Saietta Group Full Year Results

RNS Number : 8277U

Saietta Group PLC

03 August 2022

Wednesday 3 August 2022

Saietta Group plc

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

Full Year Results

Saietta Group plc (AIM SED), the international electric powertrain group, announces its maiden full year results for the 12 months ended 31 March 2022 following its successful Admission to AIM in July 2021 ("Admission").

During the period, Saietta has continued to develop and commercialise its electric drive solutions technology. The Admission to AIM has provided the Company with the opportunity to execute its growth plans including establishing a manufacturing facility and a pilot production facility which is expected to expand its UK-based production capacity to 100,000 units per annum by mid-2024.

At Admission, Saietta had 37 employees in one location since when it has grown in capability and scale and now encompasses 5 divisions in 7 locations across the UK and Netherlands with c. 180 employees.

Wicher (Vic) Kist, Chief Executive Officer of Saietta, commented:

"I am delighted to announce Saietta's first full year results as a public company following our Admission to AIM last year. The IPO proceeds have enabled us to dramatically accelerate the growth and development of the business. Since the IPO we have added a world class factory, entered the bus and truck markets, added an in-house power electronics capability, launched a marine division, and evolved our AFT motor into a fully integrated E-drive system.

"The scope of these developments reflects the range of exciting market opportunities presented by the electrification of the global automotive and marine industries. Our aim is to grow into one of the leading e-drive businesses and be a showcase of engineering and production excellence as we help the world transition to zero emission mobility.

"We are increasingly confident about the opportunity for Saietta and continue to focus on the rapid scale-up of our business to allow us to continue to accelerate our growth."

Financial Highlights

· Turnover increased fourfold to £3.6 million (2021: £0.9m)

· Grant income of £0.7 million (2021: £0.02m) meaning a total Group income of £4.3 million (2021: £0.9m)

· Gross Profit increased by c.150% to £1.7 million (2021: £0.7m)

· Adjusted EBITDA loss for the year of £4.4 million (2021: £1.0m loss)

· Cash and cash equivalents at 31 March 2022 of £18.4 million (2021: £2.9m)

Operational Highlights

· Developed from a one location business with 37 employees into a business with 5 divisions in 7 locations across the UK and Netherlands and with c. 180 employees

· Acquisition of e-Traction Europe B.V. (subsequently renamed Saietta Europe B.V.) on 11 November 2021 to accelerate Saietta's growth strategy by adding new commercial and technical capabilities in the heavy-duty sector and an established power electronics production facility

· Achieved substantial progress toward the establishment of a new manufacturing facility at Silverstone Park

· Signed joint venture agreement with Padmini VNA Mechatronics Private Limited, a leading Tier 1 Indian automotive supplier to fast-track AFT into the rapidly expanding Asian market

· Launched Propel, a state-of-the-art marine propulsion division based in the Netherlands. Propel manufactures two highly innovative propulsion technologies - the Propel S1 and Propel D1 - which have been designed and developed from Saietta's Axial Flux Technology (AFT) programmes

· Signed an agreement to help develop a next-generation zero-emissions inner-city transport solution in collaboration with Electric Assisted Vehicles ("EAV"), a market leader in lightweight vehicle engineering and sustainable technologies

· Strengthened the Board with the appointment of two new Non-Executive Directors, David Wilkinson and Seshu Bhagavathula, and a new Non-Executive Chairman, Anthony ("Tony") Gott, bringing substantial experience in accounting and public companies, heavy duty vehicles and the Indian market and the global automotive industry respectively.

· Subsequent to the year-end, it is proposed that Tony Gott will move to an Executive Chairman role from Non-Executive, in order to support the Company's continued growth.

