Annual Report • Sep 30, 2019
Annual Report
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Registered number: 11554014
| Page | |
|---|---|
| Company Information | 1 |
| Chairman's Statement | 2 |
| Board of Directors | 3 |
| Strategic Report | 4 - 7 |
| Directors' Report | 8 - 12 |
| Directors' Remuneration Report | 13 - 14 |
| Directors' Responsibilities | 15 - 16 |
| Independent Auditor's Report | 17 - 20 |
| Statement of Comprehensive Income | 21 |
| Statement of Financial Position | 22 |
| Statement of Changes in Equity | 23 |
| Statement of Cash Flows | 24 |
| Notes to the Financial Statements | 25 - 32 |
| Directors | Min Yang (Non-Executive Chairman) |
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|---|---|---|
| Geoffrey Baker (Non-Executive Director) |
||
| Company Secretary | Geoffrey Baker | |
| Registered Office | Locke Lord (UK) LLP 201 Bishopsgate London, EC2M 3AB |
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| Registered Number | 11554014 | |
| Financial Advisers | South China Financial (UK) Ltd 1/F, 13 Regent Street St. James's, London, SW1Y 4LR |
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| Auditors | PKF Littlejohn LLP 15 Westferry Circus London, E14 4HD |
|
| Legal Advisers | Locke Lord (UK) LLP 201 Bishopsgate London, EC2M 3AB |
|
| Principal Bankers | Bank of China (UK) Limited 1 Lothbury London, EC2R 7DB |
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| Registrars | Share Registrars Limited The Courtyard, 17 West Street Farnham, Surrey, GU9 7DR |
I have great pleasure in presenting our maiden Annual Report as a public company. BSF Enterprise plc ("BSF" or the "Company") was incorporated on 5 September 2018. Following an initial private funding round of £50,000 in the period ended 30 September 2019, the Company raised £767,000 before expenses in an initial public offering on the Main Market of the London Stock Exchange (the "IPO").
We formed BSF in order to undertake the acquisition of a controlling interest in a company or business (an "Acquisition"), most likely in the technology and marketing the experience of the Company's board of Directors and advisers. Any Acquisition is expected to constitute a reverse takeover transaction and consideration for the Acquisition may be in whole in the form of share-based consideration or funded from the Company's existing cash resources or the raising of additional funds. Following completion of an Acquisition, the objective of the Company will be to add value to the acquired business or asset through the deployment of capital with a view to generating value for its shareholders.
In the context of this challenging capital raising environment. I believe that BSF represents an extremely attractive proposition to prospective Acquisition counterparties considering listing on the London Stock Exchange and I remain confident that we will be able to execute an Acquisition that creates value for our shareholders.
The strong support that we received during our IPO has resulted in a shareholder register which includes a number of high net worth individuals. Our low operating cost model means we retain a strong balance sheet with £552,202 of cash, a clean capital structure and an experienced board of Directors and adviser team.
Whilst the Board has a desire to complete an acquisition in a timely manner and take advantage of current market dynamics, we will not compromise in our approach of securing attractive commercial terms and completing the appropriate detailed and systematic technical, legal and financial due diligence. We are, however, cognisant that we must marry our own rigorous investment criteria with a transaction that will command support from across the broader investment market.
We believe that this approach provides the best opportunity to identify and, where possible, mitigate any risks, whilst delivering the overarching strategy of executing a transaction that creates value for our shareholders.
I look forward to reporting our progress to you over the coming months.
Yours Sincerely
Min Yang Chairman
Ms. Yang has extensive business connections in the Asia Pacific region including greater China, and has over 20 years of hands-on experience dealing with both private and state-run businesses in China. Over the years, Min Yang has proven her unique business insight and expertise in the identification, incubation and realisation of embryonic opportunities in the resources, commodities, trading and residential estate and financial investment sectors.
Min Yang has commercialised numerous innovations in the telecommunications industry including building an Australasian telecommunications delivery company between China and Australia. Further she has helped develop, market and commercialise high-performance engine technologies now being developed in China as an auxiliary power unit for electric engines.
Ms Yang is currently the Executive Chairman of ASF Group Ltd (ASX: AFA) and Non-executive Chair of ActivEX Limited (ASX: AIV), Rey Resources Limited (ASX: REY) and Non-executive Director of Key Petroleum Limited (ASX: KEY).
