REG - Insig AI Plc - Final Results, Posting of Accounts & Notice of AGM
05/09/2024 07:15
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RNS Number : 0400D Insig AI Plc 05 September 2024
5 September 2024
Insig AI plc
("Insig AI" or the "Company")
Final results for the year ended 31 March 2024
and
Posting of the Annual Report and Accounts and Notice of Annual General Meeting
Insig AI plc (AIM:INSG), the data science and machine learning solutions
company and its subsidiaries (the "Group") is pleased to announce its
results for the year ended 31 March 2024.
The Group's Annual Report & Accounts, along with the Company's Notice of
Annual General Meeting ("AGM") will be posted to shareholders today and will
be available shortly on the Group's website: www.insg.ai/investor-relations/
(http://www.insg.ai/investor-relations/) . The AGM will be held at 1 Heddon
Street, London, W1B 4BD on 30 September 2024 at 12:30 p.m.
Highlights
· Reduced adjusted EBITDA loss of £0.6 million from £2 million in
the previous year
· Recognised by the FCA as a key contributor in its
anti-greenwashing technology initiative
· New product launch of the Transparency and Disclosure Index
· In discussions with three of 'The Big Four' Accounting Practices
· In discussions with UK asset manager regarding partnering on a
new fund launch
· Visibility of regulatory tailwinds
Richard Bernstein, CEO commented: "After a two year wait, we finally have
visibility of regulatory tailwinds that should represent the compelling event
in the nascent market of non-financial corporate disclosures. We are ideally
positioned to benefit. Alongside our capabilities to structure data for
clients to utilise AI, with improved execution, the coming months are set to
bear fruit from our substantial investment."
For further information, please visit www.insg.ai (https://www.insg.ai/) or
contact:
Insig AI
plc
richard.bernstein@insg.ai (mailto:richard.bernstein@insg.ai)
Richard Bernstein (CEO)
Zeus (Nominated Adviser & Broker)
David Foreman / James Hornigold
+44 (0)20 3829 5000
Chief Executive's Report
Dear Shareholders,
It is now three months since I became Chief Executive. I am also delighted
that John Wilson has become Chairman. Set out below is my assessment of the
performance of the business during the year ended 31 March 2024, together with
an update on recent progress and of prospects. First, let me turn to the year
ended 31 March 2024.
Financial headlines
In summary, we are reporting an operating loss before non-cash impairments of
intangible assets of £2.2 million. This compares with an operating loss prior
to impairment for the previous year of £4.8 million. Within the loss for the
year, the non-cash expense of depreciation and amortisation was £1.6 million,
resulting in an operating loss of £0.6 million prior to these non-cash
charges. The equivalent loss for the previous year was £2.0 million.
Revenues for the year were £0.4 million as against £0.7 million in the year
to March 2023.
The financial results reflect not only trading but some accounting standard
led treatments of intangible assets, and loan notes which have a distorting
impact on the optics of the results in my view. As I set out below, the
financial year ended 31 March 2024 as well as the current financial year to
date, represents a period of progress, right-sizing of the business and
pleasingly, significantly improved relationships with several hopefully long
term and significant prospective partners of Insig. Frustratingly however,
these developing relationships did not yield significant revenues in the
financial year ended 31 March 2024.
Following the conversion of £0.75 million of loan notes into equity,
outstanding convertible loan notes reduced from £2.3 million to £1.5 million
as at 31 March 2024.
Disposal of Sports in Schools Limited and The Elms Group Limited
Sports in Schools and Elms Group combined generated a profit before tax of
approximately £210,085 (2023: £19,000). In November 2023, the Company's
85.87% owned subsidiary, Pantheon Leisure plc ("Pantheon"), entered into a
sale agreement for Sports in Schools and Elms Group with Haygreen Limited for
a total cash consideration payable of £0.3 million (the "Cash
Consideration"). The joint profit before tax for Sport in Schools and Elms
Group up to November 2023 was.
The directors of Pantheon Leisure plc, which previously held the Group's
interest in Sports in Schools, have decided to proceed with striking off the
company. The company no longer conducts any form of trade, has no recoverable
assets or funds. Therefore, the Directors believe it appropriate to apply for
strike off under s1003 of the Companies Act 2006. The Directors consider
that the strike off proposal is in the best interests of the Company and its
Shareholders as a whole. This will result in a reduction in legal and
administrative costs.
In November 2023, I agreed to release security over my loan of £0.75 million
to the Company and I converted the loan plus accumulated interest into
3,925,380 ordinary shares at 20p per share.
Successful equity funding
In April 2023, the Company announced that it had completed an equity
subscription raising £0.9 million at 17p per share, and as part of which, I
subscribed for £0.15 million.
Post period end, in April and May 2024, I subscribed to the Company for
1,250,000 shares at 20p. In June 2024, the Company successfully raised £0.81
million at 12.5p per share, with NR Holdings Limited becoming a new
shareholder.
The report card for the year to 31 March 2024
In the first few months of the year under review, much of our resources were
focussed on our data and technology collaboration agreement, working with the
Financial Conduct Authority ("FCA"). In April 2023, we announced that we would
be providing the data and software platforms to the FCA's 2023 TechSprint,
known as the Global Financial Innovation Network's (GFIN) Greenwashing
TechSprint. The GFIN Greenwashing TechSprint brought together 13 international
regulators.
The goal of the project was to develop a tool or solution to help regulators
tackle or mitigate the risks of greenwashing in financial services across the
globe. The project focused on how technology, including AI and Machine
Learning, can enable regulators and supervisors to verify that ESG-related
product claims are accurate and complete and how technology can help monitor,
collate, and identify examples of greenwashing.
Insig AI provided our data and technology platform for onboarding of partners
and participants of the GFIN Greenwashing TechSprint. The core data set
comprised our database of pdf and machine-readable corporate financial and ESG
documents with entity mapping and sentence-level classification against 15 ESG
issues.
Our endeavour was recognised last September, when the FCA publicly referred to
Insig AI as a key contributor.
In October 2023, we announced the launch of The Transparency and Disclosure
Index ("TDI"). Using evidence-based analysis of more than 200 million machine
readable sentences from our corporate disclosure document repository, the TDI
demonstrates what stakeholders and market participants require: how well a
company is disclosing non-financial information and how transparent it is.
Scoring highlights gaps that are actionable for each company to remedy.
The TDI framework is based on best practice principles behind the convergence
of reporting standards. Reports are compared to best practice, benchmarking
against peer groups, measuring website clarity and accessibility of documents.
It highlights where the range of sustainability documents is considered
excessive and flags where companies may be over-using certain keywords
identified as being commonly used in greenwashing without evidence and are
possibly misleading. Using our search tools and our machine learning database,
users can perform a deep dive into every aspect of a multitude of disclosures.
Whist the TDI is not seeking to accuse any company, in 2022, both Signature
Bank and Home REIT were flagging material issues in terms of very poor
transparency and disclosure.
Despite the Company's engagement with the FCA and launching of the
Transparency and Disclosure Index, these efforts failed to translate into new
business wins. As Chief Executive, my immediate priority on appointment was to
identify why this was the case and to then implement the changes required to
be able to translate efforts into commercial success.
In mitigation, there can be no doubt that over the last two years, the UK
asset management industry has experienced a "bear market," with fund outflows
and consequential budgetary pressures. Against this backdrop, investment
decisions, particularly in new solutions, has become a casualty. Secondly,
until there is regulation in place that requires certain compliance, there is
no compelling event that necessitates a spend.
There have however, been some encouraging indicators recently that the UK
asset management industry is beginning to recover and that this will result in
an easing of budgetary constraints. Of more importance though is that from
January 2025, for EU companies with more than 250 employees, the Corporate
Sustainability Reporting Directive (CSRD) comes into force. Penalties for
non-compliance include fines (in Germany up to 5% of turnover) and prison
sentences for directors of up to five years. In the UK, the FCA's
anti-greenwashing rules are already in force. In the US, climate related risk
disclosures come into effect in January 2025.
It might be easy to attribute the lack of new business wins to the "bear
market" and the delay in regulation. It is my assessment, this would not be
accurate. "The fault, dear Brutus, is not in our stars but in ourselves,"
springs to mind. For too long, the business was engaging with people who
were not authorised to make the spending decision. Furthermore, we could have
been articulated the offering in a way that showed the benefits to prospective
customers in my opinion and we could also have contacted a greater quantity of
prospects. All these issues have now been identified: we are establishing
clear measurable deliverables and setting specific timelines and performance
reviews to monitor progress. Conversations with prospects are now focused
solely on the benefit to that prospect, rather than how clever the technology
is. Delivering on the core goals of the business is now fundamental. There
will be further enhancements in the coming weeks and months, including
improved marketing and new partnerships that can bring revenues by making
available our products and services to new markets.
Where we are today
Let me set out what Insig AI has to offer. There are two distinct parts of the
business. Firstly, a vast repository of corporate reports that enables
regulators, corporates, asset managers and all market participants to access,
interrogate and compare disclosures within and between companies. Our database
uses the best of machine learning and AI tools in this area. Secondly, our
ability to provide fast, accessible AI-ready data. Asset managers can gain
insights into their holdings, manage risk and increase alpha. Insig AI can
structure and centralise data making it secure whilst increasing the
efficiency and productivity.
When I was appointed Chief Executive, I commented that sales cycles to large
corporates for emerging technologies can take up to 18 months. This remains
the case. The business is in detailed discussions with several prospects and
given that our offering involves AI, in some cases, we are being told that the
decision-making process involves multiple parties within an organisation.
Some of these discussions include a number of the Big 4 Accounting Practices.
In the case of one of those firms, we have invested significant resources,
including participating in a workshop with FTSE100 companies and been
introduced as this firm's 'AI partner'. Our offering is able to benefit this
firm's top line as well as reducing regulatory risk to many of its clients.
