Company statement of changes in equity

For the year ended 31 March 2024

Consolidated statement of cash flows

For the year ended 31 March 2024

Time To ACT plc ("the Company") was a private company limited by shares, domiciled and incorporated in England and trading from its registered office address at LevelQ Surtees Business Park, Stockton‑On‑Tees, England, TS18 3HR.

Post year end the Company was admitted to the Aquis Stock market.

The Company's and the Group's principal activities and nature of their operations are detailed in the  Director's report.

The Group currently consists of Time To ACT plc and its subsidiary companies Diffusion Alloys Holdings Limited, Diffusion Alloys (UK) Limited, Greenspur Wind Limited and Teesside Magnetics Limited.

2.       Accounting policies

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The company's functional and presentational currency is Pound Sterling.

The company's financial statements are presented to the nearest pound.

The following principal accounting policies have been applied:

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

The company is supported by the Time To ACT plc group. The Group has net current assets of £1,720,067 (2023: £2,192,614) which includes cash at bank of £1,887,904 (2023: £3,105,699). The directors believe the Time To ACT plc group is a going concern. The Group forecasts, which take into account possible changes in activity, show the Group is able to continue to trade for a period of at least twelve months from the date of these financial statements. Time To ACT plc, as of 29th May 2024, is listed on the Aquis Stock Exchange and therefore has the platform to raise additional funds if required. The Group also considers other sources of potentially available finance when conducting its going concern review. These include, bank lending, grant funding, shareholder raises, strategic partnerships and other sources. The financial statements have therefore been prepared on a going concern basis.

Revenue is recognised as the fair value of the consideration received or receivable for the sale of goods or services to external customers in the ordinary course of business and is recorded net of value added tax.

Revenue from coating technology includes the income from technology sales, compound sales and coating development work. Technology sales are recognised on the date of sale. Compound sales are recognised on delivery. Coating development work is recognised as a rendering of services, as noted above.

Revenue arising from research and development grant support is recognised as the fair value of the consideration received or receivable in accordance with the terms of any funding agreements. Such income is accrued by reference to the costs of the activities undertaken during the period, until such time as the grant funding is received.

Revenue is recognised in relation to management services in the period in which the service is provided.

Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

Grants of a capital nature are held on the balance sheet and released to the profit and loss account in line with the related assets depreciation.

Negative goodwill

Negative goodwill arises when the cost of a business combination is less than the fair value of the interest in the identifiable assets, liabilities and contingent liabilities acquired. The amount, up to the fair value of the non‑monetary assets, acquired is credited to the profit and loss account in the period in which those non‑monetary assets are recovered, which the directors consider to be over the next 5 years.

Patents

Expenditure on Patent Applications is capitalised as an intangible fixed asset. Amortisation begins only once the Patent has been granted. The amortisation period is in line with the Patent expiry rules, being 20 years after filing date. Costs will therefore build up, without any amortisation until the Patent is granted and as soon as it is granted the costs will be amortised evenly until the expiry date.

Interest income is recognised in profit or loss using the effective interest method.

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance sheet.

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

The tax expense for the year comprises current tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

·           The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

·           Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

·           Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight‑line method.

Depreciation is provided on the following basis:

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Investments in subsidiaries are measured at cost less accumulated impairment.

Stocks of raw materials and consumables are valued at the lower of cost and estimated realisable value, after making due allowances for obsolete and slow moving items.

Work in progress is similarly valued and also includes an element of profit earned to date.

Cost includes all costs incurred in bringing each product to its present location and condition. Net realisable value is based upon estimated selling price less any further costs expected to be incurred to completion and disposal.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Short‑term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

Short‑term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

The Group only enters into basic financial instrument transactions that result in the recognition of  financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short‑term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out‑right short‑term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Investments in non‑derivative instruments that are equity to the issuer are measured:

·           at fair value with changes recognised in the Consolidated statement of comprehensive income if the shares are publicly traded or their fair value can otherwise be measured reliably;

·           at cost less impairment for all other investments.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is in approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.

Costs relating to the research and development work undertaken by the company are charged to the  profit and loss account as they are incurred.

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the statement of financial position date and the amounts reported for revenues and expenses for the year.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, not always equal the related actual results. The assumptions that have a significant risk of causing a material adjustment to the carrying amount of the assets and liabilities within the next financial year are addressed below:

Fixed asset Investments

Carrying values of investments of £1,103,165 and £515,400 in subsidiaries Diffusions Alloys Holdings Limited and GreenSpur Wind Limited are reviewed annually for indicators of impairment looking at future profitability. The investments have not been impaired in these financial statements.

Valuation of intangibles

Carrying values of intangible assets of £639,577 are amortised annually and are reviewed annually for disposal.

Cash and Share‑based payments

The company calculates the cost of share based payments £55,769 (2023 ‑ £71,517) using the Binomial option valuation model. Inputs into the model in respect of the expected option/warrant life and the volatility are subject to management estimate and any changes to these estimates may have a significant effect on the cost. A corresponding adjustment is made to equity.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The loss after tax of the parent Company for the year was £599,641 (2023 ‑ loss £17,992).