EcoVista PLC (EVTP)

 

Audited Annual Results for the year ended 31 August 2019

 

The issuer is solely responsible for the content of this announcement.

 

ECOVISTA PLC

("Ecovista" or "the company")

 

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 AUGUST 2019

 

I present to you my chairman's statement for the year 1st September 2018 to 31st August 2019.

 

Overview

The accounts for the year to 31 August 2019 showed a loss of £368,403, comparable to the loss for the year ended 31 August 2018 of £238,454. The group's investments in properties were valued during the year, which resulted in an increase in value by £125,285. During the financial period, we have seen 100 Rye Street completed and Ecovista has subsequently sold the subsidiary 100 Rye Street Ltd.

 

During the year the group was unable to raise any new equity, but a further £50,000 in convertible loan notes was raised. Due to the uncertainty of Brexit, the general uncertainty of the markets and the demise of both stockbrokers that the company has used to raise capital, it has been a tough year. The business relies on access to cash, either through debt or equity, and with the Brexit uncertainty we have been unable to raise the funds to either complete or proceed with any new deals. This has seen our balance sheet reduce from £1,390,973 to £841,889 during the year to 31 August 2019.

 

The board remains committed to continue keeping a tight rein on costs and are currently in discussion with a potential merger partner.

 

Current operations

 

Willside Limited

Willside Limited successfully obtained planning permission for nine houses on a parcel of land that the company had under option. Unfortunately, the uncertainty of Brexit made it impossible to exercise the option in order to build out the project.

 

Start Hill Limited (80% owned)

Start Hill Limited owns the plot next to the Willside plot. There is currently a 4-bedroom house called Marstons on 0.3 hectares which is currently rented out on an assured shorthold tenancy. The company plans to apply for planning permission for several properties, with the knowledge that permission has been given for nine houses next door.

 

Cignella SRL

Ecovista owns 13% of the shares in Cignella SRL, an Italian company, and has an option to buy the balance of the equity for €4m.

 

Outlook

The group continues to see deal flow and is currently looking at several potential development sites in and around the London, Essex and Hertfordshire area.

 

The directors believe that, now the Brexit decision has been made, there will be more certainty going forward, although the ability to raise further funds through share issues has somewhat diminished. The board continues to seek further investment though asset-backed debt or by merging with a cash-rich entity.

 

The board view the year ahead with hope that, now Brexit is near completion, the market for funding improves and we can take the opportunities that are presenting themselves.

 

The directors do not consider it necessary to comment on the impact of the business on the environment, nor to provide further information about employees than is given elsewhere in these financial statements.

 

David Barnett - Chairman

 

 

Date:   28 February 2020

 ECOVISTA PLC

 

 GROUP STRATEGIC REPORT

 FOR THE YEAR ENDED 31 AUGUST 2019

 

The directors present their strategic report of Ecovista plc ("the Company") and its subsidiaries ("the group") for the year ended 31 August 2019.

 

REVIEW OF BUSINESS

Review of the business is given in the Chairman's Statement on page 2.

 

FUTURE DEVELOPMENTS

The Chairman's statement on page 2 provides information on the future outlook of the group.

 

KEY PERFORMANCE INDICATORS

		2019		2018
		£		£
Investment properties		2,232,375		2,107,090
Net current assets/ (liabilities)		(442,238)		(279,871)
Cash and cash equivalents		9,143		75,637
Debt/ equity ratio		35%		30%

 

 

PRINCIPAL RISKS AND UNCERTAINTIES

The group's strategy is to follow an appropriate risk policy, which effectively manages exposures related to the achievement of business objectives. The board is responsible for approving the group's strategy and determining the appropriate level of risk.

 

Business performance risk

Business performance risk is the risk that the group may not perform as expected, either due to internal factors or due to competitive pressures in the markets in which they operate. The group seeks investments in properties with development potential. The price at which investments are made, and the price which the group may realise for its investment, will be influenced by a large number of factors, some specific to the group and its operations and some which are generic to the sector. The group closely monitors the local markets and seeks to invest in properties where it believes there is a significant advantage to be gained by developing multiple properties on a single site. This is considered a way to minimise the project risk of loss or impairment of investments.

 

Business continuity risk

The group may not be able to identity suitable investment opportunities and there is no guarantee that such opportunities will be available. Furthermore, the group may incur costs in conducting due diligence into potential investment opportunities that may not result in an investment. The group seeks to mitigate this risk by keeping close contact with local agents and continually assessing development opportunities within the chosen market as well as leveraging management's market knowledge.

