Chairman's Statement

 

On behalf of the Board, I present the annual report and financial statements of BSF Enterprise Plc for the year ended 30 September 2022.

 

We completed the acquisition of 3D Bio-Tissues Limited ("3DBT") in May 2022. 3DBT is a biotechnology spin out from Newcastle University founded by Professor Che Connon and Dr Ricardo Gouveia. 3DBT's research and product development is focused on producing biological tissue material, such as meat and skin, for clinical and consumer use. Specialised technology enables 3DBT to apply bio-focused manufacturing processes to generate complex structures such as corneas for the human eye.

 

3DBT Ltd was formed in November 2018 with associated IP formally transferred in full to the company. Initial IP was generated from UK research council funded research stretching back over 10 years during which time the tissue engineering research garnered world-wide recognition for its novelty and potential application in ophthalmic repair. 3DBT moved in to bespoke laboratory space in 2019 in order to expand the team and undertake further development work in both our tissue engineering platform and cell culture media development. This was supported by in the initial investment of £100,000 for 10% of the company by BSF Angel Funding Limited. This pre-seed investment was followed in 2020 with a further £400,000 for an additional 40% of the company. This facilitated completion of the new media supplement (City-Mix), recruitment of additional scientists and further progress on the tissue engineering platform for corneal replacements.

 

We also raised £1.75 million of new capital by way of a Placing of new shares in May 2022. This capital is being used to fund the development of 3DBT's research and development activities by way of adding additional laboratory space and recruiting additional technical resources. Marketing activity is also being expanded to support future revenues from serum-free cell culture media and cosmetics research. We have also strengthened our management team to support the Group's strategic growth objectives. These being commercialisation of City-MixTM (cell culture media supplement), peptides in skin cream in the near term.

 

The skilled 3DBT team has already produced what it believes to be world's first human corneas and we are now focused on building on this success, creating value by executing on the different verticals that our technology can be applied to. These include cultivated meat with improved structure and full thickness skin for use in the fashion business as leather. The structural and compositional similarities of the tissue-templated lab grown tissues to animal tissues means that they can be incorporated into existing and long-established industrial processes.

 

On behalf of the Board, I would like to thank our shareholders for their continued support during the year.

 

I look forward to reporting to you on our progress over the coming year.

 

 

 

Min Yang

Chairman

 

 

 

 

 

 

 

Chief Executive's Report

 

I am pleased to present my first report for the Company following the Company's acquisition of 3D Bio-Tissues Limited ("3DBT") in May 2022.

 

Business review and future developments

 

During the year ended 30 September 2022, the Company completed the acquisition of the entire issued share capital of 3DBT as more fully described in Note 9 to the consolidated financial statements.

 

Financial summary

The net loss for the year ended 30 September 2022 was £930,039 (2021: £58,325 loss). The increase in the loss compared with 2021 reflects increased corporate, legal and advisory costs in connection with the acquisition of 3DBT and re-admission, and the losses of 3DBT since it was acquired which totalled approximately £282,000.

 

As a result, the loss per share increased to 2.06 pence (2021: 0.29 pence loss per share).

 

The Group had cash of £1,061,529 at 30 September 2022 (compared with £359,868 at 30 September 2021) and approximately £936,000 as of the date of this report.

 

Since the Company's acquisition of 3DBT, significant progress has been made towards the Company's strategic objectives. This includes:

 

Expansion of laboratory capacity

3DBT more than doubled its lab production capacity to 2,400 sq ft in September. Management believes this provides the capacity to produce 200 litres per month of 3DBT's City-mix™, (1000 litres once used in its diluted form), an animal-free cell growth agent for culturing skin, muscle & fat cells for lab-grown meat and leather production. The lab facility will also enable 3DBT to produce additional lab grown meat and leather to showcase to potential customers such as manufacturers, distributors and wholesalers that are looking to commercialise lab-grown meat and leather for the mass market.

 

Patent applications

Since our readmission on the London Stock Exchange, the 3D Bio-Tissues team has been busy expanding its production facility and progressing its patent applications. 3DBT's existing patent applications are progressing well, having reached the national phase for a range of countries, and two new International Patent Applications have been filed for City-Mix™ relating to the application of the technology to produce skin, corneas, and meat.

 

Prototype products

Since the year-end, 3DBT has reached another milestone in successfully producing three small prototype fillets of cultivated meat. This is a major step forward towards 3DBT's objective of producing what it believes to be the UK's first full-scale cultivated meat fillet, which it expects to showcase in the coming months. 3DBT produced three small meat fillets of approximately 30 mm in height and 15 mm in diameter, with an average weight of 5 grammes, utilising innovative proprietary methods. It then tested the prototypes across a variety of attributes to ascertain their quality and similarity to conventional meat, with comprehensively positive results.

 

In their raw state the lab-grown fillets exhibited structural integrity and resistance to breaking when being manipulated and compressed. Management believes the fillets resembled conventional farm grown meat to touch with similar consistency and elasticity and no obvious aroma. 

Chief Executive's Report (continued)

 

Two of the fillets were then pan fried, cooking rapidly and throughout while maintaining integrity and shape and exhibiting only minimal shrinkage, as would be expected during the preparation of high-quality farm grown meat. The fillets seared easily, showed heavy caramelisation with charring and crisping on the surface, and the aromas were similar to those of barbecued meat. In summary, the test results met, and in many areas exceeded, our expectations in all respects.

 

A further significant development was that the prototype fillets were all produced without the use of conventional plant-based scaffolds or fillers, as have been universally adapted by the industry to date in order to ensure structural integrity. The fillets were therefore 100% meat, leading the Company to believe this is one of the world's first 100% cultivated meat fillets to be produced.

 

This was made possible as the fillets were cultured in 3DBT's patented, serum-free and animal-free cell booster, City-mix^TM . City-mix^TM enhances growth of cells and tissues to the point that the need for a scaffold is eliminated. City-mix^TM  is a critical intellectual property component of the Company's offering, providing clear competitive differentiation and world leading technology.

 

We are extremely pleased with the results of our first prototype which has exceeded our expectations in terms of integrity, aroma, texture and more. We believe our prototypes to be some of the first fillets of cultivated meat in the world, representing a ground-breaking development for the industry.

 

A further industry milestone is that our prototypes are 100% animal meat, having native-like structure without the need for plant-based scaffolds. This structure without scaffold was achieved through culturing the fillets with City-mix^TM , our patented animal-free media which represents the next generation in growth agents. The success of our prototypes puts us firmly on the path to producing our first showcase fillet of meat and we are hugely excited for the future.

 

Partnership agreement

In November 2022, 3DBT agreed to partner with the growth factor company Qkine to help accelerate the creation of affordable cultivated meat. Together, 3DBT and QKine will work to optimise the effectiveness of animal-free cultures to reduce the dependence on other protein compounds, increase yields, and lower overall costs. This is expected to pave the way for advances in cellular agriculture in the UK and world-wide.

 

The collaboration will see 3DBT combine City-mix^TM  its animal free media supplement for culturing muscle and fat cells, with Qkine's growth enabling protein engineering technology. QKine's technology aids the growth of stem cell culture protocols while 3DBT's innovative macromolecular crowding technology, enhances the speed of development of protein components in culture media. Together these can help reduce the production time and costs for growing cultivated meat, making it more accessible and affordable to a growing mass production market.

