TIDMTAN
RNS Number : 7101Q
Tanfield Group PLC
30 June 2022
The Tanfield Group Plc
("Tanfield" or "the Company")
Final Results and Annual Accounts for the year ended 31 December
2021 and Notice of AGM
Tanfield Group Plc, a passive investing company as defined by
AIM Rules, announces its final results and annual accounts for the
year ended 31 December 2021. Posting of the Annual Report &
Accounts to shareholders who have not elected to receive them
electronically will take place in early July and will be made
available on the Company website at www.tanfieldgroup.com
shortly.
Tanfield announces that its Annual General Meeting will be held
at 2:00p.m. (UK) time on 2 August 2022 at Weightmans LLP, The
Hallmark Building, 105 Fenchurch Street, London, EC3M 5JG. Posting
to shareholders of the Notice of Annual General Meeting circular,
including information on the resolutions, will take place in early
July and will be made available on the Company website at
www.tanfieldgroup.com shortly.
For further information:
Tanfield Group Plc
Daryn Robinson 020 7220 1666
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Megan Liddell 020 7220 1666
STRATEGIC REPORT
CHAIRMAN'S STATEMENT
The Company's main investment, Snorkel International Holdings
LLC ("Snorkel International") , began to see signs of its markets
recovering as the impact of the Covid-19 pandemic reduced. The
Board continues to closely monitor performance and is hopeful that
2022 will see a continued recovery and improved sales levels. It is
not known whether 2022 will see a return to the pre Covid-19 sales
levels. Following Tanfield's 51% joint venture partner Xtreme
Manufacturing LLC ("Xtreme"), via its subsidiary SKL Holdings LLC
("SKL") and Snorkel International, filing a Summons and Complaint
(the "US Proceedings") against the Company and its subsidiary HBWP
Inc ("HBWP"), the Board remains disappointed that an amicable
resolution has not been possible. The Board therefore continues to
seek advice and vigorously defend its position.
The investment in Smith Electric Vehicles Corp. ("Smith")
continues to be held at nil value.
NON-EXECUTIVES' REVIEW
Background
The Company is defined as an investment company with two passive
investments. This definition resulted from the disposal of the
controlling interest in Smith in 2009 and the formation of a joint
venture between Tanfield and Xtreme relating to the Snorkel
division in October 2013 (the "Joint Venture"). Tanfield currently
owns 5.76% of Smith and 49% of Snorkel International.
OVERVIEW
Snorkel International
Tanfield continues to retain an investment in Snorkel
International (currently valued at GBP19.1m, 2020: GBP19.1m)
consisting of a 49% interest and a preferred interest position,
incorporating a Priority Amount and a Preferred Return
(collectively the "Preferred Interest"), which it has held since
the Joint Venture was established in October 2013.
Since the injection of working capital following the Joint
Venture, Snorkel achieved increased year on year sales levels
however, during 2020 the impact of the Covid-19 pandemic saw the
first reduction of sales. 2021 has seen sales levels recover
somewhat, but they remain below pre pandemic levels. A summary of
sales (unaudited) and the operating loss (unaudited), excluding
depreciation is shown below:
Operating
Year Sales Increase/ profit/ (loss)
(decrease) excluding
depreciation
-------- -------- ------------- ----------------
2021 $155.0m 40% ($9.1m)
-------- -------- ------------- ----------------
2020 $110.8m (50%) ($12.3m)
-------- -------- ------------- ----------------
2019 $220.8m 10% $0.3m
-------- -------- ------------- ----------------
2018 $200.5m 21% $2.9m
-------- -------- ------------- ----------------
2017 $165.8m 27% $1.6m
-------- -------- ------------- ----------------
2016 $130.5m 19% ($2.8m)
-------- -------- ------------- ----------------
2015 $109.9m 29% ($10.6m)
-------- -------- ------------- ----------------
2014 $85.3m - ($14.9m)
-------- -------- ------------- ----------------
Despite the ongoing impact of the Covid-19 pandemic, the Board
is not aware of any market factors and have not been made aware of
any specific reason why sales growth should not be achieved in
2022, when compared to 2021 sales, as the impact of the pandemic
continues to subside.
In October 2019, the Board received the US Proceedings, in which
Xtreme, via its subsidiary SKL and Snorkel International, allege
that Tanfield has refused to comply with its contractual
obligations by not agreeing to sign over its interest in Snorkel
International for GBPnil consideration. It is the Board's belief
that the intent of Tanfield, its non-conflicted directors at the
time and its shareholders, as well as the contractual terms,
require that the Preferred Interest is paid to the Company before
its 49% holding in Snorkel International can be acquired.
Notwithstanding that, in the Board's opinion, payment of the
Preferred Interest is a clear requirement described in the Circular
that was distributed to shareholders in advance of shareholders
approving the contemplated transaction, Xtreme allege that this was
not their intent or understanding of the contemplated transaction
despite both they, and their advisers, reviewing and commenting on
the Circular prior to its distribution. They also allege that they
do not believe payment of the Preferred Interest is a requirement
of the contractual agreements.
The position of Xtreme, which is the premise of the US
Proceedings , is that while they accept that Tanfield received a
49% interest in Snorkel International and an adjusted priority
amount of $22.5m (adjusted from the headline $50m value detailed in
the Circular, and with interest accruing) in exchange for
contributing the entire Snorkel division, including all its assets
and intellectual property, to the Joint Venture, and gave Xtreme a
51% controlling interest, they allege that because Snorkel
International, under Xtreme's control, failed to achieve a 12 month
EBITDA of $25m prior to 30 September 2018, that Tanfield's $22.5m
adjusted Priority Amount, plus accrued interest, simply
disappeared; allowing Xtreme to acquire Tanfield's 49% interest for
GBPnil consideration.
Accordingly, in summary, it is alleged by Xtreme that the terms
of the transaction were such that after (a) Tanfield contributed
all of the assets and intellectual property of its Snorkel division
to the Joint Venture, which Snorkel's own tax returns declare as
having a net fair market value of $45.5m, (b) Tanfield conceded
management control of the Snorkel division to Xtreme, (c) Xtreme
ran the business as it saw fit for approximately 5 years and
Snorkel International failed to achieve an annualized $25m EBITDA,
(d) Tanfield's value disappears completely and Xtreme can take 100%
ownership of Snorkel International without paying any consideration
to Tanfield.
The Board vigorously deny that this was the intent of the
parties, or the meaning of the contractual agreements. It would
have made absolutely no commercial sense to contribute the
considerable value, trade and assets of the Snorkel division, which
both parties agreed from the outset was fundamentally a viable
company, while also relinquishing control of the division, to then
receive no consideration for the considerable value contributed to
the Joint Venture, because the controlling party failed to achieve
the target. The Board therefore continues to seek advice and
vigorously defend its position.
Despite the allegations, which the Board believe are without
merit, t he Board is currently of the opinion that the investment
in Snorkel International will result in a return to shareholders in
the future, but would like to draw your attention to the "Valuation
of Snorkel International holding" below and the critical accounting
estimates and key judgments which further explain the potential
risks .
As a result of the issues arising from the US Proceedings,
Tanfield also sought to preserve its position against Ward Hadaway,
the Company's former solicitor, as, depending on the outcome of the
US Proceedings, the Company may need to hold the firm to account
for its role in and/or advice to Tanfield in relation to the Joint
Venture transfer. Due to statutory time limitation issues, and
because a suitable Standstill Agreement - which would have fully
protected the Company - could not be agreed, it became necessary
for the Company to issue and serve a claim against Ward Hadaway in
the English High Court (the "UK Proceedings") in order to ensure
that the Company's rights were fully protected pending the outcome
of the US Proceedings.
Both proceedings have continued to progress during 2021 however,
due to Covid-19 and other factors, delays were unavoidable. Further
updates in relation to progress and timing will be provided as and
when appropriate. The outcome of the US Proceedings, if completed
before the UK Proceedings, may have a direct and material impact on
the UK Proceedings, including the quantum of any claim.
Valuation of Snorkel International holding: GBP19.1 million
(2020: GBP19.1 million)
On 30 September 2018 the fixed terms of the agreement came to an
end. In summary, if the trailing 12 month EBITDA had reached $25m
by 30 September 2018, this would have triggered payment of the
Preferred Interest, valued at GBP19.1m, which once paid, would have
allowed the Company to exercise its put option, compelling the
purchase / sale of Tanfield's remaining holding in Snorkel
International. As a $25m trailing 12 month EBITDA was not reached
by the deadline, the put option expired. Tanfield retains a 49%
interest in Snorkel International and, in the Board's opinion, the
Preferred Interest, but it can no longer compel Xtreme to pay the
Preferred Interest and acquire its 49% interest. The Board
therefore remains of the opinion that the Preferred Interest is the
minimum payment required under the terms of the contractual
agreements for Xtreme to acquire Tanfield's interest and that this
is therefore an appropriate basis for determining the value the
investment is to be carried at.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own 100% of
Snorkel International. However, based on statements within the US
Proceedings, it is evident that Don Ahern does not believe he
should have to pay anything in order to acquire Tanfield's 49% of
Snorkel International. One possible outcome is that Tanfield
continues to hold its 49% interest for the foreseeable future
however, the Board does not believe such a scenario would be in the
best interest of shareholders given the action taken by Don Ahern
against the Company and, should it become necessary, would consider
options that may assist in moving from this position.
