Half-year Report

RNS Number : 6747I

Saietta Group PLC

06 December 2022

 

Tuesday 6 December 2022

Saietta Group Plc

("Saietta", the "Company" or the "Group")

Unaudited Interim Results for the six months ended 30 September 2022

and, Post-period, First Major OEM Contract

Saietta Group Plc (AIM: SED), the multi-national business which designs, engineers and manufactures complete Light-duty and Heavy-duty e-drive systems for electric vehicles, today announces its unaudited interim results, covering the six-month period ended 30 September 2022 (the "Period").

Wicher (Vic) Kist, Chief Executive of Saietta, said:

"Buoyed by the success of our IPO in July 2021 and the subsequent funding round in August 2022, Saietta has continued to make rapid progress towards establishing itself as a key provider of electric drivetrain solutions across a wide range of vehicle platforms .

"We have also progressed our plans to establish high-tech engineering facilities in Silverstone Park and Sunderland which will facilitate our progress towards ramping up our UK-based production capacity. Furthermore, in India, Saietta VNA, a partnership with Padmini VNA, a leading Tier 1 automotive supplier, has today confirmed the signing of development agreements worth approximately £3.2 million with one of the largest OEMs operating in India.

"The JCDA signed with ConMet will see Saietta leverage its proven commercial vehicle electric powertrain engineering capabilities centred in its Heavy-duty division in the Netherlands. Saietta is working in close partnership with ConMet, drawing on a deep understanding of the requirements for commercial vehicles, to deliver a suite of products over the coming years that facilitate the rapid transition of trucks and buses to electric propulsion.

"Our milestone agreements with key partners across the world and strengthened balance sheet continue to drive our rapid expansion."

Financial Highlights for the Period

· Group income (including grants) increased to £1.3m (H1 2021: £1.0m) with the Company focusing its main activities in the first half of the year on the establishment of the Joint Commercialisation and Development Agreement with Consolidated MetCo, Inc ("ConMet") (the "JCDA") and launch readiness in the Indian light duty market

· Gross profit of £0.1m (H1 2021: £0.4m) with a gross margin of 13% (H1 2021: 55%).  The lower gross margin reflects the impact of retrofit revenues in H1 2022

· £0.3m of development costs under the ConMet JCDA incurred in the Period, of which 50% is recoverable from ConMet, recognised within assets under joint arrangements rather than as revenue in accordance with accounting standards and fiscal treatment

· Loss before tax of £10.4m (H1 2021: £5.2m loss) reflects the fact that the Group is still at the early commercialisation stage for its products and the loss includes significant share options expense and costs related to the additional fund raise

· Adjusted EBITDA¹ a loss of £6.3m (H1 2021 £1.1m loss)

· Placing of 17,101,450 shares which raised gross proceeds of £23.6m

· Net cash at the end of the period of £22.7m

Operational Highlights

· On track to ramp up UK-based and India production leveraging existing assets that are able to provide for a capacity in excess of 100,000 units p.a., having secured the location for the pilot production plant in Sunderland and progressed the development of the durability test facility at Silverstone Park

· Specialised production automation equipment is being built and will be installed at the Sunderland production facility ahead of a planned Q1 2023 opening

· Interaction with several OEMs has accelerated with the completion of the Padmini agreement and Pradumna Walimbe's appointment as Managing Director of Saietta VNA Electric Drive Private Limited ("Saietta VNA"), the Company's Indian JV

· Certain equipment in Sunderland is being prepared for redeployment to Saietta VNA to enhance its production capability

· Ongoing R&D continues to enhance the growing range of eDrive motors, refining the technology for mass production, and expanding the overall intellectual property ("IP") portfolio - in particular strengthening patent applications into Asian markets

Post-period end

· On 1 October 2022, a restructuring of the business took place in which the Performance Units were moved into separate wholly owned subsidiaries of Saietta Group PLC. These companies are:

-  Saietta Light Duty eDrive Limited (S-LDE)

-  Saietta Sunderland Plant Limited (S-SP)

-  Saietta Europe BV (S-HDE)

-  Propel B.V.