Mr Baker is a qualified lawyer in Australia and Hong Kong with a Commerce degree (Accounting and Financial Management), a Law degree and Master of Business Administration (MBA).
Mr Baker has extensive corporate and commercial legal and property expertise developed over 36 years of practising law and representing companies in Australia, China, Japan and recently UK and Europe. Mr Baker has also co-authored a number of books including the critically acclaimed book "Think Like Chinese" first released in June 2008 (Federation Press, 2008). Mr Baker has commercialised a number of innovations including bio-medical apparatus for sleep-apnoea as well as high-performance engine technology now being developed in China as an auxiliary power unit for electric engines. He is also a Director of Redstrike Group Ltd, a sports marketing company in the UK, which promotes and markets various sports events and activities and sports related technologies world-wide.
Mr Baker is currently also the Non-Executive Director of ASF Group Ltd (ASX: AFA), Rey Resources Limited (ASX: REY), ActivEX Limited (ASX: AIV) and Key Petroleum Limited (ASX: KEY).
None of the Directors are considered to be "independent" (using the definition set out in the Corporate Governance Code). It is intended that additional Directors, both executive and non-executive, will be appointed at the time of the Acquisition and that independence will be one of the factors taken into account at that time.
In order to preserve the Net Proceeds of the Placing for the purposes of applying such funds towards an Acquisition, each of the Non-Executive Directors have agreed to not be remunerated until such time as an Acquisition is completed. None of the Non-Executive Directors have received any remuneration or other benefits from the Company.
The Company has undertaken a business review and considered its future developments. Details of this have been included within the Chairman's Statement.
The Company has been created to consider opportunities within the innovation marketing and technology sector. The Company is seeking an Acquisition target that focuses on trade innovation, data-driven analytics and technology to maximise sales and assist companies to enter new markets. The Company seeks an Acquisition target within the innovation marketing and technology sector that uses its trade innovation and data to assist its customer base with the development of brands, products and services, marketing campaigns or improvement of products and services. The Acquisition target would need to be experienced in matters such as planning digital campaigns to reach the right customers (whether in China or elsewhere), market research, creative agency work, and being able to understand how such customers browse, source information and purchase goods or services. In particular, the initial focus will be to concentrate on Acquisition opportunities of companies or businesses with innovative marketing solutions and which have a marketing strategy or product or technology that has potential to disrupt an existing market.
The Directors have identified the following as the key risks facing the business:
The Company may acquire either less than whole voting control of, or less than a controlling equity interest in, a target, which may limit the Company's operational strategies and reduce its ability to enhance shareholder value.
The Company may be unable to fund the operations post acquisition of the target business if it does not obtain additional funding, however, the Company will ensure that appropriate funding measures are taken to ensure minimum commitments are met.
The Company is dependent on the Directors to identify potential acquisition opportunities and to execute an acquisition.
The Directors are not obliged to commit their whole time to the Company's business; they will allocate a portion of their time to other businesses which may lead to the potential for conflicts of interest in their determination as to how much time to assign to the Company's affairs.
The Company's business strategy is dependent on the ability of the Directors to identify suitable acquisition opportunities. If the Directors do not identify a suitable acquisition target, the Company may not be able to fulfil its objectives. Furthermore, if the Directors identify a suitable target, the Company
may not acquire it at a suitable price or at all. In addition identified and subsequently aborted, the Company may be left with substantial transaction costs.
Although the Company and the Directors will evaluate the risks inherent in a particular target, they cannot offer any further assistance that all of the significant risk factors can be identified or properly assessed. Furthermore, no assurance can be made that an investment in Ordinary Shares in the Company will ultimately prove to be more favourable to investors then a direct investment, if such an opportunity were available, in a target business.
In March 2017, the UK officially triggered Article 50 and notified the EU of its intention to leave the EU following the UK's June 2016 referendum vote (commonly known as Brexit). The triggering of Article 50 begins the process of withdrawal from the EU. In November 2018, the UK and the 27 other countries involved in Brexit negotiations, agreed upon the terms of a withdrawal agreement and includes a transitional period until 31 December 2020, during which EU law will continue to apply in and to the UK. The withdrawal agreement was signed in January 2020, however the UK and the EU will need to negotiate the exact details of the exit and a subsequent trade deal and therefore the impact on the exit and any trade deal is uncertain at this time and the board will continue to monitor its progress.