 

The announcement came just days after the U.S. Food and Drug Administration (FDA) approved lab-grown meat for consumption for the first time, in relation to Upside Foods cultivated chicken. 

 

Further acquisition opportunities

The Board continues to evaluate potential acquisition opportunities in line with its strategy to acquire a

suite of technologies that underpins the development of tissue templating for corneas, meat and leather. To date, no further opportunities have been identified.

 

 

 

Chief Executive's Report (continued)

 

Outlook

 

The year has seen a significant milestone with the acquisition of 3DBT and the raising of new capital to support the Group's growth strategy and I am excited about the future.

 

The management team has already made huge strides towards the integration of 3DBT into the Group and developed a clear plan to capitalise on the achievements made since its acquisition. There will no doubt be challenges to be faced with increasing uncertainty from the current macro-economic environment, inflation and cost pressures and, as a young business, the opportunities of bringing our products to market is the primary focus for the Group.

 

I look forward with confidence and to keeping you appraised of our progress throughout the year.

 

Che Connon

Chief Executive Officer

Strategic Report

 

Strategy

 

The Company has been created to consider opportunities within the innovation marketing and technology sector. The Company sought an acquisition target that focuses on trade innovation, data-driven analytics and technology to maximise sales and assist companies to enter new markets.

 

The acquisition of 3DBT is the first acquisition of the Company. The Group's intention is to grow through a combination of organic growth and, where possible, ‎selective acquisitions.

 

Business review and future developments

 

Analysis of the Group's business performance and future developments is set out in the Chief Executive's Report above.

 

Principal risks and uncertainties

 

The Directors have identified the following as the key risks facing the business:

 

Inability to fund operations post-acquisition

 

The Company is exploring additional fundraising options but at present, this process has not been concluded. The Company may be unable to fund the operations post acquisition if it does not obtain additional funding, however, the Company will ensure that appropriate funding measures are taken to ensure minimum commitments are met.

 

Technical risks

 

All biotechnology and therapeutic research and development programmes carry technical risks, including the programme undertaken by 3D Bio-Tissues Limited. These risks include those associated with delays, third party suppliers of research services or materials essential to the programmes, the unpredictability of the biological processes associated with cell and tissue culture and bioprocessing, and outcomes of in vitro, pre-clinical, and clinical testing. There is no guarantee that these technical risks can be effectively overcome, and a successful, regulatory approved product can be developed. The Group's products are also at risk of technological advancements of competitors who may supersede the Group's technology.

 

The Company's relationship with the Directors and conflicts of interest

 

The Company is dependent on the Directors to execute its strategy for 3DBT and to identify additional potential acquisition opportunities.

 

The Directors are not obliged to commit their whole time to the Company's business; they will allocate a portion of their time to other businesses which may lead to the potential for conflicts of interest in their determination as to how much time to assign to the Company's affairs. ‎However, Dennis Ow has been appointed as an independent ‎director of the Company to manage any such conflicts of interests.  Any matters on which Min Yang, Geoffrey Baker or Che Connon have a conflict of interest will be delegated to and considered by Dennis Ow.

 

In this respect, the acquisition of 3DBT was funded by the issue of 33,900,004 Consideration Shares to the Sellers ‎‎which were issued on Completion. The Acquisition was conditional, inter alia, upon the approval by Independent Shareholders of the ‎Waiver Proposal.‎

Strategic Report (continued)

 

Min Yang and Geoff Baker who are directors of 3DBT and are directors of BSF Angel Funding Limited which is a shareholder in the Company were considered to have a conflict of interest and hence did not participating in the Independent Director's recommendation of the Rule 9 Waiver. In addition, each of Min Yang and Geoff Baker as members of the Concert Party were excluded from voting in their capacity as Shareholders on the Rule 9 Waiver. The Corporate Governance Code requires that the independent director of a company obtain competent independent ‎advice regarding the transaction. Accordingly, Novum Securities Limited, as adviser to the Company, provided ‎formal advice to the Independent Director regarding the Acquisition, the controlling position of the Concert Party‎‎ that the Acquisition created and the effect that this would have on Shareholders generally. 

 

The Rule 9 Waiver was subject to Independent Shareholder approval at the General Meeting and the members of the Concert Party did not vote on the Rule 9 Waiver. 

 

Suitable further acquisition opportunities may not be identified or completed

 

The Company's business strategy is dependent on the ability of the Directors to identify suitable acquisition opportunities. The Company has now completed its first acquisition, however if the Directors are not able to identify additional suitable acquisition targets, the Company may not be able to fulfil its objectives. Furthermore, if the Directors identify a further suitable target, the Company may not acquire it at a suitable price or at all. In addition, if an acquisition identified and subsequently aborted, the Company may be left with substantial transaction costs. The Board of Directors has considerable experience in corporate finance activities and in managing acquired business which is expected to benefit the Company and minimise these risks.

 

Risks inherent in an acquisition

 

Although the Company and the Directors will evaluate the risks inherent in a particular target, they cannot offer any further assistance that all of the significant risk factors can be identified or properly assessed. Furthermore, no assurance can be made that an investment in Ordinary Shares in the Company will ultimately prove to be more favourable to investors than a direct investment, if such an opportunity were available, in a target business. The experience of the Board both in terms of relevant sector experience and corporate finance skills are key to managing these risks.

 

Reliance on external advisors

 

The Directors expect to rely on external advisors to help identify and assess further potential acquisitions and there is a risk that suitable advisors cannot be placed under contract or that such advisors that are contracted fail to perform as required. The Board's experience in previous transactions is key in mitigating these risks.

 

Reliance on additional funding to generate income from the acquired activities

 

Following its acquisition of 3DBT, the Company is dependent on raising additional funds in order to bring its products to a commercial market and thus income which the Directors hope will be generated by 3DBT's research activities or from its subsequent divestment of 3DBT to meet the Company's expenses. If this is not achieved, the Company may be unable to pay its expenses or make distributions on the Ordinary Shares. The Board's experience in the sector is expected to mitigate these risks.

                         

 

 

Strategic Report (continued)

 

Restrictions in offering Ordinary Shares as a consideration for an acquisition or requirements to provide alternative consideration.

 

In certain jurisdictions, there may be legal, regulatory or practical restrictions on the Company using its Ordinary Shares as a consideration for an acquisition, which may mean that the Company is required to provide alternative forms of consideration. Such restrictions may limit the Company's acquisition opportunities or make a certain acquisition more costly, which may have an adverse effect on the results of operations of the Company. The experience of the Board is key to managing such risks.

 

Key performance indicators

 

At this stage in its development, the Company is focusing on its growth strategy for 3DBT and in particular, the generation of revenues from its research activities.

 

At present, the Directors are of the opinion that, other than the maintenance of cash and cash equivalents, analysis using KPIs is not appropriate for an understanding of the business at this time.

 

Gender analysis

 

The Board recognises the need to operate a gender diverse business and takes into account the necessary diversity requirements and compliance with all employment law. The Board has experience and sufficient training/qualifications in dealing with such issues to ensure they would meet all requirements.