-  Saietta VNA Electric Drive Private Limited

· On 5 December 2022, Saietta VNA signed its first major contract with an OEM operating in the light Duty eDrive segment (see separate RNS announcement issued this morning). 

-  First in a series of agreements with a global OEM and one of the largest operating in the Indian light duty market

-  The agreements:

o  Represent initial development revenue of approximately £3.2m, and

o  envisage minimum volumes of 80,000 units across five years from first production in September 2023

· Also on 5 December 2022, the Group appointed Devyani Vaishampayan as a Non-Executive Director.  Devyani brings a wealth of experience as a Board member, in particular across all aspects of company organisation and culture (see separate RNS announcement issued this morning). 

Outlook

· Saietta remains dedicated to securing several long-term, high volume OEM relationships globally and continues to receive a large volume of sales enquiries from numerous OEMs with regards to potentially material contracts

· The work with ConMet is progressing at speed, on plan and budget with concept designs now complete.  Parts are currently being ordered for trials with the project prototypes starting in less than 6 months.  The product concepts have been shared with several US and European truck OEM's and have received enthusiastic responses.  Together with launch partners, the Company plans to start the first road trials in 2023 to demonstrate that the ConMet powered by Saietta eDrive solutions work and allow truck and trailer OEMs to order initial production series

· With momentum from the contracts secured to date and last year's launch of Propel's marine motors directly into distribution and retail, management is confident of delivering expected customer orders in line with its full year expectations which were revised in October. However, the accounting treatment of ConMet receipts, from revenue to assets under joint arrangement, will represent a reclassification from income statement to balance sheet of approximately £3m for the year ended 31 March 2023

For any further enquiries, please contact:

Saietta Group Anthony (Tony) Gott, Executive Chairman Wicher (Vic) Kist, Chief Executive Officer Steven Harrison, Chief Financial Officer	via FTI
Canaccord Genuity (Nomad and Broker) Henry Fitzgerald-O'Connor / Patrick Dolaghan	0207 523 8000
FTI Consulting (Financial PR advisor) Ben Brewerton / Dhruv Soni	Tel: [phone] [e-mail]

¹ Adjusted EBITDA above is an non-IFRS measure and  is calculated as the Group's earnings before interest, tax, depreciation, amortisation, impairment and extraordinary items including share-based payment charges, costs related to Saietta Group Plc's August 2022 subsequent fund-raising, fees in respect of establishing new staff pension scheme, write-off inventory acquired as part of Sunderland lease transaction and legal fees in respect of the incorporation of the equity accounted associated. See note 5 for more details.

About Saietta:

Saietta is an AIM-quoted, multi-national business which designs, engineers and manufactures Light Duty and Heavy Duty eDrive solutions for electric vehicles on land from scooters to buses (Vehicle categories L, M, N and T) as well as marine applications ( www.saietta.com ).

Saietta has engineered breakthrough electric motor technology including proprietary AFT (Axial Flux Technology) and RFT (Radial Flux Technology) which can be combined with in-house power electronics, powertrain controls, mechanical axles, and transmissions. The designs are unique and modular, delivering both high and low voltage electric drive solutions. Saietta's difference lies in its ability to conceive powertrain solutions tailored to deliver competitive advantage and its turnkey engineering services designed to fast-track electric vehicle manufacturers from concept to start of production.

To demonstrate the outstanding attributes of the AFT technology the company also founded its own next-generation marine propulsion division Propel ( www.propel.me ) which delivers solutions for boating in the electric era that support the transition to decarbonization and clean mobility on waterways.

Executive Chairman's Review

The rapid progress since we revealed our range of AFT motors late last year has been maintained with commercial, product and R&D developments continuing on all fronts.

