NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

 

1.   Accounting Policies

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under adopted IFRS.  

These consolidated financial statements are presented in Pounds Sterling ('GBP'), which is considered by the directors to be the functional and presentation currency.

The Company's individual statement of comprehensive income has been omitted from the Group's annual financial statements having taken advantage of the exemption not to disclose under Section 408(3) of the Companies Act 2006.

Going concern

The Directors consider it is appropriate to prepare the Iconic financial statements on the basis that that they are able to continue to operate for a period of at least 12 months from the date of approving these financial statements.

As noted in the Strategic Report when making this assessment the Directors have prepared forecasts which consider the expected level of expenditure over the course of the review period together with the anticipated revenues arising from the new business and acquisitions completed shortly after the period end. Key to the compilation of the forecasts central to the Directors' assessment of going concern are the following factors:

·    The company is at an early stage of development and is not currently profitable. Despite strong confidence in its business plan and forecasts, the Directors recognise there is a risk that it may require more funding but not be able to find agreement with a funding partner.

·    The Company has only recently exited administration and the Board is working diligently to ensure compliance with the terms of the CVA and also to get the Company relisted as soon as possible.

The Company has, like most, been affected by the COVID-19 pandemic and has lost some revenue however the Company is confident that it's risk to the pandemic has been mitigated. The Company has completed fundraising which will reduce the reliance of the Company on revenue. The Directors remain satisfied that the assumptions they have used in the forecasts to assess that Iconic is a going concern.

Basis of consolidation

The Group financial statements consolidate those of the parent company and all of its subsidiaries. Subsidiaries are entities controlled by the Group.  The parent company controls a subsidiary if it has power over the investee to significantly direct the activities, exposure, or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of the investors' returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The results of subsidiaries acquired or disposed in the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

 

The results and net assets of subsidiaries whose accounts are denominated in foreign currencies are retranslated into Sterling at average rates and year-end rates respectively.

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently associates are accounted for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is recognised in the consolidated statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless there is an obligation to make good those losses).

Business combinations

The Group applies the acquisition method of accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition date fair values of assets transferred, liabilities incurred and equity interests issued by the Group. Acquisition costs are expensed as incurred.

Revenue recognition

Revenue represents the amount of consideration to which the Group expects to be entitled in exchange for the provision of it's services to the client, net of discounts and sales taxes.

 

For the year ended 30 June 2021, the Group used the five-step model as prescribed under IFRS15 on the Group's revenue transaction. This included the identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue. The point of recognition arises when the Group satisfies the performance obligation by transferring control of a promised service to the customer which could occur over time or at a point in time. Provision is made for all foreseeable losses where the Company believes that a contract will deem to be unprofitable, or a client fails to remunerate the Company for services provided.

 

Sale of Services

 

During the 2020  financial year the company entered into a contract to deliver management services to a digital and social publisher. With regards to the provision of said services, a price is agreed in advance and these services are provided over the term of the contract. Revenue is recognised on a straight line basis over the term of the contract and the client is billed monthly in arrears. The contract also contains a variable element of revenue. The company is entitled to a profit share on a rolling 3 month basis. The company would invoice the customer for the profit share on a quarterly basis. The income would be recognised in the period that the profit was made by the customer. Any profit share due for the period which was not invoiced until after the period end will be included in accrued income.

Revenue that has been billed to the client, but which is yet to be paid is accrued within trade receivables.

 

Discontinued operations

Discontinued operations represent major operations of the business that the Group have decided to terminate. The post-tax profit or loss of the discontinued operations is presented as a single line on the face of the consolidated income statement. The presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.

Foreign currency

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. 

Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in the statement of comprehensive income.

Retirement benefit costs

The Group operates defined contribution retirement benefit schemes. Payments to these schemes are charged as an expense in the period to which they relate. The assets of the scheme are held separately from those of the Group in independently administered funds.

             Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.  The tax currently payable is based on taxable profit for the year.  Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.   

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.  Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.  Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.  Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Property, plant and equipment

Items of plant and equipment are initially recognised at cost. As well as purchase price, cost includes directly attributable costs.

Depreciation is provided on all items of property, plant and equipment, so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

 

 

 

Plant & Machinery -	33% straight line basis
Leasehold Improvements -	33% straight line basis
Computer Hardware -	33% straight line basis

Intangible fixed assets

Intangible assets comprise capitalised computer software which are initially recognised at cost.

Amortisation is provided so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Computer Software -

33% straight line basis

Intangible assets also comprise intellectual property which is initially measured at cost. The useful economic life of the asset is considered to be such that any amortisation charge would be immaterial to the financial statements. The directors have therefore decided that an annual impairment review rather than an  systematic amortisation is more appropriate for this asset.