The Directors expect to rely on external advisors to help identify and assess potential acquisitions and there is a risk that suitable advisors cannot be placed under contract or that such advisors that are contracted fail to perform as required.
There is no guarantee that the Company will be able to obtain any additional financing needed to either complete an acquisition or to implement its plans post acquisition or, if available, to obtain such financing on terms attractive to the Company. In that event, the Company may be compelled to restructure or abandon the acquisition or proceed with the acquisition on less favourable terms, which may reduce the Company's return on the investment. The failure to secure additional financing on acceptable terms could have a material adverse effect on the continued development or growth of the Company and the acquired business.
Following an Acquisition, the Company will be dependent on the income generated by the acquired business or from the subsequent divestment of the acquired business to meet the Company's expenses. If the acquired business is unable to provide sufficient amounts to the Company, the Company may be unable to pay its expenses or make distributions on the Ordinary Shares.
In certain jurisdictions, there may be legal, regulatory or practical restrictions on the Company using its Ordinary Shares as a consideration for an acquisition, which may mean that the Company is required to provide alternative forms of consideration. Such restrictions may limit the Company's acquisition opportunities or make a certain acquisition more costly, which may have an adverse effect on the results of operations of the Company.
At this stage in its development, the Company is focusing on the evaluation of various opportunities in the marketing and technology sector. As and when the Company executes its first substantial acquisition, financial, operational, health, safety, and environmental KPIs will become more relevant and reported upon as appropriate. As a result, the Directors are of the opinion that, other than the maintenance of cash and cash equivalents, analysis using KPI's is not appropriate for an understanding of the business at this time.
Cash and cash equivalents
2019 £552,202
A split of our Directors, senior managers and employees by gender at the end of the financial year is as follows:
Male - 1
Female - 1
The Board recognises the need to operate a gender diverse business, and they will ensure this is implemented following an acquisition. The Board will also ensure any future employment takes into account the necessary diversity requirements and compliance with all employment law. The Board has experience and sufficient training/qualifications in dealing with such issues to ensure they would meet all requirements. More detail will be disclosed in the future annual reports once the Company complete an acquisition.
This will become more relevant once the Company makes an acquisition.
The Company aims to conduct its business with honesty, integrity and openness, respecting human rights and the interests of shareholders and employees. The Company aims to provide timely, regular and reliable information on the business to all its shareholders and conduct its operations to the highest standards.
The Company strives to create a safe and healthy working environment for the wellbeing of its staff and to create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Company.
The Company aims to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which we operate. Through maintaining good communications, members of staff are encouraged to realise the objectives of the Company and their own potential.
This will become more relevant once the Company makes an acquisition. The Board contains personnel with a good history of running businesses that have been compliant with all relevant laws and regulations and there have been no instances of non-compliance in respect of environment matters.
The Company's policy is to minimize the risk of any adverse effect on the environment associated with its activities with a thoughtful consideration of such key areas as energy use, pollution, transport, renewable resources, health and wellbeing. The Company also aims to ensure that its suppliers and advisers meet with their legislative and regulatory requirements and that codes of best practice are met and exceeded.
This report was approved by the Board of Directors on 31 January 2020 and signed on its behalf by:
Geoffrey Baker Director
The Directors present their Annual Report together with the financial statements of the Company for the period ended 30 September 2019.
An indication of the likely future developments in the business of the Company is included in the Strategic Report and Chairman's Statement.
The Company was formed to undertake an acquisition of a controlling interest in a Company or business in the technology and marketing sector.
The results for the period are set out in the Statement of Comprehensive Income. The Directors do not recommend the payment of a dividend on the Ordinary Shares.
An explanation of the Company's financial risk management objectives, policies and strategies and information about the use of financial instruments by the Company is given in note 11 to the financial statements.
The Company was incorporated on 5 September 2018 under the UK Companies Act 2006.
Details of the current issued share capital of the Company are set out in note 10 to the financial statements. £203,400.02 of Ordinary Shares in nominal value are in issue (divided into 20,340,002 issued Ordinary Shares of 1p each).
All of the issued Ordinary Shares are in registered form, and capable of being held in certificated or uncertificated form. The Registrar will be responsible for maintaining the share register. Temporary documents of title will not be issued. The ISIN number of the Ordinary Shares is GB00BHNBDQ51. The SEDOL number of the Ordinary Shares is BHNBDQ5.