The £23.6 million fund raise in August 2022 was a major step in the Group's continuing development and supports the acceleration of our commercial progression to mass production of our electric drivetrain solutions for a range of global market applications.

As anticipated, the financial resources secured through that funding round have enabled Saietta to accelerate its interaction with a number of OEMs including the announcement of the JCDA with ConMet. The JCDA will see Saietta leverage its proven commercial vehicle electric powertrain engineering capabilities centred in its Heavy Duty eDrive (HDE) division in the Netherlands. Saietta has also progressed with plans to establish a high-tech engineering facility at Silverstone Park, UK.

In India, the Company has accelerated the potential of its AFT electric motors through Saietta VNA, a partnership with Padmini VNA, a leading Tier 1 automotive supplier.

We have demonstrated that Saietta can reduce axial flux electric drivetrain cost without diminishing performance, which is essential if EVs are to become more accessible for mass market consumers across a wider range of vehicle platforms from lightweight to commercial.

Saietta expects to be ready to use its new Sunderland facility before the end of FY22/23 to scale up the production of its proprietary AFT motors for multiple applications. Saietta will also locate the in-wheel generator (IWG) manufacture as part of the ConMet JCDA and a share of its proven e-Axle commercial vehicle drivetrain technology in Sunderland, creating the potential for more green-technology manufacturing jobs in the UK.

Outlook

Having successfully raised net proceeds of £ 22.3m in August 2022, Saietta is well positioned to drive forward commercial opportunities.  Although some revenue has already been secured in H1, more substantial results are expected in H2, particularly following the ConMet agreement's initiation in August 2022.

Financial Review

(NB: comparative figures are shown for the comparable period in the previous financial year unless otherwise stated)

Revenue and expenditure both reflect a concentration of resources on the ConMet JCDA and negotiations towards OEM opportunities for Saietta VNA in India in the first half, reflecting a further stage in the business transitioning from an R&D centre of excellence into a full-service engineering design company.

Revenues were broadly in line with prior year with commercial activity, as set out in the operating update of 18 October, pivoting towards long-term, highly valuable contracts ahead of near-term revenues.

Operational and administrative expenditure exceeded prior year by £5,136,523 (88% increase), reflecting the rapid scale up which followed the IPO itself and the subsequent funding round in August 2022 alongside the creation of an associate company in India, collaboration with key global partners and expansion of headcount in the key areas of production, testing, engineering design and commercial delivery.

Excluding the impact of share option charges and fundraising costs, the adjusted EBITDA was a loss of £6,289,568 (491% higher than prior period last year).

Interim condensed consolidated statement of comprehensive income and total comprehensive income

	Notes	Unaudited 6 months to 30 September 2022 £	Unaudited 6 months to 30 September 2021 £
Revenue	3	753,517	795,142
Cost of sales		(653,231)	(358,228)
Gross profit		100,286	436,914
Government grant income		518,640	244,009
Administrative expenses		(10,964,337)	(5,827,814)
Charge for share options granted	8	(1,910,557)	(2,636,001)
Other administrative expenses		(9,053,780)	(3,191,813)
Operating loss		(10,345,411)	(5,146,891)
Finance income		9,996	316
Finance expense		(138,909)	(84,598)
Net increase in financial guarantees		(3,507)	-
Loss before taxation		(10,447,831)	(5,231,173)
Taxation		342,610	152,614
Loss for the period		(10,135,221)	(5,078,559)
Other comprehensive income, net of income tax, to be reclassified to profit and loss in subsequent periods Exchange differences on translation of foreign operations		(23,224)	(192)
Total comprehensive loss for the period		(10,158,445)	(5,078,751)
Basic loss per share	4	(11.66)	(7.83)