Our solutions ought to be a 'no brainer'. Feedback has been very positive.
However, procurement processes in these huge enterprises are extraordinarily
lengthy and complex and lack the sense of urgency that we would expect. Whilst
these timelines are incredibly frustrating, on success, they should convert
into material, long-term substantial revenues.
Prospects
For the current year, we continue to expect to grow revenues. As importantly,
we are working to convert ongoing discussions with potential strategic
partners into commercial agreements that will enable their customers to access
our machine learning capabilities.
Amongst these, we are now engaging with three of the "Big 4" Accounting
Practices. We are also now in discussions with one of the "Big 3" Management
Consultancy firms. Separately, we have been approached by one of the UK's
largest financial PR advisors to assist in advising clients to comply with the
new Corporate Sustainability Reporting Directive.
We are in dialogue with a UK asset manager with assets under management of
more than £2 billion, with a view to partnering on a new fund launch. On the
data science side, we are expecting to win a long-term contract with an asset
manager who has indicated that it wants to work with us to improve its
structured data as it rapidly expands and wins new mandates.
As Insig AI's largest shareholder and someone who has a track record of "skin
in the game" in effecting positive change and delivering for stakeholders, I
am as keen as any shareholder to report on tangible positive results as soon
as possible. Operating in a hitherto nascent market has required patience.
Whether you own one share or one million shares, you are a part owner of this
business. The legendary investor Warren Buffett has said that investors often
focus on a daily share price movement rather than on making an objective
assessment of the long-term prospects of a company and deciding what the
business might be worth in the coming years.
I will do whatever it takes to ensure that the business delivers on both its
ideal market positioning within corporate reporting and structured AI data and
its significant commercial potential. Victory will not be achieved overnight:
it requires thought, planning, strong execution and some patience. I regard
our success as a matter of not if but when.
Richard Bernstein
Chief Executive Officer
5 September 2024
Consolidated statement of financial position
Note 31 March 2024 31 March 2023
£ £
Non-Current Assets
Property, plant and equipment 12 5,652 37,648
Right of Use Assets 13 - 28,266
Intangible assets 14 4,404,000 20,309,278
Investment in subsidiaries 15 - -
4,409,652 20,375,192
Current Assets
Trade and other receivables 16 104,740 719,840
Cash and cash equivalents 17 37,847 280,584
142,587 1,000,424
Total Assets 4,552,239 21,375,616
Non-Current Liabilities
Lease liabilities 19 - 16,868
Deferred tax liabilities 21 1,101,000 2,586,096
1,101,000 2,602,964
Current Liabilities
Trade and other payables 18 338,238 932,927
Lease liabilities 19 - 10,386
Convertible loan notes 20 1,544,324 2,261,769
1,882,562 3,205,082
Total Liabilities 2,983,562 5,808,046
Net Assets 1,568,677 15,567,570
Equity attributable to owners of the Parent
Share capital 23 3,149,058 3,109,804
Share premium 23 40,810,725 39,077,403
Other reserves 25 516,015 377,381
Share based payments reserve 24 2,485 18,845
Retained losses (42,880,866) (26,964,846)
Equity attributable to shareholders of the parent 1,597,417 15,618,587
parent company
Non-controlling interests (28,740) (51,017)
Total Equity 1,568,677 15,567,570
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 from presenting the Parent Company Income Statement and
Statement of Comprehensive Income. The loss for the Company for the year ended
31 March 2024 was £17,185,547 (31 March 2023: loss of £21,180,437).
The Financial Statements were approved and authorised for issue by the Board
of Directors on 5 September 2024 and were signed on its behalf by:
Richard Bernstein
Chief Executive Officer
Consolidated statement of comprehensive income
Continued operations Note Year ended 31 March 2023
Year ended 31 March 2024 £
£
Revenue 5 369,860 693,734
Cost of sales 5 - (50)
Gross profit 693,684
369,860
Administrative expenses 7 (2,562,208) (5,474,077)
Other gains/(losses) 9 (102,965) (15,796)
Other income 10 3,160 -
Impairments 14 (15,317,338) (16,558,296)
Operating loss (17,609,491) (21,354,485)
Finance income 11 263 101
Finance costs 11 (126,390) (80,072)
Loss before income tax (17,735,618) (21,434,456)
Tax credit/(charge) 27 1,615,430 2,865,865
Loss for the year after income tax from continued operations (16,120,188) (18,568,591)
Discontinued operations
Profit for the year from discontinued operations (attributable to equity
holders of the Parent)
210,085 6,245
Group loss for the year (15,910,103) (18,562,346)
Loss for the year attributable to owners of the Parent (15,932,380) (18,563,996)
Profit/(Loss) for the year attributable to Non-controlling interests 22,277 1,650
Basic and Diluted Earnings/(Loss) Per Share (expressed in pence per share)
Continued operations (17.71)p (17.89)p
Discontinued operations 0.21p 0.01p
Total 28 (17.50)p (17.88)p
Consolidated statement of changes in equity
Note Share capital Share premium Share based payments reserve Other reserves Retained losses Total Non Controlling Interest Total
£ £ £ £ £ £ £
Balance as at 1 April 2022
3,109,804 39,077,403 17,240 325,583 (8,400,850) 34,129,180 (52,667) 34,076,513
Profit/(Loss) for the year - - - - (18,563,996) (18,563,996) 1,650 (18,562,346)
Other comprehensive loss for the year
Items that may be subsequently reclassified to profit or loss - - - - - - - -
Total comprehensive loss for the year - - - (18,563,996) (18,563,996) (1,650) (18,562,346)
-
Share based payments - - 1,605 - - 1,605 - 1,605
Equity component of CLN issued in period - - - 51,798 - 51,798 - 51,798
Total transactions with owners, recognised directly in equity
- - 1,605 51,798 - 53,403 - 53,403
Balance as at 31 March 2023
3,109,804 39,077,403 18,845 377,381 (26,964,846) 15,618,587 (51,017) 15,567,570
Balance as at 1 April 2023
3,109,804 39,077,403 18,845 377,381 (26,964,846) 15,618,587 (51,017) 15,567,570
Profit/(Loss) for the year - - - - (15,932,380) (15,932,380) 22,277 (15,910,103)
Other comprehensive loss for the year
Items that may be subsequently reclassified to profit or loss - - - - - - - -
Total comprehensive loss for the year
- - - - (15,932,380) (15,932,380) 22,277 (15,910,103)
Expired options - - (16,360) - 16,360 - - -
Equity component of CLN issued in period - - - 138,634 - 138,634 - 138,634
Issue of shares 39,254 1,733,322 - - - 1,772,576 - 1,772,576
Total transactions with owners, recognised directly in equity
39,254 1,733,322 (16,360) 138,634 16,360 1,911,210 - 1,911,210
Balance as at 31 March 2024
3,149,058 40,810,725 2,485 516,015 (42,880,866) 1,597,417 (28,740) 1,568,677
Note Share capital Share premium Share based payments reserve Other reserves Retained losses Total equity
£ £ £ £ £ £
Balance as at 1 April 2022 3,109,804 39,077,403 17,240 325,583 (3,508,817) 39,021,213
Loss for the year - - - - (21,180,437) (21,180,437)
Total comprehensive loss for the period - - - - (21,180,437) (21,180,437)
Share based payments - - 1,605 - - 1,605
Equity component of CLN issued in the period - - - 51,798 - 51,798
Total transactions with owners, recognised directly in equity - - 1,605 51,798 - 53,403
Balance as at 31 March 2023 3,109,804 39,077,403 18,845 377,381 (24,689,254) 17,894,179
Balance as at 1 April 2023 3,109,804 39,077,403 18,845 377,381 (24,689,254) 17,894,179
Loss for the year - - - - (17,185,547) (17,185,547)
Total comprehensive loss for the year - - - - (17,185,547) (17,185,547)
Expired options - - (16,360) - 16,360 -
Equity component of CLN issued in the period -
- - 138,634 - 138,634
Issue of shares 39,254 1,733,322 - - - 1,772,576
Total transactions with owners, recognised directly in equity 39,254 1,733,322 (16,360) 138,634 16,360 1,911,210
Balance as at 31 March 2024 3,149,058 40,810,725 2,485 516,015 (41,858,441) 2,619,842
Consolidated statements of cash flows
Note 31 March 2024 31 March 2023
£ £
Cash flows from operating activities
(Loss)/profit before income tax (15,910,103) (18,562,346)
Adjustments for:
Depreciation and amortisation 1,578,916 2,839,889
Disposal of PPE (650) -
Share based payments 23 - 1,605
Impairments 15,317,338 16,558,296
Net finance (income)/costs 130,546 81,518
Gain on disposal of subsidiaries (164,300)
Provision for deferred tax liabilities (1,485,096) (1,573,992)
Changes in working capital:
(Increase)/Decrease in trade and other receivables 394,606 (433,296)
Increase/(Decrease) in trade and other payables (160,651) 121,131
Net cash used in operating activities (299,394) (967,195)
Cash flows from investing activities
Sale/(Purchase) of property, plant and equipment 12 837 (8,788)
Purchase of intangible assets 14 (1,020,516) (1,456,436)
Net cash from disposal of subsidiaries 187,204 -
Net cash used in investing activities (832,475) (1,465,224)
Cash flows from financing activities
Proceeds from issue of share capital 900,000 -
Proceeds from Borrowings - 2,250,000
Repayment of leasing liabilities (10,868) (10,387)
Net cash generated from financing activities 889,132 2,239,613
Net decrease/(increase) in cash and cash equivalents (242,737) (192,806)
Cash and cash equivalents at beginning of year 280,584 473,390
Cash and cash equivalents at end of year 17 37,847 280,584
Notes to the financial statements
1. General information
Insig AI plc is a public company limited by shares, domiciled and incorporated
in England and Wales and its activities are as described in the Strategic
Report.