The Directors of the Company during the period were as follows:
Geoffrey Baker Min Yang
As at 30 September 2019, the beneficial interests of the Directors and their connected persons in the ordinary share capital of the Company was as follows:
| Director | Number of Ordinary Shares |
% of Ordinary Share Capital |
|
|---|---|---|---|
| Geoffrey Baker | 0.00% | ||
| Min Yang | 5,000,001 | 24.58% |
Min Yang indirectly holds 5,000,000 Ordinary Shares through Advance Plan Investments Ltd, a company of which she is the sole shareholder and Director and a further 1 Ordinary Share held directly in her own name.
No Director currently has any share options and no share options were granted to or exercised by a Director in the reporting period.
The following had interests of 3 per cent or more in the Company's issued share capital as at 24 January 2020.
| Party Name | Number of Ordinary Shares |
% of Ordinary Share Capital |
|
|---|---|---|---|
| Trade Hero Holdings Ltd | 6,000,000 | 29.50% | |
| Advance Plan Investments Ltd* | 5,000,000 | 24 58% | |
| Business Victor Investments Ltd | 2,400,000 | 11.80% | |
| Forever Grand Group Ltd | 1,000,000 | 4.92% | |
| Walter Yiu-Kwong Hui | 900,000 | 4.42% | |
| Fai-Yue Lam | 900,000 | 4.42% | |
| Yue-Ming Pan | 800,000 | 3.93% | |
| Shi-Ming Chen | 800.000 | 3.93% | |
| Daniel Yuan Fang | 800,000 | 3.93% | |
| Qi Sai | 800,000 | 3.93% | |
| Shi Peng Chen | 800,000 | 3.93% | |
* Min Yang is the Director and sole shareholder of Advance Plan Investments Ltd.
Prior to a Placing, on 15 January 2019, the Company raised £50,000 pursuant to the Subscription of the Subscription Shares by the Subscribers.
The Company has raised an additional gross proceeds of £767,000 from the Placing. The Directors believe that, following an Acquisition, further equity capital raisings may be required by the Company for working capital purposes as the Company pursues its objectives going forward. Given that the anticipated operating costs of the Company have been minimal, the Company did not require further funding in the first 12 months.
It is intended that the purchase price for any potential Acquisition will be satisfied by way of share and/or cash consideration which will leave cash available for working capital purposes. However, whether a further equity raising will be required and the amount of such raising will depend on the nature of the Acquisition opportunities which arise and the form of consideration the Company uses to make an Acquisition which cannot be determined at this time.
The Directors have been given authority to issue Ordinary Shares free of pre-emption rights for the purposes of or in connection with (i) the Subscription Shares, (ii) the Placing, (iii) generally for such purposes as the Directors may think fit, an aggregate amount not exceeding 10 per cent. of the aggregate nominal value of Ordinary Shares in issue (as at the close of the first Business Day following Admission), and (iv) for the purposes of issues of securities offered to existing holders of Ordinary Shares on a pro rata basis. Otherwise, shareholders will have statutory pre-emption rights will generally apply in respect of future issues of Ordinary Shares for cash. No pre-emption rights exist in respect of future share issues wholly or partly other than for cash.
The Company expects that any returns for shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy.
The Company has not obtained any third party indemnity for its Directors.
As a company with a Standard Listing the Company is not required to comply with the provisions of the UK Corporate Governance Code. Nevertheless, the Directors, who are all Non-Executive Directors are committed to maintaining high standards of corporate governance and propose, so far as is practicable given the Company's size and nature, to voluntarily adopt and comply with the QCA Code. However at present, due to the size of the Company, the Directors acknowledge that adherence to certain other provisions of the OCA Code may be delayed until such time as the Directors are able to fully adopt them post Acquisition. In particular, action will be required in the following areas:
The Directors are responsible for internal control in the Company and for reviewing effectiveness. Due to the size of the Company, all key decisions are made by the Directors have reviewed the effectiveness of the Company's systems during the period under review and consider that there have been no material losses, contingencies or uncertainties due to weaknesses in the controls.
Details of the Company's business model and strategy are included in the Chairman's Statement and Strategic Report.