Interim condensed consolidated statements of financial position

	Notes	Unaudited at 30 September 2022 £	Unaudited at 31 March 2022 £
Non-current assets
Intangible assets	6	11,600,733	8,365,506
Property, plant and equipment		6,129,670	3,498,541
Right-of-use assets		6,613,960	2,815,049
Investments in equity accounted associates Assets under joint arrangements	7 7	267,784 147,130	- -
Other receivables		734,526	734,526
Prepayments and accrued income		84,633	101,825
Total non-current assets		25,578,436	15,515,447
Current assets
Inventories		3,020,825	2,407,043
Trade and other receivables		3,404,211	5,070,139
Prepayments and accrued income		2,397,843	1,237,197
Cash and cash equivalents		22,672,698	18,402,055
Assets/ (liabilities) for financial guarantees		34,345	-
Total current assets		31,529,922	27,179,434
Total assets		57,108,358	42,694,881
Current liabilities
Trade and other payables		3,573,729	6,819,521
Lease liabilities		1,008,791	470,069
Total current liabilities		4,582,520	7,289,590
Non-current liabilities
Provisions		40,073	168,130
Lease liabilities		5,997,195	2,380,537
Liabilities for financial guarantees		-	41,833
Total non-current liabilities		6,037,268	2,590,500
Total liabilities		10,619,788	9,880,090
Equity
Share capital	8	113,115	93,550
Share premium	8	56,669,393	34,671,207
Share options reserve	9	14,128,548	12,217,991
Foreign currency translation reserve		(147,172)	(27,939)
Accumulated losses		(24,275,314)	(14,140,093)
Total equity		46,488,570	32,814,791
Total equity and liabilities		57,108,358	42,694,881

Interim condensed consolidated statements of changes in equity

	Notes	Share capital	Share premium	Share options reserve	Translation reserve	Accumulated losses	Total
		£	£	£	£	£	£
Balance at 1 April 2021		51,921	-	7,318,820	(352)	(3,457,911)	3,912,478
Comprehensive income for the period
Loss for the period		-	-	-	-	(5,078,559)	(5,078,559)
Exchange differences on translation of foreign operations		-	-	-	(192)	-	(192)
Total comprehensive expense		-	-	-	(192)	(5,078,559)	(5,078,751)
Contributions by owners
Issue of shares	8	32,245	35,145,382	-	-	-	35,177,627
Share issue costs offset against share premium	8	-	(2,868,972)	-	-	-	(2,868,972)
Share-based payments	9	-	-	3,130,355	-	-	3,130,355
Shares issued on exercise of employee share options	8, 9	6,084	58,097	-	-	-	64,181
Settlement of the convertible loan notes						72,483	72,483
Shares issued on conversion of convertible loan notes	8	3,300	2,336,700	-	-	-	2,340,000
Balance at 30 September 2021 (unaudited)		93,550	34,671,207	10,449,175	(544)	(8,463,987)	36,749,401

Balance at 1 April 2022		93,557	34,671,275	12,217,991	(27,939)	(14,140,093)	32,814,791
Comprehensive income for the period
Loss for the period		-	-	-	-	(10,135,221)	(10,135,221)
Exchange differences on translation of foreign operations		-	-	-	(119,233)	-	(119,233)
Total comprehensive expense		-	-	-	(119,223)	(10,135,221)	(10,254,454)
Contributions by owners
Issue of shares	8	18,812	23,581,189	-	-	-	23,600,001
Share issue costs offset against share premium	8	-	(1,590,469)	-	-	-	(1,590,469)
Share-based payments	9	-	-	1,910,557	-	-	1,910,557
Shares issued on exercise of employee share options	8, 9	746	7,398	-	-	-	8,144
Balance at 30 September 2022 (unaudited)		113,115	56,669,393	14,128,548	(147,172)	(24,275,314)	46,488,570