 

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise cash, receivables, loans, creditors and accruals. The main risks associated with these financial assets and liabilities are set out below:

 

Credit risk

The group's credit risk is primarily attributable to its loans and receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made when there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

 

The credit risk on liquid funds is limited because the counterparties are banks with high credit-rating agencies.

 

 

 

 

 

 

ECOVISTA PLC

 

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 AUGUST 2019

 

 

Liquidity risk

The group's liquidity is managed by the directors through regular assessment of required cash levels. It will be necessary to raise additional funds in the future by a further issue of ordinary shares or by other means. However, neither the ability to fund future investments and overheads, nor the ability of investments to produce a suitable return, can be guaranteed, particularly in the current economic climate. Further details regarding financial instruments can be found in note 19 to the financial statements.

 

 

ON BEHALF OF THE BOARD:

 

 

David Barnett - Director

 

 

Date:   28 February 2020

ECOVISTA PLC

 

 REPORT OF THE DIRECTORS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

The directors present their report with the financial statements of the company and the group for the year ended 31 August 2019.

 

PRINCIPAL ACTIVITY

Ecovista plc is a NEX-listed investment company, whose principal activity is to acquire property for development and subsequent resale.

 

DIVIDENDS

No dividends will be distributed for the year ended 31 August 2019 (2018: £nil).

 

DIRECTORS

Ken Jones has held office throughout the period from 1 September 2018 to the date of this report. Other changes in directors holding office are as follows:

 

David Barnett was appointed on 17 January 2019

Sarah Hornsnell was appointed on 17 January 2019

Louise Hardwidge resigned on 30 April 2019

 

DIRECTORS' REMUNERATION

   

		31.8.19			31.8.18
		£			£
Ken Jones		18,000			16,000
David Barnett		8,000			21,500
Sarah Horsnell		8,000			-
Louise Hardwidge		11,500			-

              45,500                            37,500

The company did not make any pension contributions on behalf of the directors.

 

DIRECTORS' INTERESTS

		31.8.19			31.8.18
		Ordinary shares			Ordinary shares
Ken Jones		-			-
David Barnett		-			-
Sarah Horsnell		-			-
Louise Hardwidge		50,000,000			50,000,000

              50,000,000                            50,000,000

 SHARES AND LISTING

The company's ordinary shares are listed on the NEX Growth Market ('ticker': EVTP). Details of the nominated advisor and brokers are presented on the company information on page 1. The closing price of the company's shares at 31 August 2019 was 0.0115p (2018: 0.05p).

 

SUBSTANTIAL SHAREHOLDINGS

As at 31 January 2020, the company is aware of two shareholders with individual holdings of more than 3% of the company's issued share capital:

• Hubwise Securities held 571,428,571 shares (10.49%)
• Elite CAM Balanced Portfolio Fund held 428,571,428 shares (7.87%)

 

FINANCIAL RISK MANAGEMENT

Financial risk management is discussed in note 19 of the financial statements.

 

 

ECOVISTA PLC

 

REPORT OF THE DIRECTORS (continued)

FOR THE YEAR ENDED 31 AUGUST 2019

 

GOING CONCERN

After reviewing the group's forecasts and projections, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.

 

FAIR VALUE ESTIMATION

The directors consider that the carrying amount of the group's financial assets and liabilities approximate their fair realisable value at each balance sheet date and that such value equates to their fair value.

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

-	select suitable accounting policies and then apply them consistently;
-	make judgements and accounting estimates that are reasonable and prudent;
-	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 company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

 

AUDITORS

The auditors, Defries Weiss (Accountants) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

 

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

 

ON BEHALF OF THE BOARD:

 

 

David Barnett - Director

 

 

Date:  28 February 2020

 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

 ECOVISTA PLC

 

Qualified opinion

We have audited the financial statements of Ecovista plc group (the "parent company") and its subsidiaries ("the group") for the year ended 31 August 2019, which comprise the consolidated statement of profit or loss, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of financial position, the company statement of financial position, the consolidated statement of changes in equity, the company statement of changes in equity, the consolidated statement of cash flows, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

 

In our opinion, except for the effects of the matter described in the paragraph below, headed 'basis for qualified opinion':

- the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 August 2019 and of the group's loss for the year then ended;

- the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

- the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

 

Basis for qualified opinion

We have not been provided with sufficiently reliable recent evidence for the market value of the group's investment in Cignella SRL, an Italian company, which is stated at £151,806 (see note 12). There are no practicable procedures we can adopt to satisfy ourselves about the value of this investment and therefore we cannot express an opinion on it. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

 