Due to the risks involved with the ongoing different opinions
regarding the contractual agreements, it is possible the actual
realisation of value could be less, or more, than the current
valuation. A number of factors could influence the valuation of
Snorkel International between now and a potential realisation date,
including the outcome of all relevant legal proceedings, Xtreme's
negotiating stance and the exchange rate at the time of any
realisation.
Due to these inherent uncertainties, the Board is unable to
determine whether the actual outcome will be less than the current
valuation of GBP19.1m, which it believes is underpinned by the
value of the Preferred Interest, so feel the valuation of GBP19.1m
should be maintained. This valuation has been assessed against
various criteria, including exchange rate fluctuations. The Board
would like to draw the reader's attention to the critical
accounting estimates and key judgments which further explain the
uncertainty and to the Auditors' report in which it is also
highlighted.
Smith
In October 2014 Smith completed a restructuring exercise that
saw it convert debt to equity. As a result of this, they informed
the Company that its equity shareholding had reduced from 24% to
5.76% (excluding warrants).
Since then, Smith has sought to raise funds which would allow it
to implement its strategic plan. To date, no significant fundraise
has been completed and the Board of Tanfield does not foresee this
happening in the immediate future.
Valuation of Smith holding
In 2015, the Board of Directors carried out a review of the
investment in Smith resulting in a decision to impair the
investment value to GBPnil.
The Board understand that Smith has not been trading in recent
years and as Smith are unable to provide any certainty on its
future, the Board maintains its opinion that the investment value
should be held at GBPnil.
Strategy of Tanfield Board of Directors in relation to its
Investments
The Board believes its investment in Snorkel International will
result in a return of value to shareholders but cannot predict the
timeframe for such a return. With regard to Smith, due to the
ongoing uncertainty, the Board is unable to say, at this time,
whether it will result in a return of value to shareholders. The
Directors will update shareholders should this view change.
The strategy of the Company in relation to these investments is
to return as much as possible of any realised value to shareholders
as events occur and circumstances allow, subject to compliance with
any legal requirements associated with such distributions. The
Board will continue to fulfil its obligation to its shareholders in
seeking to optimise the value of its investments.
The investments are defined as passive investments and in line
with this definition Tanfield does not hold Board seats in either
Snorkel International or Smith. There is no limit on the amount of
time the existing investments may be held by the Company.
Finance expense and income
Interest cost of GBP145k was incurred in the period (2020:
GBP100k) and interest income of GBPnil (2020: GBPnil) was received
on bank balances.
Loss from operations
The loss from operations before tax was GBP514k (2020: GBP697k),
the most significant difference compared to the prior year being a
reduction in legal fees relating to the ongoing US Proceedings and
UK Proceedings, as well as an increase in the finance expense.
Loss per share
Loss per share from continuing operations was 0.32 pence (2020:
0.43 pence). No dividend has been declared (2020: GBPnil).
Cash
At 31 December 2021, the Company had cash of GBP0.6m (2020:
GBP0.5m) and approximately GBP1.4m as at the date of this report.
At 31 December 2021, GBP0.5m of cash is held on deposit with the
English Court as security in relation to the UK Proceedings and
GBP1.25m as at the date of this report.
Risks and uncertainties
Loan note instruments totalling GBP3.7m have been put in place
between 2020 and the date of this report, with GBP2.6m of notes
currently issued. Having discussed matters with the Company's
shareholders, the directors believe that, if required, the Company
should be able to source sufficient working capital, in the form of
further loans, to provide the resources to allow it to continue for
a period of 12 months from the date of this report. However, there
is no guarantee if and when a realisation of value from one of the
investments will happen, or of the costs associated in securing a
realisation, and the Board will closely monitor progress. It
recognises that its investments have a level of risk associated
with them and is somewhat reliant on their continued performance
within their markets.
The ongoing global Covid-19 pandemic is continuing to impact the
performance of the investment in Snorkel International but signs
are that Snorkel's markets began recovering in 2021 and this has
continued to be the case in early 2022. However, at this stage, it
is not possible to estimate how long it will be until the pandemic
no longer impacts the performance of Snorkel at all. The Board note
that any impact would likely be limited to timing and currently do
not believe that it should alter what it believes to be the minimum
contractual value.
Section 172: Companies Act Statement
The Board takes seriously its duties towards a wide range of
stakeholders and acts in a way to ensure that its decision making
promotes the success of the Company for the benefit of these
stakeholders in accordance with Section 172. The Board's ability to
do this is as a result of the Company status - as an investment
Company it has no employees or customers and its activities have no
impact on the wider community and environment. The statements below
provide further information as to how the directors have had regard
to the relevant matters.
The likely consequences of decisions in the long term. As
discussed earlier in this report, the sole aim of the Board is to
maximise the return to shareholders through its investment
holdings. This is of necessity a short-term focus, and the
financial outcome will determine the future position and strategy
of the Company.
The need to foster the Company's business relationships with
suppliers and the desirability of the Company to maintain a
reputation for high standards of business conduct. Engagement with
suppliers is a key part of the business as the Board looks to bring
a resolution to its investment position. Therefore, we are
selective in the suppliers we choose to work with, demonstrating
the Board's commitment to maintaining high standards of business
conduct and professionalism.
The need to act fairly between members of the Company.
Responsibility for investor relations rests with the Chairman. The
Board is committed to communicating openly with shareholders to
ensure that its strategy and performance are clearly
understood.
The Annual General Meeting is the principal forum for
shareholders, and we encourage all shareholders to attend (where
appropriate, subject to Covid-19 restrictions) and participate. The
notice of the meeting is sent at least 21 days before the meeting.
The Chairman of the Board and other directors, where possible, are
present and are available to answer questions raised by
shareholders. The Board ensure regular communications are made to
all shareholders via periodic RNS announcements.
KPI's
The Board do not use any KPI's to monitor the performance of the
business.
Approved by the Board of Directors and signed on behalf of the
Board
Daryn Robinson
Chairman
30 June 2022
DIRECTORS' REPORT
The directors submit their report and the financial statements
of Tanfield Group Plc for the year ended 31 December 2021. Tanfield
Group Plc is a public listed company incorporated and domiciled in
England and quoted on AIM.
PRINCIPAL ACTIVITIES
The Company's principal activity is that of an investment
company.
INVESTING POLICY
The holdings in Snorkel International Holdings LLC and Smith
Electric Vehicles Corp. are passive investments. It is the
intention that where distributions or realisations of such holdings
are made (or there is a receipt of marketable securities) that
these are distributed to shareholders, subject to compliance with
any legal requirements associated with such distributions. There is
presently no anticipated limit on the amount of time the holdings
are to be held by the Company. The Company does not have and will
not make any cross holdings and does not have a policy on
gearing.
RESULTS AND DIVIDS
The financial result for the year to 31 December 2021 reflects
the principal activity of the company being that of an investment
company.
Turnover for the year was GBPnil (2020: GBPnil). The loss from
operations in the year of GBP369k (2020: GBP597k) arose from
operating costs.
The statement of financial position shows total assets at the
end of the year of GBP19.7m (2020: GBP19.6m). Net Current Assets
were GBP0.5m (2020: GBP0.5m) with cash balances of GBP0.6m (2020:
GBP0.5m). Having discussed matters with certain Company
shareholders, the directors believe that, if required, the Company
should be able to source sufficient working capital, in the form of
further loans, to provide the resources to allow it to continue for
a period of 12 months from the date of this report. Note 19
provides details of further loans already provided since the year
end.
No dividend has been paid or proposed for the year (2020:
GBPnil). The loss of GBP514k (2020: GBP697k) has been transferred
to reserves .
FINANCIAL INSTRUMENTS
The Company's financial instruments comprise cash, non-current
investments, current receivables, current payables arising from its
operations and borrowings. The principal financial instruments used
by the Company during the year are cash balances raised from
borrowings. The Company has not established a formal policy on the
use of financial instruments but assesses the risks faced by the
Company as economic conditions and the Company's operations
develop.
DIRECTORS
The present membership of the Board is set out on the Company
website.
The directors' do not currently have a right to acquire shares
in the company via the exercise of options as all past options have
either been exercised or lapsed. Details of the directors'
remuneration and incentives are set out in the Directors'
Remuneration Report.
POLICY ON PAYMENT OF CREDITORS
It is Company policy to agree and clearly communicate the terms
of payment as part of the commercial arrangements negotiated with
suppliers and then to pay according to those terms based on the
timely receipt of an accurate invoice. The Company supports the CBI
Prompt Payers Code. A copy of the code can be obtained from the CBI
at Centre Point, 103 New Oxford Street, London WC1A 1DU.
