Eurovestech Plc - Limited company accounts 20.1
Eurovestech Plc - Limited company accounts 20.1
| REGISTERED NUMBER: |
| Strategic Report, Report of the Directors and |
| Financial Statements for the Year Ended 30 June 2021 |
| for |
| Eurovestech Plc |
| Eurovestech Plc (Registered number: 03913197) |
| Contents of the Financial Statements |
| for the Year Ended 30 June 2021 |
| Page |
| Company Information | 1 |
| Chairman's Report | 2 |
| Strategic Report | 6 |
| Report of the Directors | 8 |
| Report of the Independent Auditors | 12 |
| Statement of Comprehensive Income | 16 |
| Balance Sheet | 17 |
| Statement of Changes in Equity | 18 |
| Cash Flow Statement | 19 |
| Notes to the Cash Flow Statement | 20 |
| Notes to the Financial Statements | 22 |
| Eurovestech Plc |
| Company Information |
| for the Year Ended 30 June 2021 |
| DIRECTORS: |
| SECRETARY: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| INDEPENDENT AUDITORS: |
| Registered Auditors |
| 164 Field End Road |
| Eastcote |
| Middlesex |
| HA5 1RH |
| BANKERS: |
| Level 6 |
| 71 Queen Victoria Street |
| London |
| EC4V 4AY |
| REGISTRARS: |
| 6th Floor |
| 65 Gresham Street |
| London |
| EC2V 7NQ |
| Eurovestech Plc (Registered number: 03913197) |
| Chairman's Report |
| for the Year Ended 30 June 2021 |
| I'm pleased to provide this update for the year to June 2021. Eurovestech achieved a post-tax profit of £6.9 million. This reflects the resilience of Eurovestech's portfolio of investments, particularly the continuing growth of each of Toluna and Maxoptra despite the rigours of the pandemic. |
| It has without doubt been a most difficult year for all. It is gratifying to be able to report progress and positive momentum. |
| Net assets increased from £27.6 million to £36.3 million, with just £1.7 million attributable to equity issuance. Whilst the immediate impact of the issue of shares on net asset value per share was inevitably dilutive, reducing June 2020's net asset value per share to 5.6p, these shares were only made available to existing shareholders. Loyal shareholders now see net asset value per share increase to 6.9p a share. |
| Let me, though, now provide you with a more detailed update on the portfolio. |
| Toluna Holdings Limited ("Toluna") |
| Eurovestech holds 13.5% of this consumer intelligence and market research business. |
| Shareholders will recall that it was Eurovestech that provided the seed finance for this spectacularly successful investment over twenty years ago. Our nurturing of Toluna led to its AIM listing in 2005 and to it subsequently being taken private in 2011. The business was then valued at £167 million. Accordingly, our total investment of £2 million had returned £40 million in cash and left us with a minority shareholding. |
| In my Statement last year, I chronicled not just this positive news, but the more recent difficult and challenging operational performance issues that Toluna faced. More specifically, I reported what we had communicated to the board of Toluna many times: that we believed that Toluna had an excessively high-cost base, and it had to be reduced. Whilst we still regard the cost base as being too high, the Toluna board has now acknowledged that its fixed cost base is excessive. More importantly, Toluna's board accepts that it can and should be reduced. As well as occupancy costs, it has finally conceded that Toluna's incurring coupons of between 6.7 per cent and 15 per cent to its largest shareholder, Verlinvest S.A. ("Verlinvest"), is an untenable situation. The blended cost of interest is 9.2 per cent and costs Toluna more than £3.6 million each year. This debt must be refinanced and benchmarked against market rates. We estimate that this alone would improve net annual profits by close to £3 million. It is a travesty that the existing debt has remained in place for as long as it has, and we remain compelled to challenge the rationale and corporate benefit of this debt having remained in place. To comply with its fiduciary duties, we would now expect Toluna's board to take action rapidly to reduce its cost base by reviewing, amongst other costs, existing debt, rent and compensation arrangements. |
| Notwithstanding our dissatisfaction with the governance at Toluna it has, as with its sector peers, benefited from the acceleration to digital stimulated by COVID-19 Revenues for the year to December 2020 grew to £135 million. I'm pleased to report that the year to December 2021 is expected to show good top line sales growth and improving margins. Toluna's positive EBITDA does not translate into pre-tax profits, but there is significant scope to run the business more efficiently, reduce the operating cost base and adopt a more efficient and appropriate capital structure. More can and should be done. A relevant, if painful disciplining comparison should be made with sector competitors. |
| At the time of the Verlinvest-led privatisation, Toluna enjoyed a market capitalisation that was greater than its listed peer, YouGov. YouGov currently has revenues of £169 million, an enterprise value of £1.5 billion and a market capitalisation of £1.56 billion. This equates to 8.9 times its revenues. Momentive, until recently Survey Monkey, also merits comparison. It has projected revenues of $445 million for 2021, with net cash of $80 million its enterprise value is $3.1 billion, and its market cap is $3.2 billion. This equates to 7.2 times revenues. Both these companies have relatively lower operating costs and greater efficiencies. Were Toluna to be valued on eight times its historic revenues (midway between YouGov's nearly nine times revenues and Momentive's seven times revenues), it would be valued at more than £1 billion, and Eurovestech's holding valued at £140 million (more than five times the value your board determined to prudent last year). |
| Such comparisons help point the way to what can be done, and to the potential impact of such actions. The board of Toluna should not hide from these benchmarks. Rather, it must use the comparisons to provide the motivation and impetus to drive Toluna forward. |
| Eurovestech Plc (Registered number: 03913197) |
| Chairman's Report |
| for the Year Ended 30 June 2021 |
| I had to explain last year that Toluna's management had accepted £13 million of "participating preference share" investment from Verlinvest. This investment diluted Eurovestech's 14.8 per cent shareholding (the extent of dilution dependent upon the ultimate sale proceeds). In the face of this capital structure your Board prudently reduced the carrying value of Toluna by £12.7 million to £15.7 million. In the light of Toluna's acceptance that costs can and should be cut and operating efficiencies implemented and encouraging revenue growth, we have again reviewed the value at which we carry ToLuna. Your board believes that a multiple of 2.5 times historic revenues is an appropriate valuation benchmark. After deducting net debt and adjusting for the participating preference shares, this results in a carrying value of £26.1 million. (Post year-end transactions have had further positive impact on the total carrying value and Eurovestech's net asset per share, these are described in more detail below.) |
| Maxoptra Limited ("MaxOptra") |
| MaxOptra provides an independent Software as a Service ("SaaS") route optimisation and vehicle planning solution. MaxOptra's SaaS solution currently supports over three million routes every month. The service is designed to integrate with customers' key ERP/CRM solutions and to interface in live-time through drivers' own in-vehicle devices (typically standard Android or Apple mobile phones). |
| Over recent years, MaxOptra has reinvested earnings to make significant investment in strengthening its core UK-based IT team and in developing its underlying technology with a view to "future proofing" it. This is an ongoing process. New and enhanced features have been developed and released. Planned strategic developments over the coming years are intended to enhance the value of the company's embedded revenues. |
| The business has weathered the COVID-19 storm, turning adversity to advantage as it identified companies implementing new delivery services, which its SaaS model was ideally positioned to optimise. The Board expects that the company will remain profitable and continue to self-fund the planned continued investment with a view to securing an exit in two to three years. More than 80 per cent. of MaxOptra's income is derived from SaaS revenues. |