Material uncertainty about going concern

We draw attention to note 25 in the financial statements, which comments on going concern, and we note that the group incurred a net loss of £368,403 during the year, and that its current liabilities exceeded its current assets by £442,238 at the year end. As stated in note 25, these circumstances, along with other matters set forth in note 25, indicate a material uncertainty that may cast significant doubt on the group's and company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

Our application of materiality

Materiality for the group and company financial statements as a whole was set at £9,898 (2018: £69,012). This has been calculated as of the benchmark of net assets, which we have determined, in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members of the company in assessing financial performance of the group. We report to the directors all corrected and uncorrected misstatements that we identify during our audit with a value in excess of materiality. We also report to the directors any misstatements that we discover below that threshold if we believe they warrant reporting on qualitative grounds.

 

An overview of the scope of our audit

As part of designing our audit we determined materiality, as above, and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make significant judgements and estimates, for example in respect of the valuation of properties and investments. As in all of our audits, we addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

 

We conducted a full scope audit of the group and company numbers, with sufficient, appropriate audit procedures carried out on the subsidiaries for the purposes of the consolidation. Our audit was conducted from our office where the audit team was based, with regular interaction with key group personnel responsible for the management of the group and accounting.

 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

 ECOVISTA PLC

 

 

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

 

Valuation of property

The valuation of the group's development property is the key component of the group's activities, as this valuation underpins the group's result. At the year end, development property was stated at £2,232,375 (2018: £2,107,090). The valuation of property requires significant judgement and estimates by management and an external valuer where applicable. The valuation of the group's property portfolio is inherently subjective due to, among other factors, the individual nature of the properties, their location, expected future rentals, yield data, comparable market transactions and project completion dates. The significance of the estimates and judgements involved warrants specific audit focus in this area.

 

We responded to this matter by:

•               ensuring the group held good title to the properties;
•               confirming that the valuation approach was appropriate and challenging the assumptions used therein;
•               scrutinising internal valuations by reference to underlying market data;
•               challenging the categorisation of properties;
•               considering the disclosures made within the financial statements to ensure that estimates and judgements are 

 appropriately disclosed.

 

Valuation of investments

This group has a 13% investment, valued at £151,806, in Cignella SRL, an Italian property company. Owing to the unquoted and illiquid nature of this investment, the assessment of value is subjective and requires a number of significant and complex judgements to be made by management. There is a risk that inaccurate judgements made in assessing the valuation of the investment could lead to an incorrect valuation or a failure to recognise an impairment to the asset. There is also a risk that management may influence the significant judgements in respect of the investment valuation, in order to meet market expectations of the overall net asset value of the group.

 

We responded to this matter by:

•               confirming ownership of the investments;
•               obtaining management's assessment of the valuation of the investment at the year end and challenging the

 inputs and assumptions used;

•               obtaining any appropriate publicly available information on the investment;
•               ensuring the disclosures made in the financial statements comply with IFRS.

 

 

Other information

The directors are responsible for the 'other information', which comprises the information in the annual report, but does not include the financial statements and our Report of the Auditors thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.  We have nothing to report in this regard.

 

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

ECOVISTA PLC

 

 

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-	the parent company financial statements are not in agreement with the accounting records and returns; or
-	certain disclosures of directors' remuneration specified by law are not made; or
-	we have not received all the information and explanations we require for our audit; or
-	the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors.

 

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

 

 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

 ECOVISTA PLC

 

 

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

 

 

Warren Weiss LLB, MSc, MA, FCA (Senior Statutory Auditor)

for and on behalf of Defries Weiss (Accountants) Limited

Statutory Auditors

311 Ballards Lane

London

N12 8LY

 

Date:   28 February 2020

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF PROFIT OR LOSS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 31.8.19  31.8.18

 Notes £ £

 

CONTINUING OPERATIONS

Revenue              -              -

 

Other operating income              17,400              17,400

Administrative expenses              (313,672)              (190,614)

OPERATING LOSS              (296,272)              (173,214)

 

Finance costs 5              (73,633)              (65,240)

 

Finance income 5              1,556              -

LOSS BEFORE INCOME TAX	6	(368,349)			(238,454)

 

Income tax 7              (54)              -

LOSS FOR THE YEAR	(368,403)			(238,454)

(Loss)/ profit attributable to:

Owners of the parent              (375,927)              (230,910)

Non-controlling interests              7,524              (7,544)

              (368,403)              (238,454)

 

Basic earnings per share attributable    

to owners of the parent company              9 -0.007p -0.004p

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 31.8.19  31.8.18

 £ £

 

LOSS FOR THE YEAR              (368,403)              (238,454)

 