 

Corporate social responsibility

 

The Company aims to conduct its business with honesty, integrity and openness, respecting human rights and the interests of shareholders and employees. The Company aims to provide timely, regular and reliable information on the business to all its shareholders and conduct its operations to the highest standards.

 

The Company strives to create a safe and healthy working environment for the wellbeing of its staff and to create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Company.

 

The Company aims to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which we operate. Through maintaining good communications, members of staff are encouraged to realise the objectives of the Company and their own potential.

 

Corporate environmental responsibility

 

The Board contains personnel with a good history of running businesses that have been compliant with all relevant laws and regulations and there have been no instances of non-compliance in respect of environment matters.

 

The Company's policy is to minimize the risk of any adverse effect on the environment associated with its activities with a thoughtful consideration of such key areas as energy use, pollution, transport, renewable resources, health and wellbeing.

 

The Company also aims to ensure that its suppliers and advisers meet with their legislative and regulatory requirements and that codes of best practice are met and exceeded.

Strategic Report (continued)

 

Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole

 

When making decisions the Company takes into account the impact of its activities on the community, the environment and the Company's reputation for good business conduct. In this context, acting in good faith and fairly, the Directors consider what is most likely to promote the success of the Company for its members in the long term.

 

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.

 

The requirements of s172 are for the Directors to:

 

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

·    Act fairly between the members of the Company;

·    Maintain a reputation for high standards of business conduct;

·    Consider the interests 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 operated as a cash shell until its acquisition of 3DBT in May 2022. The pre-revenue nature of the business is important to the understanding of the Company by its members and suppliers, and the Directors have been transparent about the cash position and funding requirements.

 

The application of the s172 requirements can be demonstrated in relation to some of the key decisions made during the year ended 30 September 2022:

 

·    Any contracts for third-party advisory services provided have been undertaken with a clear cap on financial exposure;

·    As a result of these efforts the Company succeeded in executing the conditional agreement to acquire the entire issued share capital of 3D Bio-Tissues Limited.

 

As a Company, the Board seriously considers its ethical responsibilities to the communities and environment.

 

The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies Act 2006. The Board continuously reflects on how the Company engages with its stakeholders and opportunities for enhancement in the future. As required, the Company's external lawyers and the Company Secretary will provide support to the Board to help ensure that enough consideration is given to issues relating to the matters set out in s172(1)(a)-(f).

 

The Board regularly reviews the Company's principal stakeholders and how it engages with them. This is achieved through information provided by management via Regulatory News Service announcements, Corporate Presentations, and Shareholder Meetings and teleconferences and also by direct engagement with stakeholders themselves.

 

This report was approved by the Board of Directors on 31 January 2023 and signed on its behalf by:

 

………………………………………….

Geoffrey Baker, Director

Directors' Report

The Directors present their Annual Report together with the consolidated financial statements of the Company for the year ended 30 September 2022.

 

An indication of the likely future developments in the business of the Company is included in the Strategic Report and Chairman's Statement.

 

Principal activity

 

The Company was formed to undertake the acquisition of a controlling interest in businesses in the biotechnology, innovative marketing and e-commerce sectors. The Company completed its first acquisition in May 2022 of 3DBT, as more described in Note 9 to the Consolidated Financial Statements.

 

Results and dividends

 

The results for the year are set out in the Consolidated Statement of Comprehensive Income. The Directors do not recommend the payment of a dividend on the Ordinary Shares (year ended 30 September 2021: nil).

 

Financial instruments and risk management

 

An explanation of the Company's financial risk management objectives, policies and strategies and information about the use of financial instruments by the Company is given in note 18 to the consolidated financial statements.

 

Share capital structure

 

The Company was incorporated on 5 September 2018 under the UK Companies Act 2006.

 

All of the issued Ordinary Shares are in registered form, and capable of being held in certificated or uncertificated form. The Registrar is responsible for maintaining the share register. Temporary documents of title will not be issued. The ISIN number of the Ordinary Shares is GB00BHNBDQ51. The SEDOL number of the Ordinary Shares is BHNBDQ5.

 

Directors

 

The Directors of the Company during the year were as follows:

 

-     Geoffrey Baker
-     Dr Che Connon (appointed 16 May 2022)
-     Min Yang -     Dennis Kian Jing Ow

 

Min Yang - Non-Executive Chairman

 

Ms. Yang has extensive business connections in the Asia Pacific region including greater China, and has over 20 years of hands-on experience dealing with both private and state-run businesses in China. Over the years, Min Yang has proven her unique business insight and expertise in the identification, incubation and realisation of embryonic opportunities in the resources, commodities, trading and residential estate and financial investment sectors.

 

 

Directors' Report (continued)

 

Min Yang has commercialised numerous innovations in the telecommunications industry including building an Australasian telecommunications delivery company between China and Australia. Further she has helped develop, market and commercialise high-performance engine technologies now being developed in China as an auxiliary power unit for electric engines.

 

Ms Yang is currently the Executive Chairman of ASF Group Ltd (ASX: AFA) and Non-executive Chair of ActivEX Limited (ASX: AIV), Rey Resources Limited (ASX: REY) and Non-executive Director of Key Petroleum Limited (ASX: KEY).

 

Dr Che Connon - Chief Executive Officer

 

Professor Che Connon was appointed to the Board on 16 May 2022 on completion of the acquisition of 3DBT. Dr Che has over 20 years' experience in extracellular matrix biology and is currently a professor of tissue engineering at the University of Newcastle and its Director of Business Development for the Faculty of Medical Science. Professor Che Connon is a founder and director of 3BDT. He has successfully spun-out two additional biotechnology companies. Professor Che Connon is a founder and director of Atelerix Limited, which offers novel storage technology to support cell and tissue logistics and Cellularevolution Ltd which is building a new class of animal cell production bioreactor which runs continuously.

 

Geoffrey Baker - Non-Executive Director

 

Mr Baker is a qualified lawyer in Australia and Hong Kong with a Commerce degree (Accounting and Financial Management), a Law degree and Master of Business Administration (MBA).

 

Mr Baker has extensive corporate and commercial legal and property expertise developed over 36 years of practising law and representing companies in Australia, China, Hong Kong, Japan and recently UK and Europe. Mr Baker has also co-authored a number of books including the critically acclaimed book "Think Like Chinese" first released in June 2008 (Federation Press, 2008). Mr Baker has commercialised a number of innovations including bio-medical apparatus for sleep-apnoea as well as high-performance engine technology now being developed in China as an auxiliary power unit for electric engines.

 

Mr Baker is currently also the Non-Executive Director of ASF Group Ltd (ASX: AFA), Rey Resources Limited (ASX: REY), ActivEX Limited (ASX: AIV) and Non-executive Chair of Key Petroleum Limited (ASX: KEY).

 

Dennis Kian Jing Ow - Independent Non-Executive Director

 

Mr Ow is an experienced corporate finance executive who has worked in various investment Banks in Asia, and has extensive knowledge of capital markets, compliance and corporate governance. He was previously senior business manager of Asia Pacific for the London Stock Exchange.

 

Independence of the Board

Dennis Ow is considered to be "independent" (using the definition set out in the QCA Corporate Governance Code).