Interim condensed consolidated statements of cash flows

	Notes	Unaudited 6 months to 30 September 2022 £	Unaudited 6 months to 30 September 2021 £
Operating activities
Losses after taxation		(10,135,221)	(5,078,559)
Adjustments for non-cash items
Taxation		-	(152,614)
Tax credits received		(53,535)	-
Interest income		(9,996)	(316)
Interest expense		138,909	84,598
Share-based payments	9	1,910,557	2,636,001
Amortisation of intangible assets		147,809	18,874
Depreciation of property, plant and equipment		439,778	44,872
Depreciation of right-of-use assets		553,594	53,947
Currency translation differences		(218,835)	192
Net decrease in financial liabilities		(76,178)	-
Loss on disposal of property, plant and equipment		51,595	-
Cash used in operating activities before changes in working capital		(7,251,523)	(2,393,005)
Change in working capital
Decrease/ (increase) in inventories		(442,291)	(520,185)
Decrease/ (increase) in receivables		(652,837)	(860,328)
Increase/ (decrease) in non-interest bearing liabilities		(3,232,121)	1,276,465
Increase/ (decrease) in provisions		(641,912)	-
Net cash flow used in operating activities		(12,220,684)	(2,497,053)
Investing activities
Purchases of intangible assets	6	(102,776)	(355,093)
Capitalised internally generated development costs		(3,103,728)	(269,155)
Purchase of property, plant and equipment		(1,725,614)	(802,871)
Interest received		9,996	316
Acquisition of equity accounted investments	7	(267,784)	-
Net cash used in investing activities		(5,189,906)	(1,426,803)
Financing activities
Repayment of borrowings		-	(176,111)
Repayment of lease liabilities		(197,534)	(50,141)
Proceeds on issue of shares	8	23,301,676	35,241,809
Share issue costs		(1,284,000)	(2,507,409)
Interest paid on lease liabilities		(136,024)	(9,037)
Interest paid		(2,885)	(3,078)
Net cash flow from financing activities		21,681,233	32,496,033
Net change in cash and cash equivalents		4,270,643	28,572,177
Cash and cash equivalents, beginning of period		18,402,055	2,862,470
Cash and cash equivalents		22,672,698	31,434,647

1.  General information

Saietta Group plc is a public limited company, registered in England and Wales.  The address of its registered office is Riverbank, 2 Swan Lane, London, EC4R 3TT.

The principal activity of the company is the provision of electric drive solutions including the manufacture of prototype and production electric motors for vehicles.

2.  Basis of preparation and significant accounting policies

The interim condensed consolidated financial statements for the six-month period ended 30 September 2022 do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group´s annual consolidated financial statements as at 31 March 2022. The Group has applied the same accounting policies and methods of computation in its interim condensed consolidated financial statements as in its annual consolidated financial statements as at 31 March 2022. The interim condensed consolidated financial statements are not the statutory accounts of the Group. 

The directors are responsible for the preparation of the financial statements and to give a true and fair view. The interim condensed consolidated financial statements are prepared on a going concern basis.

The interim condensed consolidated financial statements are presented in pound sterling and all values are rounded to the pound sterling, except when otherwise indicated.

Going concern

The condensed interim set of financial statements included in this half-yearly financial report have been prepared on a going concern basis as the directors consider that the Group has adequate resources to continue operating for the foreseeable future.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Executive Chairman's Business Review.

The Group continues to move from a research and development company to manufacturing and selling AFT 140 and other related products, in particular through the recent contract with ConMet.  The Group closely monitor and manages its cash.  The Group reviews their forecasts regularly and sensitivities are run for different scenarios including, but not limited to, delays in production and therefore revenue, receipt of key capital expenditure and increasing costs.  The key risk in the cashflows is the realisation of revenues from the manufacture and sale of the AFT and from the ConMet project.  If there are significant delays this may lead to the Company needing to raise further  funds in early 2024 either through debt or equity. Furthermore, these forecasts exclude the capital requirements for additional production facility scale up that material orders for Saietta VNA, the Group's Indian JV would create.  These conditions represent a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business. Group management are confident they are progressing well on finalising the production facility and potential contract negotiations which will lead to reducing the cash flow risk. 