OTHER COMPREHENSIVE INCOME  

Item that will not be reclassified to profit or loss:

Revaluation of investment property              (105,934)              142,075

Movement in equity reserve              (74,710)              -

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX	(180,644)			142,075
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	(549,047)			(96,379)

 

Total comprehensive income attributable to:

Owners of the parent              (549,047)              (88,835)

Non-controlling interests              -              (7,544)

              (549,047)              (96,379)

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 31 AUGUST 2019

 

 31.8.19  31.8.18

 Notes £ £

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 10              532,375              2,107,090

Investment property 11              1,700,000              -

Investments	12	151,806			508,616

              2,384,181              2,615,706

CURRENT ASSETS

Trade and other receivables 13              412,496              9,623

Cash and cash equivalents 14              9,143              75,637

              421,639              85,260

TOTAL ASSETS              2,805,820              2,700,966

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 15              181,760              181,760

Share premium 16              2,918,687              2,918,687

Other reserves 16              -              74,710

Fair value reserve 16              36,141              142,075

Retained earnings 16              (2,294,699)              (1,918,715)

              841,889              1,398,517

 

Non-controlling interests              -              (7,544)

TOTAL EQUITY              841,889              1,390,973

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables 17              1,100,000              944,862

Deferred tax 7              54              -

              1,100,054              944,862

CURRENT LIABILITIES

Trade and other payables 17              63,877              67,694

Financial liabilities - borrowings

	Interest bearing loans and borrowings	17	800,000			297,437

              863,877              365,131

TOTAL LIABILITIES              1,963,931              1,309,993

TOTAL EQUITY AND LIABILITIES              2,805,820              2,700,966

 

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION - continued

 31 AUGUST 2019

 

 

 

The financial statements were approved by the Board of Directors on 28 February 2020 and were signed on its behalf by:

 

 

David Barnett - Director

 

 ECOVISTA PLC

 

 COMPANY STATEMENT OF FINANCIAL POSITION

 31 AUGUST 2019

 

 31.8.19  31.8.18

 Notes £ £

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment               -              -

Investment property               -              -

Investments	12	152,087			508,897

              152,087              508,897

CURRENT ASSETS

Trade and other receivables 13              2,045,185              1,816,142

Cash and cash equivalents 14              1,403              63,364

              2,046,588              1,879,506

TOTAL ASSETS              2,198,675              2,388,403

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 15              181,760              181,760

Share premium 16              2,918,687              2,918,687

Other reserves 16              -              74,710

Retained earnings 16              (2,053,019)              (1,780,922)

TOTAL EQUITY              1,047,428              1,394,235

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables 17              1,100,000              944,862

CURRENT LIABILITIES

Trade and other payables 17              51,247              49,307

TOTAL LIABILITIES              1,151,247              994,169

TOTAL EQUITY AND LIABILITIES              2,198,675              2,388,403

 

 

The financial statements were approved by the Board of Directors on 28 February 2020 and were signed on its behalf by:

 

 

David Barnett - Director

 

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 Called up

 share  Retained  Share  Equity

 capital  earnings  premium  reserve

 £ £ £ £

 

Balance at 1 September 2017              173,190              (1,687,805)              2,683,045              14,552

Loss for the year              -              (230,910)              -              -

Other comprehensive income              -              (57)              -              -

 

Changes in equity

Issue of share capital              8,570              -              235,642              -

Movement in convertible loan notes              -              -              -              60,158

Balance at 31 August 2018              181,760              (1,918,772)              2,918,687              74,710

Loss for the year              -              (375,927)              -              -

 

Changes in equity

Movement in equity reserve              -              -              -              (74,710)

 Balance at 31 August 2019              181,760              (2,294,699)              2,918,687              -

 

 Fair

 value      Total for Non-controlling Total

 reserve  the group  interests  equity

 £ £ £ £

 

Balance at 1 September 2017              -              1,182,982              -              1,182,982

 

Loss for the year              -              (230,910)              (7,544)              (238,454)

Other comprehensive income              -              (57)              -              (57)

 

Changes in equity

Issue of share capital              -              244,212              -              244,212

Movement in convertible loan notes              -              60,158              -              60,158

Revaluation of investment property              142,075              142,075              -              142,075

Balance at 31 August 2018              142,075              1,398,460              (7,544)              1,390,916

(Loss)/ profit for the year              -              (375,927)              7,524              (368,403)

Other movement              -              -              20              20

 

Changes in equity

Movement in equity reserve              -              (74,710)              -              (74,710)

Revaluation of investment property              (105,934)              (105,934)              -              (105,934)