 

 

 

 

 

 

 

 

Directors' Report (continued)

 

Directors' interests

 

As at 30 September 2022, the beneficial interests of the Directors and their connected persons in the ordinary share capital of the Company are set out below.

 

 

Director	Number of Ordinary Shares	% of Ordinary Share Capital
Geoffrey Baker	1,559,699	1.81%
Dr Che Connon	12,927,977	15.03%
Min Yang	5,779,850	6.72%
Dennis Kian Jing Ow	-	0.00%

 

Min Yang indirectly holds 5,000,000 Ordinary Shares through Advance Plan Investments Ltd, a company of which she is the sole shareholder and Director and a further 779,850 Ordinary Share held directly in her own name.

 

None of the Directors hold options, warrants or any form of convertible security in respect of Ordinary Shares

 

Substantial shareholders

 

The following had interests of 3 per cent or more in the Company's issued share capital as at 20 January 2023 as follows:

 

Party Name	Number of Ordinary Shares	% of Ordinary Share Capital
BSF Angel Funding Limited	16,610,944	19.32%
Jim Nominees Limited	11,074,140	12.88%
Newcastle University Holdings Ltd	6,915,624	8.04%
Advance Plan Investments Limited	5,000.000	5.81%
Hargreaves Lansdown (Nominees) Limited	6.600,325	7.68%
Business Victor Investments Limited	4,000,000	4.65%

 

*Min Yang is the Director and sole shareholder of Advance Plan Investments Ltd.

 

Capital and returns management

 

The Company raised additional gross proceeds of £1.75 million from the Placing in May 2022. The Directors believe that further equity capital raisings will be required by the Company for working capital purposes as the Company pursues its strategic objectives. The Company is exploring additional fundraising options but at present, this process has not been concluded.

 

The Directors are generally empowered to allot shares. Pursuant to Resolutions passed at the Company's General Meeting held on 16 May 2022, granted authorities to allot shares and to disapply statutory pre-emption rights in respect of the proposed allotment and issue of the New Ordinary Shares, and further up to an aggregate nominal value of £128,675, such authority to expire at the annual general meeting of the Company to be held in 2023, or, if earlier, 15 months from the date of the resolution.

Directors' Report (continued)

 

The Company expects that any returns for shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy.

 

Liability insurance for Company officers

 

The Company has not obtained any third-party indemnity for its Directors.

 

Going concern

 

The financial position of the Group, its cash flows and liquidity position are set out in these financial statements. As at 30 September 2022, the Group had cash and cash equivalents of £1,061,529. As at the date of this report, cash balances were approximately £686,000.

 

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Further details are given in Note 2 to the financial statements. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.

 

The Group has prepared monthly cash flow forecasts based on reasonable estimates of key variables including operating costs and capital expenditure through to June 2024 that supports the conclusion of the Directors that they expect sufficient funding to be available to meet the Group's anticipated cash flow requirements to this date.

 

The assessment as to whether the going concern basis is appropriate has also taken into account all information available up to the date of authorisation of these financial statements.

 

The Group will need additional funding to finance ongoing operations and any acquisitions it might make. Whilst there can be no guarantee that sufficient funds will be raised, the Board is confident that sufficient additional capital will be raised to ensure adequate funds are available to the Group. The Board has therefore concluded that the going concern basis remains appropriate in the preparation of these Consolidated Financial Statements due to the anticipated availability of sufficient financial resources in the 12 months from the date of the financial statements.

 

The Directors are not aware of any other indicators which would give doubt to the going concern status of the Group.

 

Employee and greenhouse gas (GHG) emissions

 

The Group uses less than 40,000 kWh of energy per annum. It does not have responsibility for any emissions producing sources under the Companies Act 2006.

 

Equal opportunity

 

The Company promotes a policy for the creation of equal and ethnically diverse employment opportunities including with respect to gender. The Company promotes and encourages employee involvement wherever practical as it recognises employees as a valuable asset and is one of the key contributions to the Group's success.

 

 

 

Directors' Report (continued)

 

Corporate Governance Framework

 

Details of the Company's corporate governance framework are set out below.

 

Corporate Governance Report

 

The Directors acknowledge the importance of high standards of corporate governance and intend, given ‎the Company's size and the constitution of the Board, to comply with the principles set out in the QCA ‎Code. The QCA Code sets out a standard of minimum best practice for small and mid-size quoted ‎companies.‎

 

The QCA Code sets out ten principles and we have outlined below the Group's application of the Code.

 

Deliver growth

1.  Establish a strategy and business model which promote long-term value for shareholders:

The Company's business model is to create value through an acquisition-led growth strategy with a focus on acquiring businesses in the biotechnology, innovative marketing and e-commerce sectors.

The Board has set out the vision for the Group for the medium to long term. The Board is responsible for formulating, reviewing and approving the Group's strategy, budgets and corporate actions. The Company holds Board meetings at least four times each financial year and at other times as and when required. Detailed disclosure on the Company's business model and strategy is disclosed on the Company's website and in the Strategic Report. 

2.  Seek to understand and meet shareholder needs and expectations:

The Company has a Board with experience in understanding the needs and expectations of its shareholder base. It supplements this with professional advisers including public relations company, and legal advisers who provide advice and recommendations in various areas of its communications with shareholders. The Company engages with its shareholders through its website to provide information to shareholders and provides regular updates to the market via the Regulatory News Service.

The Company is committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about us, and in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market. We will do so via retail and institutional investor roadshows, attending and presenting at investor conferences, meeting with independent investment analysts and financial journalists and our regular reporting.

The Directors actively seek to build a relationship with institutional shareholders. The Chief Executive Officer ("CEO") and other directors will make presentations to institutional shareholders and analysts from time-to-time in part to listen to their feedback and have a direct conversation on any areas of concern. The Board as a whole is kept informed of the views and concerns of major shareholders by briefings from the CEO. Any significant investment reports from analysts will be circulated to the Board. The Non-Executive Chairman is also available to meet with major shareholders if required to discuss issues of importance to them.

The Annual General Meeting ("AGM") is one forum for dialogue with shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 clear days before the AGM. The chairs of the Board and all committees, together with all other Directors, will routinely attend the AGM and are available to answer questions raised by shareholders.

Directors' Report (continued)

For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are subsequently published on the Company's website.

3.  Take into account wider stakeholder and social responsibilities and their implications for long-term success:

Engaging with all our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. The Board is regularly updated on wider stakeholder engagement to stay abreast of stakeholder insights into the issues that matter most to them and our business, and to enable the Board to understand and consider these issues in decision-making. Some examples of stakeholders aside from our shareholders are our partners and our suppliers. The Board therefore closely monitors and reviews the results of the Company's engagement with those groups to ensure alignment of interests.

4.  Embed effective risk management, considering both opportunities and threats, throughout the organisation:

The Company recognises that risk is inherent in all of its business activities. Its risks can have a financial, operational or reputational impact.  A summary of the key risks is set out in the Strategic Report on pages 8 to 10 and is provided on the website. The Company's system of risk identification, supported by established governance controls, ensures it effectively responds to such risks, whilst acting ethically and with integrity for the benefit of all its stakeholders. 