Trade creditor days based on trade payables at 31 December 2021
were 25 days (2020: 37 days).
SUBSTANTIAL SHAREHOLDINGS
On 31 December 2021 the following held substantial shares in the
company. No other person has reported an interest of more than 3%
in the ordinary shares.
No. %
--------------------------------- ----------- --------
HSBC GLOBAL CUSTODY
NOMINEE 54,108,810 33.2%
--------------------------------- ----------- --------
CHASE NOMINEES LIMITED 34,126,672 20.9%
--------------------------------- ----------- --------
AURORA NOMINEES LIMITED 19,739,558 12.1%
--------------------------------- ----------- --------
VIDACOS NOMINEES LIMITED 11,851,174 7.3%
--------------------------------- ----------- --------
THE BANK OF NEW YORK
(NOMINEES) 11,829,698 7.3%
--------------------------------- ----------- --------
LYNCHWOOD NOMINEES
LIMITED 5,511,566 3.4%
--------------------------------- ----------- --------
DIRECTORS' INTEREST IN CONTRACTS
No director had a material interest at any time during the year
in any contract of significance, other than a service contract,
with the Company or any of its subsidiary undertakings.
AUDITOR
A resolution to reappoint RSM UK Audit LLP as auditor will be
put to the members at the annual general meeting. RSM UK Audit LLP
has indicated its willingness to continue in office.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
The directors in office on the date of approval of the financial
statements have confirmed that, as far as they are aware, there is
no relevant audit information of which the auditor is unaware. Each
of the directors has confirmed that they have taken all the steps
that they ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish
that it has been communicated to the auditor.
DIRECTORS INDEMNITY
Every Director shall be indemnified by the Company out of its
own funds.
Approved by the Board of Directors and signed on behalf of the
Board
Daryn Robinson
Chairman
30 June 2022
CORPORATE GOVERNANCE
All members of the board believe strongly in the value and
importance of good corporate governance and in our accountability
to all of Tanfield's stakeholders, including shareholders and
suppliers.
The corporate governance framework which the company operates,
including board leadership and effectiveness, board remuneration,
and internal control is based upon practices which the board
believes are proportional to the size, risks, complexity and
operations of the business and is reflective of the company's
values. Of the two widely recognised formal codes, we have adopted
the Quoted Companies Alliance's (QCA) Corporate Governance Code for
small and mid-size quoted companies (revised in April 2018 to meet
the new requirements of AIM Rule 26).
Tanfield is a passive investment company with investments in
Snorkel International and Smith. It is the intention that where
distributions or realisations are made that these are distributed
to shareholders, subject to compliance with any legal requirements
associated with such distributions .
The Board is mindful of and monitors its corporate risks. The
main risks the business faces are that the investments may not
achieve their operational goals, resulting in no realisation event
and the potential for disputes with the controlling shareholders as
to the terms of a realisation event should one occur. As a passive
investment company, the Board is not able to influence the decision
making or strategy of the investment companies and so its ability
to mitigate some risks is limited.
The Company operates as a passive investment company and has put
in place a board structure that can best provide the strategic
advice, leadership and continuity required. The board structure
consists of two non-executive directors, Daryn Robinson and Martin
Groak, both sitting on the PLC Board. Due to the nature of the
business, executive directors and an operational Board are not
deemed necessary and therefore the non-executive directors are
deemed not to be independent. During the year 5 board meetings, all
fully attended, took place.
The Board considers the Board composition in terms of skills,
experience and balance. Its committees seek external expertise and
advice where required. With only two Board members, due to the
limited activities of the Company, Board cohesion is paramount and
this is regularly reviewed. The Board members have held roles and
directorships in other publicly listed companies where they have
gained a wealth of financial and public market experience which
collectively has provided them with the balance of skills and
expertise to deliver the business strategy.
The Board considers evaluation of its committees and individual
directors to be an integral part of corporate governance to ensure
it has the necessary skills, experience and abilities to fulfil its
responsibilities. To ensure the skills and knowledge of the Board
are kept up to date, it works with its Nominated Advisor &
Broker, Auditor and Solicitor to ensure that any relevant new or
amended accounting standards and interpretations, AIM rules or
Companies Act legislation are fully understood and implemented.
The Board recognises that a corporate culture based on sound
ethical values and behaviours is an asset. In accordance with the
Company's stated social responsibilities it endeavours to conduct
its business in an ethical, professional and responsible manner. As
the Company has no control over operational matters relating to its
investments, it is unable to influence the values and behaviours
directly but it supports a culture of dealings with both
shareholders and investee companies with integrity and respect.
The QCA Code is constructed around ten broad principles and a
set of disclosures. The QCA has stated what it considers to be
appropriate arrangements and asks companies to provide an
explanation about how they are meeting the principles through the
prescribed disclosures. We have considered how we apply each
principle to the extent that the board judges these to be
appropriate in the circumstances, and we provide a full explanation
of the approach taken in relation to each in the details of our
approach to Corporate Governance which can be found on the
Company's website www.tanfieldgroup.com/about#governance . The
board considers that it does not depart from any of the principles
of the QCA Code.
Going Concern
Having discussed matters with the Company's shareholders, the
directors are satisfied that, if required, the Company should be
able to source sufficient working capital, in the form of further
loans, to provide the resources to continue for a period of 12
months from the date of this report. For this reason, they continue
to adopt the going concern basis in preparing the financial
statements.
Daryn Robinson
Chairman
30 June 2022
DIRECTORS' REMUNERATION REPORT
Remuneration committee
The company has established a Remuneration Committee which is
constituted in accordance with the recommendations of the QCA Code.
The members of the committee during the year were D Robinson and M
Groak and the committee was chaired by D Robinson.
Remuneration policy
There were four main elements of the remuneration packages for
directors:
-- Basic annual salary (including directors' fees) and benefits;
-- Annual bonus payments;
-- Share option incentives; and
-- Pension arrangements.
Basic salary
The basic salary of the directors is reviewed annually having
regard to the commitment of time required and the level of fees in
similar companies. Non-Executive Directors are employed on
renewable fixed term contracts not exceeding three years.
Annual bonus
The committee established the objectives which must be met for
each financial year if a cash bonus was to be paid. The purpose of
the bonus was to reward directors for achieving above average
performance which also benefits shareholders.
Share options
The directors had options granted to them under the terms of the
Share Option Scheme which, as at the date of this report, have
expired. Share options were awarded as set out in the table below.
No new share options have been granted as at the date of this
report.
Pension arrangements
Some directors were members of a money purchase pension scheme
to which the company contributed.
Directors interests
The interests of directors holding office at the year end in the
company's ordinary 5p shares at 31 December 2021 and 31 December
2020 are shown below:
Number of shares
------ -------------------------------------------------------------------------------
2021 2020
-------------------------------------------- ------------------- --------------------
D Robinson 942,785 942,785
-------------------------------------------- ------------------- --------------------
M Groak 40,000 40,000
-------------------------------------------- ------------------- --------------------
Total 982,785 982,785
-------------------------------------------- ------------------- --------------------
The directors, as a group, beneficially own 0.6% of the
company's shares.
As at the date of this report, no director has any remaining
right to acquire shares in the company via the exercise of options
granted under the terms of their service contracts, copies of which
may be inspected by shareholders upon written application to the
company secretary.
Remuneration review
Directors emoluments for the financial
year were as follows:
Salary Pension Total Salary Pension Total
2021 2021 2021 2020 2020 2020
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
--------------------------- --------- ----------- ----------- ------------- ----------- ---------
M Groak 20 - 20 20 - 20
--------------------------- --------- ----------- ----------- ------------- ----------- ---------
D Robinson 70 3 73 61 2 63
--------------------------- --------- ----------- ----------- ------------- ----------- ---------
Total 90 3 93 81 2 83
--------------------------- --------- ----------- ----------- ------------- ----------- ---------
The directors held no share options at 31 December 2021 (2020: nil).
Approval
This report was approved by the board of directors and authorised
for issue on 30 June 2022 and signed on its behalf by:
Daryn Robinson
REPORT OF THE INDEPENT AUDITOR
Independent auditor's report to the members of Tanfield Group
Plc
Opinion
We have audited the financial statements of Tanfield Group plc
(the 'company') for the year ended 31 December 2021 which comprise
the statement of comprehensive income, statement of financial
position, statement of changes in equity attributable to equity
shareholders, cash flow statement and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted International
Accounting Standards.