Post-Period Events

· Acquired the lease on a EV motor production facility in Sunderland plus the purchase of 4 motor production lines and an electronic circuit board production line for a consideration of 1.1 million

· Initial contract wins for prototype integrated AFT140 based e-drive systems from four Light-duty vehicle manufacturers: Ayro Inc (USA), Electric Assisted Vehicles Limited (UK), an established OEM of Light-duty vehicles (India) and a new European vehicle platform developer

· Working on proof-of-concept e-drive system designs for two potential high-volume Light-duty commercial vehicle customers (India) which have the potential to develop into volumes in excess of 87,000 integrated AFT140 e-drive systems per annum

· Notified of its successful application for a £2 million grant from the UK Government's Automotive Transformation Fund under the Scale up Readiness Validation (SuRV) to support Saietta's investment in commercial vehicle e-axle pilot production and preparation for scale-up

· Reflecting the Company's rapid expansion, the Board has asked Tony Gott to take on the role of Executive Chairman in order to support the Executive team on the management and control of this growth and integration process. Tony has a great depth of experience in establishing successful large and complex organisations in the automotive industry including VW AG and the BMW group where he was responsible for the establishment and commissioning of the Goodwood Rolls Royce Factory. Vic Kist, CEO, will continue to focus on business development activities. The Board is commencing a search for an additional Independent Non-Executive Director.

Outlook

· Saietta is well placed to address the exciting market opportunities presented by the electrification of the global automotive and marine industries and remains dedicated to securing a number of long-term, high volume OEM relationships globally

· Commercialisation remains on track with the first pilot production facility in the advanced stages of development

· The Board is extremely confident, given the exceptional operational and technical progress and key hires in strategically important positions, of achieving or exceeding the Company's short- and long-term goals including revenue expectations for FY 2023

For any further enquiries, please contact:

Saietta Group

Wicher (Vic) Kist, Group Chief Executive Officer

Steven Harrison, Group Chief Financial Officer

via FTI

Canaccord Genuity (Nomad and Broker)

Henry Fitzgerald-O'Connor

Patrick Dolaghan

Tel: +44 (0) 207 523 8000

FTI Consulting (Financial PR advisor)

Ben Brewerton

Dhruv Soni

Tel: +44 (0) 20 3727 1000

saietta@fticonsulting.com

About Saietta:

Saietta is an AIM-quoted, multi-national business which designs, engineers and manufactures complete Light-duty and Heavy-duty e-drive systems 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 and 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.

Chairman's Statement

Saietta has enjoyed its most successful year since incorporation despite the numerous headwinds faced by manufacturing industries during 2021/22, including the continuing global impact of Covid-19 and the trade tensions and risks associated with Brexit.

Facilitated primarily by the proceeds raised by the admission to AIM, Saietta has made considerable progress in its core focus lightweight mobility market, commencing the planned expansion of its UK production and testing capabilities, and has, through its marine division, opened-up access to a new market segment with significant potential.

As anticipated the financial resources secured through the IPO have enabled the Company to accelerate its interaction with a number of Original Equipment Manufacturers ("OEM") and Saietta remains dedicated to securing a number of long-term, high volume OEM relationships globally.

Saietta has deployed a considerable portion of the capital raised at IPO to:

a) establish a new production facility at Silverstone Park and, shortly after the year-end, in Sunderland that is being purposed to ramp up Saietta's production capacity to approximately 100,000 units per year on an annualised basis within the next three financial years; and

b) acquire 100% of the Netherlands based electric drive train manufacturer e-Traction from the Evergrande New Energy Automotive group for a total consideration of up to €2 million which is delivering an acceleration of both commercial and technical growth plans, particularly with regards to the truck, bus and coach sector.

In response to market demand a key recent development in Saietta's business goal regarding its core axial flux technology ("AFT") has been a move to prioritise the provision of fully integrated e-drive systems. By combining the Saietta AFT motor with integrated power electronics, a gearbox and a bespoke axle configuration the Company intends to capture vertically integrated margins as opposed to focusing on standalone motor sales.

Saietta had previously aspired to offer such solutions; however, its ability to deliver integrated e-drive systems has been accelerated by the acquisition of e-Traction in November 2021 which has enabled it to progress the development of its in-house integrated inverter for AFT products. This additional capability means that inverter and powertrain controls may be supplied to end customers fully integrated with AFT motors.

The accelerated commercial success of Saietta's marine products subsidiary "Propel" which has developed an award winning fully integrated marine e-drive system and generated approximately €1.5 million of revenue in its first full year of operations. This has proven the ability of the Group to leverage AFT technology into commercially successful vertically integrated e-drivetrain systems and get them to market within months.

