Corporate Information

Chairman's Statement

Dear Shareholders,

I am pleased to present the annual report for Miotal Plc (formerly Becket Invest Plc), (the "Company" or "Miotal") for the year ended 30 September 2024. After admission of the Company to the Standard Listing and to trading on the Main Market of the London Stock Exchange on 5 June 2023 the Company have continued to make significant progress targeting established businesses to undergo a reverse takeover.

Company activities

The principal focus of the Company is to acquire opportunities in the battery metals and related technologies sectors. To this end, the Company will continue to endeavour to identify acquisition targets where such targets can offer a clear value advantage to the Company. However, the Company's focus in identifying opportunities will not be limited to a particular industry or geographic location.

On 18 September 2024, the Company announced that it had signed heads of terms to acquire the entire issued share capital of SMT Holdings Limited, a company incorporated in Abu Dhabi Global Market, Abu Dhabi, UAE which owns various strategic metals and rare earth minerals, which are essential in various industry sectors such as technology, aerospace and defence.  As a result, the company applied for their ordinary shares to be suspended until completion of the transaction or an announcement that it would no longer occur.  A director and shareholder of SMT Holdings Limited is a director and shareholder of the Company's main shareholder BPM Trading Limited.

Financial Status

The Company's financial position remains stable given that it does not currently generate any income, with available funds to support our immediate initiatives. Whilst we have not generated any operating income during the financial year, we are dedicated to ensuring that our resources are prudently managed for the benefit of the shareholders. 

Acknowledgements

Finally, I would like to express my appreciation to our shareholders for their ongoing support and patience as we pursue avenues for future operations and value creation. We remain dedicated to our shareholders' interests. 

Graeme Muir

Chairman

31 January 2025

Strategic Report

The Directors present their Strategic Report for the year ended 30 September 2024.

Principal Activities

The Company has continued to focus on opportunities in the battery metals and related technologies sectors and will focus on potential acquisition opportunities where such opportunities can offer a clear value advantage to the Company. The Company's efforts in identifying opportunities will not, however, be limited to a particular industry or geographic location. The main sources of value advantage are expected to be the relevant experience and networks of the Directors and the ability to act quickly to complete a transaction and to deploy capital. As such, the Directors believe that their broad, collective experience, together with their extensive network of contacts, will assist them in identifying, evaluating and funding suitable acquisition opportunities.

Review of Business and Development in the Year

A review of the year's activities and future prospects is contained in the Chairman's Statement.

Financial and Performance Review

The Company did not have any income producing assets during the year under review.

The results for the Company are set out in detail in the financial statements. The Company reports a loss of £339,187 for the year ended 30 September 2024 (2023: loss of £2,265,477).

Key Performance Indicators

The usual financial key performance indicators do not apply to a company with no revenue. The Company's primary financial key performance indicator ('KPI') at this stage of its development is the monitoring of its cash balances. The Company's cash at 30 September 2024 was £327,961 (2023: £677,622). The critical non-financial KPI during the year was the ability of the Company to identify an acquisition, which it achieved and signed heads of terms to acquire the share capital of SMT Holdings Limited as detailed in the Chairman's Report on Page 3.

Risk & Uncertainties

The Board regularly reviews the risks to which the Company is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

Principal risk and uncertainty facing the Company during the year under review included but was not limited to the Company's ability to identify or secure investment opportunities in the sectors or geographical locations in which the Company has decided to focus.  Refer to Going Concern section in Directors' Report, Page 6.

Promotion of the Company for the benefit of the members as a whole

The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

Strategic Report….continued

The requirements of s172 are for the Directors to:

·          Consider the likely consequences of any decision in the long term;

·          Act fairly between members of the Company;

·          Maintain a reputation for high standards of business conduct;

·          Consider the interest of the Company's employees;

·          Foster the Company's relationships with suppliers, customers and others; and

·          Consider the impact of the Company's operations on the community and the environment.

