TIDMFPP
RNS Number : 4091N
Fragrant Prosperity Holdings Ltd
30 September 2021
30 September 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR
JAPAN.
FRAGRANT PROSPERITY HOLDINGS LIMITED
("FPP" or "the Company")
Fragrant Prosperity Holdings Limited (LSE: FPP) announces its
audited annual financial results for the financial year ended 31
March 2021.
Chairman's statement for the financial year ended 31 March
2021
I have pleasure in presenting the financial statements of
Fragrant Prosperity Holdings Limited (the "Company" or "FPP") for
the financial year ended 31 March 2021.
During the financial year, the Company reported a net loss of
GBP241,709 (2020: GBP191,778) which represents ongoing
administrative expenses as well as any costs incurred in
identifying potential transactions. As at 31 March 2021, the
Company had cash in bank balance of GBP562,204 (2020:
GBP127,710).
The Board continued to review a number of potential acquisition
opportunities across the sector but none of which met the necessary
criteria for selection as at the end of the year. However, after
the year end the Company entered into a letter of Intent to acquire
the entire issued share capital of CiiTech Ltd a leading cannabis
wellness company based in the UK and Israel for consideration of
GBP17.5m payable in newly issued shares in the Company (subject to
adjustment should the number of CiiTech securities in issue change
prior to completion of the acquisition).
The Board would provide further updates to shareholders in due
course.
Craig Marshak
Chairman
Enquires:
Fragrant Prosperity Holdings Limited
Simon James Retter / Craig Marshak +44 (0) 20 3137 1902
Optiva Securities Ltd (Financial Adviser)
Jeremy King +44 (0) 20 3137 1902
FRAGRANT PROSPERITY HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE FINANCIAL YEARED 31 MARCH 2021
Directors' report
The Directors present their report together with the audited
financial statements, for the financial year ended 31 March
2021.
The Company was incorporated on 28 January 2016 in the British
Virgin Islands, as a company limited by shares under the BVI
Business Companies Act, 2004. The registered office of the Company
is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town,
Tortola, VG1110, British Virgin Islands.
Its issued share capital, consisting of Ordinary Shares, are
currently admitted to a Standard Listing on the Official List in
accordance with Chapter 14 of the Listing Rules and to trading on
the London Stock Exchange's main market for listed securities.
On the 12 December 2017 the company changed its name from Vale
International Group Ltd to Fragrant Prosperity Holdings Ltd.
The Company's nature of operations is to act as a special
purpose acquisition company.
Results and dividends
The results for the year are set out in the Statement of
Comprehensive Income on page 15. The Directors do not recommend the
payment of a dividend on the ordinary shares.
Company objective and future developments
The Company was formed to undertake an acquisition of a target
company or business. The Company has entered into a non-binding
letter of intent to acquire the entire issued share capital of
CiiTECH Ltd, a leading cannabis wellbeing company based in the UK
and Israel for consideration of GBP17,500,000 (the "Acquisition").
Under the terms of the non-binding letter of intent entered into
with CiiTECH the Company expects that consideration for the
Acquisition will be satisfied by issue of new Shares although it
expected that a concurrent fund raise will be undertaken alongside
readmission to the Standard Segment of the main market of the
London Stock Exchange. Any funds not used in connection with the
Acquisition will be used for future acquisitions, internal or
external growth and expansion, and working capital in relation to
the acquired company or business.
Following completion of the Acquisition, the objective of the
Company will be to operate the acquired business and implement an
operating strategy with a view to generating value for its
Shareholders through operational improvements as well as
potentially through additional complementary acquisitions following
the Acquisition. Following the Acquisition, the Company intends to
seek re-admission of the enlarged group to listing on the Official
List and trading on the London Stock Exchange or admission to
another stock exchange.
The Company's efforts in identifying a prospective target
company or business will not be limited to a
particular industry or geographic region. However, given the
experience of the Directors, the Company expects to focus on
acquiring a company or business in the technology sector (in
particular focussing on technology and/or intellectual property
that is used in the financial services industry) or the medicinal
cannabis and CBD Wellness sector with either all or a substantial
portion of its operations in Europe or Asia. The Directors' initial
search will focus on businesses based in or with operations in Hong
Kong, Malaysia, or the United Kingdom.
Principal risks and uncertainties
Currently the principal risks relate to the completion of the
Acquisition, and whether, if unsuccessful, the Company could find
sufficient suitable investments to ensure compliance with the
requirements of its continued listing on the standard market.