| For the year to December 2020, Maxoptra achieved a net profit of £374,000. |
| The business has demonstrated the ability to expand internationally, having secured customers in more than ten countries. |
| I am delighted to report that the business is demonstrating strong progress and is on course to achieve pre-tax profits of £1 million. Placing the business on a 20% tax charge and 15 PE multiple, would derive a value for the business of £12 million. Accordingly, Eurovestech's fully diluted 36.5% stake is valued at £4.6 million. |
| Audionamix |
| Eurovestech owns 99.9 per cent. of Audionamix. |
| Audionamix provides stemming solutions for the music industry. Its traditional core business has been sales of its XTRAX STEMS. This was the only software product nominated for Best DJ Production Technology for the 2020 TEC Awards, celebrating technical excellence in the fields of audio and sound production. Over the last year, attention has switched to selling enterprise licences. These are typically for $100,000, with a sales cycle of around six months. The professional services offering has just secured a major enterprise subscription solution, offering a client unlimited access to its separation algorithms without cloud dependency. |
| It has been widely reported that the pandemic has had an adverse impact on the music and film industries. This has proven to be the case at Audionamix, with sales cycles in the higher margin enterprise licence extended as production schedules have been deferred. As a result, the board has taken the decision to reduce the carrying value of Audionamix to £1.6 million. |
| LogNet Information Systems Limited ("LogNet") |
| Eurovestech owns 21.8% of LogNet |
| Eurovestech Plc (Registered number: 03913197) |
| Chairman's Report |
| for the Year Ended 30 June 2021 |
| LogNet is a vendor of innovative customer experience solutions software for multiple verticals including travel, airlines, utility, telecom and gaming. It is a leading travel tech supplier with a product suite that Eurovestech believes is positioned to capture a significant share of the multi-billion-dollar travel market once the industry recovers from COVID-19. |
| Sales of LogNet's billing product suite for the utility, telecom and gaming sectors have not been impacted by the COVID-19 crisis and the demand for LogNet's services continues to enjoy steady growth. The company's business model and revenue streams are diverse and based on recurring Software as a Service ("SaaS") income, selling perpetual licences to new customers and generating fees for providing professional and maintenance services to its existing customer base. LogNet is serving approximately 70 customers across the globe in its two main verticals (including substantial players in each vertical). |
| For the year to December 2020, LogNet recorded revenues of £5 million and a profit of around £300,000. In January 2021, LogNet raised funds for investment from existing shareholders. Eurovestech was unable to participate. |
| During the year, using its MaxBill solution, LogNet assisted its client, Dutch telco KPN, to handle one billion call detail records in monthly traffic. In a further positive development, after our year end, LogNet secured a major long-term contract from Ukraine's largest energy supplier to support its digital transformation. |
| Based on the share price of LogNet's January 2021 fundraise, the Board estimates the value of Eurovestech's shareholding in LogNet at £2.1 million. |
| Magenta |
| Eurovestech owns 47% of Magenta. |
| Twelve months ago, Magenta was developing its Echo solution for the airline industry. The pandemic forced the business to pivot and focus on its core legacy fleet management software business, which supports large historic corporate customers with bespoke solutions. Whilst these highly tailored solutions are currently delivering profits, creating new sales opportunities is increasingly difficult in the current climate. |
| As of 30 June 2021, Eurovestech valued its holding at £0.4 million. |
| VizEat |
| Eurovestech owns 18.6% of VizEat. |
| The COVID-19 pandemic inevitably had a major and adverse effect on trading. VizEat immediately responded by reducing its cost base by 70 per cent. and signed a deal with Trip.com, which has 400 million users, relating to domestic dining. In recent months, further strategic alliances have been signed. |
| As at 30 June 2021, Eurovestech valued its holdings at £4.1 million. |
| Recent developments |
| Let me now focus on an important recent development. |
| Earlier this month, I wrote to you with details of an opportunistic capital raise. I say opportunistic because we were notified by Invesco Perpetual, fellow long-term shareholder in Toluna, that it was selling its 27 per cent shareholding in Toluna. This was a function of its decision to exit all unquoted investments. Toluna was its final unquoted holding. |
| Eurovestech was not party to the pricing discussions between Invesco Perpetual and Verlinvest. A protracted period of negotiations culminated with Invesco Perpetual agreeing to sell its shares valuing Toluna at around 0.4 times historic revenues. This equated to a discount of around 80 per cent on Eurovestech's carrying value and in the view of your board, a steep discount to fair value. |
| The capital raise at 2.5p a share, sought to raise £3.5 million, principally to enable Eurovestech to subscribe for its pro rata entitlement of shares being sold. |
| Eurovestech Plc (Registered number: 03913197) |
| Chairman's Report |
| for the Year Ended 30 June 2021 |
| I'm pleased to report that not only was this fund raise fully subscribed, enabling Eurovestech to notify Invesco Perpetual that it will be taking up its full entitlement (plus some shares not taken by other shareholders), but the level of demand was such that applications from existing shareholders for close to £6 million were received. |
| Mindful of the cost of debt paying a 14% coupon, the directors decided to increase the capital raise to £4.4 million, so that this debt could be repaid. I am pleased to report that this debt has now been repaid, saving more than £100,000 per annum in interest. |
| Reflecting the uplift in the shares about to be purchased from Invesco Perpetual, this capital raise is expected to be modestly asset enhancing, lifting net asset value per share above 7p. |
| Prior to the purchase of the Invesco Perpetual shareholding in Toluna, the portfolio is already dominated by Toluna, which represents approximately two thirds of the value of the portfolio. Following the share purchase, it will represent closer to three quarters. The risks associated with such concentration are clear. However, the entry price is at such an under value, that I consider it right to have taken up this opportunity. I am grateful to you, our shareholders, for supporting our view and enabling us to do so. |
| R H Grogan |
| Chairman |
| 30 December 2021 |
| Eurovestech Plc (Registered number: 03913197) |
| Strategic Report |
| for the Year Ended 30 June 2021 |
| The directors present their strategic report for the year ended 30 June 2021. |
| This strategic report has been prepared in compliance with Section 414C of the Companies Act 2006 for the purpose of informing the members and helping them assess how the directors have performed their duty under Section 172 of the Companies Act 2006 to promote the success of the company. |
| REVIEW OF BUSINESS |
| The company recorded a profit for the financial year after taxation amounting to £6,927,938 (30 June 2020: loss of £13,013,238).This is due to revaluations and impairments of investments in the year. Further details of the company's performance are given in the Chairman's Report on pages 2 to 4 of these financial statements. |
| The directors do not recommend any dividends for the year ended 30 June 2021 (30 June 2020: £nil) and no dividend was paid in the year ended 30 June 2021 (30 June 2020: £nil). |
| Future developments |
| Details of future developments are detailed in the Chairman's statement on pages 2 to 5 of these financial statements. |
| Key performance indicators |
| The Company considers its key performance indicators to include growth in the value of its investment portfolio and total funds returned to shareholders. The company is actively looking to sell the investments held in the portfolio with a view to returning funds to shareholders. |