In our opinion the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 December 2021 and of its loss for the year then
ended;
-- have been properly prepared in accordance with UK-adopted
International Accounting Standards; 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
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Summary of our audit approach
-- Key audit matters - Carrying value of non-current investments
-- Materiality - Overall materiality: GBP408,000 (2020:
GBP409,000), Performance materiality: GBP306,000 (2020:
GBP306,750)
-- Scope - Our audit procedures covered 100% of total assets and 100% of loss before tax.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on the overall audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Carrying value of non-current investment
Key audit matter description
Included in the Statement of Financial Position are non current
asset investments with a carrying value of GBP19.1m (2020:
GBP19.1m). This represents holdings of 5% and 49% respectively in
Smith Electric Vehicles US Corp and Snorkel International Holdings
LLC ('Snorkel'). Note 6 and the Accounting Policies of the
financial statements describes the judgements made by the Board
with regards to the need for an impairment to be recognised in
respect of each of these investments and, in particular, the
significant uncertainty concerning the carrying value of the
company's GBP19.1m investment in Snorkel International Holdings
LLC. The investment in Smith Electric Vehicles US Corp has already
been fully impaired.
The investment in Snorkel represents the sole significant asset
held within the Statement of Financial Position of the company. As
described in the Critical Accounting Estimates and Key Judgements
there are significant uncertainties over the timing of any
realisation, and the amount that might ultimately be realised on
this investment, that could have a material effect on the
recoverable amount. The realisation of this investment for either
more or less than its carrying value could have a material impact
on the financial statements.
The Board has limited financial and non-financial information
upon which to calculate/base its estimate of the realisation value
and timing thereof. The Critical Accounting Estimates and Key
Judgements disclosures set out the basis of the Directors
consideration of the fair value of the investment, based on its
expected recoverable amount, and the assumptions made therein. The
assessments and conclusion of the directors are based on the
Investment Circular setting out the Proposed Transaction issued to
Shareholders in September 2013, the legal advice obtained at the
time and subsequent to that date along with the information
received in respect of the financial performance and position of
Snorkel. The assessment made by the Directors as to the sums
falling due under the Investment Circular differs to the assessment
made by Xtreme, which has led to legal proceedings by Xtreme
against the company to obtain control of the remaining 49% of
Snorkel. The directors have concluded that the most appropriate
basis for determining the carrying amount continues to be the
amount represented by the Preferred Interest element, which was
established at the time of the Transaction, and was the value the
investment in Snorkel was impaired to following the expiry of the
put option in 2018.
As explained in the Critical Accounting Estimates and Key
Judgements section, the timing of realisation and the sum to be
realised are dependent on definitive clarification as to the legal
position of the call option still held by Xtreme. The eventual
amount realised is also dependent on the applicable rate of
exchange at the time that any US$ proceeds are converted into GBP.
As a result, there remains significant doubt over the timing and
value at which this asset will be realised.
How the matter was addressed in the audit
Our audit work has considered the nature of the financial and
other information held by management described above, the
assumptions used by management to assess the estimated timing and
realisable value of the investment, and such other audit evidence
as was available, to form a view on the reasonableness of these
assumptions, estimates and calculations.
In carrying out our audit work we have considered and challenged
the range of outcomes considered by the directors, the conclusion
the directors have reached about the reliability of any alternative
valuation and the disclosures made, specifically in the Critical
Accounting Estimates and Key Judgements disclosures and in Note 6.
We also circularised the Company's legal advisors in both the UK
and United States.
Our application of materiality
When establishing our overall audit strategy, we set certain
thresholds which help us to determine the nature, timing and extent
of our audit procedures. When evaluating whether the effects of
misstatements, both individually and on the financial statements as
a whole, could reasonably influence the economic decisions of the
users we take into account the qualitative nature and the size of
the misstatements. Based on our professional judgement, we
determined materiality as follows:
-- Overall materiality - GBP408,000 (2020: GBP409,000)
-- Basis for determining overall materiality - 2.1% of total assets.
-- Rationale for benchmark applied - Consistent with prior year,
the company's principal activity continues to be that of an
investment company. As such, we deemed total assets to be the key
benchmark for users of the financial statements.
-- Performance materiality - GBP306,000 (2020: GBP306,750).
-- Basis for determining performance materiality - 75% of overall materiality.
-- Materiality levels for those classes of transaction where
materiality levels are lower than overall materiality - The
statement of comprehensive income was tested to the lower
Performance Materiality figure of GBP19,275 (2020: GBP34,500 to
ensure adequate coverage of these values. This has been calculated
as 3.8% (2020: 4.9%) of loss before tax.
-- Reporting of misstatements to the Audit Committee - Misstatements in excess of GBP4,080 and misstatements below that threshold that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The company has been subject to a full scope audit.
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. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting
included:
-- checking the integrity and accuracy of the cashflow forecasts prepared by management;
-- assessing the reasonableness of assumptions and explanations
provided by management to supporting information, where
available;
-- reviewing the forecast funding requirements and assessing the
directors' opinion of the entity's ability to obtain future
funding; and
-- auditing the accuracy and consistency of disclosures made in
the financial statements in respect of principal risks and going
concern.
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.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
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
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Strategic Report and the Directors' Report have been
prepared in accordance with applicable legal requirements.
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 Directors' Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
The extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements, to
perform audit procedures to help identify instances of
non-compliance with other laws and regulations that may have a
material effect on the financial statements, and to respond
appropriately to identified or suspected non-compliance with laws
and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to
identify and assess the risk of material misstatement of the
financial statements due to fraud, to obtain sufficient appropriate
audit evidence regarding the assessed risks of material
misstatement due to fraud through designing and implementing
appropriate responses and to respond appropriately to fraud or
suspected fraud identified during the audit.
However, it is the primary responsibility of management, with
the oversight of those charged with governance, to ensure that the
entity's operations are conducted in accordance with the provisions
of laws and regulations and for the prevention and detection of
fraud.
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud, the audit engagement
team:
-- obtained an understanding of the nature of the industry and
sector, including the legal and regulatory framework that the
company operates in and how the company is complying with the legal
and regulatory framework ;
-- inquired of management, and those charged with governance,
about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or alleged
instances of fraud ;
-- discussed matters about non-compliance with laws and
regulations and how fraud might occur including assessment of how
and where the financial statements may be susceptible to fraud
.
The most significant laws and regulations were determined as:
UK-adopted IAS; Companies Act 2006 and AIM listing rules.
Additional audit procedures performed by the audit engagement team
included:
-- Review of the financial statement disclosures and testing
these to supporting documentation; and
-- Completion of disclosure checklists to identify areas of non-compliance.
The area that we identified as being susceptible to material
misstatement due to fraud were: the risk of management override of
controls. The audit procedures performed by the audit engagement
team included:
-- 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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
http://www.frc.org.uk/auditorsresponsibilities . This description
forms part of our auditor's report.
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
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
ALAN AITCHISON (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Third Floor, 69 Wellington Street, Glasgow, G2 6HG
30 June 2022
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
2021 2020
Notes GBP000's GBP000's
================================ ======= ========= ====== ========= =========
Revenue - -
Staff costs 1 (93) (83)
Other operating income 19 18
Other operating expenses 3 (295) (532)
---------------------------------------------------- ------ --------- ---------
Loss from operations (369) (597)
Finance expense 2 (145) (100)
Finance income 2 - -
-------------------------------- ------- --------- ------ --------- ---------
Loss from operations before
tax (514) (697)
Taxation 4 - -
-------------------------------- ------- --------- ------ --------- ---------
Loss & total comprehensive income
for the year attributable
to equity shareholders (514) (697)
---------------------------------------------------- ------ --------- ---------
Loss per share
Loss per share from operations
Basic and diluted (p) 5 (0.32) (0.43)
STATEMENT OF FINANCIAL POSITION (Company registration number
04061965)
AS AT 31 DECEMBER 2021
2021 2020
Notes GBP000's GBP000's
================================== ============= === ====== ============= ===========
Non current assets
Non current Investments 6 19,100 19,100
------------------------------------------------------ ------ ------------- -----------
19,100 19,100
------------- -------------------------------------- ------ ------------- -----------
Current assets
Trade and other receivables 8 23 24
Cash and cash equivalents 7 588 524
------------------------------------------------------ ------ ------------- -----------
611 548
------------- -------------------------------------- ------ ------------- -----------
Total assets 19,711 19,648
------------------------------------------------------ ------ ------------- -----------
Non current liabilities
Borrowings 10 1,695 1,100
------------------------------------------------------ ------ ------------- -----------
1,695 1,100
------------- -------------------------------------- ------ ------------- -----------
Current liabilities
Trade and other payables 9 72 90
------------------------------------------------------ ------ ------------- -----------
72 90
------------- -------------------------------------- ------ ------------- -----------
Total liabilities 1,767 1,190
------------------------------------------------------ ------ ------------- -----------
Equity
Share capital 11 8,145 8,145
Share premium 11 17,336 17,336
Share option reserve 12 - 331
Special reserve 66,837 66,837
Merger reserve 1,534 1,534
Retained earnings (75,908) (75,725)
------------------------------------------------------ ------ ------------- -----------
Total equity attributable
to equity shareholders 17,944 18,458
------------------------------------------------------ ------ ------------- -----------
Total equity and liabilities 19,711 19,648
------------------------------------------------------ ------ ------------- -----------
The financial statements were approved by the board of directors
and authorised for issue on 30 June 2022 and are signed on its behalf
by:
Daryn Robinson
Chairman
STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY
SHAREHOLDERS
FOR THE YEARED 31 DECEMBER 2021
Share Share Share Merger Special Retained Total
capital premium option reserve reserve earnings
a reserve c d e
b
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
At 1 January 2020 8,145 17,336 331 1,534 66,837 (75,028) 19,155
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
Comprehensive income
Loss for the year - - - - - (697) (697)
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
Total comprehensive
income for the year - - - - - (697) (697)
At 31 December 2020 8,145 17,336 331 1,534 66,837 (75,725) 18,458
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
Comprehensive income
Loss for the year - - - - - (514) (514)
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
Total comprehensive
income for the year - - - - - (514) (514)
Transactions with
owners in their capacity
as owners:-
Share based payments
(note 12) (331) 331 -
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
At 31 December 2021 8,145 17,336 - 1,534 66,837 (75,908) 17,944
------------------------------ --------- --------- --------- ----------- ----------- --------- ---------
a The share premium account represents amounts subscribed for
share capital in excess of nominal value, net of directly
attributable share issue costs.