An explanation of the Company's financial risk management
objectives, policies and strategies is set out in note 8.
Effect of Covid 19
During the first half of the calendar year 2020, the widely
reported Covid 19 pandemic effected business and economies
throughout the globe. Given the nature of operations of the Company
the effect has been minimal to date, although some added headwinds
might be experienced resulting in a longer period of time to
identify and execute a chosen acquisition of a business due to the
overall slowdown in the global economy and travel restrictions.
Key events
At the year end the Company had cash of approximately GBP562,204
and continues to keep administrative costs to a minimum so that the
majority of funds can be dedicated to the review of and potentially
investment in, suitable projects. The company is likely to receive
additional funds in order to continue its activities.
Directors
The Directors of the Company during the year were:
Mahesh s/o Pulandaran
Simon James Retter
Craig Marshak
Richard Samuel
Daniel Reshef (appointed 31 March 2021)
Director's interest
Mahesh s/o Pulandaran holds 1 share of the Company
Stonedale Management and Investments Ltd (a company which is
under control of Simon James Retter), holds an option to subscribe
for 2,500,000 shares for nil consideration.
Craig Marshak holds options to subscribe for 2,500,000 shares
for nil consideration.
Substantial shareholders
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at 23 September
2021.
Shareholder Number of Ordinary % of Share Capital
Shares
Hargreaves Lansdown Nominees 19,936,400 32.9%
Interactive Investor Service
Nominee 10,020,706 16.5%
Vidacos Nominee Limited 8,654,292 14.3%
HSDL Nominees 5,386,239 8.9%
Barclays Direct Investing Nominees 2,996,103 4.9%
Jim Nominees Limited 3,245,976 5.4%
Lawshare Nominees Limited 3,031,729 5.0%
Winterflood Securities 1,903,507 3.1%
Capital and returns management
The Directors believe that, following an acquisition, further
equity capital raisings may be required by the Company for working
capital purposes as the Company pursues its objectives. The amount
of any such additional equity to be raised, which could be
substantial, will depend on the nature of the acquisition
opportunities which arise and the form of consideration the Company
uses to make the acquisition and cannot be determined at this
time.
The Company expects that any returns for Shareholders would
derive primarily from capital appreciation of the Ordinary Shares
and any dividends paid pursuant to the Company's dividend
policy.
Dividend policy
The Company is primarily seeking to achieve capital growth for
its Shareholders.
It is the Board's intention during the current phase of the
Company's development to retain future distributable profits from
the business, to the extent any are generated. As a holding
company, the Company will be dependent on dividends paid to it by
its subsidiaries.
The Board does not anticipate declaring any dividends in the
foreseeable future but may recommend dividends at some future date
after the completion of the Acquisition and depending upon the
generation of sustainable profits and the Company's financial
position.
The Board can give no assurance that it will pay any dividends
in the future, nor, if a dividend is paid, what the amount of such
dividend will be.
The Company will only pay dividends to the extent that to do so
is in accordance with all applicable laws.
Section 172 Statement
The Directors of the Company, as those of all UK compa-nies,
must act in accordance with a set of general duties. These duties
are detailed in section 172 of the UK Compa-nies Act 2006 which is
summarized as follows:
"A director of a company must act in the way he consid-ers, in
good faith, would be most likely to promote the success of the
company for the benefit of its stakehold-ers as a whole, and in
doing so have regard (amongst other matters) to:
(a) the likely consequences of any decision in the long
term;
(b) the interests of the company's employees;
(c) the need to foster the company's business relation-ships
with suppliers, customers and others;
(d) the impact of the company's operations on the com-munity and
the environment;
(e) the desirability of the company maintaining a reputa-tion
for high standards of business conduct; and
(f) the need to act fairly as between stakeholders of the
Company"
As part of their induction, all Directors are briefed on their
duties and they can access professional advice on these, either
from the Company Secretary or, if they judge it necessary, from an
independent adviser. The Directors fulfill their duties partly
through a governance framework that delegates day-to-day
decision-making to employees of the Company and details of this can
be found in our Governance section of the Directors Report.
The following paragraphs summarise how the Directors fulfill
their duties:
Risk Management
The Company is currently undertaking due diligence and working
towards executing an acquisition of a target. It is therefore vital
that we effectively identify, evaluate, manage and mitigate the
risks we face, and that we continue to evolve our approach to risk
management.