| The performance of the company is reflected in the performance of the Company's investment portfolio which shows a carrying value of £39.0 million at 30 June 2021 compared to £30.8 million for 30 June 2020. There were no investments or disposals in the year. The movement in the carrying value of the portfolio is a result of revaluations at 30 June 2021 of Toluna Holdings Limited and Maxoptra Limited and the impairments of Magenta Limited, Audionamix SA, Lognet Information Limited and VizEat Limited. |
| In the last year no surplus funds were returned to shareholders. |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| The principal risk regarding the future financial performance of Eurovestech Plc is the future performance of its portfolio. |
| A key risk for Eurovestech Plc is the identification and evaluation of investments. Executive management seeks to moderate the risk by undertaking comprehensive studies in co-operation with outside resources provided by appropriate industry and professional specialists of potential investments, and hence having greater assurance over the future success of investments it enters into. A further key risk is the successful performance of the existing investment portfolio. This is mitigated through monitoring of regular reporting by investee companies and working closely with their management, often through holding board positions at each investee company. |
| Financial Risk management |
| The company's strategy is to follow an appropriate risk policy, which effectively manages exposures related to the achievement of business objectives. The company's activities expose it to a variety of risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company's financial performance. Risk management is carried out by the board and their policies are outlined below. |
| Foreign exchange risk |
| The Company is exposed to translation and transaction foreign exchange risk as it operates primarily within Europe and the US with transaction denominated in Sterling, Euros and US dollars. The Company policy is to try to match the timing of the settlement of sales and purchase invoices so as to aim to eliminate currency exposure. |
| The Company does not hedge any transactions and foreign exchange differences on re-translation of foreign assets and liabilities are taken to the Profit and Loss Account. The Company does not consider there to be a significant risk from its investments. |
| Eurovestech Plc (Registered number: 03913197) |
| Strategic Report |
| for the Year Ended 30 June 2021 |
| Sensitivity to reasonable possible movements in exchange rates can be measured on the basis that all other variables remain constant. Strengthening or weakening of the Euro or US dollar against Sterling would impact equity and the results for the year. |
| The majority of the Company's financial assets are held in Sterling but movements in the exchange rate of the Euro and the US dollar against Sterling have an impact on both the result for the year and equity. |
| Interest rate risk |
| The Company finances its operations through equity fundraising and therefore does not carry significant borrowings. As the Company carries modest long-term borrowings, the Directors consider that there is no significant interest rate risk. |
| Credit risk |
| Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the Company. In order to minimise the risk, the Company endeavours only to deal with companies (including investee companies) which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount. |
| Provision of services by the Company results in trade debtors which the management considers to be of low risk. Other debtors include subscription monies from shareholders and are likewise considered to be low risk. Management do not consider that there is any concentration of risk within either trade or other debtors. No trade or other debtors have been impaired. Credit risk on cash and cash equivalents is considered to be small as the counter-parties are all substantial banks with high credit ratings. The maximum exposure is the amount of the deposit. |
| Liquidity risk |
| The Company currently holds substantial cash balances in Sterling to provide funding for normal trading activity. The Company also has access to additional equity funding and, for short term flexibility, overdraft facilities would be arranged with the Company's bankers. Trade and other creditors are monitored as part of normal management routine. |
| Capital risk management |
| The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other members. The Company will also seek to minimise the cost of capital and attempt to optimise the capital structure. Capital for further development of the Company's activities is achieved by disposals and share issues. No dividends were declared during the year or the previous year. There is no material difference between the fair values and the carrying values of these financial instruments. |
| Covid-19 pandemic risk |
| The directors have considered the potential impact of the coronavirus, and the various measures taken to contain it, on the operations of the company. They note that the impact on the company's profitability and cash generation since the start of the pandemic has been limited but will ultimately fall on the profitability of its investee companies, which in turn has been limited but has been reflected in their valuations. |
| ON BEHALF OF THE BOARD: |
| Eurovestech Plc (Registered number: 03913197) |
| Report of the Directors |
| for the Year Ended 30 June 2021 |
| The directors present their report with the audited financial statements of the company for the year ended 30 June 2021. |
| PRINCIPAL ACTIVITIES |
| The principal activities of the company in the year under review were those of investment in technology businesses. |
| DIVIDENDS |
| No dividends will be distributed for the year ended 30 June 2021. |
| RESEARCH AND DEVELOPMENT |
| The Company does not perform any research and development activities. |
| EVENTS SINCE THE END OF THE YEAR |
| Information relating to events since the end of the year is given in the notes to the financial statements. |
| DIRECTORS |
| The directors shown below have held office during the whole of the year from 1 July 2020 to the date of signing this report. |
| R P Bernstein |
| R H Grogan |
| Q C M Solt |
| The Directors have all occupied, or occupy, senior positions in UK and/or non-UK listed companies and have substantial experience in business. All of the Directors will submit themselves for re-election at the forthcoming Annual General Meeting in accordance with the Code. |
| Financial instruments |
| The company's principle financial instruments comprise cash, trade debtors and loans, investments and creditors. The main risks associated with these financial assets and liabilities are set out in the strategic report. There is a detailed analysis of financial instruments in note 17 to the financial statements. |
| Corporate governance |
| The Company is committed to a high standard of corporate governance and supports the principles laid down in the Combined Code 2010 (the "Code"). |
| The board |
| The board of Directors (the "board") currently has three members, comprising the Non-Executive Chairman, Chief Executive, Director of investments and one further independent Non-Executive Director. All of the Directors bring strong judgement to the board's deliberations. The board is of sufficient size and diversity that the balance of skills and experience is considered to be appropriate for the requirements of the business. For the Non-Executive Directors who have served a term greater than nine years, a thorough review of their continued independence and suitability to continue as Directors is performed each year. The Non-Executive Directors may continue to serve more than nine years, subject to a thorough review of their continued independence and suitability. |
| The Chairman and Chief Executive |
| The Directors confirm that the Company has complied with the requirement to be headed by an effective board and to lead and control the Company. The division of responsibilities between the Chairman of the board and the Chief Executive is clearly defined. The Chairman leads the board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organising the business but has no involvement in the day-to-day business of the Company. The Chief Executive has direct charge of the Company on a day-to-day basis and is accountable to the board for the financial and operational performance of the Company. |
| Eurovestech Plc (Registered number: 03913197) |
| Report of the Directors |
| for the Year Ended 30 June 2021 |
| Role of the board |