Therefore, the directors consider it appropriate to prepare the financial statements on a going concern basis. The condensed interim financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

3.  Segmental Analysis

Revenue by category and by geography is as follows:

Revenue by category

	Unaudited 6 months to 30 September 2022 £	Unaudited 6 months to 30 September 2021 £
Light-duty division	492,063	795,142
Heavy-duty division	261,454	-
Marine division	-	-
Total	753,517	795,142

Revenue for motor sales are recognized at a point in time, whereas the engineering design services are recognized over time.

Revenue by geography

	Unaudited 6 months to 30 September 2022 £	Unaudited 6 months to 30 September 2021 £
UK	428,304	570,465
European Union	295,522	-
Rest of World	29,691	224,677
Total	894,233	795,142

Non-current assets by geography

	Unaudited 6 months to 30 September 2022 £	Audited Year ended 31 March 2022 £
UK	20,114,787	13,162,815
European Union	5,430,790	2,352,632
Rest of World	32,859	-
Total	25,578,436	15,515,447

4.  Loss per share

The calculation of the basic loss per share is based upon the net loss after tax attributable to ordinary shareholders and weighted average number of shares in issue for the year.

	Unaudited 6 months to 30 September 2022	Unaudited 6 months to 30 September 2021
Basic Loss per share (£)	(11.66)	(7.83)
Loss attributable to equity shareholders (£)	(10,158,445)	(5,078,751)
Weighted average number of shares in issue	87,115,466	64,875,469

The basic loss per share set out above is based on the average number of shares in place across the year.

The Company was loss making for all periods presented, therefore the dilutive effect of share options has not been taken into account in the calculation of diluted earnings per share, since this would decrease the loss per share for each reporting period.

5.  Alternative Performance Measures ("APM")

In reporting financial information, the Group presents alternative performance measures ("APMs") that are not defined or specified under the requirements of IFRS. The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business. The APMs used within these results are defined below.

Alternative performance measure

Definition

Adjusted EBITDA

Adjusted EBITDA is defined as the Group's earnings before interest, tax, depreciation, amortisation, share of profit/loss from equity accounted investments and extraordinary items including the share-based payment charges, the gain on bargain purchase, costs related to Saietta Group plc's admission to the AIM, costs related to the acquisition of e-Traction Europe B.V., legal fees related to Saietta Group plc's investment in its equity-accounted associate, professional fees in respect of share options issued pre-Admission, legal fees in respect of company reorganisations & the write-off of related party receivables.

The Group uses adjusted EBITDA as an APM to review and measure the underlying profitability of the Group on an ongoing basis for comparability as it recognises that increased capital expenditure year on year will lead to a corresponding increase in depreciation and amortisation expense recognised within the consolidated income statement.

Reconciliations between these alternative performance measures and statutory reported measures are shown below, 

	Unaudited 6 months to 30 September 2022 £	Unaudited 6 months to 30 September 2021 £
Adjusted EBITDA	(6,289,568)	(1,063,793)
Depreciation and amortization	(1,167,687)	(117,693)
Finance income	9,996	316
Finance expense	(138,909)	(84,598)
Share-based payment charges	(1,910,557)	(2,636,001)
M&A support fees Costs related to Saietta Group plc's admission to the AIM Costs related to the issue of shares	(99,482) - (513,125)	- (1,176,790) -
Costs related to the acquisition of e-Traction Europe B.V.	(39,932)	-
Costs related to the co-operation with Padmini VNA	(59,925)	-
IPO-dependent staff expenses	(61,165)	-
Net increase in financial liabilities	(3,507)	-
Fees in respect of employee pension scheme set-up Write-off of spare parts acquired as part of Sunderland transaction	(70,000) (133,970)	- -
Loss before taxation	(10,477,831)	(5,078,559)
Taxation	342,610	-
Loss for the period	(10,135,221)	(5,078,559)