 Balance at 31 August 2019              36,141              841,889              -              841,889

 ECOVISTA PLC

 

 COMPANY STATEMENT OF CHANGES IN EQUITY

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 Called up

 share  Retained  Share  Equity  Total

 capital  earnings  premium  reserve  equity

 £ £ £ £ £

 

Balance at 1 September 2017              173,190              (1,610,616)              2,683,045              74,710              1,320,329

 

Loss for the year              -              (170,304)              -              -              (170,304)

 

Changes in equity

Issue of share capital              8,570              -              235,642              -              244,212

Balance at 31 August 2018              181,760              (1,780,920)              2,918,687              74,710              1,394,237

Loss for the year              -              (272,099)              -              -              (272,099)

 

Changes in equity

Movement in equity reserve              -              -              -              (74,710)              (74,710)

Balance at 31 August 2019              181,760              (2,053,019)              2,918,687              -              1,047,428

 ECOVISTA PLC

 

 CONSOLIDATED STATEMENT OF CASH FLOWS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 31.8.19  31.8.18

 Notes £ £

Cash flows from operating activities

Cash generated from operations 23              (266,085)              184,839

Interest paid              (73,633)              -

Net cash from operating activities              (339,718)              184,839

 

Cash flows from investing activities

Purchase of tangible fixed assets              (425)              (617,925)

Purchase of investment property              (230,934)              -

Acquisition of subsidiary              -              (100)

Interest received              1,556              -

Net cash from investing activities              (229,803)              (618,025)

 

Cash flows from financing activities

Net proceeds from issue of equity              -              244,212

Loan received              800,000              -

Proceeds from loan notes issued              -              550,000

Loan repayments              (296,973)              (100,000)

Loan made to third party              -              (309,699)

Net cash from financing activities              503,027              384,513

 

Decrease in cash and cash equivalents			(66,494)			(48,673)
Cash and cash equivalents at beginning of year	24	75,637				124,310

 

Cash and cash equivalents at end of year	24	9,143			75,637

ECOVISTA PLC GROUP

 

 COMPANY STATEMENT OF CASH FLOWS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 31.8.19  31.8.18

 Notes £ £

Cash flows from operating activities

Cash generated from operations 23              (95,125)              (442,136)

Interest paid              (18,392)              -

Net cash from operating activities              (113,517)              (442,136)

 

Cash flows from investing activities

Purchase of subsidiary              -              (100)

Interest received              1,556              -

Net cash from investing activities              1,556              (100)

 

Cash flows from financing activities

Net proceeds from issue of equity              -              244,212

Proceeds from loan notes issued              50,000              550,000

Loan repayments              -              (100,000)

Loan made to third party              -              (302,256)

Net cash from financing activities              50,000              391,956

 

Decrease in cash and cash equivalents			(61,961)			(50,280)
Cash and cash equivalents at beginning of year	24	63,364				113,644

 

Cash and cash equivalents at end of year	24	1,403			63,364

 

 

 

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

1. STATUTORY INFORMATION

 

Ecovista plc is a public company, registered in England and Wales. The company's registered number and registered office address can be found on page 1. It is a NEX-listed investment company.

 

 

2. ACCOUNTING POLICIES

 

 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations with those parts of Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under historical cost convention, except for the financial instruments that are measured at the fair values at the end of the reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

 

This is the first year in which IRFS has been adopted; the financial statements were previously prepared to comply with Financial Reporting Standard 102 ("FRS 102"). No transitional adjustments were necessary as a result of this change.

 

 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries) made up to 31 August each year. Control is achieved where the Company has the power to govern the financial and operating policies of an invested entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Rental income is recognised on a straight-line basis over the term of the relevant agreement.

 

 Property, plant and equipment

Depreciation is provided at 33% on the reducing balance method in order to write off computer equipment over its estimated useful life. Freehold properties are accounted for in accordance with the provisions of IAS 16 of IFRS. They are valued annually by the director who relies on his knowledge of local property prices, and from time to time by an independent professional valuer, on a fair value basis.  Increases in the carrying amount arising on revaluation of freehold property are credited to other comprehensive income and shown in a revaluation reserve in shareholders' equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income; all other decreases are charged to income statements.

 

 Investment property

Investment properties are accounted for in accordance with the provisions of IAS 40. They are valued annually by the directors who rely on their knowledge of local property prices, and from time to time by an independent professional valuer, on a fair value basis.  Increases in the carrying amount arising on revaluation of investment property are credited to other comprehensive income and shown in a revaluation reserve in shareholders equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income; all other decreases are charged to income statements.