For details of our principal risks and uncertainties and how we
manage our risk environment, please see page 4.
Our People
Our Company is committed to being a responsible business. Our
behaviour is aligned with the expectations of our people, clients,
investors, communities and society as a whole. We must also ensure
we share common values that inform and guide our behaviour so we
achieve our goals in the right way. The only employees are
currently the Directors of the company, who strive to adhere to the
highest ethical standards.
Shareholders
The Board is committed to openly engaging with our shareholders,
as we recognize the importance of contin-uing effective dialogue.
It is important to us that share-holders understand our strategy
and objectives, so these must be explained clearly, feedback heard
and any issues or questions raised properly considered. Our board
members, especially Simon Retter and Craig Marshak, hold a series
of shareholders meetings several times a year on the back of
financial and operational reporting.
Community and Environment
The Company's approach is to use our strengths to cre-ate
positive change for the people and communities with which we
interact. We want to leverage our expertise and enable colleagues
to support the communities around us.
Corporate governance
As a company with a Standard Listing, the Company is not
required to comply with the provisions of the UK Corporate
Governance Code. Although the Company does not comply with the UK
Corporate Governance Code, the Company intends to adopt corporate
governance procedures as are appropriate for the size and nature of
the Company and the size and composition of the Board. These
corporate governance procedures have been selected with due regard
to the provision of the UK Corporate Governance Code insofar as is
appropriate. A description of these procedure is set out below:
-- until an Acquisition is made, the Company will not have
nominations, remuneration, audit or risk committees. The Board as a
whole will instead review its size, structure and composition, the
scale and structure of the Directors' fees (taking into account the
interests of Shareholders and the performance of the Company), take
responsibility for the appointment of auditors and payment of their
audit fee, monitor and review the integrity of the Company's
financial statements and take responsibility for any formal
announcements on the Company's financial performance. Following the
Acquisition, the Board intends to put in place nomination,
remuneration, audit and risk committees;
-- the Board has adopted a share dealing code that complies with
the requirements of the Market Abuse Regulations. All persons
discharging management responsibilities shall comply with the share
dealing code since the date of Admission; and
-- Following the Acquisition and subject to eligibility, the
Directors may, in future, seek to transfer the Company from a
Standard Listing to either a Premium Listing or other appropriate
listing venue, based on the track record of the company or business
it acquires, subject to fulfilling the relevant eligibility
criteria at the time. However, in addition to or in lieu of a
Premium Listing, the Company may determine to seek a listing on
another stock exchange. Following such a Premium Listing, the
Company would comply with the continuing obligations contained
within the Listing Rules and the Disclosure and Transparency Rules
in the same manner as any other company with a Premium Listing.
The Company has not chosen to apply a particular corporate
governance code, as the directors consider that the most widely
recognised codes are not appropriate for companies with limited
board resources.
The Directors are responsible for internal control in the
Company and for reviewing its effectiveness. Due to the size of the
Company, all key decisions are made by the Board in full. The
Directors have reviewed the effectiveness of the Company's systems
during the period under review and consider that there have been no
material losses, contingencies or uncertainties due to the weakness
in the controls. The Board will be responsible for taking all
proper and reasonable steps to ensure compliance with the Model
Code by the Directors.
Emissions, Environmental & Social matters
The Company currently is not responsible for any emissions other
than indirectly through travel for undertaking due diligence on
target businesses. It is therefore not practical to quantify the
total emissions of the Company. Likewise as the nature of the
Company is an acquisition company, it is the opinion of the
Directors that it has no direct social, community and human rights
issues are environmental matters on which it should disclose
information. Presently all of the Directors of the Company are
male, the Directors are actively seeking to balance the board with
some female representation although this would likely occur upon a
change in the board composition upon the completion of an
acquisition.
Responsibility Statement
The directors are responsible for preparing the annual report
and the non-statutory financial statements. The directors are
required to prepare financial statements for the Company in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
International Accounting Standard 1 requires that financial
statements present fairly for each financial period the Company's
financial position, financial performance and cash flows. This
requires the faithful representation of transactions, other events
and conditions in accordance with the definitions and recognition
criteria for the assets, liabilities, income and expenses set out
in the International Accounting Standards Board's "Framework for
the Preparation and Presentation of Financial Statements". In
virtually all circumstances, a fair representation will be achieved
by compliance with all IFRS as adopted by the European Union.