The Company has sought to act in a way that upholds these principles. The Directors believe that the application of s172 requirements can be demonstrated in relation to some of the key decisions made and actions taken during the year.

Its members will be fully aware, through detailed announcements, shareholder meetings and financial communications, of the Board's broad and specific intentions and the rationale for its decisions. The Company pays its creditors promptly and keeps its costs to a minimum to protect shareholders funds. When selecting investments, issues such as the impact on the community and the environment have actively been taken into consideration.

Use of financial instruments

The Company's financial risk management objectives are to minimise its liabilities, to fund its activities through equity financing and to ensure the Company has sufficient working capital to pursue its corporate strategic objectives.

Graeme Muir

Chairman

31 January 2025

Directors' Report

The Directors present their Directors' Report together with the audited financial statements of Miotal Plc (formerly Becket Invest Plc (the "Company" or "Miotal").  A commentary on the business for the year is included in the Chairman's Statement on page 3.  A review of the business is also included in the Strategic Report on page 4.

The shareholdings of the Directors who held office throughout both years and at the date of publication are as follows:

Flare Capital Limited, a company under common directorships as Peterhouse Capital Limited, hold 9,414,290 (11.48%), shares in the Company at both year end, Martin Lampshire is an employee of Peterhouse Capital Limited, the Company's broker. 

Graeme Muir and James Crossley are directors of BPM Trading Limited, a significant shareholder of the Company, holding 62,844,800 shares (76.64%) at both year ends.

No directors held any shares in the Company as at the above date (or previous year end).

Results and dividends

The results for the year ended 30 September 2024 are set out on page 23.

The Company reports a loss of £339,187 for the year ended 30 September 2024 (2023: £2,265,477). 

There were no dividends paid in the previous or current financial year.

Going Concern

At 30 September 2024 the Company had cash resources of approximately £327,961 which, given the activities of the Company at the date of these financial statements provided it with sufficient available resources to meet all of its commitments for the next 12 months, as projected by the directors in their cashflow forecast, and, accordingly these financial statements are prepared on a going concern basis.  However, if expenditure exceeds that projected in the cash flow forecast, for the next 12 months from the date of these financial statements, the Company will require additional funds to meet financial liabilities as they arise. 

Additionally, as detailed in the Company's Prospectus at the time of its Admission to trade on the London Stock Exchange on 5 June 2023, if an Acquisition has not been announced and completed within 24 months of Admission, the Board will consult with the Shareholders as to the future direction of the Company. The Directors may recommend to Shareholders that the Company continue to pursue an Acquisition for a further 24 months, or that the Company be wound up (in order to return capital to Shareholders).  

The Company announced on 18 September 2024, that it had signed heads of terms to acquire SMT Holding Limited.  At the date of signing these financial statements, due diligence is on-going in relation to this acquisition. In addition, the Company intends to raise finance through the issue of Ordinary Shares in the Company and recognises there is uncertainty surrounding completing the acquisition as well as raising further funds for the Company.

Directors' Insurance and Indemnity Provision

The Company does not currently hold directors' and officers' liability insurance.  The Company will look to adhere to Section 234 of the Companies Act 2006 by implementing qualifying third-party indemnity provisions for the Directors in respect of liabilities incurred as a result of their office.  Whilst the Company is seeking an acquisition vehicle the Company has kept suppliers and outgoings to a minimum to keep the momentum with the costs directed to the main concern.

Employment Policy

It is the policy of the Company to operate a fair employment policy.  No employee or job applicant will be less favourably treated than another on the grounds of their sex, sexual orientation, age, marital status, religion, race, nationality, ethnic or national origin, colour or disability and all appointments and promotions will be determined solely on merit.  The Directors will encourage employees to be aware of all issues affecting the Company and place considerable emphasis on employees sharing in its success.

Changes in share capital

Details of movements in share capital during the year are set out in Note 9 to these financial statements.

Pensions

The Company did not operate a pension scheme during the year and has not paid any contributions to any scheme for Directors.