6.  Intangible fixed assets

		Patents and licenses	Development costs	Software		Total
		£	£	£		£
COST At 1 April 2022 (audited)		456,349	7,793,871	266,497		8,516,717
Additions		307,905	2,809,468	3,677		3,121,050
Currency translation differences		-	265,756	1,931		267,588
At 30 September 2022 (unaudited)		764,254	10,868,996	272,105		11,905,355
ACCUMULATED AMORTISATION At 1 April 2022 (audited)		51,720	11,900	87,591		151,211
Additions		26,934	95,027	25,848		147,809
Currency translation differences		-	4,925	6,77		5,602
At 30 September 2022 (unaudited)		78,654	111,852	114,116		304,622
Net book value at 30 September 2022 (unaudited)		685,600	10,757,594	157,989		11,600,702
Net book value at 31 March 2022 (audited)		404,629	7,781,971	178,906		8,365,506

7.  Investment in equity accounted associates and assets held under joint arrangements

Associates

	Total
	£
Balance at 1 April 2021 and 30 September 2021 (unaudited)	-
Additions	-
Balance at 31 March 2022 (audited)	-
Additions during the period	267,784
Balance at 30 September 2022 (unaudited)	267,784

Details of the Group's material associate as at 31 March 2022 are as follows:

Name of investment	Proportion of voting rights	Principal place of business and country of incorporation	Principal activity	Registered office addresss
Padmini Electric Drive Padmini Limited	49.0%	India	Motor manufacturing	5 Padmini Enclave, Hauz Khas, New Delhi, Delhi, 110016, India

On 19 September 2022, the Group acquired 49.0% of the Ordinary Share Capital of Padmini Electric Drive Private Limited for consideration of £267,784.

Padmini Electric Drive Private Limited is a limited liability company whose legal form confirms separation between the parties to the joint arrangement. There is no contractual arrangement or any other facts or circumstances that indicate that the parties to the joint control of the arrangement have rights to the assets or obligations for the liabilities relating to the arrangement. Accordingly, Padmini Electric Drive Private Limited is classified as an associate. Padmini Electric Drive Private Limited is not publicly listed. The associate is accounted for using the equity method and is a private company and there are no quoted market prices available for its shares.

The following tables sets out the summarised financial information of the Group's individually material associate, Padmini Electric Drive Private Limited, after adjusting for material differences in accounting policies:

	Period ended 30 September 2022 (Unaudited)		Period ended 30 September 2021 (Unaudited)
Current assets	546,498		-
Net assets of material associate	546,498		-

A reconciliation of the summarised financial information to the carrying amount of the Group's material associate recognised in the consolidated balance sheet is given below: 

	Period ended 30 September 2022 (Unaudited)		Period ended 30 September 2021 (Unaudited)
Net assets of material associate	546,498		-
Share of net assets of material associate and
carrying value of the Group's material associate	267,784		-

  On 19 September 2022 Padmini Electric Drive Private Limited changed its company name to Saietta VNA Electric Drive Private Limited.

Assets held under joint arrangements

	Total
	£
Balance at 31 March 2022 (audited)	-
Additions during the period Joint arrangement partner share	294,260 (147,130)
Balance at 30 September 2022 (unaudited)	147,130

On 3^rd August 2022 the Group entered into an agreement with Consolidated Metco Inc. ("ConMet") whereby both entities would contribute towards the development of intangible assets that would enable both entities to launch new products into the Heavy Duty eDrive market.  The agreement constitutes a joint arrangement and accordingly the development expenditure less the share owned by ConMet is recognized as an asset held under joint arrangements.