 

 Investments

Investments comprise of investments in unquoted equity instruments. The investments are carried at fair value through profit or loss. Where fair value cannot be measured reliably, the investments are carried at cost less impairment.

 

 

ECOVISTA PLC

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 2. ACCOUNTING POLICIES - continued

 

 

 Impairment of assets

At each reporting date assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced and an impairment loss is recognised in the statement of profit or loss. If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been previously recognised. A reversal of an impairment loss is recognised in the statement of profit or loss.

 

 Financial instruments

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument. On initial recognition, financial assets are classified as either financial assets at fair value through income statement, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

 

The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. On initial recognition the financial liability component is recorded at its fair value. At the date of issue, in the case of a convertible bond denominated in the functional currency of the issuer that may be converted into a fixed number of equity shares, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. The equity component is determined by deducting the amount of the liability component from the affair value of the compound instrument as a whole. This is recognised and included in equity and is not subsequently remeasured.

 

 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date. 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.

 

 Employee benefit costs

The group operates a defined contribution pension scheme.  Contributions payable to the group's pension scheme are charged to the income statement in the period to which they relate.

 

 Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange prevailing at the

balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange

prevailing at the date of transaction. Exchange differences are taken into account in arriving at the operating

result.

 

 Critical accounting judgements and key sources of estimation uncertainty

In the application of the group's accounting policies, which are described above, the directors are required to make judgements, estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on historical experience, expectations of future events and other factors that are believed to be reasonable under the circumstances.  Actual results in the future could differ from such estimates.  The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period.

 

The following are the group's key sources of estimation uncertainty:

 

ECOVISTA PLC

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2019

 

 Valuation of land and buildings

The group carries its land and buildings at fair value (see notes 10 and 11), with changes in fair value recognised as other comprehensive income and shown in a fair value reserve in shareholders' equity. The group uses external professional valuers to determine the relevant amounts. The valuations are inherently subjective as they are made using assumptions applied by the valuers which may not prove to be accurate.

 

 Carrying value of investments

The group is required to make judgements about the carrying value of investments in unquoted companies (see note 12) where fair values cannot be readily established, and to evaluate the extent of any impairment. It is important to recognise that the carrying value of such investments cannot always be substantiated by reference to independent markets and, in many cases, may not be capable of immediate realisation. Management make a significant judgement in this regard, in that they value the group's investments at cost less previous impairment, because they consider there to be a lack of other input or evidence to suggest an uplift in the value, given the uncertainty surrounding the economy and the property market.

 

 Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, trade and other receivables and measured at amortised cost less impairment losses for bad and doubtful debts, except where the receivables are interest-free loans made to related parties without any fixed repayment terms or where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

 

 Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

 

 Trade and other payables

Trade and other payables are initially recognised at fair value and thereafter stated in amortised cost, except where the payables are interest-free loans made by related parties without any fixed repayment terms or the effect of discounting would be immaterial, in which case they are stated at cost.

 

  New and revised IFRSs in issue but not yet effective

At the date of authorisation of these financial statements, the group has not applied the following new and revised IFRSs that have been issued but are not yet effective and not early adopted.

 

IFRS 2			Amendments - classification and measurement of share-based payments transactions
IFRS 9			Financial instruments
IFRS 15			Revenue from contracts with customers, and related clarification
IFRS 16			Leases
IFRIC 22			Foreign currency transactions and advanced consideration

 

The directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the group.

 

 

3. TURNOVER

 31.8.19  31.8.18

 £ £

 Rental income from UK properties              17,400              17,400

 

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 

4. EMPLOYEES AND DIRECTORS

 31.8.19  31.8.18

 £ £

 Directors' emoluments              45,500              37,500

 Wages and salaries              15,842              12,526

 Pension costs              243              55

              61,585              50,081

  The remuneration to the highest paid director was £18,000 (2018: £21,500).

 

The average number of employees during the year was as follows:

 31.8.19  31.8.18

 

 Staff              1              1

 Directors              3              3

              4              4

 

5. NET FINANCE COSTS

 31.8.19  31.8.18

 £ £

 Finance income:

 Interest received              1,556              -

              1,556              -

 Finance costs:

 Other interest              24,236              65,240

 Interest payable              49,397              -

              73,633              65,240

 

 Net finance costs              72,077              65,240

 

 

6. LOSS BEFORE INCOME TAX

 

 The loss before income tax is stated after charging/(crediting):

 31.8.19  31.8.18

 £ £

 Depreciation - owned assets              140              -

 Loss on disposal of fixed assets              -              15,000

 Auditors' remuneration              29,400              12,000

 Foreign exchange differences              (1,459)              (27,877)