b The share option reserve represents the cumulative share-based
payment expense.
c The merger reserve has arisen on the legal acquisition of
subsidiary companies.
d The special reserve relates to a previous reclassification of the share premium account.
e The retained earnings represents the accumulated retained
profits and losses less dividend payments.
CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2021
2021 2020
GBP000's GBP000's
============================================= ========= =========
Loss from operations (514) (697)
Adjustment for:
Finance costs 145 100
Changes in operating assets and liabilities
/ working capital:
Decrease/(Increase) in receivables 1 (1)
(Decrease) / increase in payables (18) (14)
---------------------------------------------- --------- ---------
Net cash used in operating activities (386) (612)
Cash flow from Investing Activities
Interest received - -
---------------------------------------------- --------- ---------
Net cash from investing activities - -
---------------------------------------------- --------- ---------
Cash flow from financing activities
Proceeds from issuance of ordinary shares
net of costs - -
Proceeds from borrowings 450 1,000
---------------------------------------------- --------- ---------
Net cash generated by financing activities 450 1,000
---------------------------------------------- --------- ---------
Net (decrease)/increase in cash and cash
equivalents 64 388
Cash and cash equivalents at the start
of year 524 136
---------------------------------------------- --------- ---------
Cash and cash equivalents at the end
of the year 588 524
---------------------------------------------- --------- ---------
ACCOUNTING POLICIES
(i) Basis of preparation of the financial statements
Tanfield Group Plc is a public company incorporated in England
and quoted on AIM. These financial statements have been prepared on
the going concern basis in accordance with applicable law and
UK-adopted International Accounting Standards. The financial
statements have been prepared under the historical cost convention,
except for the revaluation of certain financial assets and
liabilities measured at fair value.
The financial statements present the company accounts only and
have not been consolidated as the adjustments made to the financial
statements upon consolidation would be immaterial. 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 thousand.
The preparation of the financial statements requires management
to exercise its judgement in the process of applying the company's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed below in
"Critical accounting estimates and key judgements".
(ii) Going concern
The financial statements have been prepared on the going concern
basis, which assumes that the Company will continue to be able to
meet its liabilities as they fall due for the foreseeable future.
At 31 December 2021 the Company had cash balances of GBP0.6m (2020:
GBP0.5m) and approximately GBP1.4m as at the date of this report.
At 31 December 2021, GBP0.5m of cash is held on deposit with the
English Court as security in relation to the UK Proceedings and
GBP1.25m as at the date of this report.
Having discussed matters with certain Company shareholders, the
directors believe that, if required, the Company should be able to
source sufficient working capital, in the form of further loans, to
provide the resources to a) allow the Company to continue in
operation for a minimum of 12 months and b) see the legal
proceedings continue, possibly to a conclusion, during that period.
It is not currently expected that the ongoing Covid-19 pandemic
will impact on this. Having taken the uncertainties into account
the Board believes it is appropriate to prepare the financial
statements on the going concern basis.
The Directors do not believe that the ongoing global Covid-19
pandemic will have a direct impact on the Company's ability to
continue as a going concern due to the nature of its activities as
an investment company.
(iii) Foreign currencies
Transactions in currencies other than sterling, the functional
currency of the company, are recorded at the rates of exchange
prevailing on the dates of the transactions. At each statement of
financial position date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the statement of financial position date.
Non-monetary assets and liabilities carried at fair value that
are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined.
Gains and losses arising on retranslation are included in the
income statement for the period, except for exchange differences on
non-monetary assets and liabilities, which are recognised directly
in profit and loss.
(iv) Retirement benefit cost
The company operates a defined contribution pension scheme and
pays contributions to an externally administered pension plan. The
company has no further payment obligations once the contributions
have been paid. The contributions are recognised as an employee
benefit expense in the period in which they fall due.
(v) Share based payments
The Company issues equity-settled share-based payments to
certain employees and has applied the requirements of IFRS2
"Share-based payments".
Equity settled share-based payments are measured at fair value
at the date of the grant. Fair value is measured using a
Black-Scholes model.
The fair value is expensed on a straight-line basis over the
vesting period, based on the Company's estimate of shares that will
eventually vest.
(vi) Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the
Company's statement of financial position when the Company has
become a party to the contractual provisions of the instrument.
Financial assets
Investments
Investments in equity instruments are included at fair value
with fair value gains and losses recognised in profit or loss.
Trade and other receivables
Financial assets within trade and other receivables are
initially recognised at fair value, which is usually the original
invoiced amount and are subsequently carried at amortised cost less
provisions made for impairment.
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
An impairment loss is recognised for the expected credit losses
on receivables when there is an increased probability that the
counterparty will be unable to settle an instrument's contractual
cash flows on the contractual due dates, a reduction in the amounts
expected to be recovered, or both.
Impairment losses and any subsequent reversals of impairment
losses are adjusted against the carrying amount of the receivable
and are recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand less short-term
bank overdrafts.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Company after deducting all
of its liabilities.
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds received.
Trade and other payables
Financial liabilities within trade and other payables are
initially recorded at fair value, which is usually the original
invoiced amount, and subsequently carried at amortised cost.
Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Borrowings are classified as current liabilities
unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting
period.
(vii) Segmental reporting
In accordance with IFRS 8 operating segments are determined on
the basis of information reported to the chief operating
decision-maker for decision-making purposes. The Company considers
that it only has one segment and that the role of chief operating
decision-maker is performed by the Tanfield Group Plc's board of
directors.
(viii) Termination benefits
Termination benefits (leaver costs) are payable when employment
is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these
benefits. The Company recognises termination benefits when it is
demonstrably committed to the affected employees leaving the
Company.
Accounting standards, interpretations and amendments to
published accounts
During the year ended 31 December 2021, the Company has not
adopted any new IFRS, IAS or amendments issued by the IASB, and
interpretations by the IFRS Interpretations Committee, which have
had a material impact on the Company's financial statements.
New and amended standards and interpretations effective from 1
January 2022 not yet adopted by the Company.
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2021 reporting
periods and have not been early adopted by the group. These
standards are not expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable
future transactions .
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
The preparation of financial statements in conformity with
UK-adopted IAS requires the use of accounting estimates and
assumptions. It also requires management to exercise judgement in
the process of applying the Company's accounting policies. We
continually evaluate our estimates, assumptions and judgements
based on the most up to date information available.
The 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 year are discussed below.
Investments
Smith
The status of the Company's holding in Smith Electric Vehicles
US Corp was reviewed during the year. The Board previously advised
that the company had ceased operations and did not feel that Smith
had made sufficient progress towards achieving its plan of
obtaining a public listing to maintain the previous valuation and
had therefore decided to impair the investment in Smith to GBPnil.
Subsequently, no progress has since been made that gives rise to an
expectation of a realisation in value. As such, the Board is
maintaining its view that the investment currently has nil
value.
Nevertheless, the Board acknowledges that there is a chance the
investment could result in a return to Shareholders and will
continue to monitor the investment. Should progress be made in the
future the valuation of the investment will be revisited.
Snorkel International
The status of the Company's holding in Snorkel International
Holdings LLC was reviewed during the year. The Board has concluded
that, while Tanfield continues to retain an investment in Snorkel
International (currently carried at GBP19.1m), consisting of a 49%
interest and the Preferred Interest , under the terms of the Joint
Venture, they are unable to exercise significant influence over the
activities and strategic direction of Snorkel International and
therefore holding the investment as a trade investment, as opposed
to applying equity accounting, continues to be the correct
treatment.