The Board sets the Company's strategy, ensuring that the necessary resources are in place to achieve the agreed priorities. It is accountable to shareholders for the creation and delivery of long term shareholder value. To achieve this, the Board directs and monitors the Company's affairs within a framework of control which enables risk to be reviewed and managed effectively.
The core activities of the Board are carried out in scheduled meetings and regular reviews of the business are conducted. Additional meetings and conference calls are arranged to consider matters which would require discussions outside of scheduled meetings. The Directors maintain frequent contact with each other to discuss issues of concern and keep them fully briefed to the Company's operations. All Directors attended all Board meetings held.
A Director has a duty to avoid a situation in which they have, a direct or indirect interest that conflicts, or possibly may conflict with the interest of the Company. The Board has satisfied itself that there is no compromise to the independence of those Directors' who have appointments on the Board of, or relationship with, companies outside of the Company. The Board requires the Directors to declare all appointments to the situation which would result in a conflict of interest.
The Company currently has no trade or employees other than the Directors. Therefore, the Company has minimal carbon or greenhouse gas emissions as it is not practical to obtain emissions data at the stage. It does not have responsibility for any emissions producing sources under the Companies Act 2006.
The Company promotes a policy for the creation of equal and ethnically diverse employment opportunities including with respect to gender. The Company promotes and encourages employee involvement wherever practical as it recognises employees as a valuable asset and is one of the key contributions to the Company's success.
The Company is not regulated by the FCA or any financial services or other regulator. With effect from Admission the Company is subject to the Listing Rules and the Disclosure Guidance and Transparency Rules (and the resulting jurisdiction of the UK Listing Authority), to the extent such rules apply to companies with a Standard Listing pursuant to Chapter 14 of the Listing Rules.
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Further details are given in Note 2 to the financial statements. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
The Directors confirm that:
The auditors, PKF Littlejohn LLP were appointed by the Directors' on 21 November 2019, and have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the Annual General Meeting.
Approved on behalf of the Board of Directors by:
Geoffrey Baker Director
Date: 31 January 2020
Until an Acquisition is made the Company will not have a separate remuneration committee. The Board will instead periodically review the quantum of Directors' fees, taking into account the interests of shareholders and the performance of the Company and the Directors. Following the completion of an Acquisition, the Board intends to put in place a remuneration committee.
The items included in this report are unaudited unless otherwise stated.
The Directors who held office at 30 September 2019 and who had beneficial interests in the Ordinary Shares of the Company are summarised as follows:
| Name of Director | Position |
|---|---|
| Geoffrey Baker | Non-Executive Director |
| Min Yang | Non-Executive Chairman |
Min Yang and Geoffrey Baker have each been appointed by the Company pursuant to letters of appointment dated 18 July 2019 for a period of 12 months and thereafter subject to termination by either party on three months' notice. The Non-Executive Directors have each agreed to not be remunerated until such time as an Acquisition is completed. The Non-Executive Directors have agreed to commit an equivalent of at least one day a month to the Company. The Non-Executive Directors are not entitled to any other benefits other than the reimbursement of their reasonable expenses. The letters of appointment are governed by English law.
The Company expects that any returns for shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy set out below.
The Company intends to pay dividends on the Ordinary Shares following an Acquisition at such times (if any) and in such amounts (if any) as the Board determines appropriate in its absolute discretion. Prior to an Acquisition it is unlikely that the Company will have any earnings but to the extent the Company has any earnings it is the Company's current intention to retain any such earnings for use in its business operations, and the Company does not anticipate declaring any dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws.
There was no Directors' remuneration or pension contribution throughout the year.
In order to preserve the Net Proceeds of the Placing for the purposes of applying such funds towards an Acquisition, each of the Non-Executive Directors have agreed to not be remunerated until such time as an Acquisition is completed. None of the Non-Executive Directors have received any remuneration or other benefits from the Company.
The Directors who served during the period ended 30 September 2019, and their interests at that date, are disclosed on Page 9. There were no changes between the reporting date and the date of approval of this report.
The Board considers shareholder feedback received. This feedback, plus any additional feedback received from time to time, is considered as part of the Company's annual policy on remuneration.
The Company may from time to time seek to review salary levels of Directors, taking into account performance, time spent in the role and market data for the relevant role. It is not intended that there will be any salary review prior to completion of an Acquisition.