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 

7. INCOME TAX

 

 Analysis of tax expense

 31.8.19  31.8.18

 £ £

 Deferred tax              54              -

	Total tax expense in consolidated statement of profit or loss	54			-

 Reconciliation of total tax charge/(credit) included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

 

 31.8.19  31,8.18

 £ £

 Loss before tax              368,349              238,454

	Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018: 19%)	69,986			45,306

 

 Effects of:

  Losses carried forward              (69,986)              (45,306)

 Total tax charge/(credit)              -              -

 

 

8. PARENT COMPANY'S LOSS

 

As permitted by section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements.  The parent company's loss for the financial year was £272,099 (2018: £170,304).

 

 

9. EARNINGS PER SHARE

 

 

Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

    Earnings

 Earnings  Number  per share

 £  of shares  (pence)

 Basic earnings per share

	Year ended 31 August 2019	(368,403)			5,447,815,699			-0.007

 

	Year ended 31 August 2018	(238,454)			5,447,815,699			-0.004

 

For the current year and the prior year, there is no difference between basic and diluted earnings per share.

 

 

 

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 

10. PROPERTY, PLANT AND EQUIPMENT

 

 Group

 Freehold  Computer

 property  equipment  Totals

 £ £ £

 COST

 At 1 September 2018              2,107,090              -              2,107,090

 Additions              -              425              425

 Reclassification as investment property              (1,575,000)              -              (1,575,000)

 At 31 August 2019              532,090              425              532,515

 DEPRECIATION

	Charge for year	-			140			140

 At 31 August 2019              -              140              140

 NET BOOK VALUE

 At 31 August 2019              532,090              285              532,375

 At 31 August 2018              2,107,090              -              2,107,090

 

The freehold property held in the subsidiary 100 Rye Street Limited has been reclassified as investment property, as the group now intends to hold it for investment and to rent it out for the foreseeable future. The freehold property held in the subsidiary Start Hill Limited is a four-bedroom house in Bishop's Stortford. The parent company has no property, plant and equipment.

 

 

11. INVESTMENT PROPERTY

 

 Group

 Total

 £

 FAIR VALUE

 Additions              230,934

 Revaluations              (105,934)

 Reclassification from freehold property              1,575,000

 At 31 August 2019              1,700,000

 NET BOOK VALUE

 At 31 August 2019              1,700,000

 

The investment property is held in the subsidiary 100 Rye Street Limited, and is a six-bedroom house in Bishop's Stortford.

 

 

 

 

 

ECOVISTA PLC

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 AUGUST 2019

 

 

 

11. INVESTMENT PROPERTY - continued

 

 

Fair value at 31 August 2019 is represented by:

 

 £

 Cost              1,663,859

 Valuation in 2018              142,075

 Valuation in 2019              (105,934)

              1,700,000

 

 

The parent company has no investment property.

 

 

12. INVESTMENTS

 

 

 31.8.19  31.8.18

 £ £

 Investment in subsidiaries              281              281

 Unlisted equity investment              151,806              508,616

	Total tax expense in consolidated statement of profit or loss	152,807			508,897

 

 

 

 

The unlisted equity investment is a 13% stake in the ordinary share capital of Cignella SRL, an unquoted Italian company whose principal place of business is Del Renelli, Trequando, Italy 53020. The principal activity of Cignella SRL is that of providing hotel and leisure activities. This investment is stated at cost less impairment. The company has an option to purchase all the remaining equity in Cignella SRL on 31 December 2020 for €4,000,000.

 

The group owns 100% of the ordinary share capital of 100 Rye Street Limited, Ecovista UK Property Holdings Limited and Willside Limited and 80% of the ordinary share capital of Start Hill Limited. All the subsidiaries are engaged in the same activity as the group, and all are registered in England and Wales, with the same registered office as the parent company. At the year end, the reserves of the subsidiaries were as follows:

 

 

 31.8.19  31.8.18

 £ £

 100 Rye Street Limited              (126,600)              72,893

 Ecovista UK Property Holdings Limited              100              100

 Willside Limited              (48,928)              (38,392)

 Start Hill Limited              (29,830)              (37,621)

 

 

ECOVISTA PLC

 

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 AUGUST 2019

 

 

 

13. TRADE AND OTHER RECEIVABLES

 

 Group  Company

 31.8.19  31.8.18  31.8.19  31.8.18

 £ £ £ £

Current:

 Amounts owed by group undertakings              -              -              1,659,689              1,807,199

 VAT              1,347              558              -              -

 Prepayments              7,190              4,078              6,657              4,078

 Other debtors              403,959              4,987              378,839              4,865

              412,496              9,623              2,045,185              1,816,142

 

 

Amounts owed by group undertakings are unsecured and interest-free, and are repayable on demand.