Directors are also required to:
- select suitable accounting policies and then apply them consistently;
- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information; and
- provide additional disclosures when compliance with the
specific requirements in IFRS as adopted by the European Union is
insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company's
financial position and financial performance.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time, the
financial position of the Company. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The maintenance and integrity of the Fragrant Prosperity
Holdings Ltd website ( http://www.fragrantprosperityholdings.com/ )
is the responsibility of the Directors; work carried out by the
auditors does not involve the consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the British Virgin Islands governing the
preparation and dissemination of the financial statements and the
other information included in annual reports may differ from
legislation in other jurisdictions.
The Directors are responsible for preparing the Financial
Statements in accordance with the Disclosure and Transparency Rules
of the United Kingdom's Financial Conduct Authority ('DTR') and
with International Financial Reporting Standards as adopted by the
European Union.
The directors confirm, to the best of their knowledge that:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company; and
-- the Chairman's Statement and Directors' Report include a fair
review of the development and performance of the business and the
financial position of the Company, together with a description of
the principal risks and uncertainties that it faces.
Auditors and disclosure of information
The directors confirm that:
-- there is no relevant audit information of which the Company's
non-statutory auditor is unaware; and
-- each Director has taken all the necessary steps he ought to
have taken as a Director in order to make himself aware of any
relevant audit information and to establish that the Company's
non-statutory auditor is aware of that information.
Events after the reporting date
Subsequent to the year end the company has entered into a
non-binding letter of intent to acquire the entire issued share
capital of CiiTECH Ltd, a leading cannabis wellbeing company based
in the UK and Israel.
Events after the reporting date have been disclosed in note 13
to the financial statements.
This responsibility statement was approved by the Board of
Directors on 29 September 2021 and is signed on its behalf by;
Craig Marshak
Director
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY
HOLDINGS LTD
Opinion
We have audited the financial statements of Fragrant Prosperity
Holdings Limited (the 'Company') for the year ended 31 March 2021
which comprise the statement of comprehensive income, statement of
financial position, statement of changes in equity, statement of
cash flows and the related notes, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in the preparation of the financial
statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 March 2021 and of its loss for the year then
ended;
-- have been properly prepared in accordance with international
accounting standards in conformity with International Financial
Reporting Standards ("IFRSs") adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union ("EU");
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 Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified audit opinion.
Material uncertainty relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the entity's
ability to continue to adopt the going concern basis of accounting
included carrying out a risk assessment which covered the nature of
the Company, its business model and related risks including where
relevant the impact of Coronavirus, the requirements of the
applicable financial reporting framework and the system of internal
control. We evaluated the directors' assessment of the group's
ability to continue as a going concern, including challenging the
underlying data and key assumptions used to make the assessment,
and evaluated the directors' plans for future actions in relation
to their going concern assessment.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
company's or group'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.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance on our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Risk Our response to the risk Our response and observation
Revenue recognition
There is a risk that revenue We reviewed the Company's No revenue was recognised
is materially understated revenue recognition policies in the year and this
due to fraud. and how they are applied. was in accordance with
the Company's accounting
policy and we concluded
that no evidence of
fraud or other understatement
was identified.
------------------------------------ --------------------------------
Management override of
controls We examined journals posted
Journals can be posted around the year end, specifically We identified no evidence
that significantly alter focusing on areas which are of management override
the financial statements more easily manipulated. in respect of inappropriate
of the entity. manual journals recorded
in any section of the
financial statements.
------------------------------------ --------------------------------
Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be charged or
influenced. We use materiality both in planning and in the scope of
our audit work and in evaluating the results of our work.
We determine materiality for the Company to be GBP10,622 and
this financial benchmark, which has been used throughout the audit,
was determined by way of a standard formula being applied to key
financial results and balances presented in the financial
statements. Where considered relevant the materiality is adjusted
to suit the specific risk profile of the Company.
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.
Performance materiality was set at 75% of the above materiality
levels. We agreed with the board that we would report to the
committee all individual audit differences identified during the
course of our audit in excess of GBP531 (5% materiality). We also
agreed to report differences below these thresholds that, in our
view warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the
Company and its environment, including the system of internal
control, and assessing the risks of material misstatement in the
financial statements. The audit work is conducted centrally by one
audit team, led by the Senior Statutory Auditor.
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.
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
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.
