Company registration number 13167080 (England and Wales)
MYCO HOLDINGS PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
MYCO HOLDINGS PLC
COMPANY INFORMATION
Directors
Mr J Shepherd
Mr J Croslegh
Mr D Wood
(Appointed 1 December 2023)
Company number
13167080
Registered office
Food Enterprise Centre
Conygarth Way
Leeming Bar
DL7 9EE
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
MYCO HOLDINGS PLC
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 22
MYCO HOLDINGS PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The directors present the strategic report for the year ended 31 January 2024.
Who Are We
Myco Holdings PLC (MHP) is an innovator in Future Food and Agri-tech.
The company's principal activity is strategic management and development of Myco Foods Ltd (MFL), and Myr@d Ltd (MDL).
Our mission is ‘To feed the world sustainably’
To help lead and drive the progression of the business, David Wood was recruited as Chief Executive Officer in November 2023.
Myco Foods Ltd (MFL)
MFL is a manufacturer and innovator of natural plant-based meat substitutes, concentrating on Wholesale, B2B & Retail markets, we provide turn-key ingredients and finished products to branded and supermarket own-label customers as well as food service and trade customers.
Myr@d Ltd (MDL)
MDL is a sustainable technology research and development company in the Agri-tech sector, focusing on developing technologies to underpin future food security.
Review of the business
The directors have been focused on the planning and transition from the current outsourced manufacturing license model, to in-house growing and manufacturing. The key objectives are to improve gross margin and enhance the innovation capabilities of the business, both of which will help underpin future growth and investment.
In November 2023 the business secured an investment package to fund the progression of the business for the forthcoming 2024/25 financial year. The investment package will facilitate the following outputs:
The relocation of the HQ to a purpose-built food site.
The establishment of a dedicated & technically accredited plant-based finished product food production unit.
The creation of an onsite vertical mushroom farm.
The development of retail and food service plant-based products under the Hooba brand.
The progression of technological innovation, including the creation and implementation of artificial intelligence models to improve the yields of vertically farmed mushroom crops and the creation of mobile mushroom growing units.
The upskilling of the business resources.
Commencement of a sales strategy to gain entry into the retail, foodservice and B2B food markets.
In the final quarter of this year, significant management resources were devoted to laying the foundations for this plan.
In November 2023 MHL relocated its HQ to factory premises in North Yorkshire, this was closely followed by the business obtaining the lease for a manufacturing unit occupying the same site.
Alongside these achievements, work is underway to establish the production unit and to create a new product range.
MYCO HOLDINGS PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
In January the team was strengthened with the addition of a part-time plant-based commercial expert and a full-time Food Science graduate.
Via the investment agreement, the company is fully funded for the 12 months to January 2025 and is positively engaged and supported by a London-based investor who has taken both a debt and equity position in the company.
The directors have undertaken a valuation of the business based on the current progression of the new business model, along with the intellectual property that has been developed over several years. Last year’s Euronext activity and the subsequent audits associated with holding Plc status has subjected the business to considerable analysis and interrogation of its business model and provide transparency and governance to current and future potential investors.
Market Size and Growth
Following a period of stagnation between 2022-23 the plant-based food market in the UK is once again growing rapidly, with significant expansion forecasted for the near future.
In 2023, the global plant-based food market was valued at $50.32 billion, and it is expected to grow to $56.99 billion in 2024, at a compound annual growth rate (CAGR) of 13.3%
Drivers of Market Growth
Health and Wellness: A significant driver is the growing awareness of the health benefits associated with plant-based diets, including lower risks of cardiovascular diseases and better overall health profiles.
Environmental and Ethical Considerations: Increasing concerns about climate change and animal welfare are motivating consumers to switch to plant-based alternatives. These products are perceived as more sustainable and ethically sound compared to traditional animal-based products.
Economic Factors: Despite some economic downturns, the plant-based market remains robust due to continuous consumer interest and investment in this sector. Companies are expanding their plant-based product lines and investing in marketing to capitalize on the growing demand.