| The board is collectively responsible for the proper management of the Company. The board has a formal schedule of matters reserved to it for decision making, including responsibility for the overall management, performance and strategy of the Company, approval of annual and interim results, material acquisitions and disposals, material agreements and assessment of its going concern position. |
| Board members are given appropriate documentation in advance of each board or committee meeting, This normally includes information on current trading if its investee companies and additional information on other matters where the board is required to reach a decision. |
| Board committees |
| There are a number of committees of the board to which various matters are delegated. Details are set out below: |
| Remuneration Committee |
| The Remuneration Committee consists of the two Non-Executive Directors of the Company. Richard Grogan acts as the Chairman. The committee is responsible for: (i) making recommendations to the board on the Company's policy on the remuneration of the Executive Directors; (ii) the determination of the remuneration packages for each of the Executive Directors including any compensation payments and benefits; and (iii) the determination of awards under the Company's employee share plans to the Executive Directors and other employees of the Company. The Chairman of the committee reports the outcome of its meetings to the board. |
| Nomination Committee |
| The Nomination Committee comprises Richard Grogan and Quentin Solt, who acts as its Chairman. The committee meets as necessary and is responsible for considering and recommending to the board persons who are appropriate for appointment as Executive and Non-Executive Directors. There is a formal, rigorous and transparent procedure for the appointment of new Directors to the board under which the Nomination Committee considers suitable candidates who are proposed either by existing board members or by an external search firm. Careful consideration is given to ensure proposed appointees have enough time available to devote to the role and that the balance of skills, knowledge and experience on the board is maintained. When the committee has found a suitable candidate, the Chairman of the committee will make a proposal to the whole board, which has retained responsibility for all such appointments. The Chairman of the committee reports the outcome of its meetings to the board. |
| Audit Committee |
| The Audit Committee comprises Quentin Solt as Chairman and Richard Grogan. No Non-Executive Director currently has recent and relevant financial experience as required by the Code and this matter is under consideration by the Nomination Committee as part of their review of the existing board composition. Senior financial employees of the Company are also invited to attend by the committee as appropriate. |
| The role of the Audit Committee is to monitor the financial reporting process, the integrity of the Company's annual financial statements and the statutory audit of the financial statements. It is also responsible for reviewing the Company's internal financial control and risk management systems and the Company's relationship with the external auditors. |
| Shareholder relations |
| The Committee is committed to maintaining good communications with shareholders. The Chairman and Chief Executive have dialogue with individual shareholders in order to develop an understanding of their views which are fed back to the board. Presentations are made to analysts, investors and prospective investors covering the annual results. The Company Secretary generally deals with questions from individual shareholders. All shareholders have the opportunity to ask questions to any of the Directors at the Company's Annual General Meeting each year. The Chairman will advise shareholders on proxy voting details. |
| Eurovestech Plc (Registered number: 03913197) |
| Report of the Directors |
| for the Year Ended 30 June 2021 |
| Directors and Directors' interests |
| The present membership of the board is set out below. All Directors served during the year and up to the date of signing the financial statements. |
| Salary | Benefits | 2021 | 2020 |
| and fees | in kind | Bonus | Total | Total |
| £ | £ | £ | £ | £ |
| Executive Director |
| Richard Philip Bernstein | 215 | - | - | 215 | 48 |
| Non-Executive Directors |
| Richard Henry Grogan | 5 | 1 | - | 6 | 2 |
| Quentin Colin Maxwell Solt | 9 | - | - | 9 | - |
| 229 | 1 | - | 230 | 50 |
| Save for the employee incentive arrangements, no Director had either during or at the end of the year a material interest in any contract which was significant in relation to the Company's business. |
| Directors' interests in shares |
| The interests of the Directors and their families in the shares of the Company at 30 June 2021 and 30 June 2020 were as follows: |
| 30 June | 30 June | 30 June | 30 June |
| 2021 | 2020 | 2021 | 2020 |
| Number | Number | Number | Number |
| of shares | of shares | of options | of options |
| Richard Philip Bernstein | 22,186,712 | 13,263,568 | - | - |
| Quentin Colin Maxwell Solt | 6,928,018 | 3,365,019 | - | - |
| Richard Henry Grogan | - | - | - | - |
| Directors' Indemnities |
| The Company has entered into indemnities with each of the Directors. The indemnities are in the form of Qualifying Third Party Indemnity Provisions consistent with Section 234 of the UK Companies Act 2006 and have been in force throughout the year and to the date of signing the financial statements. These are available for inspection at the Company's registered office. |
| Internal control |
| The board is responsible for the Company's system of internal controls and reviewing its effectiveness, Internal control systems are designed to meet the particular needs of the company concerned and the risks to which it is exposed and, by their nature, can provide reasonable but not absolute assurance against material misstatement or loss. |
| The Executive Director monitors the Company's investments regularly, through receipt of financial reporting and frequent communication with investee management, including attendance at board meetings. Where possible, and prior to investing, the Company will seek to ensure that portfolio company Shareholder Agreements provide the Company with the right to receive timely monthly financial information. |
| The Executive Director also monitors the system of internal controls at investee companies and reviews their effectiveness. Whenever the Company deals in quoted investments, controls are placed on the execution of trades and all transactions are confirmed in writing on the same day as the trade is executed. The Chief Executive monitors all current asset investments on a daily basis. |
| The Company remains mindful to the requirements of the Bribery Act and no changes were deemed necessary to its existing policy during the year. |
| The Directors have considered whether it is appropriate to have an internal audit function. Given the scale of the Company, it is not considered appropriate at this time. |
| Eurovestech Plc (Registered number: 03913197) |
| Report of the Directors |
| for the Year Ended 30 June 2021 |
| Charitable donations |
| During the year to 30 June 2021 charitable donations were made of £nil (2020: £nil). There were no political donations. |
| Payment policy and practice |
| It is the Company's policy to settle the terms of payment with suppliers when agreeing the terms of the transaction and to abide by them. Company trade creditors represented 30 days (30 June 2020: 30 days) of related expenditure in the year. All investment transactions are settled as they become due. |
| DISCLOSURE IN THE STRATEGIC REPORT |
| The review of business is now disclosed in the Strategic Report on pages 6 and 7 of these financial statements. |
| STATEMENT OF DIRECTORS' RESPONSIBILITIES |
| The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation. |
| Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to: |
| - select suitable accounting policies and then apply them consistently; |
| - state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements; |
| - make judgements and accounting estimates that are reasonable and prudent; and |
| - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
| The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. |
| The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
| STATEMENT AS TO DISCLOSURE OF INFORMATION TO INDEPENDENT AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
| INDEPENDENT AUDITORS |
