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12. RESERVES

The carrying amounts of short-term borrowings approximate their fair values

The Company issued one Convertible loan note at par value of £500,000 on 21 October 2019, one convertible loan note at par value of £500,000 on 20 January 2020 and 3 Convertible loan notes during the period ended 30 June 2021 as follows, £50,000 convertible loan note at par on 19 March 2021, £100,000 Convertible loan note at par on 10 June 2021 and £100,000 Convertible loan note at par on 24 June 2021. The 2019 and 2020 bonds mature on 19 March 2022 at their nominal value of £500,000 plus an uplift on maturity of £350,000, The 2021 bonds mature on 19 March 2022 at their nominal face value of £100,000 plus an uplift on maturity of £70,000 and £50,000 plus an uplift of £35,000 on maturity or can be converted into shares at a discount of 41.17% on IPO price. The values of the liability and finance income components were determined at issuance of the loan notes.

The convertible loan note recognised in the Statement of Financial Position is calculated as follows:

16. RELATED PARTY DISCLOSURES

During the period under review, £nil (2020: £40,000) was paid in respect of consultancy fees to Dr E Albani, the director and majority shareholder of the company.

During the period under review, £nil (2020: £25,000) was paid in respect of consultancy fees to Mr C Gilbert, a significant shareholder of the company.

Included in receivables from related parties is £43,020 due from Folium International Limited. This relates to setting up costs incurred on behalf of Folium International Limited.

17. EVENTS AFTER THE REPORTING PERIOD

The COVID-19 outbreak subsequent to the year end continues to have a significant effect on the global and UK economies and will have an impact on the company’s results for 2021. As a result of government restrictions implemented to mitigate the spread of COVID-19, the ability to engage with overseas investments will continue to prove difficult.

The company has taken all necessary actions to reduce costs and manage liquidity during this period but the full impact of the pandemic remains uncertain as the situation is still unfolding.

18. ULTIMATE CONTROLLING PARTY

The company is controlled by Dr E Albani who has the majority shareholding.  

The fair value of the liability component at 30 June 2021 was £1,774,717 and at 30 June 2020 was £1,100,024. The fair value is calculated using cash flows discounts at a rate based on the interest rate of a similar non-convertible loan note and are within level two of the fair value hierarchy.

15. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

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13. TRADE AND OTHER PAYABLES

£427,991 was paid in respect of the contractual obligation in the period ended 30 June 2020. The remaining contractual obligation (outstanding balance) of £1,240,343 was forgivenn and subsequently written off during 2020

14. BORROWINGS