Future Projections
The future of the plant-based market in the UK looks promising with continued growth expected. By 2025, the UK could see up to 15 million people following a meat-reduced diet, driven by ongoing trends and consumer shifts towards healthier and more sustainable eating habits. Major brands and new entrants alike are expected to continue innovating and expanding their product offerings to meet this growing demand.
This comprehensive growth across various segments highlights the dynamic and evolving nature of the plant-based food market in the UK, signalling a strong and sustained interest from both consumers and businesses.
By delivering a focussed innovation stream over the 2024.25 period, the business will provide for a new generation of plant-based consumers who are now less likely to be aligned with traditional vegan values around animal consumption and welfare and are more likely to be aligned with Health & Environmental Sustainability. The business is therefore clearly directing MFL’s attention to producing fantastic-tasting products that are both sustainable and healthy.
The establishment of the in-house vertical farming and production facility will further enhance the sustainability credentials of the business.
MDL over the year, has continued to develop work on the vertical farming modules, and the artificial intelligence developing the IP in anticipation of the patent applications and deployment.
This technology, once deployed, will contribute significantly to increasing vertically farmed mushroom crop yields. It is also anticipated that data obtained from the AI models will also be of significant value to conventional mushroom farms.
MYCO HOLDINGS PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
Additionally, there will be future opportunities to develop a revenue stream through the deployment of vertical farming systems for global customers, some of whom are already expressing interest in the system.
Now that the premises have been secured MDL will undertake the delivery of the vertical farming system as part of the 2024/25 plan.
Finance
Until such time as the new business model is in effect MHP is reliant on external financing, this was provided in this financial year by £443,206 of convertible loans of which £472,645 was converted in 2023 at a price of £0.03 per share.
The main costs to the business in the year have been professional costs and personnel costs in MFL to allow for the development of that business.
Principal risks and uncertainties
MHP continually assesses risk to the business model, mitigating factors that may impact future growth. The main risks to the business are highlighted below.
Loss of key staff - The loss of key staff would impact the operations of the company.
MHP is managed by a small team of highly motivated stakeholders with a vested interest in the success of the company. Using risk mitigation and incentives the impact of any loss of key personnel is minimised. Whilst identifying and recruiting key talent to add value in the future.
Adverse Market Impacts - Any continued economic downturn and supply chain issues will impact the ability of the company to achieve sales targets.
Despite the market difficulties experienced in the post Covid and post Brexit environment, all the sectors in which MFL is developing sales pipelines are back to displaying growth. Research from GFI and UBS identifies Health, Taste, Price Parity and sustainability as growth areas in the future. All these areas fall within the planned development of the production and sales plan within MFL. Additionally, by vertically integrating the supply and distribution the company will protect itself from future supply chain shocks.
Financing - During the process of vertically integrating the growing and production process MHP is reliant on external funding. Disruption to this funding represents a risk to the delivery of our aims.
In order to mitigate this MHP has secured all required external funding for the year 2024-25.
Financial KPIs
The financial KPI’s have been focussed on delivering the project to budget and maintaining the turnover of the business ahead of the new revenue streams being delivered.
Moving into the financial year ending 2025, Gross margin contributing sales will become significantly more important as the business targets the on boarding of retail and foodservice customers.
Future development
Looking forward to the financial year ending January 2025 the directors are committed to finalising the vertical integration with the main goal being the establishment of the growing technology by the end of the third quarter to enable rapid growth of both the underlying ingredients business and the launch of new branded and white label products by the end of the year.
MYCO HOLDINGS PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
Mr J Shepherd
Director
24 September 2024
MYCO HOLDINGS PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 5 -
The directors present their annual report and financial statements for the year ended 31 January 2024.
Principal activities
The principal activity of the company is that of a holding company.