| The independent auditors, Lawrence Johns, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| Report of the Independent Auditors to the Members of |
| Eurovestech Plc |
| Opinion |
| We have audited the financial statements of Eurovestech Plc (the 'company') for the year ended 30 June 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
| In our opinion the financial statements: |
| - | give a true and fair view of the state of the company's affairs as at 30 June 2021 and of its profit for the year then ended; |
| - | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
| - | have been prepared in accordance with the requirements of the Companies Act 2006. |
| Basis for opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
| Conclusions relating to going concern |
| In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
| Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
| Reporting on other information |
| The directors are responsible for the other information. The other information comprises the information in the Annual Report, but does not include the financial statements and our Report of the Auditors thereon. |
| Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
| In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| - | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| - | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
| Report of the Independent Auditors to the Members of |
| Eurovestech Plc |
| Matters on which we are required to report by exception |
| In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
| Companies Act 2006 exception reporting |
| Under the Companies Act 2006 we are required to report to you if, in our opinion: |
| - we have not received all the information and explanations we require for our audit; or |
| - adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or |
| - certain disclosures of directors' remuneration specified by law are not made; or |
| - the financial statements are not in agreement with the accounting records and returns. |
| We have no exceptions to report arising from this responsibility |
| Responsibilities of directors |
| As explained more fully in the Statement of Directors' Responsibilities set out on page eleven, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
| Report of the Independent Auditors to the Members of |
| Eurovestech Plc |
| Auditors' responsibilities for the audit of the financial statements |
| Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
| We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. |
| In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
| - enquiring of management, internal audit and the audit committee, including obtaining and reviewing supporting documentation concerning the company's policies and procedures relating to: |
| - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; |
| - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
| - the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; |
| - discussing among the engagement team indicators of fraud. |
| As part of this discussion, we identified potential fraud risks in relation to: |
| - the completeness and accuracy of fixed asset investments, loans due and bank and cash. |
| - obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the Companies Act 2006, Tax legislation, and Regulations from the construction industry. |
| Audit response to risks identified |
| In addition to the above, our procedures to respond to risks identified included the following: |
| - reviewing the Financial Statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above; |
| - enquiring of management concerning actual and potential litigation and claims; |
| - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
| - completed focussed testing on fixed asset investments, loans due and bank and cash balances at 30 June 2021; |
| - reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and |
| - in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
| We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
| A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
| Report of the Independent Auditors to the Members of |
| Eurovestech Plc |
| Use of our report |
| This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
| for and on behalf of |
| Registered Auditors |
| 164 Field End Road |
| Eastcote |
| Middlesex |
| HA5 1RH |
| Eurovestech Plc (Registered number: 03913197) |
| Statement of Comprehensive Income |
| for the Year Ended 30 June 2021 |
| 30.6.21 | 30.6.20 |
| Notes | £ | £ |
| TURNOVER | 3 |
| Direct expenses |
| GROSS LOSS | ( |
) | ( |
) |
| Administrative expenses |
| (5,225,650 | ) | (20,468,391 | ) |
| Other operating income |
| OPERATING PROFIT/(LOSS) | 5 | ( |
) |
| Interest receivable and similar income |
| 7,192,636 | (12,817,686 | ) |
| Interest payable and similar expenses | 6 |
| PROFIT/(LOSS) BEFORE TAXATION | ( |
) |
| Tax on profit/(loss) | 7 |
| PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
( |
) |
| Eurovestech Plc (Registered number: 03913197) |
| Balance Sheet |
| 30 June 2021 |
| 30.6.21 | 30.6.20 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Tangible assets | 8 |
| Investments | 9 |
| CURRENT ASSETS |
| Debtors | 10 |
| Investments | 11 |
| Cash at bank and in hand | 12 |
| CREDITORS |
| Amounts falling due within one year | 13 |
| NET CURRENT LIABILITIES | ( |
) | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CREDITORS |
| Amounts falling due after more than one year |
14 |
| NET ASSETS |
| CAPITAL AND RESERVES |
| Called up share capital | 18 |
| Share premium account | 19 |
| Capital redemption reserve | 19 |
| Other reserves | 19 |
| Retained earnings | 19 |
| SHAREHOLDERS' FUNDS |
| The financial statements on pages 15 to 31 were approved by the Board of Directors and authorised for issue on |
| Eurovestech Plc (Registered number: 03913197) |
| Statement of Changes in Equity |
| for the Year Ended 30 June 2021 |
| Called up | Share |
| share | Retained | premium |
| capital | earnings | account |
| £ | £ | £ |
| Balance at 1 July 2019 |
| Changes in equity |
| Issue of share capital | - |
| Total comprehensive income | - | ( |
) | - |
| Balance at 30 June 2020 |
| Changes in equity |
| Issue of share capital | - |
| Total comprehensive income | - | - |
| Balance at 30 June 2021 |
| Capital |
| redemption | Other | Total |
| reserve | reserves | equity |
| £ | £ | £ |
| Balance at 1 July 2019 |
| Changes in equity |
| Issue of share capital | - | - |
| Total comprehensive income | ( |
) |
| Balance at 30 June 2020 |
| Changes in equity |
| Issue of share capital | - | - |
| Total comprehensive income |
| Balance at 30 June 2021 |
| Eurovestech Plc (Registered number: 03913197) |
| Cash Flow Statement |
| for the Year Ended 30 June 2021 |
| 30.6.21 | 30.6.20 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 | ( |
) | ( |
) |
| Interest paid | ( |
) | ( |
) |
| Net cash from operating activities | ( |
) | ( |
) |
| Cash flows from investing activities |
| Purchase of investments | - | (11,321 | ) |
| Interest received |
| Net cash from investing activities |
| Cash flows from financing activities |
| New loans in year |
| Loan repayments in year | ( |
) |
| Amount introduced by directors | - | 10,145 |
| Amount withdrawn by directors | (25,000 | ) | - |
| Share issue |
| Share premium |
| Net cash from financing activities |
| Increase/(decrease) in cash and cash equivalents | ( |
) |
| Cash and cash equivalents at beginning of year |
2 |
73,170 |
| Cash and cash equivalents at end of year | 2 | 422,154 | 32,894 |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Cash Flow Statement |
| for the Year Ended 30 June 2021 |
| 1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAX ON LOSS TO CASH GENERATED FROM OPERATIONS |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Profit/(loss) before tax on loss | ( |
) |
| Depreciation charges |
| Movement on investee company balances | - | 1,875,232 |
| Revaluations and impairments | (8,220,000 | ) | 9,509,870 |
| Movement on listed investments | 19 | - |
| Finance costs | 264,698 | 195,552 |
| Finance income | (467,286 | ) | (332,390 | ) |
| (1,493,700 | ) | (1,760,022 | ) |
| Decrease in trade and other debtors |
| (Decrease)/increase in trade and other creditors | ( |
) |
| Cash generated from operations | ( |
) | ( |
) |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
| Year ended 30 June 2021 |
| 30.6.21 | 1.7.20 |
| £ | £ |
| Cash and cash equivalents | 422,154 | 32,894 |
| Year ended 30 June 2020 |
| 30.6.20 | 1.7.19 |
| £ | £ |