It is not intended that there will be any new appointments to the Board until an Acquisition is completed. Following completion of an Acquisition, it is intended that a full review of the Board will take place.
The Company does not currently have any annual or long-term incentive schemes in place for any of the Directors and therefore there are no disclosures in this respect.
The Company does not have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors.
Approved on behalf of the Board of Directors by;
Geoffrey Baker Director
Date:
31 January 2020
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. 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 the affairs of the Company and of the profit or loss for that period.
In preparing these financial statements, the Directors are also required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors are responsible for preparing the Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Financial Reporting Standards as adopted by the European Union.
Each of the Directors, whose names and functions as listed in the Board of Directors confirm that, to the best of their knowledge:
Approved on behalf of the Board of Directors by;
Geoffrey Baker Director
Date: 31 January 2020
We have audited the financial statements of BSF Enterprise plc (the 'Company') for the period ended 30 September 2019 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entitles, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
Materiality for the Company financial statements as a whole was set at £27,000, with performance materiality set at £18,900.
Materiality has been calculated as 5% of the benchmark of net assets, which we have determined, in our professional judgement, to be the key principal benchmark within the financial statements relevant to members of the Company in assessing financial performance. As the Company has yet to acquire a controlling interest in a company or business, the key focus of the Company is to maintain cash levels in order to use this resource to carry out a future acquisition.
We agree to report to those charged with governance all misstatements we identified through our audit with a value in excess of £1,350. We also agreed to report other audit misstatements below that threshold that we believe warrant reporting on qualitative grounds.
In designing our audit, we determined materiality, and assessed the risk of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgements. We also addressed the risk of management override of internal controls, including evaluation whether there was evidence of bias by the Directors that representation a risk of material misstatement due to fraud.
We have determined that there are no key audit matters to communicate in our report.
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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
In our opinion the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
We were appointed by the board on 21 November 2019 to audit the financial statements for the period ending 30 September 2019. Our total uninterrupted period of engagement is 1 year.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussions with the Directors. We considered the extent of compliance with those laws and regulations as part of our audit procedures on the related financial statement items. We communicated identified laws and regulations throughout our audit team and remained alert to indications of non-compliance throughout the audit. As with any audit, there remained a higher risk of non-detection of irregularities, as these may have involved collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Our audit opinion is consistent with the additional report to the audit committee.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Joseph Archer (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor
15 Westferry Circus Canary Wharf London E14 4HD
| Note | From 5 September 2018 to 30 September 2019 f |
|
|---|---|---|
| Continuing operations | ||
| Listing expenses Administrative expenses |
5 | (67,020) (27,378) |
| Loss before taxation | 4 | (94,398) |
| Taxation | 6 | |
| Loss for the year | (94,398) | |
| Other comprehensive loss for the year | ||
| Total comprehensive loss for the year attributable to the equity owners |
(94,398) | |
| Earnings per share | ||
| Basic and diluted (pence per share) | 7 | (1.59) |
There are no items of other comprehensive income.
The notes to the financial statements form an integral part of these financial statements.
| Note | 2019 f |
|
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | 8 | 552,202 |
| Total current assets | 552,202 | |
| Total assets | 552,202 | |
| Equity and liabilities | ||
| Capital and reserves | ||
| Share capital | 10 | 203,400 |
| Share premium | 10 | 407,984 |
| Retained deficit | (94,398) | |
| Total equity | 516,986 | |
| Liabilities | ||
| Current liabilities | ||
| Other payables | 9 | 35,216 |
| Total liabilities | 35,216 | |
| Total equity and liabilities | 552,202 |
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the Board of Directors and authorised for issue on 31 January 2020 and signed on its behalf by;
Geoffrey Baker Director
Registered number: 11554014
| f | Share capital Share premium £ |
Retained deficit f |
Total f |
|
|---|---|---|---|---|
| Comprehensive income for the period |
||||
| Loss during the period | (94,398) | (94,398) | ||
| Total comprehensive loss for the period Transactions with |
(94,398) | (94,398) | ||
| owners | ||||
| Shares issued on incorporation |
1 | 1 | ||
| Issue of new Ordinary Shares |
203,399 | 613,600 | 816,999 | |
| Share issue costs | (205,616) | (205,616) | ||
| As at 30 September 2019 |
203,400 | 407,984 | (94,398) | 516,986 |
The notes to the financial statements form an integral part of these financial statements.