At our IPO, Saietta had 37 employees in one location with designs and intellectual property for a series of branded AFT motors and a business plan for a marine application. Fast-forward just twelve months and the Company has grown in capability and scale. It now encompasses 5 divisions in 7 locations across the UK and Netherlands with c. 180 employees. Following this rapid expansion, and at the Board's request, I intend to take on the role of Executive Chairman in order to concentrate fully on the management and control of this growth and integration process. This will allow Wicher Kist ("Vic"), as CEO, to continue to focus on business development and commercialisation. The Board is commencing a search for an additional Non-Executive Director.

Outlook

Saietta employees Group-wide have been integral to delivering on its ambitious growth plans and the Board is extremely confident that our short- and long-term goals remain firmly within our grasp. Saietta's commercialisation remains on track and its first pilot production facility is into the advanced stages of development. We remain confident that, once operational, this will ramp up the delivery of products to our customers.

Saietta and its innovative technology are well placed to address the exciting market opportunities presented by the electrification of the global automotive and marine industries. Saietta has made exceptional progress operationally and technically in 2021/22 and a number of key hires in strategically important positions means that it is well equipped to capture the opportunities presented by the EV revolution.

The Board has confidence that the commercial opportunities for Saietta across global markets remain readily apparent and the rapid scale-up of its business will allow it to access these opportunities in the near future.

Chief Executive's Review

This was a ground-breaking year for Saietta in many ways. From launching new divisions, expanding global reach and meeting external challenges, the past year has shown the fundamental strength of our contrarian approach and seen some significant milestones reached even earlier than expected. Our turnover in the 12 months ended 31 March 2022 increased 300% to £3.6 million (2021: £0.9m).

The business has transformed from a single-facility firm with designs for a series of branded AFT motors into a multi-faceted, fast-growing, international business. The Group now consists of:

• An international light duty division offering an entire, integrated e-drive system (comprising gear box, axle, inverter, and controller) packaged around an AFT 140 motor. The Board believes this increases the value of the AFT product offering by 500% and accelerates the timeline for its adoption into vehicle platforms;

• A marine division with an award-winning suite of marine propulsion products which is already capturing sales and is ready for further commercial scale up;

• An international heavy-duty division addressing commercial EVs across both the truck and bus markets globally which has supplied 7 OEMs across Europe to date and has its products operated by 8 different commercial enterprises;

• An in-house power electronics division enabling certain products to be offered in a higher value, full system package; and

• A world class automotive electric motor factory in Sunderland with 4 motor production lines and an electronic circuit board production line which has to date manufactured over 25 million electric motors for automotive OEMs.

Our achievements during the year

Padmini VNA Mechatronics Private Limited ("Padmini VNA") Partnership

In May 2021, the Group announced a landmark partnership agreement with Padmini VNA, one of India's premier Tier 1 automotive suppliers.

The commercial agreement will see Padmini partner with Saietta to develop new and exciting opportunities in India's fast-growing electric two-wheel market. Padmini's customer base includes many of India's revered two-wheeler OEMs including Hero MotorCorp, TVS, Bajaj Auto and Royal Enfield.

We now expect the share investment to be finalised by the end of August 2022.

AIM admission

On 7 July 2021, the Group listed on the London Stock Exchange's AIM market, raising gross proceeds of £37.5m. This capital was raised to provide Saietta with the funds to execute its growth plans, including establishing a motor durability testing facility and contributing to the expansion of a pilot production facility, which will increase the Company's European production capacity to 100,000 units per annum.

Collaboration with Electric Assisted Vehicles ("EAV")

September 2021 saw the Group announce its technical collaboration project focusing on inner-city mobility solutions with Electric Assisted Vehicles ("EAV").

The collaboration will first centre on EAV's Lightweight Inner-City Solution (LINCS) vehicle, which incorporates a modular lightweight skateboard-style platform intended to be an emissions free alternative to the traditional transit van in urban environments. As part of the agreement, Saietta will become the exclusive supplier of advanced in-wheel traction motors to Electric Assisted Vehicles.

Launch of Propel

In November 2021, the Group announced the launch of Propel, its state-of-the-art marine propulsion division.