| Cash and cash equivalents | 32,894 | 73,170 |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Cash Flow Statement |
| for the Year Ended 30 June 2021 |
| 3. | ANALYSIS OF CHANGES IN NET DEBT |
| At 1.7.20 | Cash flow | At 30.6.21 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 32,894 | 389,260 | 422,154 |
| 32,894 | 422,154 |
| Liquid resources |
| Current asset investments | 19 | (19 | ) | - |
| 19 | (19 | ) | - |
| Debt |
| Debts falling due within 1 year | (3,089,000 | ) | 2,285,400 | (803,600 | ) |
| Debts falling due after 1 year | (18,000 | ) | (2,396,400 | ) | (2,414,400 | ) |
| (3,107,000 | ) | (111,000 | ) | (3,218,000 | ) |
| Total | (3,074,087 | ) | 278,241 | (2,795,846 | ) |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements |
| for the Year Ended 30 June 2021 |
| 1. | COMPANY INFORMATION |
| Eurovestech Plc is a limited company domiciled and incorporated in England and Wales. The registered office is 164 Field End Road, Eastcote, Middlesex HA5 1RH. |
| 2. | ACCOUNTING POLICIES |
| Accounting convention |
| These financial statements have been prepared in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006. |
| The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound. |
| The financial statements have been prepared on the historical cost convention, however some financial assets have been modified by revaluation to be held at fair value through the profit and loss. The principal accounting policies adopted are set out below. |
| Turnover |
| Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT. |
| Tangible assets |
| Depreciations is provided at the following annual rates in order to write off each asset over its estimated useful life. |
| Fixtures and fittings | - | 25% on cost |
| Computer equipment | - | 25% on cost |
| Investments in subsidiaries |
| Investments in subsidiary undertakings are recognised at cost. |
| Hire purchase and leasing commitments |
| Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
| Pension costs and other post-retirement benefits |
| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
| Investments |
| Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss. |
| A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| Financial assets |
| The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. |
| Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. |
| Financial assets consist of loans and receivables and investments at fair value through profit or loss. |
| Financial assets are classified into specific categories. The classification depends on the nature and purpose of the financial assets and is determined at the point of recognition.Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. |
| Investments - non-current |
| As the Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, non-current investments are designated at fair value through profit or loss on initial recognition. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy and investment information provided to the board of Directors. |
| De-recognition of investments occurs when the rights to receive cashflows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. |
| Fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction. In estimating fair value, the Directors use a methodology which is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio. |
| Methodologies are applied consistently from one year to another except where a change results in a better estimate of fair value. Only where fair value cannot be reliably measured is cost used as the basis of valuation. |
| The principal methodologies applied in valuing unlisted investments include the following: |
| - earnings multiple; |
| - price of recent investment; and |
| - net assets. |
| In applying the earnings multiple methodology, the Directors apply a market-based multiple that is appropriate and reasonable to the sustainable earnings of the Company. In the majority of cases the enterprise value of the underlying business is derived by the use of a multiple of earnings before interest and tax applied to current year’s earnings where these can be forecast with a reasonable degree of certainty and are deemed to represent the best estimate of maintainable earnings. Where this is not the case, historic earnings will generally be used in their place. For companies which are early stage or not profitable, a multiple of revenue is used as the key measurement. |
| Listed investments held for long-term gain are valued on the basis of the bid price at the year-end date. |
| Investments - current |
| Current asset investments are classified as held for trading and are measured at fair value with gains and losses arising on their fair value recorded in the Profit and Loss Account. Listed current investments are stated at bid price at the year-end date. Convertible loan notes are classified as loans and receivables and recorded at fair value. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| Investments - derivatives |
| Where the company invests in Contract for difference investments, the investments are not held as assets as they are never actually owned. Any gains and losses arising are recorded in the Profit and Loss Account less any commission, interest charges, dividend adjustments and fees. |
| Cash and cash equivalents |
| Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. |
| Trade debtors |
| Trade debtors are recognised and carried at the original invoice amount less an allowance for uncollectable amounts. An estimate of uncollectable amounts is made when collection of the full amount is no longer probable. Uncollectable amounts are written off to the Profit and Loss Account when identified. |
| Fair value estimation |
| The Company classifies financial assets using a fair value hierarchy that reflects the significance of the inputs used in making the related fair value measurements. The level in the fair value hierarchy within which a financial asset is classified is determined on the basis of the lowest level input that is significant to that asset’s fair value measurement. The fair value hierarchy has the following levels: |
| - Level 1 - Quoted prices in active markets; |
| - Level 2 - Inputs other than quoted prices that are observable. such as prices from market transactions; and |
| - Level 3 - One or more inputs that are not based on observable market data. |
| Financial liabilities |
| The Company's financial liabilities consist of trade and other creditors and other loans. |
| Financial liabilities are recognised when the Company becomes a party to the contractual arrangements of the instrument. Liabilities are recognised initially at their fair value, net of transaction costs, and subsequently measured at amortised cost less settlement payments, using the effective interest method, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, unless it is not material. |
| Financial liabilities are classified according to the substance of the contractual arrangements entered into. Where the contractual obligations of financial instruments, including share capital, are equivalent to a similar debt instrument, those instruments are classed as financial liabilities. Financial liabilities are classified as creditors in the Balance Sheet. |
| Where the contractual terms of issued shares do not have any terms meeting the definition of a financial liability then this is classified as an equity instrument. |
| Derecognition of financial liabilities |
| Financial liabilities are derecognised only when the company's obligations are discharged, cancelled, or they expire. |
| Foreign currency translation |
| Foreign currency transactions are translated at the exchange rate prevailing at the dates of the transaction. Foreign currency monetary assets and liabilities are translated at year-end exchange rates and any exchange gains and losses are recorded in the Profit and Loss Account. |
| Borrowing costs |
| All borrowing costs are expensed to the Profit and Loss Account as incurred. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| Exceptional items |
| Exceptional items are those that the Directors consider are of unusual size or nature that they are required to be separately disclosed to allow the user of the financial statements to understand the underlying performance of the Company. |
| Impairment of non-financial assets |