Since the injection of working capital following the Joint
Venture, Snorkel achieved increased year on year sales levels
however, during 2020 the impact of the Covid-19 pandemic saw the
first reduction of sales. 2021 has seen sales levels recover
somewhat, but they remain below pre pandemic levels. A summary of
sales (unaudited) and the operating loss (unaudited), excluding
depreciation is shown below:
Operating
Year Sales Increase/ profit/ (loss)
(decrease) excluding
depreciation
-------- -------- ------------- ----------------
2021 $155.0m 40% ($9.1m)
-------- -------- ------------- ----------------
2020 $110.8m (50%) ($12.3m)
-------- -------- ------------- ----------------
2019 $220.8m 10% $0.3m
-------- -------- ------------- ----------------
2018 $200.5m 21% $2.9m
-------- -------- ------------- ----------------
2017 $165.8m 27% $1.6m
-------- -------- ------------- ----------------
2016 $130.5m 19% ($2.8m)
-------- -------- ------------- ----------------
2015 $109.9m 29% ($10.6m)
-------- -------- ------------- ----------------
2014 $85.3m - ($14.9m)
-------- -------- ------------- ----------------
Despite the ongoing impact of the Covid-19 pandemic, the Board
is not aware of any market factors and have not been made aware of
any specific reason why sales growth should not be achieved in
2022, when compared to 2021 sales, as the impact of the pandemic
continues to subside.
Under the terms of the Joint Venture, the level of financial
information available to the Board to assess the fair value of the
investment in Snorkel International is limited to quarterly
historical financial information, incorporating a consolidated
operating statement, balance sheet and cashflow.
In 2018, the Board impaired Tanfield's investment value in
Snorkel International down to GBP19.1m, from the previous valuation
of GBP36.3m. The valuation of GBP19.1m is based on the value of the
Preferred Interest which is made up of the priority amount, set in
2013 based upon the assets of the Snorkel division contributed to
the Joint Venture, plus the preferred return, being interest
accruing on the priority amount. This is the basis of valuation
that was set out in the Circular issued to Shareholders at the time
of the Joint Venture. The Board have not included the effect of
discounting for the timing of a future realisation as they do not
believe this materially impacts on the valuation.
The previous valuation of GBP36.3m was originally calculated in
2013 and assumed the $25m EBITDA trigger, compelling the payment of
the Preferred Interest and the purchase of Tanfield's interest in
Snorkel International by Xtreme, would be reached within the
predefined period ending 30 September 2018. As Snorkel
International, under Xtreme's control, failed to achieve the EBITDA
trigger, Tanfield retains a 49% interest in Snorkel International
and the Preferred Interest, but it can no longer compel Xtreme to
pay the Preferred Interest and acquire its 49% interest .
In November 2018, the Board received a call option notice in
which Xtreme, via its subsidiary SKL, requested to exercise a call
option to acquire Tanfield's interest in Snorkel International. In
the request, SKL stated that the option price to acquire Tanfield's
holding was $0 (nil) and that payment of the Preferred Interest was
not required.
The Board did not agree with this statement and does not believe
that the contractual agreements, or the Circular distributed to
shareholders to fully explain the terms of the transaction - and
thereby seek their authority to enter in to the transaction - allow
for a call option whereby Xtreme can acquire Tanfield's interest in
Snorkel International for a nil value. The Board therefore rejected
the call option notice and sought to amicably resolve the dispute
with Tanfield's 51% joint venture partner, Xtreme. As announced on
22 October 2019, Xtreme (via its subsidiary SKL and Snorkel
International) filed the US Proceeding against Tanfield and its
subsidiary HBWP.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own 100% of
Snorkel International. However, based on statements within the US
Proceedings, it is evident that Don Ahern does not believe he
should have to pay anything in order to acquire Tanfield's 49%
interest in Snorkel International. One possible outcome is that
Tanfield continues to hold its 49% interest for the foreseeable
future however, the Board do not believe such a scenario would be
in the best interest of shareholders and, should it become
necessary, would consider options that may assist in moving from
this position.
The Board has reviewed the historic financial information, along
with the global industrial and aerial work platform market
conditions and has concluded it is appropriate to value Tanfield's
investment in Snorkel International based on what the Board
understands are the contractual arrangements and so at an amount
based on the Preferred Interest amount of GBP19.1m.
This valuation has been assessed against various criteria,
including past performance (including but not limited to a growth
in sales, bill of material costs and improved operating
profitability), production capacity, market conditions, the
capability of the business to increase output and exchange rate
fluctuations. In coming to this opinion, the Board has considered
the trends within the business and their consistency; in
particular:
-- the rate of sales growth being more or less than that
recently achieved by Snorkel International.
-- the level of operating profitability improvement being more
or less than that recently achieved by Snorkel International.
-- The impact of exchange rate movements given that any proceeds
will be received in USD, considering current, historic and average
exchange rates.
Between 1 January 2021 to 31 December 2021, the range of the GBP
to USD exchange rate has a low of 1.3191 and a high of 1.4208, the
average being 1.3751. If GBP19.1m is assumed to represent the
average exchange rate, then based on the low of 1.3191 the
valuation increases by approximately 4% to GBP19.9m and based on
the high of 1.4208 the valuation reduces by approximately 3% to
GBP18.5m giving a potential movement of 7% in the valuation. Whilst
the Board is not in a position to mitigate any potential exchange
rate variation, until such time as the realisation of the Snorkel
International investment is known, it will continue to consider
such means as may be possible to maximise the GBP return to
shareholders.
If the assumption is made that both the progress within Snorkel
International and the wider global market conditions will continue
to improve, then the Board note that the valuation could
potentially increase beyond the GBP19.1m which is underpinned by
the Preferred Interest element. However, the Board has considered
various Snorkel International trading scenarios, based around
historic sales growth trends and does not believe the valuation is
likely to materially increase from GBP19.1m in the near future.
The Board, however, caveat that a number of factors could
influence the valuation and performance of Snorkel International
between now and a potential realisation date, including Xtreme's
opinion of the contractual agreements which has resulted in the US
Proceedings (see Strategic Report for further information), the
outcome of the UK Proceedings and the ongoing global Covid-19
pandemic. Due to the risks involved with the ongoing different
opinions regarding the contractual agreements, it is possible the
actual realisation of value could be less than the current
valuation, potentially as low as GBPnil as alleged by Xtreme and
depending on the outcome of ongoing legal proceedings. While the
impact of the global Covid-19 pandemic subsided during 2021, it is
not possible at this stage to estimate what likely future impact
the pandemic may have. The Board note that any ongoing impact of
Covid-19 would likely be limited to the performance of Snorkel
International and the timing of a possible realisation but
currently do not believe that it should alter what it believes to
be the minimum contractual value.
Given the risks, the Board has considered whether a further
impairment loss should be recognised but have concluded that based
on their understanding of the contractual agreements in place, no
further impairment is required at this time.
Whilst the timing and quantum of realisation of the investment
remains unclear, the Board is currently of the opinion that the
investment in Snorkel International will result in a return to
shareholders in the future, that the current value of the
investment of GBP19.1m remains appropriate and there is not an
alternative, more reliable valuation of the investment than the
current estimate.
NOTES TO THE ACCOUNTS
1. Staff costs
2021 2020
Aggregate remuneration comprised GBP000's GBP000's
--------------------------------------------------------------------------------- ------------- ------------------
Wages and salaries 90 81
Other pension costs 3 2
--------------------------------------------------------------------------------- ------------- ------------------
Total staff costs 93 83
--------------------------------------------------------------------------------- ------------- ------------------
2021 2020
Average monthly number of employees No. No.
Directors 2 2
--------------------------------------------------------------------------------- ------------- ------------------
Total 2 2
--------------------------------------------------------------------------------- ------------- ------------------
Details of Directors' fees and salaries, bonuses, pensions, benefits in kind and other benefit
schemes together with details in respect of Directors' share option plans are given in the
Directors' Remuneration Report.
2. Finance expense and finance income
2021 2020
Finance expense GBP000's GBP000's
Interest on borrowings 145 100
----------------------------------------------------------------------------------- -------------------- -----------
Total finance expense 145 100
----------------------------------------------------------------------------------- -------------------- -----------
2021 2020
Finance income GBP000's GBP000's
---------------------------------------- -------- ----------- ------------------------------------------ -----------
Interest on cash, cash equivalents & financial - -
instruments
Total finance income - -
----------------------------------------------------------------------------------- -------------------- -----------
3. Other operating expenses
2021 2020
GBP000's GBP000's
------------------------ ------------------------ ----------- ------------------------------------------ -----------
Property related expenses 24 27
Auditor's remuneration
(see below) 22 22
Other operating expenses 249 483
---------------------------------------------------------- --- ------------------------------------------ -----------
Total operating expenses 295 532
---------------------------------------------------------- ----------------------------- ---------------- -----------
Auditor's remuneration
Amounts payable to RSM UK Audit LLP and their associates in respect of both audit
and non-audit services are as follows:
2021 2020
GBP000's GBP000's
--------------------------------------------------------------------------------------------- ------------ -----------
Audit Services
* statutory audit of accounts 23 22
Other services relating to
taxation
* compliance services - -
-------------------------------------------------- ----------------------------------------------- -----------
23 22
Comprising
* Audit services 23 22
* Non audit services - -
4. Taxation
Analysis of and factors affecting taxation
charge
The taxation charge on the loss for the year differs from the
amount computed by applying the corporation tax rate to the loss
before taxation as a result of the following factors:
2021 2020
GBP000's GBP000's
-------------------------------------------------------------------- --- --------------- ---------------
Loss before taxation (514) (697)
-------------------------------------------------------------------- --- --------------- ---------------
Notional taxation charge at UK rate of 19%
(2020: 19%) (98) (132)
Effects of:
Non-deductible expenses 34 80
Deferred tax asset not recognised in the
period 64 52
Total taxation charge in the income statement - -
-------------------------------------------------------------------- --- --------------- ---------------
The Company has tax losses of approximately GBP4.6m (2020: GBP4.3m)
available to carry forward against future profits of the same
trade. No deferred tax asset has been recognised due to the uncertainty
of future profitability of the Company.