Propel is dedicated to designing, developing and commercialising a range of innovative electric motors to advance the electrification of the marine industry. This will support decarbonisation and delivery of sustainable and clean mobility on waterways, while helping boat owners to meet increasingly stringent legislation. Premiering at the Marine Equipment Trade Show (METS) in Amsterdam in November 2021, Propel showcased two highly innovative propulsion technologies - the Propel S1 and Propel D1 - which have been designed and developed from Saietta's AFT programmes.

Following this successful launch, commercial sales of £1.3m (€1.5m) were achieved within the financial year and the order book for the 2022/23 financial year is already at €500,000. There are now 11 domestic dealers signed up in Holland as well as commercial approaches from a number of larger international distributors. Saietta is targeting average revenues per unit of €3,500 and new regulations governing the usage of ICE motors in inland waterway applications in Europe lead the management to anticipate material demand going forward.

Acquisition of e-Traction Europe B.V.

In November 2021, the Group acquired 100% of e-Traction Europe B.V. ("e-Traction"), a Netherlands-based company which is a designer and supplier of electric drivetrains for heavy goods vehicles (HGVs) and buses, as well as a designer and manufacturer of high voltage power electronics, including inverters and control systems.

The acquisition of e-Traction advances the development and commercial deployment of the Group's high voltage electric motor designs, and brings additional product variants into Saietta's portfolio - encompassing complementary power electronics and heavy-vehicle drivetrains. The Power Electronics division that Saietta has established following the acquisition is allowing the other divisions to accelerate their business plans and enhance the value of their product offerings.

The acquisition is also expected to provide the Group with an increased share of the electric motor market through access to the heavy duty market segment.

Strategy, recent developments and commercial opportunities

Looking ahead, the outlook is incredibly positive for Saietta. We envisage the development and growth experienced in 2021/22 will continue and accelerate, as the Group's development milestones are met.

The evolution of the AFT business model towards the development and supply of integrated e-drive systems is expected to materially enhance Saietta's long term revenue and margin expectations. However, the Directors believe that the manufacturing scale-up of the product programme will require a greater investment than the original standalone motor supply plan. To allow for a strategic re-allocation of resources, the scope for the development of the previously planned motor durability test centre has been reduced to a smaller facility purposed for internal testing only. The Directors believe that the accelerated move into complete e-drive systems can deliver greater revenue than the proposed test centre.

This new business model has already resulted in initial contract wins for prototype integrated AFT140 based e-drive systems from four light duty vehicle manufacturers around the world. In combination, these customers estimate they will require in the region of 350,000 e-drive systems over the next 5 years and the Company estimates an average unit price of £1,250 (any such sales will remain subject to contract and will likely be through separate or joint venture entities and therefore should in no circumstances been considered as a revenue forecast for the Group).

As a result of these commercial developments, Saietta will be prioritising the mass production of the AFT140 over other products in the AFT portfolio. Since the post-period acquisition of the Sunderland Factory, the Company has received further enquiries of interest from a range of European vehicle OEMs in different market segments, in addition to the above-mentioned commercial progress.

Since its acquisition in November 2021, e-Traction has been renamed as Saietta Europe B.V. and, through collaboration with the rest of the Group, has developed new products to expand its focus from the niche EU bus market to the far larger global truck market. Given regulatory developments in the global HGV market, we are confident of material demand for these e-drive systems in the short and medium term.

Our Manufacturing Division is now a 39-person strong team with established functions in procurement, production, quality control and aftersales - as well as an established supply and logistics framework. This proven volume and quality capability has been instrumental in the recent increase of commercial traction across the Group.

Post-period end, Saietta was notified of its successful application for a £2 million grant from the UK Government's Automotive Transformation Fund under the Scale up Readiness Validation (SuRV). The grant, which commenced on 1 August 2022 and runs for 18 months, forms part of Saietta's investment programme in Commercial Vehicle E-axle pilot production and preparation for scale-up.

I am delighted that Tony Gott has agreed to become Executive Chairman for a four-year period to drive the management and control of our growth and oversee the various integration processes we have underway. This will allow me to continue to focus on business development and commercialisation.

Future growth strategy

The Group intends to invest for growth in the following areas:

• Completion of pilot production facility at Silverstone Park which will increase the Company's European production capacity to 6,000 units per annum;

• Repurposing the 86,000 square feet Sunderland factory to deliver 100,000 AFT units per annum;

• Securing a number of long-term, high volume OEM relationships globally;

• Increase brand awareness and reputation of the Group, both domestically and globally; and

• Continue to secure crucial patents across all key international markets.