These financial statements are prepared in pounds sterling being the currency
of the primary economic environment in which the Group operates.
2. Summary of significant accounting policies
The principal Accounting Policies applied in the preparation of these
Consolidated Financial Statements are set out below. These Policies have been
consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of preparation of Financial Statements
The Group and Company Financial Statements have been prepared in
accordance with UK-adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. The Group and Company
Financial Statements have also been prepared under the historical cost
convention.
The Financial Statements are presented in Pound Sterling rounded to
the nearest pound.
The preparation of Financial Statements in conformity with UK
adopted International Accounting Standards (IAS) requires the use of certain
critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group and Company Financial
Statements are disclosed in Note 4.
2.2. New and amended standards
The following amendments to standards have become effective for the first time
for annual reporting periods commencing on 1 January 2023 and have been
adopted in preparing these financial statements:
Standard Impact on initial application Effective date
IAS 1 (Amendments) and IFRS Practice Statement 2 Disclosure of Accounting Policies 1 January 2023
IAS 8 (Amendments) Definition of Accounting Estimate 1 January 2023
IAS 12 Income Taxes (Amendments) Deferred Tax Related to Assets and Liabilities Arising from a Single 1 January 2023
Transaction
The adoption of these amendments had no material impact on the financial
statements.
At the date of approval of these financial statements, the following
amendments to IFRS which have not been applied in these financial statements
were in issue, but not yet effective, until annual periods beginning on 1
January 2024:
Standard Impact on initial application Effective date
IAS 7 (Amendments) and IFRS 7 Supplier Finance Arrangements 1 January 2024
IAS 1 (Amendments) Classification of Liabilities as Current or Non-Current 1 January 2024
IFRS 16 (Amendments) Lease Liability in a Sale and Leaseback 1 January 2024
IAS 1 (Amendments) Presentation of Financial Statements 1 January 2024
IAS 1 (Amendments) Non-Current Liabilities with Covenants 1 January 2024
IAS 21 (Amendments) Lack of Exchangeability 1 January 2024
*Subject to endorsement by the UK
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of
the Company and its subsidiaries made up to 31 March 2024. Subsidiaries are
entities over which the Group has control. Control is achieved when the Group
is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the
consolidated financial statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within
the parent company financial statements. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring the accounting policies
used in line with those used by other members of the Group. All significant
intercompany transactions and balances between Group enterprises are
eliminated on consolidation.
2.4. Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable, and represent amounts receivable for goods supplied, stated net of
discounts, returns and value added taxes. Under IFRS 15 there is a five-step
approach to revenue recognition which is adopted across all revenue streams.
The process is:
· Step 1: Identify the contract(s) with a customer;
· Step 2: Identify the performance obligations in the contract;
· Step 3: Determine the transaction price;
· Step 4: Allocate the transaction price to the performance
obligations in the contract; and
· Step 5: Fees are recognised once the work is completed and
provided to the client.
The Group has two types of revenue streams being machine learning and data
services and sports activities.
Machine learning and Data services revenue comprises of:
1. ESG Research Tool
Fees are recognised as the agreed work is conducted.
2. Machine Readable Data
Fees are recognised as the agreed work is conducted.
3. Bespoke Data Science Solutions
Charged on a project basis and includes work related to data migration, design
fees, communication fees and technological services. The fees are recognised
as the agreed work in conducted.
For the services detailed above, revenue is recognised and invoiced in
accordance with milestones agreed within each contract with the customer,
which can vary on a case-by-case basis. In all scenarios, the revenue is
recognised in accordance with the provision of the agreed services provided
or, where the quantum and timing of the services can be difficult to predict,
rateable over the period of the agreement. Depending on the client, invoices
can be monthly, quarterly or ad-hoc. Invoices can be adjusted in situations
where the agreed scope of work is exceeded or additional work is applied.
Up until the sale of Sport in Schools, sports activities revenue was
recognised once performance obligations have been satisfied and work is
completed with payment due in advance of the performance obligations. Under
the Group's standard contract terms, customers may be offered refunds for
cancellation of sports and leisure activities. It is considered highly
probable that a significant reversal in the revenue recognised will not occur
given the consistent low level of refunds in prior years.
2.5. Going concern
The preparation of financial statements requires an assessment on the validity
of the going concern assumption. The Directors have reviewed projections for a
period of at least 12 months from the date of approval of the financial
statements as well as potential opportunities. Any potential short falls in
funding have been identified and the steps to which Directors are able to
mitigate such scenarios and/or defer or curtail discretionary expenditures
should these be required have been considered. The directors have noted in
their going concern assessment that the convertible loan notes provided to the
Company are due for repayment on 30 September 2025 and the Company has
forecast the receipt of a research and development refund in the coming
months.
In approving the financial statements, the Board have recognised that there is
a material uncertainty. This conclusion was reached after an in-depth review
of the current sales position of the Group, as well as the uncertainty
surrounding the forecasted sales pipeline of the Group. Therefore, operational
results continue at a loss as the Group is not cash generative. The financial
statements do not include any adjustments that may arise in the event of the
Group not being a going concern. However, having made enquiries and considered
the uncertainties outlined above, the Directors have a reasonable expectation
that the Group will continue to be able to raise finance as required over this
period to enable it to continue in operation and existence for the foreseeable
future. Accordingly, the Board believes it is appropriate to adopt the going
concern basis in the preparation of the financial statements.
2.6. Foreign currencies
(a) Functional and presentation currency
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional currency of the UK
parent entity and UK subsidiaries is Pounds Sterling, The Financial Statements
are presented in Pounds Sterling which the Company's functional and Group's
presentational currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
period-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the income statement.
2.7. Intangible assets
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of subsidiary entities at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently
measured at cost less any accumulated impairment losses. Goodwill which is
recognised as an asset is reviewed for impairment at least annually. Any
impairment is recognised immediately in the statement of comprehensive income
and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash generating units expected to benefit from synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the cash
generating unit is less than the carrying amount of the unit, the impairment
loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss
recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the
amount of goodwill is included in the determination of the profit or loss on
disposal.
Goodwill arising on acquisitions before the date of transition to IFRS's has
been retained at the previous UK GAAP amounts subject to being tested for
impairment at that date.
Development costs are expensed in arriving at the operating profit or loss for
the year unless the Directors are satisfied as to the technical, commercial
and financial viability of individual project. In this situation, the
expenditure is recognised as an asset and is reviewed for impairment on an
annual basis. Amortisation is provided on all development costs to write off
the cost less estimated residual value of each asset over its expected useful
economic life on a straight line basis at the following annual rates:
Technology assets - 7 years straight line
Development costs - 7 years straight line
Customer relationships - 13 years straight line
Databases - 7 years straight line
2.8. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
2.9. Property, plant and equipment
Property, Plant and equipment is stated at cost less accumulated depreciation
and any accumulated impairment losses. Depreciation is provided on all
property, plant and equipment to write off the cost less estimated residual
value of each asset over its expected useful economic life on a straight line
basis at the following annual rates:
Plant and Equipment - 25% and 10% straight line
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount. If an impairment review is conducted following an
indicator of impairment, assets which are not able to be assessed for
impairment individually are assessed in combination with other assets within a
cash generating unit.
Gains and losses on disposal are determined by comparing the proceeds with the
carrying amount and are recognised within 'Other (losses)/gains' in the Income
Statement.
2.10. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not
ready to use, and goodwill, are not subject to amortisation and are tested
annually for impairment. Property, plant and equipment is reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units). Non-financial assets that
suffered impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.11. Financial Instruments
Financial assets and financial liabilities are recognised in the Group's
statement of financial position when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial
liabilities are only offset and the net amount reported in the consolidated
statement of financial position and income statement when there is a currently
enforceable legal right to offset the recognized amounts and the Group intends
to settle on a net basis or realise the asset and liability simultaneously.
Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in
profit or loss.
Debt instruments are classified as financial assets measured at fair value
through other comprehensive income where the financial assets are held within
the company's business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and the contractual terms
of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial assets
All Group's recognised financial assets are measured subsequently in their
entirety at either amortised cost or fair value, depending on the
classification of the financial assets.
Classification of financial assets
Financial assets that meet the following conditions are measured subsequently
at amortised cost using the effective interest rate method:
• the financial asset is held within a business model whose objective
is to hold financial assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments
of principal and interest on the principal amount outstanding.
The Company classifies the following financial assets at fair value through
profit or loss (FVPL):
• debt instruments that do not qualify for measurement at either
amortised cost (see above) or FVOCI;
• equity investments that are held for trading; and
• equity investments for which the entity has not elected to
recognised fair value gains and losses through OCI.
The Group does not hold any financial assets that meet conditions for
subsequent recognition at fair value
through other comprehensive income ("FVTOCI").
Impairment of financial assets
The Group recognises a financial asset only when the contractual rights to the
cash flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks
and rewards of ownership and continues to control the transferred asset, the
Group recognises its retained interest in the asset and an associated
liability for amounts it may have to pay. If the Group retains substantially
all the risks and rewards of ownership of a transferred financial asset, the
Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
Financial liabilities
The classification of financial liabilities at initial recognition depends on
the purpose for which the financial liability was issued and its
characteristics. All purchases of financial liabilities are recorded on trade
date, being the date on which the Group becomes party to the contractual
requirements of the financial liability. Unless otherwise indicated the
carrying amounts of the Group's financial liabilities approximate to their
fair values.
The Group's financial liabilities consist of financial liabilities measured at
amortised cost and financial liabilities at fair value through profit or loss.
Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer
in a business combination, (ii) held for trading, or (iii) designated as at
FVTPL, are measured subsequently at amortised cost using the effective
interest method. The Group's financial liabilities measured at amortised cost
comprise convertible loan notes, trade and other payables, and accruals.