5. Loss per share
Basic loss per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of shares
in issue during the period. In calculating the dilution per share,
share options outstanding and other potential ordinary shares
have been taken into account where the impact of these is dilutive.
As the potential dilutive ordinary shares from share options reduce
the loss per share these shares are omitted from the dilutive
loss per share calculation. The average share price during the
year was 2.38p (2020: 2.75p).
2021 2020
No. No.
Number of shares 000's 000's
------------------------------------ ---- --------------------------------------- ------------- -----------
Weighted average number of ordinary shares for
the purposes of basic earnings per share 162,907 162,907
Effect of dilutive potential
ordinary
shares from share options - - -
------------------------------------ ---- --------------------------------------- ------------- -----------
Weighted average number of ordinary shares for
the purposes of diluted earnings per share 162,907 162,907
----------------------------------------------------------------------------------- ------------- -----------
Loss
2021 2020
From operations GBP000's GBP000's
------------------------------------ ---- --------------------------------------- ------------- -----------
Loss for the purposes of basic earnings per share
being net profit attributable to owners of the
parent (514) (697)
Potential dilutive ordinary shares from share - -
options
------------------------------------------------------------------------- -------------- ---------------
Loss for the purposes of diluted earnings per
share (514) (697)
------------------------------------------------------------------------- ------------------ -----------
Loss per share from operations
Basic and diluted (p) (0.32) (0.43)
6. Non current
investments
A summary of the Non current investments is shown below:
2021 2020
GBP000's GBP000's
------------------------------------------ --- ------------------------ ------------------- -----------
Investment in Smith Electric Vehicles
US Corp - -
Investment in Snorkel International
Holdings LLC 19,100 19,100
------------------------------------------ ------------------------ ------------------- -----------
Total non current investments 19,100 19,100
------------------------------------------ ------------------------ ------------------- -----------
Smith Electric Vehicles US Corp
At 31 December 2021, the Company held a 5.76% (2020: 5.76%)
share of the issued share capital of Smith Electric Vehicles US
Corp, a company registered in the US. In 2015 the Board decided to
impair the investment in Smith to GBPnil and they continue to
maintain this position. However, the Board will continue to monitor
the investment.
Snorkel International Holdings LLC
At 31 December 2021, the Company held a 49% (2020: 49%) share of
the issued share capital of Snorkel International Holdings LLC, a
company registered in the US. This shareholding is being held as a
non current investment at fair value (2021: GBP19.1m, 2020:
GBP19.1m). The cumulative impairment provision against this
investment is GBP17.2m (2020: GBP17.2m). See Strategic Report for
further considerations.
7. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits
held by the Company. The carrying amount of these assets approximates
their fair value. The Company primarily holds cash and cash equivalents
in Sterling bank accounts.
2021 2020
GBP000's GBP000's
----------------- ------------------ -------------------------- ------------------ -------------------------------- ------------------------
Cash and cash
equivalents a 588 524
----------------- ------------------ -------------------------- ------------------ -------------------------------- ------------------------
a Included in cash and cash equivalents is GBP500k (2020: GBP500k)
held on deposit with the English Court as security in relation
to the UK Proceedings
8. Trade and other receivables
2021 2020
GBP000's GBP000's
----------------------------------------------------------- ---- ---- ----------------- --------------------------- ------------------------
Receivable within one year
Other debtors and prepayments 23 24
----------------------------------------------------------- --------------------------- --------------------------- ------------------------
23 24
----------------------------------------------------------- --------------------------- --------------------------- ------------------------
The directors consider that the carrying amounts of trade and other
receivables approximates to their fair value.
9. Trade and other payables
The directors consider that the carrying amounts of trade and
other payables approximates to their fair value.
2021 2020
GBP000's GBP000's
------------------------------- ----------------- --------------------------- -------------- ---------------------- ------------------------
Payable within one year
Trade payables 20 53
Social security and other
taxes 1 1
Accrued expenses 51 36
72 90
----------------------------------- ----------------------------------------------- -------- --------- ------- ----------------------------
Average credit period taken on trade purchases
(days) a 25 37
a Creditor days have been calculated as trade payables over other
operating expenses multiplied by 365 days.
10. Borrowings
2021 2020
Non-current Total Non-current Total
GBP000's GBP000's GBP000's GBP000's
------------------------ -------------- --------- -------------- ---------
Unsecured
Loan notes 1,695 1,695 1,100 1,100
-------------------------- -------------- --------- -------------- ---------
Total borrowings 1,695 1,695 1,100 1,100
-------------------------- -------------- --------- -------------- ---------
Unsecured 10% loan notes 2025
The Company issued 212,500 loan notes for GBP212,500 on 30 March
2020, 143,750 loan notes for GBP143,750 on 30 June 2020 and 143,750
loan notes for GBP143,750 on 14 September 2020. Interest is charged
on the initial loan note value at 10% per annum which is rolled up
and included above. A loan note holder may at any time after 28
February 2025 serve notice upon the Company requesting the
redemption of all the Loan Notes, plus accrued interest, held by
them. In the event of a realisation from the US Proceedings and/or
the UK Proceedings exceeding GBP2.5m, any amount in excess of
GBP2.5m will be used to realise a proportion of Loan Notes and
accrued interest. Should a repayment take place prior to 28
February 2025, a 20% early redemption premium shall apply.
Unsecured 10% second loan notes 2025
The Company issued 500,000 second loan notes for GBP500,000 on
29 July 2020, 200,000 loan notes for GBP200,000 on 25 January 2021
and 250,000 loan notes for GBP250,000 on 1 June 2021. Interest is
charged on the initial loan note value at 10% per annum which is
rolled up and included above. A loan note holder may at any time
after 28 February 2025 serve notice upon the Company requesting the
redemption of all the Loan Notes, plus accrued interest, held by
them. In the event of a realisation from the US Proceedings and/or
the UK Proceedings exceeding GBP1.5m, any amount in excess of
GBP1.5m will be used to realise a proportion of Loan Notes and
accrued interest. Should a repayment take place prior to 28
February 2025, a 20% early redemption premium shall apply.
11. Share capital and share premium
The Company has one class of ordinary shares which carry no right
to fixed income. All shares are fully paid up.
Nominal Number of Share capital Share premium
share value shares GBP000's GBP000's
------------------- -------------------------------- ---- ----------------------------- ------------------------ --------------------------
At 1 January 2020 5p 162,906,850 8,145 17,336
------------------- -------------------------------- ---- ----------------------------- ------------------------ --------------------------
-
At 31 December
2020 5p 162,906,850 8,145 17,336
------------------- -------------------------------- ---- ----------------------------- ------------------------ --------------------------
At 31 December
2021 5p 162,906,850 8,145 17,336
------------------- -------------------------------- ---- ----------------------------- ------------------------ --------------------------
12. Share based payments
IFRS2 requires share based payments to be recognised at fair
value. The company measures the fair value of its share based
payments to employees, "share options", using the Black-Scholes
valuation method at the date of grant. The share based payment
expense is recognised in profit or loss over the vesting period.
All share based payments are equity settled and details of the
share option activity during 2021 and 2020 are shown below.
2021 2020
Number Weighted Number Weighted
of share average exercise of share average exercise
options price (pence) options price (pence)
----------------------------------- ---- ----------------------------- ------------------------- -------------------- ------------------------------------
Outstanding at the beginning
of the year 3,800,000 27 4,100,000 27
----------------------------------- ---- ----------------------------- ------------------------- -------------------- ------------------------------------
Lapsed (3,800,000) 27 (300,000) 27
Outstanding at the end
of the year - 3,800,000 27
Exercisable - 3,800,000 27
----------------------------------- ---- ----------------------------- ------------------------- -------------------- ------------------------------------
There were no outstanding options at 31 December 2021. The outstanding
options at 31 December 2020 had a weighted average remaining
contractual life of 0.05 years.
A charge to the income statement of GBPnil (2020: GBPnil) and
a credit directly to equity of GBPnil (2020: GBPnil) have been
made during the year in accordance with IFRS2 'Share-based payments'.