Saietta is quickly positioning to become a world leader in drive train systems and technology for applications across the electric vehicle and marine segments. We believe that the process of global transport transition is accelerating while expanding into heavy commercial functions and that, with our advanced automotive technology and engineering capabilities, we are well placed to become a force to be reckoned with in this new global landscape.

Financial Review

The Financial Review should be read in conjunction with the consolidated financial statements of the Group and the notes thereto. The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial statements of the Company continue to be prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and in accordance with the Companies Act 2006.

Overview

Following the successful Admission to AIM in July 2021, Saietta began utilising the funds raised to fulfill its expansion plans as laid out during the admission process. This included the purchase of plant and machinery which will form the cornerstone of Saietta's automated production facility, expanding its commercial operations and furthering the Group's ability to generate revenue across a number of divisions and geographies.

The Group delivered encouraging results during the year, generating total revenue of £3.6m (2021: £0.9m) whilst formalising its business structure and establishing five principal divisions, discussed in greater detail in the CEO's statement, which will form the foundation of its expansion plans:

a) Lightweight mobility division

b) Heavy-duty commercial division

c) Marine division

d) Manufacturing plant

e) Saietta VNA - India

Establishment of production facility

As at 31 March 2022, the Group had invested £1.9m into developing the automated production line which will serve to increase the Group's AFT motor production capacity from 1,000 per annum to approximately 6,000 per annum in its first full year of operation. A further £3.6m has also been allocated for specific machinery which is on order.

On 4 April 2022, the Group completed a lease for an 86,000 square feet production facility in Sunderland which will ultimately be able to produce in excess of 100,000 units per annum. The automated production lines will be completed in Sunderland with full-automation scheduled for March 2023 and full automation in by the end of 2023.

At the time of the IPO, £10m was assigned to this task. The propitious selection of the Sunderland plant and synergies from the E-Traction acquisition have both materially reduced the capital outlay necessary.

Business development - Lightweight mobility division

Despite the impact of external factors including the continuing global impact of Covid-19 and the trade tensions and the risks associated with Brexit and latterly, Ukraine, Saietta was able to achieve considerable operational and financial success during the year.

Sales within the UK totaled £1.2m, an increase of £0.4m from 2021 (£0.8m). This was driven primarily by engineering design service revenue of £0.9m (2021: £0.8m), motor sales revenue of £0.1m (2021: £0.1m) and commitment fees of £0.2m (2021: £nil).

The volume of sales from Engineering Design Services varies year to year and is dependent upon the stage reached for each project. As the commercial production of the Group's electric motors has increased, revenue from the sale of motors now comprises a greater proportion of total revenue.

Business development - Heavy-duty and Marine divisions

In 2021/22 the Group's Heavy-duty and Marine divisions, which are primarily centered in the Netherlands, achieved European sales of £2.2m (2021: £nil) and Rest of World sales of £0.2m (2021: £nil).

This was driven by the launch of the Group's Propel inboard and outboard motors, for which there has been very positive initial customer demand, and translated into sales of £1.3m (2021: £nil) in its first months of operations.

Similarly, within the Group's Heavy-duty division, the sales pipeline is strong and the acquisition of e-Traction Europe B.V., subsequently renamed Saietta Europe B.V., has contributed additional revenue of £0.6m in respect of retrofit sales since the acquisition in November 2021.

Gross profit

Saietta delivered gross profit of £1.7m (2021: £0.7m) with a healthy gross profit margin of 48% (2021: 78%). The fall in gross margin is driven by revenue mix, in particular through the additional revenue generated by the Heavy-duty and Marine divisions.

Other income

£0.7m (2021: £0.0m) of grant income was recognised from three projects (2021: 1 project). Principal amongst these were the projects with Innovate UK ("APC 16") which generated income of £0.6m (2021: £nil) and two Dutch partners which generated £0.1m (2021: £nil).

Administrative expenses

Administrative costs for the year of £14.1m represents an increase of £12.3m (2021: £7.0m). This increase is driven by the Group expanding its operations across geographies which in turn has served to increase its fixed cost base. In particular, the IPO provided funds to grow its existing operations, launch Propel B.V., and acquire e-Traction Europe B.V. which has caused total, average staff numbers to increase from 25 in 2021 to 100 in 2022.