 

The Company's key internal controls procedures include:

 

Financial Controls

 

The Company's Audit Committee comprises Dennis Ow (as Chairman) ‎and Min Yang Non-Executive Director). The Audit Committee meets as often as required and at least twice a year. The Audit Committee's main functions include reviewing the effectiveness of internal control systems and risk assessment, making recommendations to the Board in relation to the appointment and remuneration of the Company's auditors and monitoring and reviewing annually their independence, objectivity, effectiveness and qualifications.

 

The Audit Committee also monitors the integrity of the financial statements of the Company and Group, including its annual and interim reports and any other formal announcement relating to financial performance. The Audit Committee is responsible for overseeing the Company's relationship with the external auditors, including making recommendations to the Board on the appointment of the external auditors and their remuneration. The Audit Committee considers the nature, scope and results of the auditors' work and reviews, and can develop and implements policies on the supply of non-audit services that are provided by the external auditors where appropriate. The Audit Committee focuses particularly on compliance with legal requirements, accounting standards and the relevant Listing Rules for Companies and ensuring that an effective system of internal financial and non-financial controls is maintained. The ultimate responsibility for reviewing and approving the annual report and accounts remains with the Board. The identity of the Chairman of the Audit Committee is reviewed on an annual basis and the membership of the Audit Committee and its terms of reference are kept under review. The Audit Committee members have no links with the Company's external auditors.

 

Standards and policies

 

The Board is committed to maintaining appropriate standards for all the Group's business activities and ensuring that these standards are set out in written policies where appropriate.

 

 

Directors' Report (continued)

 

The Board acknowledges that the Group's operations may give rise to possible claims of bribery and corruption. In consideration of the UK Bribery Act the Board reviews the perceived risks to the Group arising from bribery and corruption to identify aspects of the business which may be improved to mitigate such risk. The Board has adopted a zero-tolerance policy toward bribery and has reiterated its commitment to carry out business fairly, honestly and openly. The Company has also adopted a share Dealing Code for the Board, in conformity with the requirements of the Listing Rules for Companies and the Market Abuse Regime (MAR) and will take steps to ensure compliance by the Board and senior staff with the terms of the code. In summary, the code stipulates that those covered by it should: not deal in any securities of the Company unless prior written notice of such proposed dealings has been given to the Board and written clearance received from the Board; not purchase or sell any securities of the Company in the two months immediately preceding the announcement of the Company's half-yearly or annual results; not use another person, company or organisation to act as an agent, or nominee, partner, conduit or in another capacity, to deal in any securities on their behalf where that third person would breach obligations under this paragraph; and immediately inform the Board of any dealings in the Company's shares.

 

All material contracts are required to be reviewed and signed by a senior Director of the Company and reviewed by our external counsel.

 

The Company has a social media policy. The objective of the policy is to minimise the risks to the Company through use of social media. The policy deals with the use of all forms of social media, all social networking sites, internet postings, the Company's website, non-regulatory news feeds and blogs. It applies to use of social media for business purposes as well as personal use that may affect the Company in any way. The policy covers all employees, officers, consultants, contractors, interns, casual workers and agency workers.

 

Maintain a dynamic management framework

5.  Maintain the Board as a well-functioning, balanced team led by the Chair:

The Board comprises four Directors; one Executive Director and three ‎Non-Executive Directors, reflecting a blend of different experiences and backgrounds.

The QCA Code states that a company should have at least two independent non-executive directors. At ‎present, the Company has only one independent non-executive director being Mr Dennis Ow. The Board believes that the composition of the Board brings a desirable range of skills and ‎experience in light of the Company's challenges and opportunities following Admission, while at the same ‎time ensuring that no individual (or a small group of individuals) can dominate the Board's decision ‎making. The Company will appraise the structure of the Board on an ongoing basis.‎

 

The Non-Executive Chairman is primarily responsible for the working of the Board of the Company and for assessing the individual contributions of each Board member to ensure that:

-  Their contribution is measurable, timely, relevant and effective

-  They commit sufficient time to the business to fulfil their statutory and fiduciary duties

-  Where relevant, they maintain their independence

- They function collectively in a coherent and productive manner

- The receive appropriate training to stay up to date and improve performance

 

 

Directors' Report (continued)

 

The Company has the following appropriately constituted committees, each with formally delegated duties and responsibilities set out in respective written terms of reference:

 

·    Audit Committee;

·    Remuneration  Committee; and

·    Nomination Committee

 

Details of these committees is set out below on pages 25 to 26.

The Board is responsible for the overall leadership and effective management of the Company, setting the Company's values and standards and ensuring maintenance of a sound system of internal control and risk management. The Board is also responsible for approving Company policy and its strategic aims and objectives as well as approving the annual operating and capital expenditure budgets. The Board supports the concept of an effective Board leading and controlling the Company and believes the Company has a well-established culture of strong corporate governance and internal controls that are appropriate and proportional, reflecting the Company's culture, size, complexity and risk.

All Directors bring a wide range of skills and international experience to the Board. The non-executive Directors hold meetings without the executive Directors present. The Chairman is primarily responsible for the working of the Board of the Company. The CEO is primarily responsible for the running of the business and implementation of the Board strategy and policy. The CEO is assisted in the managing of the business on a day-to-day basis by the Board as a whole.

The Board hold regular meetings where it approves major decisions and utilises its expertise to advise and influence the business. The Board will meet on other occasions as and when the business demands. During the financial year under review the Board met on five occasions.

The Board and its committees are supplied with appropriate and timely information, including detailed financial information, in order to discharge its duties. All Directors have access to the advice and services of the company secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. Independent professional advice is also available to Directors in appropriate circumstances.

A detailed agenda is established for each scheduled meeting and appropriate documentation is provided to Directors in advance of the meeting. Regular Board meetings provide an agenda that will include reports from the CEO, reports on the performance of the business and current trading, and specific proposals where the approval of the Board is sought. Areas discussed include, amongst others, matters relating to the acquisition of 3DBT, placing and funding arrangements and the strategic direction of the Company. Minutes of the meetings from committees of the Board are circulated to all members of the Board, unless a conflict of interest arises, to enable all Directors to have oversight of those matters delegated to committees.

In accordance with the Company's Articles of Association, those Directors that have been appointed since the previous AGM shall retire from office but shall be eligible for re-appointment. All Directors have access to the advice and services of the company secretary and other independent professional advisers as required. Non-executive Directors have access to key members of staff and are entitled to attend management meetings in order to familiarise themselves with all aspects of the Company. It is the responsibility of the Chairman and the company secretary to ensure that Board members receive sufficient and timely information regarding corporate and business issues to enable them to discharge their duties.

 

 

 

Directors' Report (continued)

 

Board and committee meetings attendance

 

During the year under review, two Audit Committee meetings, one Remuneration Committee meeting and one Nomination Committee meeting were held.

 

During the year there were five Board meetings by the Directors of the Company.

 

Attendance of Directors and committee members at Board and committee meetings held during the year is set out in the table below.