In this context, matters that we are specifically required to
report to you as uncorrected material misstatements of the other
information include where we conclude that:
-- Fair, balanced and understandable - the statement given by
the directors that they consider the annual report and financial
statements taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Company's position and performance, business model and
strategy, is materially inconsistent with our knowledge obtained in
the audit; or
We have nothing to report in respect of these matters.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of Company and
its environment obtained in the course of the audit, we have not
identified material misstatements in the chairman's statement or
the directors' report.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 7, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Explanation as to what extent 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. Our approach was as
follows:
-- We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Coup and determined the most
significant are those that relate to the reporting framework (IFRS)
and the relevant tax compliance regulations in the jurisdictions in
which the Company operates.
-- We understood how the Company is complying with those
frameworks by making enquiries of management, the Company
Secretary, and those responsible for legal and compliance
procedures. We corroborated our enquiries through our review of
board minutes, papers provided to the board, discussion with the
board and any correspondence received from regulatory bodies.
We assessed the susceptibility of the Company's financial
statements to material misstatement, including how fraud might
occur by enquiring with management and the board during the
planning and execution phase of our audit. We considered the
programs and controls that the Company has established to address
risks identified, or that otherwise prevent, deter and detect fraud
and how senior management monitors those programs and controls.
Where the risk was considered to be higher, we performed audit
procedures to address each identified fraud risk including revenue
recognition as discussed above. These procedures included testing
manual
journals and were designed to provide reasonable assurance that
the financial statements were free from fraud or error.
-- Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved journal entry testing, with a focus on manual
journals and journals indicating large or unusual transactions
based on our understanding of the business; enquiries of the
Company Secretary and management; and focused testing, as referred
to in the key audit matters section above.
Other matters which we are required to address
We were appointed by the board on 25 June 2021 to audit the
financial statements for the period ending 31 March 2021. Our total
uninterrupted period of engagement is 2 years, covering the period
ending 31 March 2021.
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.
Our audit opinion is consistent with the additional report to
the board.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with our engagement letter dated 25 June 2021. 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.
BENJAMIN BIDNELL (Senior Statutory Auditor)
For and on behalf of SHIPLEYS LLP, Chartered Accountants and
Statutory Auditor
10 Orange Street, Haymarket, London, WC2H 7DQ
29 September 2021
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIALED 31 MARCH 2021
Year ended Year ended
31 March 31 March
2021 2020
Notes GBP GBP
Other operating expenses (227,146) (191,778)
Interest charge (14,563) -
------------- -------------
OPERATING LOSS BEFORE TAXATION (241,709) (191,778)
Income tax expense 3 - -
------------- -------------
LOSS FOR THE PERIOD ATTRIBUTABLE
TO EQUITY HOLDERS OF THE COMPANY (241,709) (191,778)
OTHER COMPREHENSIVE INCOME
Other comprehensive income - -
TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD (241,709) (191,778)
------------- -------------
Basic and diluted loss per share
(pence) 5 (0.46) (0.39)
------------- ---------------
The notes to the financial statements form an integral part of
these financial statement
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
As at As at
31 March 2021 31 March 2020
Notes GBP GBP
CURRENT ASSETS
Cash and cash equivalents 562,204 127,710
Prepayments 23,638 17,375
TOTAL ASSETS 585,842 145,085
CURRENT LIABILITIES
Trade Creditors (42,919) (27,250)
Accruals (7,500) (7,500)
Convertible loan note (274,166) (210,000)
--------------- ---------------
TOTAL LIABILITIES (324,585) (244,750)
--------------- ---------------
NET ASSETS 261,257 (99,665)
=============== ===============
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY
Share capital 6 1,492,146 989,913
Retained earnings (1,281,286) (1,089,578)
Convertible loan note Reserve 50,397 -
--------------- ---------------
TOTAL EQUITY 261,257 (99,665)
=============== ===============
The notes to the financial statements form an integral part of
these financial statements
This report was approved by the board and authorised for issue
on and signed on its behalf by;
.....................