All eligible Directors have been invited to participate in the Company's pension scheme with True Potential.  At the time of publication all Directors have opted out of the workplace pension.

Energy and Emissions Data

As the Company has not consumed more than 40,000kwh of energy in this reporting year, it qualifies as a low energy user under these regulations and is not required to report on its emission, energy consumption or energy efficiency activities.

Directors' Report….continued

Directors' remuneration

Details of the remuneration of the Directors can be found in Note 5 to these accounts.

Directors' interests in transactions

Other than disclosed in Notes 5 and 11 no Director had during, or at the end of the year, a material interest in any contract which was significant in relation to the Company's business.

Directors

The following Directors held office during the year and/or at the signing date of this annual report:

Graeme Muir

Daniel Monks (Appointed 14 June 2024)

James Crossley (Appointed 1 December 2023, Resigned 30 June 2024)

Thomas Furlong (Resigned 1 December 2023)

Martin Lampshire (Resigned 6 October 2023)

Internal controls and corporate governance

The Board is responsible for identifying and evaluating the major business risks faced by the Company and for determining and monitoring the appropriate course of action to manage these risks.

Substantial shareholdings

As at 30 September 2024, the following shareholders hold more than 3% of the issued share capital:

Within the nominee shareholdings it is confirmed that no individual person or organisation owns 3% or more.

Subsequent events

Details of subsequent events are disclosed in Note 13 of the financial statements.

Directors' Report….continued

Annual general meeting

This report and the financial statements will be presented to shareholders for their approval at the Company's Annual General Meeting ("AGM"). The Notice of the AGM will be distributed to shareholders together with the Annual Report.

Audit committee

The Audit and Risk Committee comprising Daniel Monks as chair and Graeme Muir will meet not less than twice a year. The Audit and Risk Committee will be responsible for making recommendations to the Board on the appointment of auditors and the audit fee and for ensuring that the financial performance of the Company is properly monitored and reported. In addition, the Audit and Risk Committee will receive and review reports from management and the auditors relating to the interim report, the annual report and accounts and the internal control systems of the Company.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Chairman's Statement, Strategic Report, the Directors' Report, the Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare financial statements in accordance with UK adopted International Financial Reporting Standards (IFRS), in conformity with the requirements of the Companies Act

The financial statements are required by law and IFRS to present fairly the financial position and performance of the Company; the Companies Act 2006 provides in relation to such financial statements that references in the relevant part of the Act to financial statements give a true and fair view and references to their achieving a fair presentation.

Under Company Law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the profit or loss of the Company for that year.  The Directors are also required to prepare the financial statements in accordance with the Rules of the London Stock Exchange.

In preparing the Company's financial statements, the Directors are required to:

·          select suitable accounting policies and then apply them consistently;

·          make judgements and accounting estimates that are reasonable and prudent;

Directors' Report….continued

·          state whether applicable accounting standards, UK adopted IFRS, in conformity to the Companies Act, have been followed, subject to any material departures disclosed and explained in the financial statements;

·          prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

·          prepare a Directors' Reports, Strategic Report and Directors' Remuneration Report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to the auditors

The Directors who held office at the date of the approval of these Financial Statements as confirm that:

·          so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

·          the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The Directors are responsible for preparing the annual report in accordance with applicable law and regulations. The Directors consider the annual report and the financial statements, taken as a whole, provides the information necessary to assess the Company's performance, business model and strategy and is fair, balanced and understandable.

Website publication

Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions.  The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website extending to the ongoing integrity of the financial statements contained within.

Information to shareholders - Website

The Company has its own website (www.miotal.com) for the purposes of improving information flow to shareholders as well as to potential investors.

Directors' Report….continued

Directors' Responsibilities Pursuant to DTR4

To the best of their knowledge, the Directors confirm:

·          the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position of the Company and its profit or loss as at 30 September 2024; and

·          the annual report, including the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties faced.