| At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes an estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is written down to its recoverable amount. Recoverable amount is the higher of fair value less costs to sell and value in use and is determined for an individual asset. If the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, the recoverable amount of the cash-generating unit to which the asset belongs is determined. Discount rates reflecting the asset specific risks and the time value of money are used for the value in use calculation. |
| Provisions |
| Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events and it is likely that an outflow of resources embodying economic benefits will be required to settle the obligation and that amount can be reasonably estimated. Where the Company expects all or some of the obligation to be reimbursed, the reimbursement is recognised as a separate asset to the extent that it is virtually certain to be reimbursed. The expense relating to any provision is presented in the Profit and Loss Account net of any reimbursement. |
| Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the year-end date. If material. provisions are determined by discounting the expected future cashflows using rates that reflect current market assessments of the time value of money. |
| Leases |
| For finance leases, where the Company bears substantially all the risks and rewards related to ownership of the leased asset, the related asset is capitalised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Finance costs are charged to the Profit and Loss Account over the period of the lease in accordance with the capital balance outstanding. |
| Operating leases, where the lessor retains substantially all the risks and rewards of ownership, are charged to the Profit and Loss Account on a straight line basis over the lease term. Lease incentives are spread over the term of the lease. |
| Long term incentive employee compensation |
| The Company operates a profit sharing scheme for the remuneration of its Directors and employees. Due to the long-term nature of this incentive scheme, the Company's future liabilities are contingent liabilities that are uncertain in their timing and amount and as such are exluded from the balance sheet of these financial statements. |
| Equity instruments |
| Equity instruments issued by the company are recorded as the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
| Issued share capital |
| Ordinary shares are classified as equity. |
| Share premium |
| The share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of the expenses of the share issue. |
| Capital redemption reserve |
| The capital redemption reserve represents share premium that has been redeemed by the Company. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| Other reserve |
| The other reserve represents equity-settled share-based employee expense until such share options are exercised. |
| Retained earnings |
| Retained earnings include all current and prior year results for the Company. |
| Taxation |
| The tax expense represents the sum of the tax currently payable and deferred tax. |
| Current tax |
| Current corporate tax assets and liabilities comprise those obligations to fiscal authorities in the UK where the Company carries out its operations, based on the taxable profit for the year. They are calculated according to the tax rates and tax laws enacted or substantively enacted in the fiscal period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. All changes to current tax liabilities are recognised as a component of tax expense in the Profit and Loss Account. |
| Deferred tax |
| Deferred corporate taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amount of assets and liabilities in the financial statements with their respective tax bases. Deferred tax liabilities are provided for in full. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the year-end date. |
| The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority. |
| Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Profit and Loss Account, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity. |
| Dividends |
| Final equity dividends to the shareholders of Eurovestech Plc are recognised in the year that they are approved by shareholders. Interim equity dividends are recognised in the period that they are paid. |
| Dividends receivable are recognised when the Company’s right to receive payment is established. |
| Use of key accounting estimates and judgements |
| Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimation is contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised |
| below: |
| Critical accounting assumptions and estimates |
| (a) The valuation of non-current investments. Valuation of non-current investments requires a number of judgements including assessing the appropriate valuation multiples based on the stage of development of the portfolio companies and relevant industry comparators. Should the valuation show a diminution of value, a decision as to whether an impairment occurred is carried out. A number of factors are involved and include the likelihood of prolonged reduction in value, the overall economic outlook and industry or sector specific factors. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| (b) Accounting for the value of the Executive Directors’ long-term incentive requires judgement over the period of ownership of the related investments, expected overall profit on disposal and the effective rate of interest. |
| Going concern |
| The company does not trade as such and its value is in its investee companies. The company has a strong balance sheet and cash position. The directors have also considered the impact of the COVID-19 pandemic and related containment measures on the company’s activities and whilst the ultimate impact cannot be quantified, the impact on operations to date has not been significant and the directors do not expect it to become significant in the foreseeable future. The company raised £4.4m in December 2021 via an equity issue to existing shareholders. As a result, the directors have, at the time of approving the financial statements, a reasonable expectation that the company has adequate resources to continue in existence for at least 12 months from the date of approval of these financial statements. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. |
| 3. | TURNOVER |
| The turnover and profit (2020 - loss) before taxation are attributable to the principal activities of the company. |
| An analysis of turnover by class of business is given below: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| An analysis of turnover by geographical market is given below: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| United Kingdom |
| 4. | EMPLOYEES AND DIRECTORS |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Wages and salaries |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| 30.6.21 | 30.6.20 |
| Directors | 3 | 3 |
| Administration | 2 | - |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 4. | EMPLOYEES AND DIRECTORS - continued |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Directors' remuneration |
| Information regarding the highest paid director for the year ended 30 June 2021 is as follows: |
| 30.6.21 |
| £ |
| Emoluments etc |
| 5. | OPERATING PROFIT/(LOSS) |
| The operating profit (2020 - operating loss) is stated after charging: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Other operating leases |
| Depreciation - owned assets |
| Auditors' remuneration |
| 6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Interest payable |
| 7. | TAX ON LOSS |
| Analysis of the tax charge |
| No liability to UK corporation tax arose for the year ended 30 June 2021 nor for the year ended 30 June 2020. |
| Reconciliation of total tax charge included in profit and loss |
| The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Profit/(loss) before tax | ( |
) |
| Profit/(loss) multiplied by the standard rate of corporation tax in the UK of |
( |
) |
| Effects of: |
| Expenses not deductible for tax purposes |
| Income not taxable for tax purposes | ( |
) | ( |
) |
| Depreciation in excess of capital allowances |
| Tax losses | 80,816 | 133,840 |
| Total tax charge | - | - |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 8. | TANGIBLE ASSETS |
| Fixtures |
| and | Computer |
| fittings | equipment | Totals |
| £ | £ | £ |
| COST |
| At 1 July 2020 |
| and 30 June 2021 |
| DEPRECIATION |
| At 1 July 2020 |
| Charge for year |
| At 30 June 2021 |
| NET BOOK VALUE |
| At 30 June 2021 |
| At 30 June 2020 |
| 9. | INVESTMENTS |
| Shares in |
| group |
| undertakings |
| £ |
| COST OR VALUATION |
| At 1 July 2020 |
| Revaluations |
| Impairments | ( |
) |