Craig Marshak
Director
29 September 2021
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEARED 31 MARCH 2021
Year ended Year ended
31 March 31 March 2020
2021
GBP GBP
Loss before tax (241,709) (191,778)
Interest charge 14,563 -
Share based payment 50,000 50,000
----------- ---------------
Cash flow from operating activities (177,147) (141,778)
----------- ---------------
Changes in working capital
Movement in other payables 15,670 (6,000)
Movement in prepayments and other
debtor (6,263) 125
----------- ---------------
Net cash outflow from operating
activities (167,740) (147,653)
----------- ---------------
Issue of equity 543,930 64,790
Issue costs (41,696) (5,000)
Issue of convertible loan note 100,000 210,000
----------- ---------------
Net cash flow from investing activities 602,233 269,790
----------- ---------------
Net decrease in cash and cash
equivalents 434,494 122,136
Cash and cash equivalents at beginning
of period 127,710 5,574
----------- ---------------
Cash and cash equivalents at end
of period 562,204 127,710
=========== ===============
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 31 MARCH 2021
Share capital Convertible Retained Total
Loan Note earnings
Reserve
GBP GBP GBP GBP
As at 31 March 2019 930,124 - (947,800) (17,676)
-------------- ------------ ------------ ----------
Issue of equity 64,790 - - 64,790
Issues of equity costs (5,000) - - (5,000)
Loss for the year - - (191,778) (191,778)
Share based payment charge - - 50,000 50,000
-------------- ------------ ------------ ----------
Total comprehensive loss
for the year - - (141,778) (141,778)
-------------- ------------ ------------ ----------
As at 31 March 2020 989,913 - (1,089,578) (99,665)
-------------- ------------ ------------ ----------
Issue of equity 543,930 - - 543,930
Issues of equity costs (41,696) - - (41,696)
Recognition of Convertible
Loan - 50,397 - 50,397
Loss for the year - - (241,709) (241,709)
Share based payment charge - - 50,000 50,000
-------------- ------------ ------------ ----------
Total comprehensive loss
for the year - - (191,709) (191,709)
-------------- ------------ ------------ ----------
As at 31 March 2021 1,492,146 50,397 (1,281,286) 261,257
============== ============ ============ ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 31 MARCH 2021
1. GENERAL INFORMATION
The Company was incorporated in the British Virgin Islands on 28
January 2016 as an exempted company with limited liability.
The Company's Ordinary shares are currently admitted to a
standard listing on the Official List and to trading on the London
Stock Exchange.
On the 12 December 2017 the company changed its name from Vale
International Group Ltd to Fragrant Prosperity Holdings Ltd.
The Company's nature of operations is to act as a special
purpose acquisition company.
2. ACCOUNTING POLICIES
The Board has reviewed the accounting policies set out below and
considers them to be the most appropriate to the Company's business
activities.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and IFRIC interpretations applicable to
companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention as modified for
financial assets carried at fair value.
The financial information of the Company is presented in British
Pound Sterling ("GBP").
Standards and interpretations issued but not yet applied
At the date of authorisation of this financial information, the
Directors have reviewed the Standards in issue by the International
Accounting Standards Board ("IASB") and IFRIC, which are effective
for accounting periods beginning on or after the stated effective
date. In their view, none of these standards would have a material
impact on the financial reporting of the Company.
Going concern
Until such time as the Company makes a significant investment it
will meet its day to day working capital requirements from its
existing cash reserves and by raising new equity finance.
In the year ended 31 March 2021 the Company recorded a loss
after tax of GBP241,709 (2020: GBP191,778) and a net cash outflow
from operating activities of GBP167,740 (2020: GBP147,653).
The directors have prepared cash flow forecasts covering a
period of at least 12 months from the date of approval of the
financial statements which assume that no significant investment
activity is undertaken unless sufficient funding is in place.
The Company had cash of GBP562,204 at 31 March 2021 which the
directors believe is sufficient to undertake the required steps to
make an investment and fulfil its investment mandate.
Based on their assessment, the Directors have a reasonable
expectation that the Company has adequate resources, supplemented
by the additional funds to be raised, to continue as a going
concern for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing these financial
statements.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other
short term investments to be cash equivalents.
Taxation
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred income tax is provided for using the liability method
on temporary timing differences at the reporting date between the
tax basis of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred income tax liabilities are
recognised in full for all temporary differences. Deferred income
tax assets are recognised for all deductible temporary differences
carried forward of unused tax credits and unused tax losses to the
extent that it is probable that taxable profits will be available
against which the deductible temporary differences and
carry-forward of unused tax credits and unused losses can be
utilised.
The carrying amount of deferred income tax assets is assessed at
each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each
reporting date and are recognised to the extent that is probable
that future taxable profits will allow the deferred income tax
asset to be recovered.