8.  Share capital and share premium

Allotted, issued and fully paid:

			Unaudited	Audited
Number of shares	Class	Nominal value	6 months to 30 September 2022	Year ended 30 March 2022
			£	£
102,832,147	Ordinary	£0.0011	113,115
85,051,953	Ordinary	£0.0011		93,557

	Number of shares		Share capital	Share premium	Total
			£	£	£
Balance at 1 April 2021 (unaudited)	519,205,742		51,921	-	51,921
Consolidation of shares	(472,005,220)		-	-	-
Issue of shares	29,314,690		32,245	35,145,382	35,177,627
AIM listing costs offset against share premium	-		-	(2,868,972)	(2,868,972)
Shares issued on exercise of employee share options	5,530,491		6,084	58,097	64,181
Shares issued on conversion of convertible loan notes	3,000,000		3,300	2,336,700	2,340,000
Balance at 30 September 2021 (unaudited)	85,045,703		93,550	34,671,207	34,764,757
Shares issued on exercise of employee share options	6,250		7	68	75
Balance at 31 March 2022 (audited)	85,051,953		93,557	34,671,275	34,764,832
Issue of shares	17,101,450		18,812	23,581,189	23,600,001
Share issue costs offset against share premium	-		-	(1,590,469)	(1,590,469)
Shares issued on exercise of employee share options	678,744		746	7,398	8,144
Balance at 30 September 2022 (unaudited)	102,832,147		113,115	56,669,393	56,782,508

On 3 August 2022, the Group raised net proceeds of £22,316,001, after broker fees and other expenses of £1,284,000, through the placing of 17,101,450 new Ordinary Shares of £0.0011 each in the capital of the Company (the "Placing Shares") with new and existing investors at a price of £1.38 per share. An amount equal to the nominal value of the Placing Shares was credited to share capital, with the proceeds raised in excess of this nominal value being credited to share premium.

The Placing Shares rank pari passu with the Company's existing Ordinary shares.

During the period, 678,744 share options which had vested pursuant to the terms of their issue were exercised by option holders at a strike price of £0.012 resulting in the issue of 678,744 new Ordinary shares ("New Ordinary Shares") with a nominal value of £0.011p. As a result, £747 was credited to share capital and the amount received in excess of the nominal value, £7,398, was credited to share premium.

The New Ordinary Shares rank pari passu with the Company's existing ordinary shares.

9.  Share-based payments

Common share options

Options have been granted to shareholders, directors and employees to purchase common shares.  These options generally vest over a period of up to four years from grant date and are exercisable in the event of a listing.

Details of the common option plans are as follows:

		For the six months ended 30 September 2022
		Number	Weighted average exercise price
		#	£
Outstanding at 1 April 2021 (unaudited)		10,826,072	0.012
Granted		8,577,394	0.012
Lapsed		(586,370)	0.012
Vested		(9,919,457)	0.012
Outstanding at 30 September 2021 (unaudited)		8,897,639	0.012
Granted		-	0.012
Lapsed		(30,000)	0.012
Vested		(2,634,366)	0.012
Outstanding at 31 March 2022 (audited)		6,233,273	0.012
Granted		3,775,000	0.012
Lapsed		(30,000)	0.012
Vested		(1,343,130)	0.012
Outstanding at 30 September 2022 (unaudited)		8,635,143	0.012

The fair value of each option granted was estimated on the grant date using the Black-Scholes and where appropriate Monte Carlo simulation option-pricing model with the following average assumptions:

	For the six months ended 30 September 2021	For the year ended 31 March 2022	For the six months ended 30 September 2022
Exercise price at grant date	£0.012	£0.01	£0.012
Expected life (in years)	2	3	2
Risk-free interest rate	0.58%	0.58%	1.39%
Expected volatility	87.05%	87.05%	71.66%
Weighted average share price	92.48 pence	92.56 pence	152.99 pence

The expected volatility is based on the historic volatility (based on the share price) of the company and comparator companies with publicly available share prices.

The risk-free interest rate is based on the average return on 2-year UK Gilts.

	Unaudited For the six months ended 30 September 2022 £	Unaudited For the six months ended 30 September 2021 £	Audited Year ended 31 March 2022 £
Cost of options vesting in the period	1,910,557	3,130,355	4,899,171

-ENDS-

 

END

 

 

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