 

 

14. CASH AND CASH EQUIVALENTS

 

 Group  Company

 31.8.19  31.8.18  31.8.19  31.8.18

 £ £ £ £

 Bank accounts              9,143              75,637              1,403              63,364

 

 

15. CALLED UP SHARE CAPITAL

 

 

 

 Allotted, issued and fully paid:

 Number: Class: Nominal 31.8.19  31.8.18

 value: £ £

 5,447,815,699 Ordinary 0.001p              54,473              54,473

   128,572,167 Deferred 0.099p              127,287              127,287

              181,760              181,760

Each ordinary share confers on its owner the right to vote and participate in dividends and on a winding-up. The deferred shares confer no right to vote or to participate in dividends, nor to participate in a winding-up until each ordinary share has provided a dividend of £100,000.

 

 

16. RESERVES

 

The share premium reserve includes premiums received on issuing equity shares, net of any associated transaction costs associated with the issue.

 

The fair value reserve represents the cumulative effect of the revaluations of freehold properties, which are revalued to their fair value at each reporting date.

 

The equity reserve represents the equity component of convertible loan notes.

 

Retained earnings include the retained profits and losses of the current and prior periods.

 

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 

 

17. TRADE AND OTHER PAYABLES

 

 Group  Company

 31.8.19  31.8.18  31.8.19  31.8.18

 £ £ £ £

Current:

 Trade payables              31,729              28,516              28,228              28,516

 Amounts owed to group undertakings              -              -              -              100

Social security and other taxes

410

291

410

291

  Loan (see note 18)              800,000              297,437              -              -

 Pensions payable              66              24              66              24

 Accrued expenses              31,208              21,475              22,543              17,621

 Directors' current accounts              464              464              -              -

 Other payables              -              16,924              -              2,755

              863,877              365,131              51,247              49,307

 Non-current:

 Loans              1,100,000              944,862              1,100,000              944,862

 Aggregate amounts              1,963,877              1,309,993              1,151,247              994,169

 

Non-current payables include £550,000 convertible loan notes which were issued to an unrelated party on 31 August 2018. The notes are convertible at the lender's option into new ordinary shares at 0.05p per share. The final conversion date is 31 August 2020 and the notes carry a 7% interest coupon. The net proceeds from the issue of the loan notes were split between the liability element and the equity component, representing the fair value of the embedded option to convert the liability into equity of the company. The loan note equity reserve thus created was £74,710. However, this assumed that the share price of Ecovista plc would exceed 0.05p, which has not been the case since the convertible loan notes were issued. It is now considered that there is no realistic prospect of the lender exercising its option to convert the loan notes into equity, and the reserve has now been reversed.

 

 

18.	SECURITY FOR LOAN

 

 The current loan in note 17 is secured on a fixed charge on the investment property of 100 Rye Street Limited.

 

 ECOVISTA PLC

 

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

 FOR THE YEAR ENDED 31 AUGUST 2019

 

 

 

19. FINANCIAL INSTRUMENTS

 

The main risks arising from the group and company's financial instruments are detailed in the strategic report on page 3. The carrying values of the group and company's financial assets and liabilities are summarised by category below. The fair value of the group and company's recorded financial assets does not materially differ from their book values.

 

 

Group

	2019				2018
	Held at amortised cost		Fair value through profit and loss		Held at amortised cost		Fair value through profit and loss
	£		£		£		£

Financial assets

Fixed asset investments		-		151,806		-		508,616
Prepayments		7,190		-		4,078		-
Cash and cash equivalents		9,143		-		75,637		-

               16,133              151,806              79,715              508,616

 

Financial liabilities

Convertible loan notes		-		1,100,000		-		944,862
Trade payables		31,729		-		28,516		-
Loans payable		800,000		-		297,437		-
Accruals and other payables		32,148		-		39,178		-

              863,877              1,100,000              365,131              944,862

 

 Company

	2019				2018
	Held at amortised cost		Fair value through profit and loss		Held at amortised cost		Fair value through profit and loss
	£		£		£		£

Financial assets

Fixed asset investments		-		151,806		-		508,616
Other debtors		378,839		-		-		-
Prepayments		6,657		-		4,078		-
Cash and cash equivalents		1,403		-		63,364		-
Loans and receivables		1,659,689		-		1,807,199		-

               2,046,588              151,806              1,874,641              508,616