 

	Board meetings	Audit Committee meetings	Remuneration Committee meetings	Nomination Committee meetings
Ming Yang	5	2	n/a	n/a
Geoff Baker	5	n/a	1	1
Dennis Ow	5	2	1	1
Che Connon	4	n/a	n/a	n/a

 

Division of responsibilities

 

The division of responsibilities between the non-executive Chairman and the CEO is clearly defined in writing. However, they work closely together to ensure effective decision making and the successful delivery of the Group's strategy.

 

The Chief Executive Officer

 

The CEO is responsible for the running of the Group's business for the delivery of the strategy for the Group, leading the management team and implementing specific decisions made by the Board to help meet shareholder expectations. He also takes the lead in strategic development, by formulating the vision and strategy for the Group.

 

The CEO reports to each Board meeting on all material matters affecting the Group's performance. Given the structure of the Board and the fact that the Chairman and CEO roles are fulfilled by two separate individuals, the Board believes that no individual or small group of individuals can disproportionately influence the Board's decision making.

 

The Chairman

 

The Chairman leads the Board, ensuring constructive communications between the Board members and that all Directors are able to play a full part in the activities of the Company. She is responsible for setting Board agendas and ensuring that Board meetings are effective and that all Directors receive accurate, timely and clear information.

 

The Chairman officiates effective communication with shareholders and ensures that the Board understands the views of major investors and is available to provide advice and support to members of the executive team.

 

 

Directors' Report (continued)

 

Non-executive Directors

 

There are currently three non-executive Directors (including the Chairman), of which one is an independent non-executive Director. The role of the non-executive Directors is to understand the Group in its entirety and constructively challenge strategy and management performance, set executive remuneration levels and ensure an appropriate succession planning strategy is in place.

 

They must also ensure they are satisfied with the accuracy of financial information and that thorough risk management processes are in place. The non-executive Directors also assist the Board with issues such as governance, internal control, remuneration and risk management. No non-executive Directors are participants in any share option plans of the Company.

 

Effectiveness

 

Composition of the Board

 

The Board consists of the Non-Executive Chairman, the CEO, two non-executive Directors and two further independent non-executive directors. The names, skills and short profiles of each member of the Board, are set out on pages 12 to 13. Each year the Board considers the independence of each non-executive Director in accordance with the Code.

 

To ensure that they clearly understand the requirements of their role, the Company has a letter of appointment in place with each non-executive Director. Service agreements are entered into with the executive Director and senior executives so that they can clearly understand the requirements of the role and what is expected of them.

 

Commitment

 

Each Director commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend Board meetings and join ad hoc Board calls and offer availability for consultation when needed. The contractual arrangements between the Directors and the Company specify the minimum time commitments which are considered sufficient for the proper discharge of their duties. However, all Board members appreciate the need to commit additional time in exceptional circumstances.

Non-executive Directors are required to disclose prior appointments and other significant commitments to the Board and are required to inform the Board of any changes to their additional commitments.

Before accepting new appointments, non-executive Directors are required to obtain approval from the Chairman and the Chairman requires the approval of the whole Board. It is essential that no appointment causes a conflict of interest or impacts on the non-executive Director's commitment and time spent with the Group in their existing appointment.

Details of executive Director service contracts and of the Chairman's and the non-executive Directors' appointment letters are given on page 27 of the Remuneration Committee Report.

Development

The Board is informed of any material changes to governance, laws and regulations affecting the Group's business.

 

Directors' Report (continued)

 

Information and support

All Directors have access to the advice and services of the company secretary and each Director and each Board committee member may take independent professional advice at the Company's expense, subject to prior notification to the other non-executive Directors and the company secretary.

The appointment and removal of the company secretary is a matter for the Board as a whole. The company secretary is accountable directly to the Board through the Chairman.

6.  Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities:

The Board has been assembled to allow each Director to contribute the necessary mix of experience, skills and personal qualities to deliver the strategy of the Company for the benefit of the shareholders over the medium to long term.

Together the Board provide relevant sector skills, the skills associated with running public companies and technical and qualifications to assist the Company in achieving its stated aims.

The Directors keep their skillsets up to date as required through the range of roles they perform with other companies and consideration of technical and industry updates by external advisers.

The Directors receive regular briefing papers on the operational and financial performance of the Company from the executives and senior management.

7.  Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement:

Appointments to the Board

 

The Company has only recently established a remuneration committee pursuant to the acquisition of 3DBT.

 

Previously, the Company has not had a separate remuneration committee. The Board has instead periodically reviewed the quantum of Directors' fees, taking into account the interests of shareholders and the performance of the Company and the Directors. The Company has a Remuneration Committee, the composition of which is set out on page 25.

 

The Remuneration Committee is responsible for maintaining a Board of Directors that has an appropriate mix of skills, experience and knowledge to be an effective decision-making body, ensuring that the Board is comprised of Directors who contribute to the successful management of the Company and discharge their duties having regard to the law and the highest standards of corporate governance, considering and recommending Board candidates for election or re-election and reviewing succession planning.

 

The Remuneration Committee undertakes a detailed selection process as per the recruitment and diversity policy to appoint or re-appoint a Director to the Board. Included in this process are appropriate reference checks which include but are not limited to character reference and bankruptcy to ensure that the Board remains appropriate for that of a listed company.

 

8.  Promote a corporate culture that is based on ethical values and behaviours:

The Board seeks to embody and promote a corporate culture that is based on sound ethical values and behaviours, something we see as being a cornerstone to a strong risk management programme.

 

 

Directors' Report (continued)

 

Code of Business Ethics

 

The Board acknowledges the need for continued maintenance of the highest standard of corporate governance practice and ethical conduct by all Directors and employees of the Group. The Board has approved a code of business ethics for Directors, officers and employees, which describes the standards of ethical behaviour that are required to be maintained. This code was approved pursuant to the Company's readmission. The Group promotes the open communication of unethical behaviour within the organisation.

 

Compliance with the code assists the Company in effectively managing its operating risks and meeting its legal and compliance obligations as well as enhancing the Group's corporate reputation.

 

The code describes the Group's requirements on matters such as confidentiality, conflicts of interest, use of Group information, sound employment practices, compliance with laws and regulations and the protection and safeguarding of the Group's assets.

 

An employee who breaches the code of business ethics face disciplinary action. If an employee suspects that a breach of the code has occurred or will occur, he or she must report that breach to the CEO, via the Company's confidential "Whistle Blowing" process.

 

No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be investigated, acted upon and kept confidential.

 

Anti-bribery and anti-corruption

 

The Company has adopted an anti-corruption and bribery policy which applies to the Board and employees of the Company and the Group. It generally sets out their responsibilities in observing and upholding a zero-tolerance position on bribery and corruption in all areas in which the Group operates. It also provides guidance to those working for the Group on how to recognise and deal with bribery and corruption issues and the potential consequences of failing to adhere to this guidance. The Company expects all employees, suppliers, contractors and consultants to conduct their day-to-day business activities in a fair, honest and ethical manner, be aware of and refer to this policy in all of their business activities worldwide and to conduct business on the Company's behalf in compliance with it. Management at all levels are responsible for ensuring that those reporting to them, internally and externally, are made aware of and understand this policy.