Impairment of non-current assets

At each reporting date the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.  An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

             Financial assets

Financial assets are recognised when the Group becomes a party to the contractual provisions of the financial asset.

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire, or when the financial asset and substantially all of the risks and rewards are transferred.

The financial assets of the Group are initially measured at fair value adjusted for transaction costs (where applicable).

Financial assets are classified into the following categories:

-      Amortised cost

-      Fair value through profit or loss (FVTPL)

-      Fair value through other comprehensive income (FVOCI)

The classification is determined by both:

-      The Group's business model for managing the financial asset

-      The contractual cash flow characteristics of the financial asset

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs and finance income.

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

-     They are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows

-     The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method.  Discounting is omitted where its effect is immaterial.  The Group's cash and cash equivalents, trade and other receivables fall into this category. 

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate.  Losses are recognised in profit or loss and reflected in an allowance against trade and other receivables.  When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Trade and other receivables

The group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance as lifetime expected credit losses.  These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument.  In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Group assesses impairment of trade and other receivables on a collective basis.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. These are initially and subsequently recorded at fair value.

Financial liabilities

The Group's principal financial liabilities include trade and other payables, leases and convertible debt none of which would be classified as fair value through profit or loss.

Therefore, these financial liabilities are classified as financial liabilities at amortised cost, as defined below:

Other financial liabilities include the following items:

·      Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

·      Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Convertible loan notes

Convertible loan notes issued by the Group comprise loan notes that can be converted to ordinary shares at the option of the holder.

The liability component of the convertible loan notes is recognised on the date of inception and is determined using a market interest rate for an equivalent non-convertible instrument. The equity element is recognised as the difference between the value of the financial instrument as a whole and the value of the liability component. Any directly attributable transaction costs are allocated to the equity and liability components in proportion to their initial carrying amounts.

Subsequently, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method.

Leased assets

The company applies IFRS 16 Leases. Accordingly leases are all accounted for in the same manner:

·      A right of use asset and lease liability is recognised on the statement of financial position, initially measured at the present value of future lease payments;

·      Depreciation of right-of-use assets and interest on lease liabilities are recognised in the statement of comprehensive income;

·      The total amount of cash paid is recognised in the statement of cash flows, split between payments of principal (within financing activities) and interest (also within financing activities)

The initial measurement of the right of use asset and lease liability takes into account the value of lease incentives such as rent free periods.

The costs of leases of low value items and those with a short term at inception are recognised as incurred.

Share capital

The group's ordinary shares are classified as equity instruments.

New standards adopted

In the current year, the Group has applied a number of amendments to Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after 1 January 2020. These have not had any material impact on the amounts reported for the current and prior years:

 

-  Amendments to References to the Conceptual Framework in IFRS Standards

-  Amendments to IFRS 3: Definition of a Business

-  Amendments to IAS 1 and IAS 8: Definition of Material

-  Covid-19 Related Rent Concessions (Amendment to IFRS 16).

New standards, interpretations and amendments not yet effective

The following Adopted IFRSs have been issued but have not been applied by the Group in these financial statements, all of which are effective for the accounting period commencing 1 January 2022. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

 

-  Narrow scope amendments to IFRS 3, IAS 16 and IAS 27

-  Annual improvements to IFRS Standards 2018 - 2020

-  Amendments to IAS 1: Classification of Liabilities as Current or non Current

 

The directors do not expect any material impact as a result of adopting the standards and amendments listed above in the financial year they become effective.

 

From 1 January 2021 the company will apply UK-adopted IAS. At the date of application, both UK-adopted IAS and EU-adopted IFRS will be the same.

 

2.   Critical Accounting Estimates and Judgements

The group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. Significant management judgements are as follows:

 

 

Legacy Issues

·      Due to the change in the Board, key management and operations of the Group that took place in March 2021, it is possible that there are unrecorded liabilities relating to discontinued activities about which the Board are unaware. The Board have undertaken, to the extent possible, a thorough review of the creditor position of the Parent Company and the Group, with a core focus on the legacy business operations. Notwithstanding the Board's assessment, there is a residual risk unforeseen liabilities may arise. However, due to the publicity around the new business, shutting down the old one and drawing down on the EHGOS facility, a number of claims were made against the company. Since the period end, no additional creditors have made a claim against the Group or the Parent Company. While it is important to consider these liabilities in these accounts the Board have however made a judgment that the risk of unrecorded actual or contingent liabilities is now low.

·      The Group's former Board under through its Cellplan subsidiary was promoting bespoke stem cell medical insurance and launched a website to market the product. After due enquiry, the new Board is not aware that any such policies were issued. There does however remain a residual risk that policies may have been issued. The board consider that the incidence and financial impact is now low.