| At 30 June 2021 |
| NET BOOK VALUE |
| At 30 June 2021 |
| At 30 June 2020 |
| Cost or valuation at 30 June 2021 is represented by: |
| Shares in |
| group |
| undertakings |
| £ |
| Valuation in 2015 | (3,870,229 | ) |
| Valuation in 2016 | 9,630,794 |
| Valuation in 2017 | (2,613 | ) |
| Valuation in 2018 | (3,617,395 | ) |
| Valuation in 2019 | 868,320 |
| Valuation in 2020 | (9,509,870 | ) |
| Valuation in 2021 | 8,220,000 |
| Cost | 37,262,856 |
| 38,981,863 |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 9. | INVESTMENTS - continued |
| There were no additions or disposals during the year. |
| The Company's investments in associated companies at 30 June 2021 were as follows; |
| Name of Investment | Percentage interest in | Fair value at |
| ordinary shares at | 30 June 2021 |
| 30 June 2021 (% | ) | £ |
| Audionamix SA | 99.90 | 1,600,000 |
| Magenta Corporation Limited | 47.00 | 400,000 |
| Maxoptra Limited | 45.28 | 4,620,000 |
| Lognet Information Systems Limited | 21.83 | 2,100,000 |
| VizEat Limited | 18.62 | 4,100,000 |
| Toluna Holdings Limited | 13.47 | 26,100,000 |
| PierianDX | 2.00 | 50,863 |
| Supponor Limited | 0.09 | 11,000 |
| Investments carrying value | 38,981,863 |
| The registered offices of the investments are as follows; |
| Name of Investment | Registered Office Address |
| Audionamix SA | 164 Field End Road, Eastcote, Middlesex |
| Magenta Corporation Limited | Third Floor, 8 Golden Square, London |
| Maxoptra Limited | Third Floor, 8 Golden Square, London |
| Lognet Information Systems Limited | 42-50 Hersham Road, Walton-On-Thames, Surrey |
| VizEat Limited | Acre House, 11/15 William Road, London |
| Toluna Holdings Limited | Ealing Cross 85 Uxbridge Road, Ealing, London |
| PierianDx | 77 Maryland Plaza, St. Louis, Missouri, USA |
| Supponor Limited | 12 Hammersmith Grove, Suite 3125, London |
| 10. | DEBTORS |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Trade debtors |
| Other debtors |
| Prepayments and accrued income |
| The fair value of trade and other debtors approximates to their carrying value. |
| 11. | INVESTMENTS |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Listed investments | - | 19 |
| Listed investments are carried at market value. |
| 12. | CASH AT BANK AND IN HAND |
| Cash at bank and on call at the year end was £422,154 (2020: £32,894). |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Other loans (see note 15) |
| Trade creditors |
| Taxation and social security |
| Other creditors |
| Directors' current accounts | 710 | 25,710 |
| Accruals and deferred income |
| 14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Bank loans (see note 15) |
| 15. | LOANS |
| An analysis of the maturity of loans is given below: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Amounts falling due within one year or on demand: |
| Other loans |
| Amounts falling due between two and five years: |
| Bank loans - 2-5 years |
| During the year, loans from HLF s.a.r.l., Crystal Amber Advisors (UK) LLP and a private individual were repaid. New loans from Locksash Company and a private individual were taken in the year. |
| The key terms of the outstanding loans at 30 June 2021 are as follows; |
| On 1 April 2021, a loan of £2,400,000 with Locksash Company is secured with a charge over Eurovestech's shareholdings in Maxoptra Limited (113,302 shares) and Lognet Information Systems Limited (6,759,240 shares), at an interest rate of 12.0% payable quarterly. The loan is for a period of 24 months from drawdown. |
| On 16 April 2021, a loan of £500,000 was taken out with a private individual. The key terms are that interest of 14% per annum is to be paid quarterly. The loan was repaid in full in December 2021. |
| Brough forward from last year is a loan of £300,000 taken out with a private individual. The key terms are that interest of 12% per annum is to be paid quarterly from a revised agreement dated 25 March 2021. The loan was repayable on 30 June 2022 and was actually repaid in full in December 2021. |
| In May 2020, a COVID 19 Government bounce back loan of £18,000 was taken out. The key terms are that the Government guarantees 100% of the loan and there are no fees or interest to pay for the first 12 months of the loan. After 12 months the interest rate will be 2.5% per annum. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 16. | LEASING AGREEMENTS |
| Minimum lease payments under non-cancellable operating leases fall due as follows: |
| 30.6.21 | 30.6.20 |
| £ | £ |
| Within one year |
| Between one and five years |
| 17. | FINANCIAL INSTRUMENTS |
| Categories of financial instrument |
| 30 June | 30 June |
| 2021 | 2020 |
| £ | £ |
| Financial Assets |
| Cash and cash equivalents | 422,154 | 32,894 |
| Loans and debtors | 226,899 | 330,360 |
| Financial assets at fair value through profit and loss - non-current | 38,981,863 | 30,761,863 |
| Financial assets at fair value through profit and loss - current | - | 19 |
| Financial liabilities |
| Borrowings | 3,218,000 | 3,107,000 |
| Creditors | 70,455 | 231,474 |
| Fair Value of financial assets |
| Listed equity securities | - | 19 |
| Unlisted equity securities | 38,981,863 | 30,761,863 |
| 18. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 30.6.21 | 30.6.20 |
| value: | £ | £ |
| Ordinary | £0.01 | 5,258,227 | 3,518,227 |
| During the year 174,000,000 ordinary shares with a par value of £0.01 each were issued for cash of £1,740,000. |
| 19. | RESERVES |
| Share | Capital |
| Retained | premium | redemption | Other |
| earnings | account | reserve | reserves | Totals |
| £ | £ | £ | £ | £ |
| At 1 July 2020 | 24,107,665 |
| Profit for the year |
| At 30 June 2021 | 31,035,603 |
| At 30 June 2021, the company's distributable reserves were £3,313,582 (2020: £4,605,644). All gains which remain unrealised at the balance sheet date are not distributable. |
| Eurovestech Plc (Registered number: 03913197) |
| Notes to the Financial Statements - continued |
| for the Year Ended 30 June 2021 |
| 20. | CONTINGENT LIABILITIES |
| In 2008, the Company entered into shareholder approved employee incentive arrangements with the Company's two Executive Directors. These incentive arrangements provide for each of the Executive Directors to receive 7.5 per cent of the net profits (after disposal costs) made by the Company in relation to its investments above a 5 per cent internal rate of return. In 2012, the incentive arrangements lapsed relating to one executive director. Given the significant degree of estimation in respect of the calculation of the amount to be paid, the timing of its payment and the likelihood of losses on the investments the amount of obligation cannot be measured with sufficient reliability and no provision is therefore recognised. |
| 21. | CAPITAL COMMITMENTS |
| The Company had no capital commitments at 30 June 2021 (2020: £nil). |
| 22. | RELATED PARTY DISCLOSURES |
| During the year, the Company charged Toluna Holdings Limited £20,000 (2020: £20,000) in fees for Non-Executive Directors' services and re-charged expenses of £33 (2020: £28). At 30 June 2021, £6,000 (2020: £12,033) was due from Toluna Holdings Limited, inclusive of vat. Toluna Holdings Limited is one of Eurovestech Plc's investee companies. |
| During the year, the Company provided additional loan funding of €498,853 (£445,786) (2020: €660,000 (£586,374)) to Audionamix SA and charged interest of €478,774 (£420,000) (2020: €380,170 (£332,387)) to Audionamix SA. At 30 June 2021, €977,627 (£865,785) (2020: €3,136,782 (£2,793,993) was due from Audionamix SA. The directors decided to provide against the year end balance due from Audionamix SA to reduce the balance due to £nil (2020; £nil). Audionamix SA is a Eurovestech Plc investee company. |
| At the Balance Sheet date, included within other debtors, is an amount owed by a non-executive director of £22,698 (2020: £37,588). |
| At the Balance Sheet date, included within creditors, is an amount owed to a director of £710 (2020: £25,710). |
| The Company has a profit sharing agreement with its Executive Directors. Refer to note 20 for further details. |
| There were no other related party transactions. |
| 23. | SUBSEQUENT EVENTS |
| In December 2021, the company raised £4.4m via an issue of 176,000,000 equity shares to existing shareholders at a price of 2.5p per share. |
| 24. | FINANCIAL STATEMENTS |
| Copies of these financial statements are available from Companies House, Crown Way, Maindy, Cardiff CF14 3UZ (www.companieshouse.gov.uk) and from the Eurovestech PLC website (www.eurovestech.co.uk). |