| ACCOUNTING POLICIES | 2.
ACCOUNTING POLICIES The
principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been applied consistently to all the years presented unless otherwise stated. Basis
of preparation The
consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB), IFRIC interpretations and the Companies (Guernsey) Law 2008 as applicable
to companies reporting under IFRS. Basis
of measurement Going
Concern The
Group has experienced net losses and significant cash outflows from cash used in operating activities over the past years, and as of
March 31, 2023, had an accumulated deficit of $ 125.7 109 13.3 7.7 The
Directors have prepared cash flow projections that include the costs associated with the continued clinical trials and additional investment
to fund that operation. On the basis of those projections, the directors conclude that the company will not be able to meet its liabilities
as they fall due within the next 12 months from the date when these financial statements are issued. The cash balance as at 1 August
2023 is approximately $ 1 7.8 The
Directors are however aware, through their own extensive experience in the sector, that this position is not uncommon in the context
of a pre-revenue life sciences company principally involved in cash consuming research and development activity. The Directors took
strategic advantage of the opportunity to dual list the Company on NASDAQ in May 2022 in order to be able to access potential
liquidity in the US, which is generally a more favorable environment for life sciences companies to raise money and where there are
more specialist investors focused on early-stage opportunities. The Company raised $2.5m as part of the NASDAQ IPO and more recently
raised an additional $5.7m in March 2023 through a private placement to management, new and existing investors. The top line data for the clinical trial is expected in Q4 2023 and the
Directors are taking steps to put engagements and plans into place to ensure that sufficient funds will be forthcoming. These steps include
possible deferred payments of existing liabilities, working capital cost reductions and raising additional equity. Until
and unless the Group and Company secures sufficient investment to fund their clinical pipeline, there is a material uncertainty that
may cast significant doubt on the Group and Company’s ability to continue as a going concern, and therefore, that it may be unable
to realize its assets and discharge its liabilities in the normal course of business. Despite this material uncertainty, the Directors
conclude that it is appropriate to continue to adopt the going concern basis of accounting as the Directors are confident, based on the
previous fund-raising history as well as additional measures being planned, that sufficient funds will be forthcoming
and accordingly they have prepared these financial statements on a going concern basis. New
and Revised Standards Standards
in effect in 2023 There
are no new IFRS standards, amendments to standards or interpretations that are mandatory for the financial year beginning on April 1,
2022, that are relevant to the Group or that have had any material impact in the year to March 31, 2023. New standards, amendments to
standards and interpretations that are not yet effective, have been deemed by the Group as currently not relevant, and not likely to
have a material impact on the Group, and hence are not listed here. Basis
of consolidation Subsidiary
undertakings are all entities over which the Group exercises control. The Group has control when it can demonstrate all of the following:
(a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability
to use its power over the investee to affect the amount of the investor’s return. The
existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered
when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains control
and are de-consolidated from the date at which control ceases. Inter-company
transactions, balances and unrealised gains on transactions between group companies are eliminated upon consolidation. Unrealised losses
are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group. Segment
reporting Operating
segments are reported in a manner consistent with the internal reporting provided to the Board. The Board allocates resources to and
assess the performance of the segments. The Board considers there to be only one operating segment being the research and development
of biotechnological and pharmaceutical products. Taxation The
tax credit for the year represents the total of current taxation and deferred taxation. The credit in respect of current taxation is
based on the estimated taxable loss for the year. Taxable profit or loss for the year is based on the profit or loss as shown in the
statement of comprehensive income, as adjusted for items of income or expenditure which are not deductible or chargeable for tax purposes.
The current tax asset for the year is calculated using tax rates which have either been enacted or substantively enacted at the balance
sheet date. Deferred
tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and expected to apply when the related deferred tax is realised, or the
deferred liability is settled. Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will
be available against which the temporary differences can be utilised. In
the current year, Research and Development tax credits are not provided for and are recognized when received. This change in policy is
as a result of the UK tax authority’s new regime of reviewing nearly every tax claim it receives. Prior to the current year, Research
and Development tax credits were provided for the year that the costs were incurred. These were estimated based on eligible research
and development expenditure. Any difference rebated are recognized when the cash is received from the UK tax authorities. Foreign
currency translation Items
included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment
in which the entity operates (the functional currency), which is Pounds sterling. The
consolidated financial statements are presented in US dollars, which is the Group’s presentation currency. Foreign
currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. The
financial statements are translated into US dollars on the following basis:
● Assets
and liabilities at the rate of exchange ruling at the year-end date.