| Note Cash flow from operating activities |
From 5 September 2018 to 30 September 2019 t |
|---|---|
| Operating loss | (94,398) |
| Changes in working capital: | |
| 9 Increase in trade and other payables |
35,216 |
| Net cash generated (used in)/from operating activities | (59,182) |
| Cash flows from financing activities | |
| Proceeds from issue of shares, net of issue costs | 611,384 |
| Net cash generated from financing activities | 611,384 |
| Increase in cash and cash equivalents | 552,202 |
| Cash and cash equivalents at beginning of the 8 period |
|
| 8 Cash and cash equivalents at end of the period |
552,202 |
No net debt reconciliation is provided as the Company has no debt.
The notes to the financial statements form an integral part of these financial statements.
The Company is a public limited liability company, listed on the London Stock Exchange, incorporated and registered in England and Wales on 5 September 2018 with registered company number 11554014.
The principal activity of the Company is to consider opportunities within the innovation marketing and technology sector. The Company is seeking an Acquisition target that focuses on trade innovation, data-driven analytics and technology to maximise sales and assist companies enter new markets. The address of the registered office is c/o Locke Lord (UK) LLP, 201 Bishopsgate, London, EC2M 3AB.
This was the Company's first year of operations and the accounting period runs from incorporation on 5 September 2018 to 30 September 2019.
The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC interpretations as adopted for by the European Union, and effective, or issued and early adopted, as at the date of these statements. The financial statements have been prepared using the historical cost basis for each type of asset, liability, income and expense. No fair value adjustments have been applied in the preparation of the Company Financial Information.
The financial statements are presented in British Pounds Sterling, the currency of the primary economic environment in which the Company operates and its functional currency.
The financial statements are presented in £ unless otherwise stated.
At the date of authorisation of this financial information, the Directors have reviewed the Standards in issue by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"), which endorsed by the European Union and which are effective for annual accounting periods beginning on or after the stated effective date. IFRS 16 "Leases" is the only such standard. In the view of the Directors, this standard will not have a material impact on the financial reporting of the Company, as currently the Company has no lease agreements in place. This may change should an acquisition occur.
These financial statements have been prepared on a going concern basis, which assumes that the Company will continue to be able to meet its liabilities as they fall due for the foreseeable
future. The Company meets its day to day working capital requirements through existing cash reserves. The Directors have prepared projected cash flow information for a period of at least twelve months from the date of their approval of the financial statements. On the basis of this cash flow information, the Directors consider that the Company will continue to operate without the need for additional financing whilst it identifies and completes suitable transaction opportunities. When a suitable transaction is identified, the Directors will consider the need for further funding to complete the transaction. Therefors consider it appropriate to prepare the financial statements on a going concern basis.
No comparative figures have been presented as the Company Financial Information covers the period from incorporation on 5 September 2018.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
The chief decision-maker believes that the Company's continuing operations comprise one segment being identifying and acquiring investment projects. The financial information therefore of the single segment is the same as that set out in the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flows.
The Company considers any cash on short-term deposits and other short term investments to be cash equivalents.
The Company considers the credit ratings of banks in which it holds funds in order to reduce its exposure to credit risk. The Company will only keep its holdings of cash and cash equivalents within institutions which have a strong credit rating.
Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to profit or loss. except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Financial assets and financial liabilities are recognised on the statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an effective yield basis.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire.
Basic earnings per share is calculated by dividing:
· The loss attributable to owners of the Company, excluding any costs of servicing equity other than Ordinary Shares;
· By the weighted average number of Ordinary Shares outstanding during the financial period.
The preparation of financial statements in conformity with IFRS as adopted by the European Union requires management to make estimates and assumptions that affect the reported amounts of income, expenditure, assets and liabilities. Estimates and judgements are continually evaluated, including expectations of future events to ensure these estimates to be reasonable.
The Directors consider that there are no critical accounting judgements or estimates relating to the financial information of the Company.
The loss before income tax is stated after charging:
| 2019 | |
|---|---|
| Fees payable to the Company's auditors - Audit of the Company's annual accounts |
18,000 |
During the period from incorporation on 5 September 2018 to 30 September 2019, the Company incurred £9,300 of accounting fees, £18,000 of audit fees and £78 in bank charges.
