfth anniversary of the Group’s admission onto the London Stock Exchange in order for the scheme to vest. The Group did not enter into any share-based payment transactions with parties other than employees and advisors during the current or prior period. 19 Related party transactions Transactions with key management personnel Key management personnel comprise the Directors and executive ofﬁcers. The remuneration of the individual Directors is disclosed in the Report of the Directors. Other transactions – Group On 20 August 2021, the Company entered into an arm’s length strategic advisory agreement with Tessera Investment Management Limited, a Company which is a shareholder in the Company, pursuant to which Tessera has agreed to provide strategic and general corporate advice, and acquisition and capital raising transaction support services to the Company. Tessera was paid an initial transaction success fee of £50,000 (plus VAT) on admission for transaction management services provided to the Company in connection with admission and capital raising activities. From admission, Tessera continues to provide strategic advisory services to the Company, including general corporate advice, and acquisition and capital raising transaction support, and is entitled to be paid a ﬁxed monthly retainer fee of £5,000 (plus VAT) per month payable in arrears. A discretionary transaction success fee payable to Tessera may be agreed between the Company and Tessera with such payment payable on successful completion of an acquisition by the Company. As at 31 December 2022, Tessera was owed £6,302 (2021: £15,000 plus VAT) by the Company for accrued monthly retainer fees. 20 Post balance sheet events There are no events subsequent to the reporting date which would have a material impact on the ﬁnancial statements. 21 Contingent liabilities There are no contingent liabilities at the reporting date which would have a material impact on the ﬁnancial statements. 32BAY CAPITAL PLC 9 month Year ended period ended 31 December 2022 31 December 2021 £ £ Administrative expenses (253,635) (309,084) Operating loss (253,635) (309,084) Interest receivable 2,314 – Loss on ordinary activities before taxation (251,321) (309,084) Taxation charge – – Loss for the year/period (251,321) (309,084) All activities in both the current and the prior period relate to continuing operations. BAY CAPITAL PLC33 The notes on pages 36 to 38 form part of these ﬁnancial statements. Company Proﬁt and Loss For the year ended 31 December 2022 31 December 31 December 31 December 31 December 2022 2022 2021 2021 Note £ £ £ £ Non-current assets Investment in subsidiaries 3 10 10 Current assets Cash and cash equivalents 4 6,458,073 6,720,238 Trade and other receivables 5 8,022 2,322 6,466,095 6,722,560 Total assets 6,466,105 6,722,570 Current liabilities Trade and other payables 6 53,532 69,655 53,532 69,655 Total liabilities 53,532 69,655 Total net assets 6,412,573 6,652,915 Equity Issued share capital 7 700,000 700,000 Share premium 6,258,748 6,258,748 Capital redemption reserve 2 2 Share-based payment reserve 14,228 3,249 Retained deﬁcit (560,405) (309,084) Shareholders’ funds 6,412,573 6,652,915 The Company ﬁnancial statements were approved and authorised for issue by the Board on 27 April 2023 and were signed on its behalf by: David Williams Non-Executive Director 34BAY CAPITAL PLC The notes on pages 36 to 38 form part of these ﬁnancial statements. Company Balance Sheet As at 31 December 2022 Share- Capital based Share Share redemption payment Retained capital premium reserve reserves deﬁcit Total Note £ £ £ £ £ £ Balance at incorporation date 2 – – – – 2 Loss for the period – – – – (309,084) (309,084) Transactions with owners in their capacity as owners: Issue of new ordinary shares 7 699,998 6,298,748 2 – – 6,998,748 Ordinary share issue costs – (40,000) – – – (40,000) Share-based payment – – – 3,249 – 3,249 At 31 December 2021 700,000 6,258,748 2 3,249 (309,084) 6,652,915 Loss for the year – – – – (251,321) (251,321) Transactions with owners in their capacity as owners: Share-based payment – – – 10,979 – 10,979 At 31 December 2022 700,000 6,258,748 2 14,228 (560,405) 6,412,573 BAY CAPITAL PLC35 The notes on pages 36 to 38 form part of these ﬁnancial statements. Company Statement of Changes in Equity For the year ended 31 December 2022 36BAY CAPITAL PLC Notes forming part of the Company Financial Statements For the year ended 31 December 2022 1 Accounting policies The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in theses consolidated ﬁnancial statements. The principal policies adopted in the preparation of the company ﬁnancial statements are as follows: (a) Basis of preparation These ﬁnancial statements have been prepared in accordance with the requirements of FRS 101 “Reduced disclosure Framework”, the Financial Reporting Standard applicable in the UK and the requirements of the Companies (Jersey) Law 1991. The ﬁnancial statements are prepared on the historical cost basis. The comparative ﬁgures presented cover the nine-month period from incorporation on 31 March 2021 to 31December 2021. (b) Investments