The effective interest method is a method of calculating the amortised cost of
a financial asset/liability and of allocating interest income/expense over the
relevant period. The effective interest rate is the rate that discounts
estimated future cash receipts/payments through the expected life of the
financial asset/liability or, where appropriate, a shorter period.
Convertible loan notes
On issue of a convertible loan, the fair value of the liability component is determined by discounting the contractual future cash flows using a market rate for a non-convertible instrument with similar terms. This value is carried as a liability on the amortised cost basis unless is designated as a Fair Value Through Profit and Loss ("FVTPL") at inception.
Financial instruments designated as FVTPL are classified in this category irrevocably at inception and are derecognised when extinguished. They are initially measured at fair value and transaction costs directly attributable to their acquisition are recognised immediately in profit or loss. Subsequent changes in fair values are recognised in the income statement with profit or loss.
Equity instruments are instruments that evidence a residual interest in the assets of an entity after deducting all of its liabilities. Therefore, when the initial carrying amount of a compound financial instrument is allocated to its equity and liability components, the equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. The value of any derivative features (such as a call option) embedded in the compound financial instrument other than the equity component (such as an equity conversion option) is included in the liability component.
Derecognition of financial liabilities
A financial liability (in whole or in part) is recognised when the Group has
extinguished its contractual obligations, it expires or is cancelled. Any gain
or loss on derecognition is taken to the income statement.
2.12. Leases
The Group leases certain property, plant and equipment.
The lease liability is initially measured at the present value of the lease
payments that are not paid. Lease payments generally include fixed payments
less any lease incentives receivable. The lease liability is discounted using
the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. The Group estimates the
incremental borrowing rate based on the lease term, collateral assumptions,
and the economic environment in which the lease is denominated. The lease
liability is subsequently measured at amortized cost using the effective
interest method. The lease liability is remeasured when the expected lease
payments change as a result of new assessments of contractual options and
residual value guarantees.
The right-of-use asset is recognised at the present value of the liability at
the commencement date of the lease less any incentives received from the
lessor. Added to the right-of-use asset are initial direct costs, payments
made before the commencement date, and estimated restoration costs. The
right-of-use asset is subsequently depreciated on a straight-line basis from
the commencement date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
Each lease payment is allocated between the liability and finance charges. The
corresponding rental obligations, net of finance charges, are included in
lease liabilities, split between current and non-current depending on when the
liabilities are due. The interest element of the finance cost is charged to
the Statement of Profit and Loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period. Assets obtained under finance leases are depreciated over
their useful lives. The lease liabilities are shown in Note 19.
Exemptions are applied for short life leases and low value assets, with
payment made under operating leases charged to the Consolidated Statement of
Comprehensive Income on a straight-line basis of the period of the lease.
2.13. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.14. Equity
Equity comprises the following:
· "Share capital" represents the nominal value of the Ordinary
shares;
· "Share Premium" represents consideration less nominal value of
issued shares and costs directly attributable to the issue of new shares;
· "Treasury shares" are the portion of shares that a company keeps
in its own treasury. These can be gifted or purchased.
· "Other reserves" represents the merger reserve, revaluation
reserve and share option reserve where;
o "Merger reserve" represents the difference between the fair value of an
acquisition and the nominal value of the shares allotted in a share exchange;
o "Share option reserve" represents share options awarded by the group;
· "Retained earnings" represents retained losses.
2.15. Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity, as a
deduction, net of tax, from the proceeds provided there is sufficient premium
available.
2.16. Share based payments
The Group operates a number of equity-settled, share-based schemes, under
which the Group receives services from employees or third party suppliers as
consideration for equity instruments (options and warrants) of the Group. The
fair value of the third party suppliers' services received in exchange for the
grant of the options is recognised as an expense in the Income Statement or
charged to equity depending on the nature of the service provided. The value
of the employee services received is expensed in the Income Statement and its
value 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 (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example,
the requirement for employees to save).
The fair value of the share options and warrants are determined using the
Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of
options that are expected to vest. The total expense or charge 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 entity revises its estimates of the number of options that are expected to
vest based on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in the Income Statement or equity
as appropriate, with a corresponding adjustment to a separate reserve in
equity.
When the options are exercised, the Group issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium when the options are
exercised.
2.17. Taxation
Corporation tax is the main tax that a limited company must pay based on their
profits, in addition to any gains from the sale of assets. For the year ended
31 March 2024, corporation tax is calculated as 25% of a company's profit for
the year. No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in respect of
temporary differences arising from differences between the carrying amount of
assets and liabilities in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable profit. However,
deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill; deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets (including those arising from
investments in subsidiaries), are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary
differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries only to the extent that it is
probable the temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary difference can
be used.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in except where the Group 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.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net
basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted
or substantively enacted by the statement of financial position date and are
expected to apply to the period when the deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax assets and liabilities are not discounted.
2.18. Discontinued operations
Discontinued operations define the parts of a Group Company that are sold,
shut down, or no longer operational during the financial year of the Group.
The financial performance of discontinued operations is presented separately
to the Group in the consolidated statement of income, and the statement of
cash flows.
2.19. Research and development
Expenditure on research activities undertaken with the prospect of gaining new
scientific or technical knowledge and understanding is recognised in the
income statement as an expense as incurred. Development costs that are
directly attributable to the design and testing of identifiable and unique
products controlled by the Group are recognised as intangible assets where the
following criteria are met:
- It is technically feasible to complete the asset so that it will be
available for use;
- Management intends to complete the asset and use or sell it;
- There is an ability to use or sell the asset;
- It can be demonstrated how the asset will generate probable future
economic benefits;
- Adequate technical, financial and other resources to complete the
development and to use or sell the asset are available; and
- The expenditure attributable to the asset during its development can be
reliably measured.
Directly attributable costs that are capitalised as part of the asset include
the product development employee costs and an appropriate portion of relevant
overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised
as an expense are not recognised as an asset in a subsequent period.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk,
credit risk and liquidity risk. The Group's overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group's financial performance. None of these
risks are hedged.
Risk management is carried out by the management team under policies approved
by the Board of Directors.
Market risk
The Group is exposed to market risk, primarily relating to interest rate and
foreign exchange. The Group has not sensitised the figures for fluctuations in
interest rates and foreign exchange as the Directors are of the opinion that
these fluctuations would not have a significant impact on the Financial
Statements at the present time. The Directors will continue to assess the
effect of movements in market risks on the Group's financial operations and
initiate suitable risk management measures where necessary.
Credit risk
Credit risk arises from cash and cash equivalents as well as loans to
subsidiaries and outstanding receivables. Management does not expect any
losses from non-performance of these receivables. The amount of exposure to
any individual counter party is subject to a limit, which is assessed by the
Board.
The Group considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk.
Impairment provisions for loans to subsidiaries are recognised based on a
forward-looking expected credit loss model. The methodology used to determine
the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset. At
year end it was assessed credit risk was low due to future profits forecast
therefore no provision was required.
For those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised. At year end all receivables were less than 60 day
outstanding and deemed highly likely to be received therefore no provision was
required.
Liquidity risk
In keeping with similar sized groups, the Group's continued future operations
depend on the ability to raise sufficient working capital through the issue of
equity share capital or debt. The Directors are reasonably confident that
adequate funding will be forthcoming with which to finance operations.
Controls over expenditure are carefully managed. With exception to deferred
taxation, financial liabilities are all due within one year.
3.2. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, to enable the Group to continue its
activities, and to maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the Group may
adjust the issue of shares or sell assets to reduce debts.
The Group defines capital based on the total equity of the Company. The Group
monitors its level of cash resources available against future activities and
may issue new shares in order to raise further funds from time to time.
4. Critical accounting estimates and judgements
The preparation of the Financial Statements in conformity with the
requirements of the Companies Act 2006 obliges management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of expenses during the period.
Estimates and judgements are regularly evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Items subject to such estimates and assumptions, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial years, include but are not limited to:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value
in use of the cash generating units to which the goodwill has been allocated.
The value in use calculation requires the entity to estimate the future cash
flows expected to arise from the cash generating unit and a suitable discount
rate in order to calculate present value. The carrying amount of goodwill is
the deemed cost on first time application of UK Adopted International
Accounting Standards in conformity with the requirements of the Companies Act
2006.
Details of the carrying value of goodwill at the period end and the impairment
review assessment are given in Note 14.
Impairment of intangible assets
The Company follows the guidance of IAS 36 to determine when impairment
indicators exist for its intangible assets. When impairment indicators exist,
the Company is required to make a formal estimate of the recoverable amount of
its intangible assets. This determination requires significant judgement. In
making this judgement, management evaluates external and internal factors,
such as significant adverse changes in the technological market, economic or
legal environment in which the Company operates as well as the results of its
ongoing development programs. Management also considers the carrying amount of
the Company's net assets in relation to its market capitalisation as a key
indicator. For the year ended 31 March 2024, future sales forecasts related to
the intangible assets of the Company were taken into consideration when
finalising the impairment value. Further details of the impairment of
intangible assets are included in note 14.
Capitalised development costs
Development costs incurred in building the Group's key platform for future
expansion have been capitalised in accordance with the requirements of IAS38.
The majority of these costs consist of salary expenses to which an estimated
proportion of development time has been applied. Salary expenses are
capitalised because the work done is expected to lead to future economic
benefits for the Group. The proportion of salary expenses that are capitalised
is based on the judgement of management, taking IAS38 into account after
reviewing how much each employee contributes to the Company's development
projects respectively.
Investment in Subsidiaries
The Company considers the recoverability of the investment in subsidiaries to
be a key area of judgment, and this is held at its carrying amount which is
expected to be recovered from the subsidiary. The directors believe that the
investment in subsidiaries balance at year end is recoverable based on the
directors' expectation around the potential that the subsidiaries have to
generate sufficient economic benefits in the foreseeable future.