 

The Group takes a zero-tolerance approach to acts of bribery and corruption by any Directors, officers, employees and contractors. The Group will not offer, give or receive bribes, or accept improper payments to obtain new business, retain existing business or secure any advantage and will not permit others to do so on its behalf.

 

 9.  Maintain governance structures and processes that are fit for purpose and support good decision making by the Board:

The Board meets at least four times each year in accordance with its scheduled meeting calendar. The Board sets direction for the Company through a formal schedule of matters reserved for its decision. Prior to the start of each financial year, a schedule of dates for that year's Board meetings is compiled to align as far as reasonably practicable with the Company's financial calendar while also ensuring an appropriate spread of meetings across the financial year. This may be supplemented by additional meetings as and when required.

 

Directors' Report (continued)

 

The Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting, and Board and committee papers are expected to be distributed well before meetings take place. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by the Company's management.

 

The Board is responsible for the long-term success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible for overall group strategy; approval of major investments; approval of the annual and interim results; annual budgets; dividend policy; and Board structure. It monitors the exposure to key business risks and reviews the annual budgets and their performance in relation to those budgets. There is a clear division of responsibility at the head of the Company. The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The CEO is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company through the executive team.

 

The Board is supported by the Audit Committee, Nomination Committee and the Remuneration Committee. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The Remuneration Committee ensures remuneration is aligned to the implementation of the Company strategy and effective risk management, taking into account the views of shareholders and is also assisted by executive pay consultants as and when required.

 

The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company's affairs. The role of the Board is as follows:

 

·      To provide direction and entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risks to be appropriately assessed and managed;

·      To set the Company's strategic aims, ensure that the necessary financial and human resources are in place for the Company to meet its objectives and review management performance;

·      To demonstrate ethical leadership, setting the Company's value and standards and ensuring that its obligations to its shareholders and others are well understood;

·      To create a performance culture that drives value creation without exposing the Company to excessive risk or value destruction;

·      To be accountable, and make well-informed and high quality decisions based on a clear understanding of the Company's broader goals and specific objectives;

·      To create the right framework for helping Directors meet their statutory duties under the Companies Act 2006, and/or any other relevant statutory and regulatory regimes; and

·      To promote its governance arrangements and embrace the evaluation of their effectiveness.

Build trust

10.  Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders:

Dialogue with shareholders

The Group places considerable importance on effective communications with shareholders.

 

 

Directors' Report (continued)

 

The Group's communication strategy requires communication with shareholders and other stakeholders in an open, regular and timely manner so that the market has sufficient information to make informed investment decisions on the operations and results of the Group. The strategy provides for the use of systems that ensure a regular and timely release of information about the Group is provided to shareholders.

The Group also posts all reports, stock exchange announcements and media releases and copies of significant business presentations on the Company's website: https://bsfenterprise.com/news/      

Constructive use of the AGM

The Board encourages full participation of shareholders at the AGM to ensure a high level of accountability and understanding of the Group's strategy and goals.

The Company provides information in the notice of AGM that is presented in a clear, concise and effective manner. Shareholders are provided with the opportunity to submit questions in relation to each resolution before they are put to the vote and discussion is encouraged by the Board. The board will publish a summary of any questions received which are of common interest, together with a written response on the Company's website as soon as practicable after the conclusion of the AGM and GM (as applicable).

Conflicts of interest

Min Yang, Geoffrey Baker and Dr Che Connon are directors of the Company and are also directors of ‎3D Bio-Tissues ‎Limited.  ‎Min Yang and Geoffrey Baker are also directors of BSF Angel Funding ‎Limited, a shareholder of the Company.   ‎Dennis Ow has been appointed as an independent ‎director of the Company to manage any such conflicts of interests.  Any matters on which the Min Yang, Geoffrey Baker or Dr Che Connon have a conflict of interest will be delegated to and considered by Dennis Ow.

 

Audit Committee

The Audit Committee has the primary responsibility of monitoring the quality of internal controls to ‎ensure that the financial performance of the Group is properly measured and reported on. It ‎receives and reviews reports from the Group's management and external auditors relating to the ‎interim and annual accounts and the accounting and internal control systems in use throughout the ‎Group. The Audit Committee will normally meet not less than three times in each financial year and has unrestricted access to the Group's external auditors. In the year ended 30 September 2022, the Committee met twice. The members of the Audit Committee ‎comprises Dennis Ow (as Chairman) ‎and Min Yang.‎

 

Remuneration Committee

The Remuneration Committee reviews the performance of the Executive Director, Chairman of the ‎Board and senior management of the Group and make recommendations to the Board on ‎matters relating to their remuneration and terms of service. The Remuneration Committee also makes ‎recommendations to the  Board on proposals for the granting of share options and other equity incentives ‎pursuant to any employee share option scheme or equity incentive plans in operation from time to time. ‎The Remuneration Committee meets as and when necessary, but at least twice each year. In exercising ‎this role, the Directors have regard to the recommendations put forward in the QCA Code and, where ‎appropriate, the QCA Remuneration Committee Guide and associated guidance. The members of the ‎Remuneration Committee ‎comprise Geoff Baker (as Chairman) ‎and Dennis Ow.

 

Nomination Committee

The Nomination Committee leads the process for board appointments and makes recommendations to ‎the Board. The Nomination Committee evaluates the balance of skills, experience, independence and ‎knowledge on the board and, in the light of this evaluation, prepares a description of the role and capabilities ‎required for a particular appointment.

 

Directors' Report (continued)

 

The Nomination Committee meets as and when necessary, but at ‎least twice each year. The Nomination Committee comprises Geoff Baker (as Chairman) ‎and Dennis Ow.

 

The Directors are responsible for internal control in the Company and for reviewing effectiveness. Due to the size of the Company, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the Company's systems during the year under review and consider that there have been no material losses, contingencies or uncertainties due to weaknesses in the controls.

 

Details of the Company's business model and strategy are included in the Chairman's Statement and Strategic Report.

 

Statement as to disclosure of information to auditors

 

The Directors confirm that:

 

·    there is no relevant audit information of which the Company's statutory auditor is unaware; and

·    each Director has taken all the necessary steps he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's statutory auditor is aware of that information.

 

Auditors

 

The auditors, PKF Littlejohn LLP were reappointed by the Directors on 12 July 2022, and have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the Annual General Meeting.

 

 

Approved on behalf of the Board of Directors by:

 

 

………………………………..

Geoffrey Baker

Director

 

Date: 31 January 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Directors' Remuneration Report

The Company has only recently established a remuneration committee pursuant to the acquisition of 3DBT. Until now, the Company has not had a separate remuneration committee. The Board has instead periodically reviewed the quantum of Directors' fees, taking into account the interests of shareholders and the performance of the Company and the Directors.

The items included in this report are unaudited unless otherwise stated.

The Directors who held office at 30 September 2022 and who had beneficial interests in the Ordinary Shares of the Company are summarised as follows:

Name of Director	Position
Dr Che Conon	Chief Executive Officer
Geoffrey Baker	Non-Executive Director
Min Yang	Non-Executive Chairman
Dennis Kian Jing Ow	Non-Executive Director

 

Directors' letters of appointment

 

Min Yang and Geoffrey Baker were each appointed by the Company pursuant to letters of appointment dated 18 July 2019 for a period of 12 months and thereafter subject to termination by either party on three months' notice. Ms Yang was appointed as Chairman. The Non-Executive Directors each agreed to not be remunerated until such time as an Acquisition was completed however, Mr Baker has received £2,500 per month from April 2021. The Non-Executive Directors have agreed to commit an equivalent of at least one day a week to the Company. The Non-Executive Directors are not entitled to any other benefits other than the reimbursement of their reasonable expenses. The letters of appointment are governed by English law.