Results and dividends
No interim ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J Shepherd
Mr J Croslegh
Mr D Wood
(Appointed 1 December 2023)
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr J Shepherd
Director
24 September 2024
MYCO HOLDINGS PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024
- 6 -
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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
MYCO HOLDINGS PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MYCO HOLDINGS PLC
- 7 -
We have audited the financial statements of Myco Holdings PLC (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
The company’s fixed asset investments comprise it’s two subsidiary undertakings Myco Foods Limited and Myr@d Limited, which have an aggregate carrying value of £10,000,000 on the company’s balance sheet on page 11 of these financial statements. Due to the nature of the business being an early stage start up, allied to the current economic climate within the UK and the industry within which it operates, the audit evidence available to us to support future forecast revenues was limited. Consequently, we were unable to satisfy ourselves that a £10,000,000 valuation of the group was appropriate and were unable to determine whether any adjustment to this amount was necessary.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
MYCO HOLDINGS PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MYCO HOLDINGS PLC
- 8 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In respect solely of the limitation on our work relating to investments, described above:
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
we were unable to determine whether adequate accounting records had been maintained.
Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
MYCO HOLDINGS PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MYCO HOLDINGS PLC
- 9 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 an auditor's report 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.
Martin Davey
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
25 September 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
MYCO HOLDINGS PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
2024
2023
Notes
£
£
Administrative expenses
(42,551)
(114,144)
Interest receivable and similar income
5
163
Loss before taxation
(42,388)
(114,144)
Tax on loss
6
Loss for the financial year
(42,388)
(114,144)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MYCO HOLDINGS PLC
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
7
3,358
3,979
Investments
8
10,000,000
10,000,000
10,003,358
10,003,979
Current assets
Debtors
9
1,107,057
257,091
Cash at bank and in hand
1,348
9,928
1,108,405
267,019
Creditors: amounts falling due within one year
10
(171,589)
(209,481)
Net current assets
936,816
57,538
Net assets
10,940,174
10,061,517
Capital and reserves
Called up share capital
12
10,415,299
10,105,244
Share premium account
718,492
107,502
Profit and loss reserves
(193,617)
(151,229)
Total equity
10,940,174
10,061,517
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
Mr J Shepherd
Director
Company Registration No. 13167080
MYCO HOLDINGS PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 February 2022
10,050,000
(37,085)
10,012,915
Year ended 31 January 2023:
Loss and total comprehensive income for the year
-
-
(114,144)
(114,144)
Issue of share capital
12
55,244
107,502
-
162,746
Balance at 31 January 2023
10,105,244
107,502
(151,229)
10,061,517
Year ended 31 January 2024:
Loss and total comprehensive income for the year
-
-
(42,388)
(42,388)
Issue of share capital
12
310,055
610,990
-
921,045
Balance at 31 January 2024
10,415,299
718,492
(193,617)
10,940,174
MYCO HOLDINGS PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
15
(451,949)
(252,730)
Investing activities
Purchase of tangible fixed assets
(4,123)
Interest received
163
Net cash generated from/(used in) investing activities
163
(4,123)
Financing activities
Proceeds from issue of shares
10,000
Proceeds from borrowings
443,206
256,781
Net cash generated from financing activities
443,206
266,781
Net (decrease)/increase in cash and cash equivalents
(8,580)
9,928
Cash and cash equivalents at beginning of year
9,928
Cash and cash equivalents at end of year
1,348
9,928
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 14 -
1
Accounting policies
Company information
Myco Holdings PLC is a private company limited by shares incorporated in England and Wales. The registered office is Food Enterprise Centre, Conygarth Way, Leeming Bar, DL7 9EE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
The directors have considered all factors, including the wider economy, as part of their assessment of going concern. Although current trading conditions create both cashflow and profitability risks for the company, the directors believe on balance that the business is a going concern. The company has secured funding from a London investor that provides the funds required to allow the company and its subsidiaries, Myco Foods Ltd and Myr@d Ltd, to scale and add significant value to the group. The directors believe that this investment is sufficient to enable the company, and its subsidiaries, to meet their ongoing and planned commitments for the next twelve months. As such, the accounts have been prepared on the going concern basis.true
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
20% reducing balance
Office equipment
10% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.4
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 17 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end 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 calculated at 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 profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of investments
During the prior period, the company issued 10,000,000 Ordinary shares of £1 each at par. The consideration took the form of acquiring the issued share capital of Myco Foods Limited and Myr@d Limited via a share-for-share exchange rather than a cash movement and was recognised by creating an investment value of £5,000,000 in each of the company's subsidiaries. The investment valuation is based on product know-how and future cashflows and is held at historic cost less impairment. The value of investments are subject to annual impairment reviews to ensure their carrying amount does not exceed their recoverable value. The impairment review carries estimation uncertainty and relies on the future revenues in fellow group undertakings in order to generate revenue for the entity. The review has been completed on a cash generating unit ("CGU") basis by reviewing the smallest groups of assets to generate revenues for the company and sensitivities have been applied to ensure a material impairment is not required.