13. Financial risk management
The Company's operations are exposed to various financial risks
which are managed by various policies and procedures. The main
risk and their related management are discussed below:
Credit risk management
The Company's exposure to credit risk arises from its trade and
other receivables and cash deposits with financial institutions.
The Company's maximum exposure to credit risk is summarised below: 2021 2020
GBP000's GBP000's
----------------------------- --------- ---------
Trade and other receivables 2 2
Cash and cash equivalents 588 524
-------------------------------- --------- ---------
590 526
----------------------------- --------- ---------
Liquidity risk management
The Company is exposed to liquidity risk arising from having
insufficient funds to meet the Company's future financing needs.
The Company's liquidity management process includes projecting
cash flows and considering the level of liquid assets available
to meet future cash requirements along with monitoring statement
of financial position liquidity. The Board reviews forecasts,
including cash flow forecasts on a quarterly basis.
13. Financial risk management (continued)
Maturity analysis
The table below analyses the Company's financial liabilities on
a contractual gross undiscounted cash flow basis into maturity
groupings based on amounts outstanding at the statement of financial
position date up to the contractual maturity date.
Within 1 1 to 5 Over 5 years Total
year years
GBP000's GBP000's GBP000's GBP000's
------------------------- --------- --------- ------------- ---------
2021
Trade and other payables 72 - - 72
Borrowings - 1,695 - 1,695
------------------------- --------- --------- ------------- ---------
72 1,695 - 1,767
------------------------- --------- --------- ------------- ---------
2020
Trade and other payables 90 - - 90
Borrowings - 1,100 - 1,100
------------------------- --------- --------- ------------- ---------
90 1,100 - 1,190
------------------------- --------- --------- ------------- ---------
Foreign exchange risk management
The Company is exposed to movements in foreign exchange rates due
to any realisation of its investment in Snorkel International being
denominated in foreign currencies. The carrying amount of the company's
investment in Snorkel International at 31 December 2021, which
is denominated in USD, is GBP19.1m (2020: GBP19.1m). During 2021,
the GBP to USD exchange rate averaged 1.3751 with a low of 1.3191
and a high of 1.4208. The company has no other material assets
or liabilities denominated in foreign currencies. If appropriate
the Company can use currency derivative financial instruments such
as foreign exchange contracts to reduce exposure. These were not
used in the period.
Capital management
The Company's main objective when managing capital is to protect
returns to shareholders. The Company also aims to maximise its
capital structure of debt and equity so as to minimise its cost
of capital. The Company manages its capital with regard to risks
inherent in the business and the sector in which it operates by
monitoring its net debt to capital gearing ratio on a regular basis.
The Company considers its capital to include share capital, share
premium, special reserve, share option reserve, merger reserve
and retained earnings.
Net debt of the company (including changes in liabilities arising
from financing activities)
2021 2020
GBP000's GBP000's
---------------------------------------------- -------- ----- ------------ ---------------
Borrowings:
Loan notes
Opening balance of loan notes in
issue 1,100 -
Loan notes issued in the year -
cash flows 450 1,000
Other changes including accrued
interest (non-cash) 145 100
--------------------------------------------------------------- ------------ ---------------
Total Liability in respect of loan
notes in issue 1,695 1,100
Less: cash and cash equivalents (588) (524)
Net debt / (cash) at year end 1,107 576
Total Capital 17,944 18,458
--------------------------------------------------------------- ------------ ---------------
Net debt to capital ratio (%) 6.2% 3.1%
--------------------------------------------------------------- ------------ ---------------
During 2021, in order to fund the legal proceedings, the Company
issued further loan notes resulting in an increased net debt position
of GBP1,107k at 31 December 2021 (2020: GBP576k).
14. Contingencies
Authorised Guarantee Agreement
At the time of the Joint Venture between Tanfield Group Plc and
Xtreme Manufacturing LLC relating to Snorkel International in
October 2013, Tanfield Group Plc was the tenant of the Vigo Centre
manufacturing facility from which the Snorkel division carried out
its UK manufacturing operations. In order to gain permission to
assign the lease to Snorkel Europe Limited, Tanfield Group Plc
entered into an authorised guarantee agreement on the 25-year lease
which commenced 27 June 2006.
15. Related party transactions
Remuneration of key personnel
The remuneration of the key management personnel, which includes
Directors, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures. Further information
about the remuneration of individual directors is provided in the
Directors' Remuneration Report on.
2021 2020
GBP000's GBP000's
----- ---- --------------------------------------- ------------- ------------
Salaries and short term benefits
including NI 90 81
Post employment benefits 3 2
----------------------------------------------------- ------------- ------------
93 83
----- ---- --------------------------------------- ------------- ------------
16. Retirement benefits
The Company operates a defined contribution retirement benefit
plan for all qualifying employees. The total cost charged to income
of GBP3k (2020: GBP2k) represents contributions payable to that
scheme by the Company at rates specified in the rules of the
scheme. As at 31 December 2021, contributions of GBPnil (2020:
GBPnil) due in respect of the current reporting period had not been
paid over to the scheme.
17. Financial instruments recognised in the statement of financial
position
2021 2020
Assets Fair value Total Fair value Total
through through
Amortised profit Loans and profit
cost and loss receivables and loss
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
-------------------------- --------------- ------------- ----------- ---------------- ----------- -----------
Current financial
assets
Trade and other
receivables 2 - 2 2 - 2
Investments - 19,100 19,100 - 19,100 19,100
Cash and cash equivalents 588 - 588 524 - 524
---------------------------- --------------- ------------- ----------- ---------------- ----------- -----------
Total 590 19,100 19,690 526 19,100 19,626
---------------------------- --------------- ------------- ----------- ---------------- ----------- -----------
2021 2020
Liabilities Other Held for Total Other financial Held for Total
financial trading liabilities trading
liabilities
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
----------------------------- -------------- ------------- ----------- ---------------- ----------- -----------
Current liabilities
Trade and other payables 72 - 72 90 - 90
Borrowings 1,695 1,695 1,100 1,100
----------------------------- -------------- ------------- ----------- ---------------- ----------- -----------
Total 1,767 - 1,767 1,190 - 1,190
----------------------------- -------------- ------------- ----------- ---------------- ----------- -----------
Financial assets and liabilities measured at fair value are
measured using a fair value hierarchy that reflects the
significance of the inputs used in making the fair value
measurements, as follows:-
-- Level 1 - Unadjusted quoted prices in active markets for
identical asset or liabilities ('quoted prices');
-- Level 2 - Inputs (other than quoted prices in active markets
for identical assets or liabilities) that are directly or
indirectly observable for the asset or liability ('observable
inputs'); or
-- Level 3 - Inputs that are not based on observable market data ('unobservable inputs').
All of the company's financial assets and liabilities measured
at fair value are measured using level 3 valuations in both the
year ended 31 December 2021 and the year ended 31 December
2020.
The fair value investment is measured against the contractual
terms of the Joint Venture with Xtreme, as detailed in the circular
distributed to shareholders to fully explain the terms of the
transaction - and thereby seek their authority to enter into the
transaction. Further details are provided in the strategic report
and in the critical accounting estimates and key judgements.
18. Investments
The tables below give brief details of the Company's investments
at 31 December 2021. The Company had no operating subsidiaries as
of 31 December 2021.
Group Interest
in allotted capital Country
Investments Principal activity & voting rights of incorporation
-------------------------- ------------------- ------------------------- --------------------
Smith Electric Vehicles Electric vehicle
US Corp manufacture 5.76% US
-------------------------- ------------------------ ------------------ --------------------
HBWP Inc Holding Company 100.00% US
-------------------------- ------------------------ ------------------ --------------------
Snorkel International
Holdings LLC Holding Company 49.00% US
-------------------------- ------------------------ ------------------ --------------------
Tanfield Engineering Powered Access 49.00% US
Systems US (Inc) a
-------------------------- ------------------------ ------------------ --------------------
Snorkel Europe Ltd a Powered Access 49.00% UK
-------------------------- ------------------------ ------------------ --------------------
Snorkel International Powered Access 49.00% US
Inc a
-------------------------- ------------------------ ------------------ --------------------
Snorkel Australia Limited Powered Access 49.00% AUS
a
-------------------------- ------------------------ ------------------ --------------------
Snorkel New Zealand Powered Access 49.00% NZ
Limited a
-------------------------- ------------------------ ------------------ --------------------
a The Company's interest is held indirectly through HBWP Inc, a
wholly owned subsidiary, and its investment in Snorkel
International Holdings LLC
19. Post balance sheet events
The Company issued further unsecured 10% loan notes 2025 amounting
to GBP125,000 on 1 March 2022 and unsecured third loan notes amounting
to GBP950,000 on 17 and 23 May 2022.
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END
FR FLMFTMTTTBRT
(END) Dow Jones Newswires
June 30, 2022 02:00 ET (06:00 GMT)
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