The share-based payment charge decreased from £5.7m in 2021 to £4.4m in 2022, due to most historical share options vesting at Admission. This is offset against a full year charge associated with the new Long-Term Incentive Plan ('LTIP') awards from April 2021 and an increased number of employees resulting in greater numbers qualifying for the Company's share option scheme.

Adjusted EBITDA

The underlying level of loss that is measured by Earnings Before Interest, Tax, Depreciation and Amortisation and non-recurring expenditure, which excludes expenses associated with the Admission to AIM and share-based payments (adjusted EBITDA), shows an increase in adjusted EBITDA loss from £1.0m in 2021 to £4.4m in 2022.

For full details on how the adjusted EBITDA figure is calculated, please see note 4.

Non-current assets

As at 31 March 2022, non-current assets amounted to £15.5m (2021: £4.0m), including intangible assets of £8.4m (2021: £3.4m) and property, plant and equipment of £3.5m (2021: £0.2m).

Intangible assets increased by £5.0m during the year. Capitalised, internally-generated development costs and the purchase of intangible assets accounted for £3.8m (2021: £0.8m) and £0.8m (2021: £nil) respectively.

Current assets

As at 31 March 2022, current assets amounted to £27.2m (2021: £3.6m), including net funds of £18.4m (2021: £2.9m).

The principal elements of the increase in net funds were:

• Gross proceeds through placing and subscription of £37.5m (2021: £nil);

• Share issue costs associated with the listing of £2.5m (2021: £nil);

• Operating cash outflow of £7.6m (2021: £0.2m);

• Conversion of the convertible loan notes of £2.34m (2021: £nil) into Equity at Admission on 7 July 2021;

• Investing activities including the acquisition of intangibles, property, plant & equipment and the capitalisation of development costs which totalled £8.9m (2021: £0.9m); and

• Movements in working capital of £1.2m outflow (2021: £1.7m inflow).

Director's Report

The Directors present their report and the consolidated financial statements for the year ended 31 March 2022.

The Directors who served during the year and their beneficial interest in the Company's issued share capital at year end were:

	Date of appointment	Date of resignation	Ordinary shares of £0.011 each 2022	Ordinary shares of £0.011 each 2021
Executive Directors:
Wicher Kist	23 November 2018	N/A	1,295,174	-
Steven Harrison	22 April 2021	N/A	-	-
Paul Preece	23 November 2018	7 July 2021	1,043,517	-
Non-Executive Directors:
Emmanuel Clair	23 November 2018	N/A	12,603,709	12,467,615
David Wilkinson	7 July 2021	N/A	8,333	-
Anthony Gott¹	7 July 2021	N/A	-	-
Seshu Bhagavathula	17 December 2021	N/A	-	-
John Winn	1 March 2020	7 July 2021	6,326,934	6,646,526

¹On 1 August 2022, Anthony Gott was appointed Executive Chairman.

Principal Activities

Saietta Group plc is a company registered in England and Wales that has developed the innovative AFT electric motor, designed to deliver class-leading performance for its target markets whilst being low cost and built for mass market production. Saietta's initial target market is the high volume, fast-growing lightweight mobility market including motorcycles in Asia.

Following its acquisition of e-Traction in November 2021, Saietta is also a provider of electric drive solutions to OEMs and transport operations in the Heavy Goods Vehicle ("HGV") sector.

Review of Business

A review of the business, its development and performance for the year and its position at the year end, together with the future prospects of the Group, is contained in the Chairman & Chief Executive Officer's Report and the Strategic Report to be included in the Annual Report and Accounts.

Going concern

The Group operates in markets that are rapidly growing and has strategic plans that respond to such growth. In delivering those plans, the Group is mindful of the ultimate benefits from maintaining control over the deployment of its intellectual property in applications with major OEMs. In order to do so, it recognises that at times it will potentially need to co-invest with certain major OEMs to enhance the future value it can achieve from application of its products directly into OEM customer sales. In such instances the commercial merits will be weighed in determining whether funding is sought.

The Group has prepared forecasts for future scenarios both incorporating such funding needs and excluding such.