The investment in subsidiaries includes loans as detailed in note 15. The
loans are considered recoverable by management, and the investments made have
been impaired in line with their level of recoverability.
Subsidiary investments are also reviewed to decide on whether impairments will
be required, based on the valuation of the subsidiary's assets. Such
impairments that occurred during the year are detailed in note 15.
Going Concern
As discussed more fully in the in the Strategic Report, these financial
statements have been prepared on the going concern basis. This approach is
based on management's judgement that cashflow requirements for the continued
development can be achieved through operating activities and additional
fundraising if required.
5. Segment information
Business segments are identified according to the different trading activities
in the Group.
During the year, the Group's trading segments were machine learning and data
services representing revenue of £369,860 (2023: £693,734) and its sports
and leisure activities, comprising sports tuition at schools representing its
revenue of £928,807 (31 March 2023: £1,398,427 ). All revenue was generated
in the UK. The sport and leisure activities were discontinued during the year
as a result of the subsidiaries that provided this service being disposed in
November 2023. Consequentially, the revenue recognised from the sport and
leisure activities is representative of the period April to November 2023.
31 March 2024 Machine learning and Data services Sport in Schools Total
£ £ £
Revenue 369,860 928,807 1,298,667
Cost of sales - (498,890) (498,890)
Administrative expenses (2,562,208) (374,496) (2,936,704)
Other gains/(losses) (102,965) 164,093 61,128
Other income 3,160 384 3,544
Finance income 263 822 1,085
Finance costs (126,390) (4,156) (130,546)
Impairments (15,317,338) - (15,317,338)
Profit/(Loss) before tax per reportable segment (17,735,618) 216,564 (17,519,054)
Additions to intangible assets 1,020,516 - 1,020,516
Reportable segment assets 4,552,239 - 4,552,239
Reportable segment liabilities 2,983,562 - 2,983,562
31 March 2023 Machine learning and Data services Sport in Schools Total
£ £ £
Revenue 693,734 1,398,427 2,092,161
Cost of sales (51) (732,915) (732,966)
Administrative expenses (5,484,356) (640,413) (6,124,769)
Other gains/(losses) (15,796) (7,572) (23,368)
Other income 1,291,873 444 1,292,317
Finance income 101 - 101
Finance costs (81,518) - (81,518)
Impairments (16,558,296) - (16,558,296)
Profit/(Loss) before tax per reportable segment (20,154,309) 17,971 (20,136,338)
Additions to intangible assets 1,456,436 - 1,456,436
Reportable segment assets 20,809,036 566,580 21,375,616
Reportable segment liabilities 5,544,528 263,518 5,808,046
6. Revenue
31 March 2024 Machine learning and Data services Sport in Schools Total
£ £ £
Revenue 369,860 928,807 1,298,667
31 March 2023 Machine learning and Data services Sport in Schools Total
£ £ £
Revenue 693,734 1,398,427 2,092,161
Lodbrok Capital LLP were the only customer that accounted for over 10% of the
Group's revenue for the year, contributing £179,675 (2023: Lodbrok Capital
LLP - £334,657).
7. Administrative expenses - continued operations
Year ended Year ended
31 March 2024 - continued operations 31 March 2023 - Group
£ £
Employee salaries and costs 82,150 1,374,989
Director remuneration 258,521 351,828
Office and expenses 24,821 152,481
Travel & subsistence 18,738 47,587
Professional & consultancy fees 335,791 635,774
IT & Software - 81,902
Subscriptions 99,280 291,281
Insurance 82,144 106,719
Depreciation and amortisation 1,554,998 2,839,889
Share option expense - 1,605
Exchange related costs 94,191 67,452
Other expenses 11,574 173,262
Total administrative expenses 2,562,208 6,124,769
Of the above Group staff costs, £711,605 (31 March 2023: £1,167,769 ) has
been capitalised in accordance with IAS 38 as development costs and are shown
as an intangible addition in the year.
Services provided by the Company's auditor and its associates
During the year, the Group (including overseas subsidiaries) obtained the
following services from the Company's auditors and its associates:
Group
Year ended 31 March 2024 Year ended 31 March 2023
£ £
Auditors' remuneration 80,300 70,500
8. Employee benefit expense
Group Company
Staff costs (excluding Directors) Year ended Year ended Year ended Year ended
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Salaries and wages 183,887 2,081,959 - -
Social security costs 46,043 305,479 - -
Pension contributions 20,987 128,743 - -
Other employment costs 1,973 13,668 - -
252,890 2,529,849 - -
The average monthly number of employees for the Group during the year was 109
(31 March 2023: 112) and the average monthly number of employees for the
Company was nil (31 March 2023: nil).
Of the above Group staff costs, £711,605 (31 March 2023: £1,167,769 ) has
been capitalised in accordance with IAS 38 as development costs and are shown
as an intangible addition in the year.
There were no employees in the Company apart from Directors whose remuneration
is disclosed in Note 26.
9. Other gains/(losses)
Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Continued operations
Other Losses (17,450) 23,368
Modification of convertible loan notes (96,374) -
Other gains 10,859 -
Other gain/(losses) (102,965) 23,368
Discontinued Operations
Profit on disposal of subsidiary 164,300 -
Other Losses (207) -
Other gain/(losses) 61,128 23,368
10. Other operating income
Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Continued operations
Sale of equipment 3,160 444
3,160 444
Discontinued operations
Other income 386 -
3,546 -
11. Finance income/(costs)
Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Continued operations
Interest received from cash and cash equivalents 263 101
Discontinued operations
Interest received from cash and cash equivalents 822 -
Finance income 1,085 101
Continued operations
Loan interest (126,390) (81,518)
Discontinued operations
Loan interest (4,156) -
Finance Costs (130,546) (81,518)
12. Property, plant and equipment
Group
Plant and equipment Total
£ £
Cost
As at 1 April 2022 206,329 206,329
Additions 10,616 10,616
Acquired upon acquisition (54,332) (54,332)
As at 31 March 2023 162,613 162,613
As at 1 April 2023 162,613 162,613
Additions 2,323 2,323
Disposals (135,566) (135,566)
As at 31 March 2024 29,370 29,370
Depreciation
As at 1 April 2022 140,665 140,665
Charge for the year 23,593 23,593
Acquired upon acquisition (39,293) (39,293)
As at 31 March 2023 124,965 124,965
As at 1 April 2023 124,965 124,965
Charge for the year 23,980 23,980
Disposal (125,227) (125,227)
As at 31 March 2024 23,718 23,718
Net book value as at 31 March 2023 37,648 37,648
Net book value as at 31 March 2024 5,652 5,652
All tangible assets shown above are assets in use by the Group's subsidiary
undertakings.
13. Right of use Assets
Group
Right of Use leases Total
£ £
Cost
As at 1 April 2022 154,180 154,180
Additions - -
Disposal - -
As at 31 March 2023 154,180 154,180
As at 1 April 2023 154,180 154,180
Additions - -
Disposal (154,180) (154,180)
As at 31 March 2024 - -
Depreciation
As at 1 April 2022 115,635 115,635
Charge for the year 10,279 10,279
Disposal - -
As at 31 March 2023 125,914 125,914
As at 1 April 2023 125,914 125,914
Charge for the year 6,481 6,481
Disposal (132,395) (132,395)
As at 31 March 2024 - -
Net book value as at 31 March 2023 28,266 28,266
Net book value as at 31 March 2024 - -
Right of Use Assets represent leasehold premises from which the Group operates
in relation to its sports and leisure activities.
All right of use assets shown above are assets in use by the Group's
subsidiary undertakings.
The right of use assets were disposed of as part of the sale of Sport in
Schools and Elms Group that took place on 14 November 2023. As a result, they
are no longer recognised by the Group.
14. Intangible assets
Intangible assets comprise goodwill and development costs.
Assets - Cost and Net Book Value Goodwill Development costs Technology assets Customer Databases Total
£ £ £ relationships £ £
£
Cost
As at 1 April 2022 21,621,803 1,085,000 16,385,727 1,207,000 1,094,000 41,393,530
Additions - 1,456,436 - - - 1,456,436
As at 1 April 2023 21,621,803 2,541,436 16,385,727 1,207,000 1,094,000 42,849,966
Additions - 1,020,516 - - - 1,020,516
As at 31 March 2024 21,621,803 3,561,952 16,385,727 1,207,000 1,094,000 43,870,482
Amortisation
As at 1 April 2022 - (1,085,000) (1,964,556) (74,724) (52,095) (3,176,375)
Amortisation - (537,328) (2,018,000) (94,404) (156,285) (2,806,017)
Impairment (11,655,908) (919,108) (2,742,498) (355,162) (885,620) (16,558,296)
As at 1 April 2023 (11,655,908) (2,541,436) (6,725,054) (524,290) (1,094,000) (22,540,688)
Amortisation - (31,587) (1,442,714) (74,155) - (1,548,456)
Disposal/write-off (60,000) - - - - (60,000)
Impairment (9,905,895) - (5,122,663) (288,780) - (15,317,338)
As at 31 March 2024 (21,621,803) (2,573,023) (13,290,431) (887,225) (1,094,000) (39,466,482)
Net book value 2023 9,965,895 - 9,660,673 682,710 - 20,309,278
Net book value 2024 - 988,929 3,095,296 319,775 - 4,404,000
As part of the disposal of Sport in Schools and Elms Group in November 2023,
goodwill of £60,000 was disposed of.
Development costs are predominantly capitalised staff costs associated with
enhancements to the technology being developed by Insig Partners Limited. The
Group's technology, customer relationships and database technology are
acquired from the acquisitions undertaken during the period.
Goodwill is recognised when a business combination does not generate cash
flows independently of other assets or groups of assets. As a result, the
recoverable amount, being the value in use, is determined at a cash-generating
unit (CGU) level.
