Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Financial instruments and fair value disclosures

v3.22.2.2
Financial instruments and fair value disclosures
12 Months Ended
Sep. 30, 2022
Financial instruments and fair value disclosures  
Financial instruments and fair value disclosures

25.    Financial instruments and fair value disclosures

Capital management

The Group’s policy is to maintain a strong balance sheet for the business and to have an appropriate funding structure. Shareholders’ equity and long-term debt are used to finance assets under construction. The Group is not subject to any externally imposed capital requirements.

Financial assets and financial liabilities

Categories of financial assets and financial liabilities are as follows:

Financial assets at amortised cost

Carrying value

Fair value

$'000

    

30 September 2022

    

30 September 2022

Cash and cash equivalents

48,966

 

48,966

Trade and other receivables

6,899

 

6,899

55,865

 

55,865

    

Carrying value

    

Fair value

$'000

    

30 September 2021

    

30 September 2021

Cash and cash equivalents

 

86,966

 

86,966

Trade and other receivables

 

57

 

57

 

87,023

 

87,023

    

Carrying value

    

Fair value

$'000

    

30 September 2020

    

30 September 2020

Cash and cash equivalents

 

195

 

195

Trade and other receivables

 

216

 

216

 

411

 

411

The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised costs in the consolidated financial statements to approximate their fair value.

Financial liabilities at amortised cost

    

Carrying value

    

Fair value 

$'000

30 September 2022

30 September 2022

Trade and other payables

22,655

 

22,655

Lease liabilities

7,834

7,834

30,489

 

30,489

    

Carrying value

    

Fair value

$'000

    

30 September 2021

    

30 September 2021

Trade and other payables

 

16,659

 

16,659

 

16,659

 

16,659

    

Carrying value

    

Fair value

$'000

    

30 September 2020

    

30 September 2020

Trade and other payables

 

2,054

 

2,054

Bridging finance

 

1,034

 

1,034

Convertible loans

4,426

4,426

 

7,514

 

7,514

The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised costs in the financial statements to approximate their fair value.

Financial liabilities at fair value through profit or loss

IFRS 13 Fair Value prescribes a fair value hierarchy made up of 3 levels of inputs based on the reliability of the underlying data used in establishing the fair value. The fair value of public warrants is determined using level 2 inputs. Level 2 of the hierarchy includes instruments that are not traded in an active market and is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. Private warrants are classified as a level 3 financial instrument. The fair value is determined using the fair value of the public warrants, adjusted for a lack of marketability discount of 7.5% because these warrants may only be transferred to a specified group of permitted transferees, therefore limiting the depth of the market

Fair value

Fair value

Carrying value

Level 2

Level 3

30 September

30 September

30 September

$'000

    

2022

    

2022

    

2022

Warrant liability

10,644

 

5,756

 

4,888

10,644

 

5,756

 

4,888

Fair value

Fair value

Carrying value

Level 2

Level 3

30 September

30 September

30 September

$'000

    

2021

    

2021

    

2021

Warrant liability

128,038

 

75,900

 

52,139

128,038

 

75,900

 

52,139

Market risk

It is, and has been throughout the period under review, the Group’s policy not to use or trade in derivative financial instruments. The Group’s financial instruments comprise its cash and cash equivalents and various items such as trade debtors and creditors that arise directly from its operations. The main purpose of the financial assets and liabilities is to provide finance for the Group’s operations in the period.

Interest rate risk management

The Group would be exposed to interest rate risk if the Group borrows funds, when required, at variable interest rates. There is currently no exposure to interest rate risk.

Credit risk

Credit risk is the risk of financial loss where counterparties are not able to meet their obligations. Group policy is that surplus cash, when not used to repay borrowings, is placed on deposit with the Group’s main relationship banks and with other banks or money market funds based on a minimum credit rating of A3/A-   and maximum exposure.

There is no significant concentration of risk to any single counterparty.

Management consider that the credit quality of the various receivables is good in respect of the amounts outstanding and therefore credit risk is considered to be low. There is no significant concentration of risk.

The carrying amount of financial assets, as detailed above, represents the Group’s maximum exposure to credit risk at the reporting date assuming that any security held has no value.

Having considered the Group’s exposure to bad debts and the probability of default by customers, no expected credit losses have been recognised in accordance with IFRS 9.

Foreign Exchange risk

The Group operates internationally and is exposed to  foreign exchange risk arising from various currency exposures, primarily with respect to Sterling (“£”) and Euro (“€”). The Group holds Sterling, US Dollar and Euro bank accounts in order to limit its exposure.

The Group is also exposed to foreign exchange risk to the extent that its ultimate parent entity has a US dollar functional currency. This is limited to the parent consolidated accounts.

The table below summarises the FX exposure on the net monetary position of each group entity against its respective functional currency, expressed in the group’s presentation currency.

Year ended 30/09/2022

    

£'000

Parent

 

UK subsidiary

 

73,889

Total

 

73,889

The reasonable shifts in exchange rates below are based on historic volatility.

If the $/£ rates moved by +/- 10.41% then the effect on profit would be as follows:

Year ended 30/09/2022

    

$'000

 

Reasonable shift

 

10.41

%

Total effect on Loss of +ve movements

 

7,694

Total effect on Loss of -ve movements

 

(7,694)

Liquidity risk

Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows, matching the expected cash flow timings of financial assets and liabilities with the use of cash and cash equivalents, borrowings, overdrafts and committed revolving credit facilities with a minimum of 12 months to maturity.

Future borrowing requirements are forecast on a monthly basis and funding headroom is maintained above forecast peak requirements to meet unforeseen events.

The maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Group can be required to pay financial liabilities on an undiscounted basis, is as follows:

Trade and

    

Deferred

    

Lease

2022

other

government

Liabilities

$'000

    

payables

    

grants

    

Total

On demand

 

 

Within one year

22,655

 

 

1,154

23,809

More than one year but less than two years

 

 

1,760

1,760

More than two year but less than five years

 

4,183

 

3,767

7,950

More than five years

 

 

22,655

 

4,183

 

6,681

33,519

    

Trade and

    

Deferred

    

    

    

    

    

    

2021

other

government

Convertible

$'000

    

payables

    

grants

    

Loans

    

 loan notes

    

Total

On demand

 

 

 

 

 

Within one year

 

17,069

 

 

 

 

17,069

More than one year but less than two years

 

 

 

 

 

More than two year but less than five years

 

 

2,459

 

 

 

2,459

More than five years

 

 

 

 

 

 

17,069

 

2,459

 

 

 

19,528

    

Trade and

    

Deferred

    

    

    

    

    

    

2020

other

government

Convertible

$'000

    

payables

    

grants

    

Loans

    

loan notes

    

Total

On demand

 

 

 

 

 

Within one year

 

2,386

 

 

1,034

 

4,426

 

7,846

More than one year but less than two years

 

 

 

 

 

More than two year but less than five years

 

 

534

 

 

 

534

More than five years

 

 

 

 

 

 

2,386

 

534

 

1,034

 

4,426

 

8,380