3
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
9,000
9,380
Depreciation of owned tangible fixed assets
621
144
Operating lease charges
6,067
952
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
2
2
Directors remuneration is borne by the company's subsidiary, Myco Foods Limited.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
5
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
163
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
163
6
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(42,388)
(114,144)
Expected tax credit based on the standard rate of corporation tax in the UK of 24.00% (2023: 19.00%)
(10,173)
(21,687)
Tax effect of expenses that are not deductible in determining taxable profit
10,732
Unutilised tax losses carried forward
10,173
10,955
Taxation charge for the year
-
-
7
Tangible fixed assets
Leasehold improvements
Office equipment
Total
£
£
£
Cost
At 1 February 2023 and 31 January 2024
1,781
2,342
4,123
Depreciation and impairment
At 1 February 2023
30
114
144
Depreciation charged in the year
175
446
621
At 31 January 2024
205
560
765
Carrying amount
At 31 January 2024
1,576
1,782
3,358
At 31 January 2023
1,751
2,228
3,979
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
8
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
14
10,000,000
10,000,000
9
Debtors
2024
2023
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
1,102,208
245,698
Other debtors
693
9,437
Prepayments and accrued income
4,156
1,956
1,107,057
257,091
Amounts owed by group undertakings are unsecured and repayable on demand.
10
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
11
135,500
164,939
Trade creditors
789
27,710
Other creditors
22,800
Accruals and deferred income
12,500
16,832
171,589
209,481
Other borrowings are secured as disclosed in note 11.
11
Loans and overdrafts
2024
2023
£
£
Other loans
135,500
164,939
Payable within one year
135,500
164,939
Other loans are interest free and unsecured. Repayment will be made via conversion to equity rather than a cash settlement.
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 21 -
12
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 30p each
33,684,146
33,684,146
10,105,244
10,105,244
Oridnary of 1p each
31,005,544
-
310,055
-
64,689,690
33,684,146
10,415,299
10,105,244
On 13 December 2023 the following allotment of shares were made:
For each issue of shares the excess consideration above nominal value, totalling £610,990, has been recognised in share premium.
The shares have attached to them full voting, dividend and capital distribution rights.
13
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
2,400
1,904
14
Subsidiaries
Details of the company's subsidiaries at 31 January 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Myco Foods Limited
England and Wales
Innovator of plant-based meat substitutes
Ordinary
100.00
Myr@d Limited
England and Wales
Dormant
Ordinary
100.00
MYCO HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
15
Cash absorbed by operations
2024
2023
£
£
Loss for the year after tax
(42,388)
(114,144)
Adjustments for:
Investment income
(163)
Depreciation and impairment of tangible fixed assets
621
144
Movements in working capital:
Increase in debtors
(849,966)
(156,720)
Increase in creditors
439,947
17,990
Cash absorbed by operations
(451,949)
(252,730)
16
Analysis of changes in net debt
1 February 2023
Cash flows
Other non-cash changes
31 January 2024
£
£
£
£
Cash at bank and in hand
9,928
(8,580)
-
1,348
Borrowings excluding overdrafts
(164,939)
(443,206)
472,645
(135,500)
(155,011)
(451,786)
472,645
(134,152)
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