● Profit
and loss account items at the average rate of exchange for the year. Exchange
differences arising from the translation of the net investment in foreign entities, borrowings and other currency instruments designated
as hedges of such investments, are taken to equity (and recognized in the statement of comprehensive income) on consolidation. License
fees Payments
related to the acquisition of rights to a product or technology are capitalised as intangible assets if it is probable that future economic
benefits from the asset will flow to the Group and the cost of the asset can be reliably measured. Payments
made which provide the right to perform research are carefully evaluated to determine whether such payments are to fund research or acquire
an asset. Licence fees expenses are recognised as incurred. Research
and development All
on-going research and development expenditure is currently expensed in the period in which it is incurred. Due to the regulatory environment
inherent in the development of the Group’s products, the criteria for development costs to be recognised as an asset, as set out
in IAS 38 ‘Intangible Assets’, are not met until a product has been granted regulatory approval and it is probable that future
economic benefit will flow to the Group. The Group currently has no such qualifying expenditure. Financial
instruments The
Group classifies a financial instrument, or its component parts, as a financial liability, a financial asset or an equity instrument
in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an
equity instrument. The
Group evaluates the terms of the financial instrument to determine whether it contains an asset, a liability or an equity component.
Such components shall be classified separately as financial assets, financial liabilities or equity instruments. A
financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.
(a) Financial
assets, initial recognition and measurement and subsequent measurement At
initial recognition financial assets are measured at their fair value. Subsequent measurement depends on their classification. Financial
assets such as receivables, cash and cash equivalents and deposits are subsequently measured at amortized cost using the effective interest
method, less loss allowance. The
Group does not hold any financial assets at fair value through profit or loss or fair value through other comprehensive income.
(b) Financial
liabilities, initial recognition and measurement and subsequent measurement At
initial recognition, financial liabilities are measured at their fair value minus, if appropriate, any transaction costs that are directly
attributable to the issue of the financial liability. All financial liabilities are subsequently measured at amortized cost using the
effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss
on derecognition is also recognized in profit or loss. The
Group’s financial liabilities include trade and other payables. Cash
and cash equivalents Cash
and cash equivalents comprise cash at bank and on hand. Impairment Impairment
of financial assets measured at amortised cost At
each reporting date the Group recognises a loss allowance for expected credit losses on financial assets measured at amortised cost. In
establishing the appropriate amount of loss allowance to be recognised, the Group applies either the general approach or the simplified
approach, depending on the nature of the underlying group of financial assets. General
approach The
general approach is applied to the impairment assessment of refundable lease deposits and other refundable lease contributions, restricted
cash and cash and cash equivalents. Under
the general approach the Group recognises a loss allowance for a financial asset at an amount equal to the 12-month expected credit losses,
unless the credit risk on the financial asset has increased significantly since initial recognition, in which case a loss allowance is
recognised at an amount equal to the lifetime expected credit losses. Simplified
approach The
simplified approach is applied to the impairment assessment of trade receivables. Under
the simplified approach the Group always recognises a loss allowance for a financial asset at an amount equal to the lifetime expected
credit losses. Impairment
of non-financial assets
i) Non-financial
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
ii) Non-financial
assets are impaired when their carrying amount exceeds the recoverable amount. The recoverable amount is measured as the higher of
fair value less cost of disposal and value in use. The value in use is calculated as being net projected cash flows based on financial
forecasts discounted back to present value. Share
capital Ordinary
shares of the Company are classified as equity. Property,
plant and equipment
(i) Recognition
and measurement Items
of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Costs include
expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality
of the related equipment is capitalised as part of that equipment. When
parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components)
of property, plant and equipment. Gains
and losses on disposal of an item of property, IT and equipment are determined by comparing the proceeds from disposal with the carrying
amount of property, IT and equipment, and are recognized in profit or loss. When revalued assets are sold, the amounts included in the
revaluation reserve are transferred to retained earnings.