Financial instruments
Financial assets and financial liabilities are recognised on the
statement of financial position when the company becomes a party to
the contractual provisions of the instrument.
Financial assets
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition
depends on the financial asset's contractual ]cash flow
characteristics and the Group's business model for managing
them.
The classification depends on the purpose for which the
financial assets were acquired. Management determines the
classification of its financial assets at initial recognition and
re-evaluates this classification at every reporting date.
As at the reporting date, the Group did not have any financial
assets subsequently measured at fair value.
Operating segments
The directors are of the opinion that the business of the
Company comprises a single activity, that of an investment company.
Consequently, all activities relate to this segment.
Critical accounting estimates and judgements
The preparation of financial statements in compliance with IFRS
as adopted for use by the European Union requires the use of
certain critical accounting estimates or judgements. The directors
do not consider there to be any key estimation uncertainty. In
respect of critical judgements, the only key judgement is the
adoption of going concern on the basis for preparing the financial
statements, details of which are set out in note 2.
Share based payments
The Company operates equity-settled, share-based compensation
plans, under which the entity receives services from employees as
consideration for equity instruments (options) of the Company. The
fair value of employee services received in exchange for the grant
of share options are recognised as an expense. The total expense to
be apportioned over the vesting period is determined by reference
to the fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions; and
-- including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in
assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied. At the end of each reporting period the Company
revises its estimate of the number of options that are expected to
vest.
It recognises the impact of the revision of original estimates,
if any, in profit or loss, with a corresponding adjustment to
equity.
When options are exercised, the Company issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
The fair value of goods or services received in exchange for
shares is recognised as an expense.
3. INCOME TAX EXPENSE
The Company is regarded as resident for the tax purposes in
British Virgin Islands.
No tax is applicable to the Company for the year ended 31 March
2021 and 2020. Consequently no deferred tax is recognised as all
timing differences are permanent.
4. LOSS BEFORE TAXATION
The loss before income tax is stated after charging:
Year ended Year ended
31 March 31 March
2021 2020
GBP GBP
Staff costs (note 7) 15,200 26,000
Auditors' remuneration:
Fees payable to the Company's auditor
for the audit of the Company's annual
accounts 7,500 7,500
LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. There are currently no
dilutive potential ordinary shares.
Loss per share attributed to ordinary shareholders
Year ended Year ended
31 March 2021 31 March 2020
Loss for the period (GBP) (241,709) (191,778)
Weighted average number of
shares (Unit) 52,506,310 49,344,097
Loss per share (pence) (0.46) (0.39)
5. SHARE CAPITAL
Number GBP
of shares
Balance at 31 March 2019 43,214,287 930,124
Issued during the year 8,638,535 59,789
----------- ----------
Balance at 31 March 2020 51,852,822 989,913
----------- ----------
Issued during the year 10,360,564 543,930
Issue costs - (41,696)
----------- ----------
Balance at 31 March 2021 62,223,386 1,492,146
----------- ----------
On the 16(th) July 2019 the Company issued 8,638,535 new
ordinary shares in the company at a price of 0.75 pence per
share.
On 3 March 2021 the Company issued 10,360,564 new ordinary
shares in the company at a price of 5.25 pence per share.
6. STAFF COSTS
Year ended Year ended
31 March 2021 31 March 2020
GBP GBP
Staff costs - -
Director fees 15,200 26,000
---------------
15,200 26,000
--------------- ---------------
The average numbers of person employed by the Company (including
directors) during the reporting period was 4 (2020: 4).
7. CAPITAL MANAGEMENT POLICY
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The capital structure of the Company consists
of equity attributable to equity holders of the Company, comprising
issued share capital and reserves.
8. FINANCIAL RISK MANAGEMENT
The Company uses a limited number of financial instruments,
comprising cash and other payables, which arise directly from
operations. The Company does not trade in financial
instruments.
Financial risk factors
The Company's activities expose it to a variety of financial
risks: currency risk, credit risk, liquidity risk and cash ow
interest rate risk. The Company's overall risk management programme
focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Company's financial
performance.
a) Currency risk
The Company does not operate internationally and its exposure to
foreign exchange risk is limited to the transactions and balances
that are denominated in currencies other than Pounds Sterling.
b) Credit risk
The Company does not have any major concentrations of credit
risk related to any individual customer or counterparty. Credit
risk arises from cash and cash equivalents and deposits with
banks
and financial institutions. The Group has taken necessary steps
and precautions in minimising the credit risk by lodging cash and
cash equivalents only with reputable licensed banks.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and the Company ensures it has adequate resource to discharge
all its liabilities. The directors have considered the liquidity
risk as part of their going concern assessment. (See note 2). At
the date of approval of the financial statements there was a
material uncertainty in relation to liquidity risk.
d) Cash flow interest rate risk
The Company has no significant interest-bearing liabilities and
assets. The Company monitors the interest rate on its interest
bearing assets closely to ensure favourable rates are secured.