Corporation tax is calculated at 19% of the estimated taxable profit for the period.
The charge for the period can be reconciled to the loss in the Statement of Comprehensive Income as follows:
| 2019 ਜੋ |
|
|---|---|
| Loss before tax on continuing operations | (94,398) |
| Tax at the UK corporation tax rate of 19% | (17,936) |
| Tax losses carried forward | 17,936 |
| Tax charge for the period | |
The Company has accumulated tax losses of £94,398. No deferred tax asset was recognised in respect of these accumulated tax losses as there is insufficient evidence that the amount will be recovered in future years.
The calculation of earnings per share is based on the following loss and number of shares:
| 2019 | |
|---|---|
| Loss for the period from continuing operations | £94,398 |
| Weighted average shares in issue | 5,940,616 |
| Earnings per share (in pence) | (1.59p) |
Basic earnings per share is calculated by dividing the loss for the period from continuing operations of the Company by the weighted average number of Ordinary Shares in issue during the period. There are no potential dilutive shares in issue.
| 2019 ಕೆ |
|
|---|---|
| Cash at Bank | 552,202 |
| 2019 ಕ್ಕೆ |
|
|---|---|
| Current: | |
| Trade payables | 7,916 |
| Accruals | 27,300 |
| 35,216 |
| Number of shares |
Share capital ਜੋ |
Share premium ੱ |
|
|---|---|---|---|
| Issued and fully paid Ordinary shares of £0.01 each | |||
| At 30 September 2019 | 20,340,002 | 203,400 | 407.984 |
The Company was incorporated on 5 September 2018. On incorporation, two Ordinary Shares of £0.01 par value were issued at par. On 15 January 2019, a further 5,000,000 Ordinary Shares of £0.01 par value were issued at par for cash consideration of £50,000. On 26 July 2019, 15,340,000 new Ordinary Shares were issued at the Placing £0.05, pursuant to the Placing. This totalled further cash consideration of £767,000. Expenditure relating to the new share issue totalling £205,616 was subsequently deducted from share premium.
The Company's principal financial instruments comprise cash and cash equivalents and other payables. The Company's accounting policies and method adopted, including the criteria for recognition, the basis on which income and expenses are recognised in respect of each class of financial assets, financial liability and equity instrument are set out in note 2. The Company does not use financial instruments for speculative purposes.
The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows:
| 2019 ਜੇ |
|
|---|---|
| Financial assets | |
| Cash and cash equivalents | 552,202 |
| Financial liabilities at amortised cost | |
| Trade payables and accruals | 35,216 |
The Company's major financial instruments include bank balances and amounts payable to suppliers. The risks associated with these financial instruments, and the policies on how to mitigate these risks are set out below. The Directors manage and monitor these exposures to ensure appropriate measures are implemented on a timely and effective manner.
The Company has no foreign currency transactions or borrowings, therefore it is not exposed to market risk in respect of foreign exchange risk or interest risk.
Risk management is undertaken by the Board of Directors.
Liquidity risk arises from the Company's management of working capital.
The Company regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations. The Directors have considered the liquidity risk as part of their going concern assessment (see note 2). Controls over expenditure are carefully managed in order to maintain its cash reserves whilst it targets a suitable transaction. Financial liabilities are all due within one year.
The Company's credit risk is wholly attributable to its cash balance. The credit risk from its cash and cash equivalents is limited because the counter parties are banks with high credit ratings and have not experienced any losses in such accounts.
The Company's exposure to interest rate risk is the interest received on the cash held, which is immaterial.
The Company's objectives when managing capital is to safeguard the Company's ability to continue as a going concern, in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure. The Company has no borrowings, In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company monitors capital on the basis of the total equity held being £516,986 as at 30 September 2019.
There are no material differences between the fair value of the Company's financial assets and liabilities and their carrying values in the financial information.
There were no subsequent events after the reporting period.
Geoff Baker and Min Yang are Directors of both BSF Enterprise plc and BSF International Limited.
During the year, an amount of £50,000 was received from BSF International Limited in respect of amounts received on the issue of shares in BSF International plc, which were held in Escrow until the BSF Enterprise plc bank account was open.
Key management are considered to be the Directors and there was no Directors Remuneration for the year, as stated in the Directors Remuneration Report.
There is no ultimate controlling party of the Company.
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