 

Dennis Ow was appointed as a non-executive Director pursuant to a letter of appointment dated 2 August 2021 for an initial period of 12 months and thereafter subject to termination by either party on three months' notice. Mr Ow was not entitled to any remuneration pursuant to his letter of appointment. The appointment letter contains no payment for early termination or profit sharing or commission arrangements.

 

The letters of appointment of each of the non-executive Directors were amended pursuant to side letters dated 26 April 2022, effective on Admission to provide that each non-executive Director will be paid £30,000 per annum (commencing on Admission). The amended appointment letters contain no payment for early termination or profit sharing or commission arrangements.

 

Dr Che Connon entered into a service agreement with the Company dated 26 April 2022 under which Dr Che Connon is employed as the Chief Executive Officer of the Company from Admission and thereafter until terminated by either party giving 3 months' prior written notice.

 

Dr Che Connon receives an initial annual salary of £80,000 based on 2 days' work per week and subject to proportional increase at £40,000 per annum per extra day a week that is agreed between the parties . Dr Che Connon will be entitled to a bonus payment of £10,000 to be paid if the 3DBT achieves agreed sales targets of City-mix or Etsyl products within 18 months of the commencement of his employment. Dr Che Connon is entitled to participate in the Restrictive Share Plan and the EMI Option Plan. He is also entitled to the reimbursement of his reasonable expenses. Dr Che Connon is not entitled to any benefits on termination of employment.

 

 

Directors' Remuneration Report (continued)

 

Shareholders' returns

 

The Company expects that any returns for shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy set out below.

 

Dividend policy

 

The Company intends to pay dividends on the Ordinary Shares at such times (if any) and in such amounts (if any) as the Board determines appropriate in its absolute discretion and in accordance with requirements of the Companies Act 2006.

 

Prior to revenue generation, it is unlikely that the Company will have any earnings but to the extent the Company has any earnings it is the Company's current intention to retain any such earnings for use in its business operations, and the Company does not anticipate declaring any dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws.

 

During the year ended 30 September 2022, there were no dividends paid (2021: nil).

 

Particulars of Directors' remuneration (audited)

 

								Totals Year ended	Year ended
				Fees and salaries		Restricted share awards		30 September 2022	30 September 2021
				£		£		£	£
	Executive Directors
	Dr Che Connon		26,667			87,794		114,461	-
	Non-executive Directors
	Geoff Baker		30,000			35,118		65,118	17,500
	Min Yang		11,250			17,559		28,809	-
Dennis Ow		11,250				-	11,250			-
					79,167	140,471		219,638	17,500

 

 

Statement of Directors' shareholding and share interests (audited)

 

The Directors who served during the year ended 30 September 2022, and their interests at that date, are disclosed on pages 12 and 14. There were no changes between the reporting date and the date of approval of this report.

 

 

 

 

 

 

Directors' Remuneration Report (continued)

 

 

UK Remuneration percentage changes

 

As the remuneration for the preceding financial year related only to Geoff Baker, no percentage changes for remuneration for the other directors are presented. Geoff Baker has received £2,500 per month from April 2021. There were no changes to this level of remuneration in the year ended 30 September 2022.

 

UK 10-year performance graph

 

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 has only been listed since 2017, is not paying dividends, is currently incurring losses as it gains scale and has only recently completed its first acquisition. In addition, and as mentioned above, the remuneration of Directors is not currently linked to performance and we therefore do not consider the inclusion of this graph to be useful to shareholders at the current time. The Directors will review the inclusion of this table for future reports.

 

Consideration of shareholder views

 

The Board considers shareholder feedback received. This feedback, plus any additional feedback received from time to time, is considered as part of the Company's annual policy on remuneration.

 

Policy for salary reviews

 

The Company may from time to time seek to review salary levels of Directors, taking into account performance, time spent in the role and market data for the relevant role.

 

Other matters

 

None of the Directors hold options, warrants or any form of convertible security in respect of Ordinary Shares. Save as set out above and below, there is currently no intention for the Company to make incentivisation arrangements for the Directors to be involved in the capital of the Company or otherwise any employee share option arrangements.

 

On 16 May 2022, the Company resolved to adopt the Restricted Share Plan, which will allow for the grant of shares to directors and selected ‎employees subject to restrictions and forfeiture risks which will be lifted after a certain period. It is intended that ‎participants will be executive directors and senior employees of the ‎Company.‎ No more than 15% of the issued share capital of the Company from time to time can be ‎issued or issuable under the plan ‎and other grant of shares by the Company which are ‎subject to restrictions and forfeiture risks.‎ A total of 7,798,491 shares were issued including 6,623,793 shares issued to directors. Further details are set out in Note 17 to the Consolidated Financial Statements.

 

On 16 May 2022 the Company resolved to adopt the Employee Share ‎Option Plan ("ESOP") which will allow for the grant of EMI options and non-approved share options over shares in the Company to be granted to selected individuals. An option will become exercisable at some future date and the participant will then have the right to acquire shares at a price (the "option price") fixed when the option was granted.  The ESOP will be administered by the board. Further details are set out in Note 17 to the Consolidated Financial Statements No options have been issued under the ESOP at the date of this Report.

 

 

 

Directors' Remuneration Report (continued)

 

The Company does not pay pension amounts in relation to any of the Directors remuneration. The Company has not paid out any excess retirement benefits to any Directors.

 

Approved on behalf of the Board of Directors by:

 

………………………………………….

Geoffrey Baker Director                                                                                                                                       Date: 31 January 2023

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the Group's and Parent Company's 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 have elected to prepare the Group and Parent Company financial statements in accordance with UK-adopted International Accounting Standards and in conformity with the requirements of the Companies Act 2006. 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 the affairs of the Company and the Group and of the profit or loss for that period.

 

In preparing these financial statements, the Directors are also required to:

 

-     select suitable accounting policies and then apply them consistently;

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

-     state whether they have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 and subject to any material departures disclosed and explained in the financial statements; and

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

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the  Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the Financial Statements 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.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

 

Directors' responsibility statement pursuant to disclosure and Transparency Rules

 

The Directors are responsible for preparing the Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006..

 

Each of the Directors, whose names and functions as listed in the Board of Directors confirm that, to the best of their knowledge:

 

·    the financial statements, prepared in accordance with UK-adopted International Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

·    the Strategic and Directors' Report include a fair review of the development and performance of the business and the financial position of the Group and Parent Company, together with a description of the principal risks and uncertainties that it faces; and

·    the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's and Parent Company's performance, business model and strategy.

 

 

Statement of Directors' Responsibilities (continued)

 

 

Approved on behalf of the Board of Directors by:

 

 

 

………………………………………….

Geoffrey Baker

Director

 

Date: 31 January 2023