(ii) Depreciation Depreciation
is calculated on the depreciable amount, which is the cost of an asset, less its residual value. Depreciation
is recognised in profit or loss on a straight-line basis over the estimated useful life of each part of an item of property, plant and
equipment. The
estimated useful lives for the current period and the comparative period are as follows: DISCLOSURE OF ESTIMATED USEFUL LIVES
IT
and equipment 3 Depreciation
methods, useful lives and residual values are reviewed at each reporting date. Depreciation is allocated to the operating expenses line
of the statement of comprehensive income. Leases All
leases are accounted for by recognising a right-of-use asset and a lease liability except for:
● Leases
of low value assets; and
● Leases
with a duration of 12 months or less. The
Group has leases for its offices. Each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group
does not have any leases of low value assets. Variable lease payments which do not depend on an index or a rate (such as lease payments
based on a percentage of Group sales) are excluded from the initial measurement of the lease liability and asset. The Group classifies
its right-of-use assets in a consistent manner to its property, plant and equipment (see Note 10). At
lease commencement date, the Group recognises a right-of-use asset and a lease liability in its consolidated statement of financial position.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made
in advance of the lease commencement date (net of any incentives received). The
Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such
indicators exist. At
the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted
using the Group’s incremental borrowing rate because as the lease contracts are negotiated with third parties it is not possible
to determine the interest rate that is implicit in the lease. The incremental borrowing rate is the estimated rate that the Group would
have to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent value. This rate
is adjusted should the lessee entity have a different risk profile to that of the Group. Lease
payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments
based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably
certain to be exercised. Subsequent
to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and finance
costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. Short
term leases exempt from IFRS 16 are classified as operating leases. Payments made under operating leases are recognised in profit and
loss on a straight-line basis over the term of the lease. Share
based payments The
calculation of the fair value of equity-settled share based awards and the resulting charge to the statement of comprehensive income
requires assumptions to be made regarding future events and market conditions. These assumptions include the future volatility of the
Company’s share price. These assumptions are then applied to a recognized valuation model in order to calculate the fair value
of the awards. Where
employees, Directors or advisers are rewarded using share based payments, the fair value of the employees’, Directors’ or
advisers’ services are determined by reference to the fair value of the share options/warrants awarded. Their value is appraised
at the date of grant and excludes the impact of any nonmarket vesting conditions (for example, profitability and sales growth targets). In
accordance with IFRS 2, a charge is made to the statement of comprehensive income for all share-based payments including share options
based upon the fair value of the instrument used and warrants issued in return for services. A corresponding credit is made to a share
based payment reserve – options, in the case of options awarded to employees, Directors, advisers and other consultants. A corresponding
credit is made to a share based payment reserve – warrants, in the case of warrants issued in return for services. Warrants Warrants
are issued by the Group in return for services and as part of a financing transaction. Warrants
issued in return for services. Warrants
issued in return for services fall within scope of IFRS 2 and are classified as a share-based payment. The share-based payment is measured
at fair value and charged to the Statement of comprehensive income. There is no remeasurement of fair value. Warrants
issued as part of a financing transaction. Warrants
issued as part of a financing transaction fall outside the scope of IFRS 2. These are classified as equity instruments because a fixed
amount of cash is exchanged for a fixed amount of equity. The relative fair value is recognised within equity and is not remeasured. Classification
of these instruments is governed by the so-called ‘fixed’ test for non-derivatives, and the ‘fixed for fixed’
test for derivatives. Under the fixed test, a non-derivative contract will qualify for equity classification only where there is no contractual
obligation for the issuer to deliver a variable number of its own equity instruments. Under the fixed for fixed test, a derivative will
qualify for equity classification only where it will be settled by the issuer exchanging a fixed amount of cash or another financial
asset for a fixed number of its own equity instruments. Warrants
issued by the Company as part of a financing transaction, are classified as equity instruments because a fixed amount of cash is exchanged
for a fixed amount of equity of the Company. No other features exist that would result in financial liability classification. Convertible
loan notes The
Group issues Convertible loan notes which can be classified as equity or a liability depending on whether the fixed for fixed condition
is met or not. Where
the fixed for fixed condition is met The
Group classifies convertible loan notes that meet the fixed for fixed condition as equity instruments and records the principal of the
loan note as equity in a Convertible loan note reserve. The accrued interest on the principal amount is also recorded in the Convertible
loan note reserve as it is convertible into equity. Upon redemption of the instrument and the issue of share capital, the amount is reclassified
from the convertible loan note reserve to share capital and share premium. Fair
Value Measurement Management
have assessed the categorization of the fair value measurements using the IFRS 13 fair value hierarchy. Categorization within the hierarchy
has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset
as follows; Level
1 - valued using quoted prices in active markets for identical assets; Level
2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1; Level
3 - valued by reference to valuation techniques using inputs that are not based on observable market data. 2A. RECLASSIFICATION OF PRIOR YEAR PRESENTATION Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations. For
a more accurate representation of research and development expenses, an adjustment has been made to the Consolidated statement of
Operations and comprehensive loss for the years ended March 31, 2022, and March 31, 2021, to reclassify patent related expenditure
to research and development expenses from operating expenses. The
impact of the reclassification on the Group’s Consolidated statement of operations and comprehensive loss is as follows: SCHEDULE
OF RECLASSIFICATION OF CONSOLIDATED STATEMENT OF OPERATIONS Consolidated
statement of operations and comprehensive loss
Year ending 31 March 2022 As Previously reported Adjustment As restated
$ $ $
Research and development (1,301,178 ) (308,380 ) (1,609,558 )
Operating expenses (4,916,388 ) 308,380 (4,608,008 )
Total operating expenses (6,217,566 ) - (6,217,566 )
Total Comprehensive loss for the year (6,268,197 ) - (6,268,197 ) Consolidated
statement of operations and comprehensive loss
Year ending 31 March 2021 As Previously reported Adjustment As restated
$ $ $
Research (173,821 ) (174,526 ) (348,347 )
Operating expenses (3,192,358 ) 174,526 (3,017,859 )
Total operating expenses (3,366,206 ) - (3,366,206 )
Total Comprehensive loss for the period (3,007,142 ) - (3,007,142 ) |