Fair values
Management assessed that the fair values of cash and short-term
deposits, trade receivables, trade payables, bank overdrafts and
other current liabilities approximate their carrying amounts
largely due to the short-term maturities of these instruments.
9. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise cash and
cash equivalents and other payable. The Company's accounting
policies and method adopted, including the criteria for
recognition, the basis on which income and expenses are recognised
in respect of each class of financial assets, financial liability
and equity instrument are set out in Note 2. The Company do not use
financial instruments for speculative purposes.
The principal financial instruments used by the Company, from
which financial instrument risk arises, are as follows:
As at As at
31 March 31 March 2020
2021
GBP GBP
Financial assets
Loans and receivables
Cash and cash equivalents 562,204 127,710
-------------------------- --------------------------
Total financial assets 562,204 127,720
================== ==================
Financial liabilities measured
at amortised cost
Other payables 42,919 34,750
Convertible loan note 274,166 210,000
-------------------------- --------------------------
Total financial liabilities 317,085 244,750
================== ==================
The convertible loan notes comprise 2 instruments, one dated 13
December 2019, for GBP210,000 which carries interest at 5% per
annum and are convertible at the election of the holder into shares
at a price of 2 pence per share. The second is dated 5 June 2020
and also carries interest at 5% per annum and are convertible at
the election of the holder into shares at a price of 2 pence per
share.
There are no financial assets that are either past due or
impaired.
10. RELATED PARTY TRANSACTIONS
Key management are considered to be the directors and the key
management personnel compensation as follow:
Year ended Year ended
31 March 2021 31 March 2020
GBP GBP
Simon James Retter* - -
Craig Marshak - -
Richard Samuel - 7,500
Robin Andrew Carrington
Rice - 8,500
Mahesh Pulandaran - -
---------------- ---------------
- 16,000
----------------- ---------------
*In 2020 GBP10,000 fees were due to Stonedale Management &
Investments Ltd a company controlled by Simon Retter regarding work
undertaken on the financial investment undertaken during the
year.
*In 2021 GBP15,200 of fees were paid to Stonedale Management
& Investments Ltd a company controlled by Simon Retter
regarding work undertaken on the financial investment undertaken
during the year.
In addition Stonedale management holds an option over 2,500,000
shares with an exercise price of 0p resulting in a share based
payment charge of GBP50,000 during the current year.
During the year options over 2,500,000 shares with an exercise
price of 0p resulting in a share based payment charge of GBP50,000
were awarded to Craig Marshak during the current year.
No pension contributions were made on behalf of the Directors by
the Company. No share options were granted to or exercised by a
Director in the reporting period.
During the reporting period, other than those noted above the
Company did not enter into any material transactions with related
parties. As at reporting date, the there was no amount due to the
directors.
11. CONTROL
The Directors consider there is no ultimate controlling
party.
12. DESCRIPTION OF RESERVES
Retained Earnings comprises accumulated gains and losses
incurred to date.
Convertible Loan Note reserve comprises the fair value of the
equity component of the convertible loan notes held by the
Company.
13. SUBSEQUENT EVENTS
On 24(th) May 2021 the Company entered into a non-binding letter
of intent to acquire the entire issued share capital of CiiTECH Ltd
a leading cannabis wellness company based in the UK and Israel. FPP
has conditionally agreed to acquire CiiTECH for GBP17,500,000 to be
satisfied by the issue of shares in the Company at a price of 5.25
pence per share. The Company suspended its listing on the Standard
Segment of the main market of the London Stock Exchange at this
time.
On 29(th) July 2021 the Company repaid the existing convertible
loan notes with a value of GBP310,000 plus interest and issued a
new convertible loan note for GBP400,000 which carries interest at
5% per annum with an average exercise price of 3 pence per
share.
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END
FR SEIFFUEFSEFU
(END) Dow Jones Newswires
September 30, 2021 01:59 ET (05:59 GMT)
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