These CGUs represent the smallest identifiable group of assets that generate
cash flows. The CGUs are deemed to be the assets within the operating units.
Each CGU to which goodwill is allocated represents the lowest level within the
Group at which the goodwill is monitored for internal management purposes.
The total intangible value in use for each CGU, incorporating goodwill and the
intangible asset value, is determined using discounted cash flow projections
derived from the total historical revenue profile of each identifiable CGU.
The assumptions which are applied to each CGU including the useful economic
life are set out in Note 2.7.
The Directors of the Group now assess Insig AI Plc as a one whole CGU. This is
due to the Group's revenues not being largely independent of each other.
Therefore, they are not individually identifiable as assets which generate
cash inflows, but instead as a group.
The key assumptions for the value in use calculations are those regarding
growth rates particularly in respect of the growth in revenue and discount
rates. The discount rate is reviewed annually to take into account the
current market assessment of the time value of money and the risks specific to
the cash generating units and rates used by comparable companies. The
discount rate used to calculate the value in use is 27.5%. The long term
growth rate used for the terminal value calculation was 2%. Impairments of
intangible assets are sensitive to changes in forecasted revenue and changes
in the discount rate, which are depicted in the tables below. As a result,
management has scrutinised the probable economic benefit of the intangible
assets based on revenue forecasts produced, to apply appropriate impairments
where necessary.
Sensitivity test - Impairments
Group
2024
Impact on impairment £
+10% Revenue 933,000
-10% Revenue (933,000)
Group
2024
Impact on impairment £
+5% Discount rate 1,209,000
-5% Discount rate (1,908,00)
The tables above reflect the sensitivity of the Company's impairments to
changes in revenue and the discount rate. A 10% change in revenue will either
increase or decrease the impairment by £933,000 (depending on if it is an
increase or decrease). A 5% increase in the discount rate increases the
impairment by £1,209,000, and reduces the impairment by £1,908,000 if the
discount rate reduces by 5%.
An impairment review of the Group's development costs, technology, customer
relationships and database technology is carried out on an annual basis.
The recoverable amounts of the cash-generating units are determined from
value in use calculations. The key assumptions for the value in use
calculations are those regarding forecast revenues, discount rates and
operating costs. Management have considered the following elements:
(i) Based on current assessments of the Insig Partners
activities made by the Directors, they consider that whilst revenues are
forecast to grow in 2024 and exponentially grow from 2025-2027, these
forecasts are reduced from previous forecasts prepared.
(ii) The reduction of activities in Insig Data have led to the
Directors assessing the need for an impairment.
(iii) Operational costs are monitored and controlled
Following their assessment, the Directors concluded an impairment charge of
£15,317,338 (2023: £16,558,296) was necessary for the year ended 31 March
2024 due to the reduced future sales forecast following the Company's sales
performance in the current and prior years.
15. Investments in subsidiary undertakings
Company
Shares in Group Undertakings Investment in subsidiaries Loans to Group Undertakings
Cost
31 March 2023 15,594,537 4,788,599
Additions - 217,535
Impairment (15,594,537) -
31 March 2024 - 5,006,134
Company
Shares in Group Undertakings and Group Loans NBV 31 March 2024 NBV 31 March 2023
£ £
Cost
Insig Partners - 15,594,537
Insig Data - -
Loans to Group undertakings 4,075,827 4,788,599
Total 4,075,827 20,383,136
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
Although Insig Data's trading activity remained stagnant during the year, it
hasn't ceased its trade.
The Company has provided a guarantee in respect of the outstanding liabilities
of the subsidiary companies listed below in accordance with Section 479A -
479C of the Companies Act 2006 as these subsidiary companies of the Group are
exempt from the requirements of the Companies Act 2006 relating to the audit
of the accounts by virtue of Section 479A of this Act.
During the year, £15,594,537 of the investment held in Insig Partners was
impaired after review from Management. This impairment was determined after
comparing the total investment value of £15,594,537 with the value in use
total. There was also an impairment of the intangible assets held within Insig
Partners. This was applied as a result of a revised forecast dated from March
2024 to March 2030. The revised sales expected for the Company's products and
cost base led to a reduced enterprise value of Insig Partners' intangible
assets.
During the year, the loans granted to Insig Partners by Insig AI plc were
partially impaired by £930,307. These impairments were agreed based on the
recoverability of the loans, after taking the net assets of the subsidiary
into account.
Subsidiaries
The following companies were subsidiaries at the balance sheet date and the
results and year end position of these companies have been included in these
consolidated financial statements.
Name of subsidiary Registered office address Country of incorporation and place of business Proportion of ordinary shares held (%) Nature of business
Insig Partners Limited 6 Heddon Street, London, W1B 4BT United Kingdom 100% Artificial Intelligence
Westside Sports Limited 6 Heddon Street, London, W1B 4BT United Kingdom 100% Holding company
Insight Capital Consulting Limited** 6 Heddon Street, London, W1B 4BT United Kingdom 100% Artificial Intelligence
Insig Data Limited 6 Heddon Street, London, W1B 4BT United Kingdom 100% Artificial Intelligence
Ultimate Player Limited 6 Heddon Street, London, W1B 4BT United Kingdom 100% Dormant
Pantheon Leisure Plc * 6 Heddon Street, London, W1B 4BT United Kingdom 85.87% Activities of head office
* Shares held indirectly through Westside Sports Limited
** Shares held indirectly by Insig Partners Limited
The data for the disposed subsidiaries are not included in the balance sheet.
The profit and loss figures for the disposed subsidiaries are included within
the statement of profit and loss, under the "discontinued operations" heading.
This data represents Sport in Schools' and The Elms Group's performance up to
the date of disposal, which was 14 November 2023.
16. Trade and other receivables
Group Company
Current 31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Trade receivables 77,250 125,030 - -
Amounts due from subsidiary undertakings - - 230,853 106,864
Prepayments 27,067 38,498 27,067 26,749
VAT receivable - - 8,809 18,086
Research and development receivable - 542,000 - -
Other receivables 423 14,312 - -
Total 104,740 719,840 266,729 151,699
The ageing of trade receivables is as follows:
Group
As at 31 March 2024 As at 31 March 2023
£ £
Up to 3 months 77,250 125,030
Total 77,250 125,030
Company
As at 31 March 2024 As at 31 March 2023
£ £
Up to 3 months - -
Total - -
17. Cash and cash equivalents
Group Company
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Cash at bank and in hand 37,847 280,584 14,459 3,749
18. Trade and other payables
Group Company
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Trade payables 139,722 266,978 116,883 149,346
Accruals 108,860 371,056 71,735 233,290
Deferred income - 50,000 - -
Other payables 24,482 4,852 1,967 -
Taxes and social security 65,174 240,041 2,264 -
338,238 932,927 192,849 382,636
The ageing of trade and other payables is as follows:
Group
As at 31 March 2024 As at 31 March 2023
£ £
Up to 3 months 231,637 170,849
3 to 6 months - 296,448
6 to 12 months 90,101 -
Over 12 months 16,500 -
Total 338,238 467,297
Company
As at 31 March 2024 As at 31 March 2023
£ £
Up to 3 months 115,121 83,012
3 to 6 months - 66,333
6 to 12 months 77,726 -
Total 192,847 149,346
19. Leases and borrowings
Group
Company
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Not later than one year:
Convertible loan note 1,544,324 2,261,769 1,544,324 2,261,769
Right of use liability - 10,386 - -
Later than one year:
Right of use liability - 16,868 - -
Total 1,544,324 2,289,023 1,544,324 2,261,769
20. Convertible loan notes
CLN 1 CLN 2 CLN 3 31 March 2024
£ £ £ £
Convertible loan note 1,000,000 500,000 750,000 2,250,000
Interest
Accrued interest 95,057 45,643 35,076 175,776
Conversion - - (785,076) (785,076)
Modification of convertible loan note (65,021) (31,355) - (96,376)
Total 1,030,036 514,288 - 1,544,324
Equity
Amount classified as equity 86,025 52,618 - 138,643
Total 86,025 52,618 - 138,643
On 4 May 2022, the Company entered into a formal agreement for a £1.0m
convertible loan note to be provided by Richard Bernstein, Director of the
Company. A total of £1,000,000 has been drawn down by the Company. The loan
facility when issued was originally repayable on or before 31 December 2022,
and interest accrued from the date monies were drawn down at a rate of 5%. The
convertible loan note can be converted at the noteholder's discretion.
On 17 June 2022, the Company entered into a convertible loan facility
agreement with David Kyte, a long-term shareholder in the Company for
£500,000. A total of £500,000 has been drawn down by the Company. The loan
facility when issued was repayable on or before 31 December 2022, and interest
accrued from the date monies were drawn down at a rate of 5%. The convertible
loan note can be converted at the noteholder's discretion.
On 22 December 2022, the Company agreed revised terms for both the convertible
loan note (CLN) agreements with Richard Bernstein and David Kyte for £1m and
£0.5m respectively.
The following revisions were made during the year ended 31 March 2023.
- Interest owed on the first CLN will be rolled up into the loan
expiring 31 December 2023, with an interest of 8% per annum.
- A conversion price of 20 pence for Richard Bernstein, and 18
pence for David Kyte.
- The issuance of 1,666,667 warrants expiring on 31 December 2025
exercisable at a price of 30 pence for Richard Bernstein.
- The issuance of 1,388,889 warrants expiring on 31 December 2025
exercisable at a price of 25 pence for David Kyte.
-
The revisions for the year ended 31 March 2024 are as follows:
On 20 December 2023, it was agreed that the terms of the CLN with David Kyte
will be extended by six months to 30 June 2024, and the interest rate was
changed from 8% per annum to 12% per annum.