3.   Loss from Operations

 

	Year ended 30 June 2021 £	Year ended 30 June 2020 £
The loss for the period is stated after charging:
Depreciation	2,504	2,503
Auditors remuneration - audit services	50,000	40,000
Auditors remuneration - corporate finance services	-	63,500

 

Expenses by nature:	£	£
Legal and professional fees	911,787	632,978
Consultancy fees	1,053,856	213,098
Other supplies and external services	444,473	359,101
Staff costs	1,164,975	999,686
Total operating expenses	3,575,091	2,204,863
Depreciation, amortisation and impairment of assets	2,504	2,503
Impairment of loans	-	150,000
Total administrative expenses	3,577,595	2,357,366
Direct costs in connection with EHGOF financing facility	70,000	262,000
Other penalties	4,593,154	-
	8,240,749	2,619,366

4.   Staff Costs

 

	Year ended 30 June 2021 £			Year ended 30 June 2020 £
Staff costs (including directors) comprise:
Wages and salaries	1,128,545			905,958
Defined contribution pension cost	(150)			25,370
Social security contributions and similar taxes	36,580			68,358
Staff costs relating to continuing activities	1,164,975			999,686
Employee Numbers
The average number of staff employed by the group during the period amounted to:
General and administration		3	7
		3	7

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities, and are the directors of the company.

Remuneration of the directors and highest paid director is shown in the Remuneration Committee Report.

 

5.   Discontinued operations

In March 2019 the Board made the decision to discontinue the stem cell research operations. The operating loss until the date of discontinuation of the operations is summarised as follows:

	Year ended 30 June 2021	Year ended 30 June 2020
	£	£
Revenue	-	-
Administrative expenses - write back of creditor balances	(3,673)	450,062
Operating profit/(loss)	(3,673)	450,062
Taxation	-	-
Profit/(loss) for the period	(3,673)	450,062
Other comprehensive expense	-	-
Total comprehensive profit/(loss) for the period	(3,673)	450,062

 

6.   Finance Costs

	Year ended 30 June 2021 £	Year ended 30 June 2020 £
Finance costs
Penalties on redemption of convertible loan notes	-	277,380
Penalties on make whole agreement	-	72,000
Other loan penalties	4,592,522	-
Interest on leases	632	3,740
Total finance expense	4,593,154	353,120

7.   Taxation

	Year ended 30 June 2021 £	Year ended 30 June 2020 £
Current tax	-	-
Total current tax	-	-

 

The reason for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to losses for the period are as follows:

	Year ended 30 June 2021 £	Year ended 30 June 2020 £
Loss before taxation	(7,694,775)	(2,390,121)
Tax using the parent company's domestic tax rate of 19% (2019: 19%)	(1,462,007)	(454,123)
Effects of:
Unrelieved tax losses and other deductions arising in the period	1,462,007	383,779
Expenses not deductible for taxation purposes	-	70,344
Total tax charged in the income statement	-	-

The deferred taxation attributable to losses arising in the year and for losses carried forward has not been recognised in these accounts due to the uncertainty over whether this will be recovered.

8.   Loss per share

	Year ended 30 June 2021 £	Year ended 30 June 2020 £
Numerator
Loss for the period	(7,697,306)	(2,390,121)
Denominator
Weighted average number of ordinary shares used in basic EPS	22,750,589,218	2,500,412,604
Basic and diluted loss per share         -  continuing operations         -  discontinued operations	(0.00) (0.00)	(0.00) (0.00)

 

 

9.   Property, plant and equipment

Group

	Plant & Machinery £	Leasehold Improvements £	Computer Hardware £	Total £
Cost
Balance at 30 June 2020	355,772	185,849	83,095	624,716
Additions	18,000	-	-	-
Balance at 30 June 2020	373,772	185,849	83,095	624,716
Disposals	(373,772)	(185,849)	(83,095)	(624,716)
Balance at 30 June 2021	-	-	-	-
Amortisation
Balance at 30 June 2019	355,772	185,849	76,002	617,623
Charge for the period	-	-	2,503	2,503
Impairment in the period	-	-	-	-
Balance at 30 June 2020	355,772	185,849	78,505	620,126
Charge for the year	-	-	2,504	2,504
Eliminated on disposal	(355,772)	(185,849)	(81,009)	(622,630)
Balance at 30 June 2021	-	-	-	-
Carrying amounts
Balance at 30 June 2021	-	-	-	-
Balance at 30 June 2020	18,000	-	4,590	22,590

Right of use asset

The group does not lease any buildings or equipment which are required to be disclosed under IFRS 16.