By order of the board

Graeme Muir

Chairman

31 January 2025

Remuneration Report and Plan

Dear Shareholder,

On behalf of the Board, I am pleased to present our Remuneration Report. It has been prepared in accordance with the requirements of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the "Regulations") and, after this introductory letter, is split into two areas: the Remuneration Policy and the Annual Report on Remuneration.

Miotal was admitted to the Standard Listing and to trading on the Main Market of the London Stock Exchange on 5 June 2023. Since the listing, Miotal has been an investment company with the premise of acquiring an established business in the technology sector.

The Company stated that the current Directors are presently being paid annual amounts of:

·             Graeme Muir - £100,000 per annum; and

·             Daniel Monks - £100,000 per annum (post-RTO only)

The Company is currently too small to have a Remuneration Committee and the establishment of such a committee (and the appointments to it) will be revisited upon the completion of the Company's first acquisition, along with incorporating its terms of reference.

The Directors, and their respective connected persons, do not hold any options or warrants or other rights over any unissued Ordinary Shares of the Company.

Shareholders should note that the Company's Remuneration Policy contains provisions that the Remuneration Committee, once established, will be granted powers to set new remuneration arrangements from time to time. An annual review will be undertaken to ensure remuneration is competitive and in line with market practice and good governance. Any changes to the Remuneration Policy will be put to shareholders at the next available Annual General Meeting.

Graeme Muir

Chairman

 31 January 2025

Remuneration Policy

The Company adopted a formal remuneration policy on admission, 5 June 2023.

As part of the current Remuneration Policy, the Remuneration Committee, once established, will have extensive discretionary powers to set new remuneration arrangements that are commensurate with the business, from time to time. The Remuneration Committee will make changes to salary levels of the existing Directors, set salaries and compensation and introduce benefits, pension, annual bonus and long-term incentive arrangements which are competitive and in line with market practice and governance guidelines and which would be designed to align the interests of shareholder growth and director compensation. The salaries and fees of all Directors were agreed following the admission of the Company to the Standard List and to trading on the Main Market of the London Stock Exchange on 5 June 2023.

Notice periods

The notice period for all Directors is three months and notice must be provided in writing.

Other Employees

The Company currently has no other employees.

Other policy matters

Policy sections normally set out approaches in the areas of executive recruitment, termination of employment, shareholder consultation, consideration of employment conditions elsewhere in the Company and employee consultation. Other than items explained above, the Company believes that these issues are not applicable at present.

Remuneration Policy….continued

Report Approval

A resolution to approve this report will be proposed at the AGM of the Company. The vote will have advisory status.

Directors' emoluments and compensation (audited)

Set out below are the emoluments of the Directors for the years ended 30 September 2024 and 30 September 2023:

Long term incentive plan arrangements

There are no charges to comprehensive income in either year for any option or warrant plan.

Other disclosures on remuneration during 2024

Other than the salaries and fees, detailed above in this Report, no other remuneration was paid, payable or is at present expected to be paid or payable for 2024 or 2023. As such, there are no further disclosures to be made in respect of salary or fee changes for 2024, pension, benefits, annual bonus in respect of 2023 or 2024, vesting, outstanding or forward long-term incentive plan awards.

UK 10-year performance graph against CEO remuneration

The Directors have considered the requirement for a UK 10-year performance graph comparing the Company's Total Shareholder Return with that of a comparable indicator. The Directors do not currently consider that including the graph will be meaningful because the Company only listed on 5 June 2023 and is not paying dividends. The Directors intend to include such a comparison table from 2025, if appropriate.

Remuneration Policy….continued

Relative importance of spend on pay

The Directors have considered the requirement to present information on the relative importance of spend on pay compared to other financial metrics. Given that the Company had no trading business in 2024, did not generate revenues or pay dividends, the Directors do not believe it is necessary to include such information or that it would serve any meaningful purpose at the current time.

UK Remuneration percentage changes

Listed companies are required to make disclosures in respect of percentage year-on-year changes in the lead executive's and employee remuneration, the ratio of the lead executive's remuneration to that of different employee groups. These disclosures are not applicable.