On the 12 September 2022, the Company entered into a formal agreement for a
£750,000 convertible loan note to be provided by Richard Bernstein, Director
of the Company. A total of £750,000 has been drawn down by the Company.
The loan facility is repayable on or before 30 June 2023, and interest will be
accrued from the date monies are drawn down
at a rate of 5%. The loan facility has a conversion price which is set at the
higher of 35 pence per ordinary share or the prevailing share price at the
date of conversion. The convertible loan note can be converted at the
noteholder's discretion.
On 14 December 2023, it was agreed that the terms of the CLN with Richard
Bernstein will be extended by six months to 30 June 2024. All other terms of
the agreement remained the same.
On 15 November 2023, the Company received notice from Richard Bernstein to
convert the balance of the agreement entered on 12 September 2022 to 3,925,380
ordinary shares at a conversion price of 20 pence per share. The total amount
converted, including interest, was £785,076.
21. Deferred tax
An analysis of the deferred tax liability is set out below.
Cost
£
Deferred tax liability
As at 31 March 2022 4,160,088
Deferred tax liability for intangibles (1,573,992)
As at 31 March 2023 2,586,096
Deferred tax liability for intangibles (1,485,096)
As at 31 March 2024 1,101,000
22. Financial Instruments by Category
Group
31 March 2024 31 March 2023
Amortised cost Total Amortised cost Total
Financial Assets per Statement of Financial Position £ £ £ £
Trade and other receivables 77,673 77,673 681,341 681,341
Cash and cash equivalents 37,847 37,847 280,584 280,584
115,520 115,520 961,925 961,925
31 March 2024 31 March 2023
Amortised cost Total Amortised cost Total
Financial Liabilities per Statement of Financial Position £ £ £ £
Trade and other payables 1,792,907 1,792,907 2,964,025 2,964,025
Right of use lease liabilities - - 27,254 27,254
1,792,907 1,792,907 2,991,279 2,991,279
The convertible loan notes provided during the year by Richard Bernstein and
David Kyte have been included in the payables as they are classed as financial
liabilities.
Company
31 March 2024 31 March 2023
Amortised cost Total Amortised cost Total
Financial Assets per Statement of Financial Position £ £ £ £
Trade and other receivables 230,852 230,852 106,864 106,864
Due from subsidiary undertakings 4,075,827 4,075,827 4,788,599 4,788,599
Cash and cash equivalents 14,459 14,459 3,749 3,749
4,321,138 4,321,138 4,899,212 4,899,212
31 March 2024 31 March 2023
Amortised cost Total Amortised cost Total
Financial Liabilities per Statement of Financial Position £ £ £ £
Trade and other payables 192,849 192,849 382,636 382,636
192,849 192,849 382,636 382,636
The Company's financial instruments comprise cash and cash equivalents,
receivables and payables which arise in the normal course of business. As a
result, the main risks arising from the Company's financial instruments are
credit and liquidity risks. Please refer to Note 3.1 share capital and
premium.
Group and Company Number of shares Share capital
31 March 31 March 31 March 2024 31 March 2023
2024 2023
Ordinary shares 109,601,025 105,675,645 1,841,833 1,056,757
Deferred shares 22,811,638 22,811,638 2,053,047 2,053,047
Total 132,412,663 128,487,283 3,894,880 3,109,804
Number of Ordinary shares Share capital Share premium Total
Issued at 0.01 pence per share £ £ £
As at 31 March 2023 105,675,645 1,056,756 39,077,403 40,134,159
24 April 2023 - Equity subscription from treasury reserve - - 900,000 900,000
15 November 2023 - Loan conversion 3,925,380 39,254 745,822 785,076
27 November 2023 - Issue of shares from treasury reserve - - 87,500 87,500
As at 31 March 2024 109,601,025 1,096,010 40,810,725 41,906,735
As at 31 March 2024, The Company had 505,888 shares held in treasury. The
number of ordinary shares presented are the number of ordinary shares before
taking the treasury reserve into account.
On 24 April 2023, the Company raised £0.9 million by way of equity
subscription. 5,294,118 shares were issued at 17 pence per share from the
Company's treasury reserve.
On 28 September 2023, the Company agreed to issue 500,000 ordinary shares from
treasury to John Wilson for adviser services provided.
On 15 November 2023, Richard Bernstein converted the balance of the
convertible loan, being £785,076 into 3,925,380 ordinary shares at a
conversion price of 20 pence per share.
On 27 November 2023, the Company agreed to issue 500,000 ordinary shares from
treasury to Roger Parry for the corporate development adviser services
provided.
On 28 November 2023, the Company agreed to issue 200,000 ordinary shares from
treasury to Gareth Evans for investor relations services provided.
Deferred Shares (nominal value of 0.09 pence per share) Number of Deferred shares Share capital
£
As at 31 March 2023 22,811,638 2,053,047
As at 31 March 2024 22,811,638 2,053,047
The Company has an authorised share capital limit in place, which will be
considered by shareholders at the next annual general meeting.
23. Share based payments
The Company has established a share option scheme for Directors, employees and
consultants to the Group. Share options and warrants outstanding and
exercisable at the end of the period have the following expiry dates and
exercise prices:
Grant Date Vesting Date Expiry Date Exercise price in £ per share 31 March 2024
Options & Warrants
Opening balance 10,027,138
1 August 2019 31 January 2020 31 July 2023 0.20 (666,666)
1 August 2019 31 July 2021 31 July 2023 0.20 (333,334)
1 August 2019 31 July 2020 31 January 2024 0.40 (333,334)
1 August 2019 31 July 2021 31 January 2024 0.40 (666,666)
8,027,138
The Company and Group have no legal or constructive obligation to settle or
repurchase the options or warrants in cash.
During the year, a total of 2,000,000 options expired.
Warrants
2024 2023
Outstanding at beginning of period 3,452,138 396,582
Exercised - -
Vested - 3,055,556
Outstanding as at period end 3,452,138 3,452,138
Exercisable at period end 3,452,138 3,452,138
The movements in the weighted average exercise price of the warrants were as
follows:
2024 2023
Outstanding at beginning of period 0.46 0.84
Granted - 0.28
Outstanding as at period end 0.46 1.12
Exercisable at period end 0.46 0.46
In accordance with IFRS2, the fair value of the warrants issued and recognised
as a charge in the accounts for the 12 month period is nil (31 March 2023 -
£Nil). In arriving at this amount, the expected volatility is based on
historical volatility, the expected life is the average expected period to
exercise, and the risk-free rate of return is the yield on a zero-coupon UK
government bond for a term consistent with the assumed option life.
The fair value of the equity instruments granted was determined using the
Black Scholes Model. The inputs into the model for warrants outstanding at the
year-end were as follows
2022 Warrants
Granted on: 22 December 2022
Life (years) 3 years
Share price (pence per share) 15p
Exercise price 25p
Shares under option 3,055,556
Vesting period (years) 3 years
Small company discount factor 20%
Total fair value (pence per option) 0.33
Options
In January 2011, the Company adopted an unapproved share option scheme and on
1 August 2019, the Company granted options over 4,000,000 ordinary shares in
the Company as part of a Director's compensation agreement. In March 2022, the
Company granted options over 3,350,000 ordinary shares to a Director and
certain employees. No options were granted in the year ended March 2023 and
2024. Details of the options are set out below:
2024 2023
Outstanding at beginning of period 6,575,000 7,350,000
Lapsed during period (2,000,000) (775,000)
Exercised - -
Granted - -
Outstanding as at period end 4,575,000 6,575,000
Exercisable at period end 2,000,000 4,000,000
2024 2023
Outstanding at beginning of period 44.0 46.0
Lapsed 30.0 48.0
Exercised - -
Granted - -
Outstanding as at period end 53.0 44.0
Exercisable at period end 53.0 44.0
The movements in the weighted average exercise price of the options were as
follows:
The fair value of the equity instruments granted was determined using the
Black Scholes Model. The only conditions attached to the options is continuing
employment. The inputs into the model for options outstanding at the year-end
were as follows:
2022 Options
Granted on: 8 March 2022
Life (years) 10 years
Share price (pence per share) 27.5p
Exercise price 48p
Shares under option 3,350,000
Risk free rate 0.57%
Expected volatility 43.1%
Vesting period (years) 8 to 9 years
Small company discount factor 35%
Total fair value (pence per option) 0.02
The expected volatility is based on historical volatility, the expected life
is the average expected period to exercise, and the risk-free rate of return
is the yield on a zero-coupon UK government bond for a term consistent with
the assumed option life.
In accordance with IFRS 2, the fair value of the share options issued and
recognised as a charge in the accounts for the 12 month period is £nil (2023:
£nil).
The weighted average contractual life of options outstanding on 31 March 2024
was 5 years (2023: 4.3 years).
24. Other reserves
Merger reserve Total
£ £
Equity reserve for convertible loan notes
At 31 March 2023 51,798 325,583 377,381
Equity element arising on the issue of convertible loan notes - 138,634
138,634
325,583 516,015
At 31 March 2024 190,432
25. Directors' remuneration
31 March 2024
Salary or Fees Pension Total
£ £ £
Executive Directors
Richard Bernstein 35,000 - 35,000
Steven Cracknell 156,000 10,000 166,000
Warren Pearson 178,643 10,000 188,643
Colm McVeigh 150,000 6,000 156,000
Non-executive Directors
John Murray 2,917 - 2,917
Richard Cooper* 12,000 - 12,000
534,560 26,000 560,560
*Richard Cooper is a director of Luclem Estates & Advisory Limited which
received £32,873 in fees in the year to 31 March 2024.
Directors who retired after the year end:
· John Murray - deceased 24 April 2023
· Colm McVeigh - resigned 29 May 2024
· Warren Pearson - resigned as director 29 May 2024
Of the above Group directors' remuneration, £308,911 (31 March 2023:
£288,665) has been capitalised in accordance with IAS 38 as development
related costs and are shown as an intangible addition in the year. None of the
settlement fees were capitalised.