Investments in subsidiary undertakings are stated at cost unless, in the opinion of the Directors, there has been impairment to their value, in which case they are written down to their recoverable amount. (c) Functional and presentational currency The Company’s functional and presentational currency for these ﬁnancial statements is the pound sterling. (d) Going concern The Company was formed as an acquisition company to seek investment and acquisition opportunities in the industrial, construction and business services sectors, and software and technology companies which service those industries. The Directors, having made due and careful enquiry, are of the opinion that the Company has adequate working capital to execute its operations over the next 12months. The Company’s unaudited cash balance as at 21 April 2023 was £6,400,318, and excluding the consummation of any investment or acquisition which will likely require speciﬁc funding, has adequate resources available to fund the on-going forecasted operating expenses for at least twelve months following approval of the ﬁnancial statements. The Directors, therefore, have made an informed judgement, at the time of approving the ﬁnancial statements, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in preparing the annual ﬁnancial statements. (e) Financial assets and liabilities The Company’s ﬁnancial assets and liabilities comprise of cash and trade and other payables. Trade and other payables are not interest bearing and are stated at their amortised cost. (f) Taxation Current tax is the expected tax payable on the taxable income for the year. (g) Disclosure exemptions adopted In preparing these ﬁnancial statements the Company has taken advantage of disclosure exemptions conferred by FRS101. Therefore, these ﬁnancial statements do not include: l Certain disclosures regarding the Company's capital l A statement of cash flows l The effect of future accounting standards not yet adopted BAY CAPITAL PLC37 Notes forming part of the Company Financial Statements continued l The disclosure of the remuneration of key management personnel; and l Disclosure of related party transactions with other wholly owned members of the Group headed by Bay Capital Plc. In addition, and in accordance with FRS101 further disclosure exemptions have been adopted because equivalent disclosures are included in the consolidated ﬁnancial statements of Bay Capital Plc. These ﬁnancial statements do not include certain disclosures in respect of: l Share-based payments l Impairment of assets l Disclosures required in relation to ﬁnancial instruments and capital management (h) Judgements and key areas of estimation uncertainty In preparing the Company ﬁnancial statements, the Directors have to make judgments on how to apply the Company's accounting policies and make estimates about the future. The Directors do not consider there to be any critical estimates or judgments that have been made in arriving at the amounts recognised in the Company ﬁnancial statements. 2 Employees Staff costs, including Directors, consist of: 9 month Year ended period ended 31 December 2022 31 December 2021 £ £ Wages and salaries 50,000 7,500 50,000 7,500 9 month Year ended period ended 31 December 2022 31 December 2021 Number Number The average number of employees, including Directors, during the year was: 2 2 The Chairman’s fees are paid through Rise Rocks Limited, a Company wholly owned by the Chairman. 3 Investment in subsidiaries Shares in subsidiary undertakings £ Cost and net book value At 31 December 2021 and 31 December 2022 10 Details of the Company’s subsidiaries are shown in Note 10 of the consolidated ﬁnancial statements. 4 Cash and cash equivalents 2022 2021 £ £ Cash and cash equivalents 6,458,073 6,720,238 6,458,073 6,720,238 38BAY CAPITAL PLC Notes forming part of the Company Financial Statements continued 5 Trade and other receivables 2022 2021 £ £ Prepayments 8,022 2,322 8,022 2,322 All amounts shown under receivables fall due for payment within one year. 6 Trade and other payables 2022 2021 £ £ Amounts due to subsidiary undertakings 10 10 Accruals 53,522 69,645 53,532 69,655 Amounts due to subsidiary undertakings are interest-free and repayable on demand. 7 Share capital Allotted, called up and fully paid 2022 2021 2022 2021 Number Number £ £ Ordinary shares of 1p each 70,000,000 70,000,000 700,000 700,000 For the full details of the share capital movements in the year, please see Note 15 of the consolidated ﬁnancial statements. 8 Related party transactions Transactions with other Group companies have not been disclosed as permitted by FRS101, as the Group companies are wholly owned. 9 Contingent liabilities There are no contingent liabilities at the reporting date which would have a material impact on the ﬁnancial statements. 10 Post balance sheet events There are no events subsequent to the reporting date which would have a material impact on the ﬁnancial statements. 11 Ultimate controlling party In the opinion of the Directors, there is no single ultimate controlling party. 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