Compliance with the Corporate Governance Code

The Committee has considered and will continue to monitor the regulatory environment and in particular the revised UK Corporate Governance Code. As the Company develops and introduces a formal remuneration policy, the Committee will reflect on these issues. The Committee is satisfied that in respect of 2024 the remuneration policy operated as intended in terms of Company performance and quantum.

The Committee will ensure that policies and practices are consistent with the six factors set out in Provision 40 of the Code including Clarity, Simplicity, Risk, Predictability, Proportionality and Alignment of Culture. Given the limited and simple nature of existing remuneration arrangements, the Committee believes they are consistent with these principles.

UK Directors' shares (audited)

The interests of the Directors, who served during the current and prior year, in the share capital of the Company as of 30 September 2024 and at the date of this report has been set out in the Directors' Report on page 6.

Policy Approval

A resolution to approve this policy will be proposed at the AGM of the Company.

Approved on behalf of the Board of Directors by:

Graeme Muir

Chairman

31 January 2025

Independent Auditors' Report

For the year ended 30 September 2024

Registered number 13628478

Opinion

We have audited the financial statements of Miotal Plc (formerly Becket Invest Plc) (the 'company') for the period ended 30 September 2024 which comprise Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows 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 30 September 2024, and of its loss for the period 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 responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 2 in the financial statements, which indicates that the Company is required to identify and complete a reverse takeover transaction within 24 months from its Admission to trade on the Main Market of the London Stock Exchange on 5 June 2023; based on the following information contained in the Company's Prospectus:

'The Board will seek to identify target acquisitions that can, subject to due diligence, complete a reverse takeover transaction within 24 months.  If an Acquisition has not been announced within 24 months of Admission, the Board will consult with the Shareholders as to the future direction of the Company. The Directors may recommend to Shareholders that the Company continue to pursue an Acquisition for a further 24 months, or that the Company be wound up (in order to return capital to Shareholders). The Board's recommendation will then be put to a Shareholder vote (from which the Directors will abstain). In the event that the Company is wound up, any capital available for distribution will be returned to Shareholders.'

As stated in Note 2, these events or conditions, along with the other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 entity's ability to continue to adopt the going concern basis of accounting included review and scrutiny of the cash flow forecast prepared by the directors for the twelve-month period from the date of signing the financial statements and also discussions with the directors relating to planned expenditure over the next year. The cash flow forecast prepared by the directors appears reasonable however it highlights that spending is required to be in line with projections or otherwise, without additional funds from the issuance of the company's ordinary shares, the company will be unable to meet its financial obligations as they arise over the coming 12 months. 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the Company's financial statements as a whole to be £3,500 (2023: £7,160) based on total assets (1.0%) in both years.

We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements. Performance materiality is set at £2,100 (2023: £4,296) based on 60% of the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. 

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors' remuneration.

We agreed with the directors to report to it all identified errors in excess of £175 (2023: £358).  Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Independent Auditors' Report….continued

Overview of the scope of our audit

In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial statements.  In particular, we looked at the capturing of administrative costs, for example ensuring all set up costs and listing costs were captured.  We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Key Audit Matters

In addition to the matter described in the Material Uncertainty related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.  Key audit matters are those matters that, in our professional judgement, 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) that we identified. These matters included 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.

This is not a complete list of all risks identified by our audit.

Independent Auditors' Report….continued

Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on these matters individually and we express no such opinion.

Other information

The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor's report thereon.  The directors are responsible for the other information contained within the annual report and financial statements. 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 the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

•      the information given in the Strategic Report and the Directors' Report for the financial period 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.

Independent Auditors' Report….continued

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 and 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 and the part of the directors' remuneration report to be audited 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 set out on page 9, 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 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.

Independent Auditors' Report….continued

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

•        We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context was the UK Companies Act and relevant taxation legislation.

•        We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management.  Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting and basis of journals and sample testing all expenditure in the period.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.