31 March 2023
Salary Pension Total
£ £ £
Executive Directors
Richard Bernstein 35,000 - 35,000
Steven Cracknell 146,667 10,000 156,667
Warren Pearson 146,667 10,000 156,667
Colm McVeigh 233,333 9,333 242,666
Non-executive Directors
John Murray 35,000 - 35,000
Richard Cooper* 12,000 - 12,000
608,667 29,333 638,000
*Richard Cooper is a director of Luclem Estates & Advisory Limited which
received £31,826 in fees in the year to 31 March 2024.
The remuneration of Directors and key executives is determined by the
remuneration committee having regard to the performance of individuals and
market trends.
26. Income tax expense
Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Current Tax
UK corporation tax on profit for the year (117,043) (542,000)
Adjustments in respect of prior periods (13,290) (749,873)
Total current tax (130,333) (1,291,873)
Deferred Tax
Intangibles on business combinations (1,485,096) (1,573,992)
Total deferred tax (1,485,096) (1,573,992)
Total income tax expense (1,615,429) (2,865,865)
Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Loss before tax (17,571,318) (21,428,211)
Tax at the applicable rate of 25% (2023: 25%) (4,392,830) (4,071,360)
Effects of:
Expenditure not deductible for tax purposes 3,048,662 2,940,457
Income not taxable for tax purposes (65,462) -
Adjustments in respect of prior periods - current tax (13,290) -
Adjustments in respect of prior periods - deferred tax - -
Additional deduction for R&D expenditure - (401,421)
Surrender of tax losses for R&D tax credit refund - 168,207
R&D expenditure credits - 8,461
Group relief surrendered/(claimed) (13,335) (20,948)
Adjustments in respect of prior periods regarding R&D - (749,873)
Effect of tax rate change on deferred tax opening balance - (209,040)
Unrecognised deferred tax asset in relation to carried forward losses (179,174) (530,348)
Tax charge (1,615,429) (2,865,865)
The Group has unutilised tax losses of approximately £14,545,091 (31 March
2023 £13,828,392) available to carry forward against future taxable profits.
No deferred tax asset has been recognised on accumulated tax losses because of
uncertainty over the timing of future taxable profits against which the losses
may be offset.
27. Earnings/Loss per share
Continued Operations
The calculation of the total basic loss per share of 17.71 pence (31 March
2023: 17.89 pence) is based on the loss attributable to equity holders of the
parent company's continued operations of £16,120,188 (31 March 2023:
£18,568,591) and on the weighted average number of ordinary shares of
100,155,706 (31 March 2023: 103,757,837) in issue during the year.
Discontinued Operations
The calculation of the total basic earnings per share of 0.21 pence (31 March
2023: 0.01 pence) is based on the earnings attributable to equity holders of
the parent company's discontinued operations of £210,085 and on the weighted
average number of ordinary shares of 100,155,706 (31 March 2023: 103,757,837)
in issue during the year.
In accordance with IAS 33, basic and diluted loss per share are identical for
the Group as the effect of the exercise of share options would be to decrease
the loss per share. Details of share options that could potentially dilute
earnings per share in future periods are set out in Note 24.
28. Contingent Liabilities
The Group had a contingent liability as at 31 March 2024 in respect of a
Research & Development Tax Credit of £117,042 (2023: £nil) received from
HM Revenue & Customs ("HMRC"). The Tax Credit, which relates to the year
ended 31 March 2023 tax return, was recognised in the financial statements as
an asset as at 31 March 2023 and was received from HMRC during the year ended
31 March 2024. HMRC provided a notice of enquiry in January 2024 and opened an
enquiry in relation to the balance. The enquiry remained open at the year end
and the Group is in ongoing discussions regarding the enquiry post year end.
The full balance of £117,042 is included in the enquiry and is therefore the
total estimated value included as a contingent liability, however the Group is
confident in defending the full value of the Tax Credit.
29. Discontinued Operations
On 14 November 2023, the Company's 85.87% owned subsidiary, Pantheon Leisure
plc ("Pantheon"), entered into a sale agreement for Sports in Schools and Elms
Group with Haygreen Limited for a total cash consideration payable of
£300,000. The disposed subsidiaries are reported in the financial statements
as discontinued operations. Financial information relating to the discontinued
operations from 1 April 2023 to the date of disposal are set out below.
The financial performance and cash flow information are for the period ended
14 November 2023.
Financial performance and cash flow information
November 2023
£
Revenue 928,807
Net expenses (883,022)
Gain on disposal 164,300
Profit before income tax 210,085
Profit for the year from discontinued operations 210,085
Net cash used in operating activities (58,319)
Net cash generated from investing 138,572
Net cash used in financing (261,847)
Net increase in cash and cash equivalents (181,594)
Details of the sale of the subsidiaries
November 2023
£
Consideration received or receivable:
Cash 300,000
Total disposal consideration 300,000
Carrying amount of net assets sold (see below) (74,500)
Disposal fee (1,200)
Loss of goodwill after disposal (60,000)
Profit on disposal of subsidiaries 164,300
The carrying amounts of assets and liabilities as at the date of sale (14
November 2023) were:
November2023
£
Property, plant and equipment 7,830
Cash 111,596
Right of use asset 21,785
Trade and other receivables 170,494
Total assets 311,705
Trade and other payables (237,205)
Total liabilities (237,205)
Net Assets disposed 74,500
30. Related party transactions
Loans to Group undertakings
Amounts receivable as a result of loans granted to subsidiary undertakings are
as follows:
Company
31 March 2024 31 March 2023
£ £
Insig Partners 4,404,000 4,655,904
Insig Data 42,113 -
Insight Capital Consulting Limited 184 31
Pantheon Leisure Plc (370,470) 132,664
Westside Sports Limited - -
4,075,827 4,788,599
Insig Partners Limited
Loans totalling £678,402 were provided to Insig Partners Limited from Insig
AI Plc during the year to cover operating costs (31 March 2023: £1,322,635).
During the year, the loan balance owed by Insig Partners was impaired by
£930,306 to £4,404,000, to reflect the value of the investment that is held
within the subsidiary as at 31 March 2024.
Insig Data Limited (formerly FDB Systems Limited)
Loans totalling £42,113 were provided to Insig Data from Insig AI Plc during
the year to cover operating costs (31 March 2023: £291,761).
Insight Capital Consulting Limited
Loans totalling £153 were provided to Insight Capital Consulting from Insig
Partners Limited during the year to cover operating costs (31 March 2023:
£31).
Pantheon Leisure Plc
Loans totalling £5,666 were provided to Pantheon Leisure from Insig AI Plc
during the year to cover operating costs (31 March 2023: £2,121).
The proceeds and dividends due to be received by Pantheon Leisure after the
disposal of Sport in Schools and The Elms Group in November 2023 totalled
£508,800. The proceeds were deposited in Insig AI Plc's bank account and the
£210,000 dividends were applied against Pantheon's intercompany balance with
Insig AI.
All intra Group transactions are eliminated on consolidation.
Other transactions
The Group defines its key management personnel as the Directors of the Company
as disclosed in the Directors' Report.
Luclem Estates Limited, a company of which Richard Cooper is a director, was
paid a fee of £25,638 the year ended 31 March 2024 (31 March 2023: £32,112)
for the provision of corporate management and consulting services to the
Company. There was a balance of £7,235 owing at year end (31 March 2023:
£7,362).
On 24 April 2023, the Company raised £0.9 million by way of equity
subscription for 5,294,118 ordinary shares of 1 pence each in the Company (at
17 pence per Ordinary Share. As part of this subscription, Richard Bernstein
subscribed for 874,509 shares at 17 pence per share.
On 4 July 2023 the Company agreed revised terms for a convertible loan note
agreement with Richard Bernstein as announced on 12 September 2022 for
£0.75m. The Company and Richard Bernstein agreed to extend the term of the
CLN by six months to 30 December 2023. All other terms were unchanged.
On 15 November 2023, the Group disposed of Sport in School Limited and Elms
Group Limited. Following the Disposal, an existing convertible loan between
the Company and Richard Bernstein was revised. This included the release of
security over Westside Sports Limited and a new conversion price of 20.0 pence
per ordinary share of 1 pence each in the Company being a 21.2 per cent.
premium to the closing price on 14 November 2023.
31. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
32. Events after the reporting date
On 4 April 2024, the Group agreed to a £250,000 equity funding facility with
Richard Bernstein, who is now the Chief Executive Officer of Insig AI. The
facility allows him to subscribe for up to 1,250,000 new ordinary shares at a
price of 20 pence per share until 31 August 2024.
On 30 May 2024, Colm McVeigh stepped down from the Board from his role as CEO
to pursue other opportunities. Warren Pearson also stepped down from the
Board, but remains as a full-time employee to focus on product development.
John Wilson was appointed as Non-Executive chairman with immediate effect.
On 30 May 2024, the Group acquired 5.45% equity interest in ImpactScope OU, an
award-winning AI and blockchain company based in Estonia. The consideration is
through the issue of 900,000 ordinary shares at a price of 13.75 pence per
share. ImpactScope also appointed Insig AI as its exclusive agent for global
sales of their award-winning Greenwashing Identifier.
On 5 June 2024 the Company raised £0.813 million via an equity subscription
for 6,500,000 shares at a price of 12.5 pence per share.
On 5 June 2024, the Company granted share options over 7,800,000 ordinary
shares of 1 pence each in the Company to certain Directors and employees with
an expiry date of 5 June 2029.
On 3 July 2024, Richard Bernstein and David Kyte extended the redemption dates
of their existing convertible loan notes (CLN) with the Company to 30
September 2025. Richard agreed to reduce the interest on the CLN to 6% per
annum. The 12% interest on David Kyte's CLN remains unchanged.
END
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