These forecasts align to the strategy set out at IPO which were based on the assumption that the Group will significantly increase its revenue and be able to generate significant gross profit in the next 12 months. If the timing of the increased revenue generation is delayed there may be a need for the Group to raise additional financing.

Whilst the Directors expect that additional funding can be raised this is not guaranteed and when continuing with an accelerated expansion this presents a material uncertainty which may cast significant doubt over the Group's and the Company'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. The financial statements do not reflect any adjustments that would be required to be made if they were prepared on a basis other than the going concern basis.

Results and Dividends

The Group loss for the year, before taxation, amounted to £11,132,085 (2021: £7,297,163). The Directors do not recommend a final dividend this year (2021: £nil).

Research and development costs

In accordance with the policy outlined in note 2, the Group incurred research and development expenditure of £3,874,385 (2021: £1,319,170) in the year. Commentary on the major activities is given in the Strategic Report.

Financial instruments

The use of financial instruments and financial risk management policies is covered in the Strategic Report and also in note 27 of the financial statements.

Substantial shareholdings

At 31 March 2022, the Company had been notified that (other than Directors) the following were interested in 3% or more of the issued capital of the Company:

	Number of Ordinary shares	% of issued share capital
Amati AIM VCT plc	9,530,898	11.21%
Lawrence Marazzi	7,554,543	8.88%
John Michael Winn	6,326,934	7.44%
Premier Milton Investors	6,167,456	7.25%
Schroder Investment Management	5,685,015	6.68%
Scott Roberts	2,681,723	3.15%
Unicorn Asset Management	2,625,497	3.09%

At 31 July 2022, there were 85,051,953 Ordinary shares in issue.

Governance and the Board

The Board's governance system provides balanced support for the executive management team in the development of the Group's strategy and with the need to ensure effective monitoring of its implementation. The Board and its committees have considered the significant events of the year and their impact on the Group's business and reputation.

During the year the Audit & Risk Committee was chaired by David Wilkinson, the Remuneration Committee was chaired by Anthony Gott and the Nomination Committee was chaired by Anthony Gott. The Board remains confident in the work of those committees and the overall system of governance.

Major macroeconomic impacts

Covid-19: We are mindful that the COVID-19 pandemic continues to have a notable impact on global supply chains; however, we do not anticipate that our production and sales volumes projections will be adversely affected in FY2022/23.

Economic and geopolitical factors: Inflationary pressures have been increasing throughout the first half of 2022, with major economies across the globe experiencing high energy prices linked to the conflict in Ukraine. This could impact the business as some prices we pay our suppliers are directly indexed to market rates and therefore our profit margins could be slightly reduced by these increased raw material costs. This increasing inflationary pressure could also affect consumer inflation expectations and cause a direct response from central banks in FY2022/23 and beyond, which could negatively affect the trajectory of future economic growth. Looking ahead, we will continue to monitor the impact of changes in material costs on our margins and may look to adjust sales prices if we cannot avoid passing cost increases on to our consumers.

Semiconductor shortage: Throughout FY2021/22, the automotive industry has had to respond to the global shortage of semiconductors which has been caused by a number of factors including supplier production disruption, increasing demand within the automotive sector driven by the shift to automation, and increased demand from non-automotive sectors. This has had a direct impact on our supply chain and our ability to satisfy customer demand but is not expected to impact on our sales volumes. Looking ahead, we expect gradual improvements in the availability of semiconductors, driven by increases in production capacity at suppliers.

Events after the reporting period

On 4 April 2022, Saietta Group plc was assigned the lease of a manufacturing facility in Sunderland, UK. The lease term commences on 4 April 2022 and terminates 27 September 2040. In addition, the Company paid consideration of £1,100,000 for plant & equipment housed within this facility.

In June 2022, Saietta was notified of its successful application for a £2 million grant from the UK Government's Automotive Transformation Fund under the Scale up Readiness Validation (SuRV) to support Saietta's investment in commercial vehicle e-axle pilot production and preparation for scale-up.

Auditors

Each of the persons who is a director at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and

• the director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. The auditors, BDO LLP, will be proposed for reappointment in accordance with section 489 of the Companies Act 2006.

Saietta Group plc has not included the requirements of Streamlined Energy and Carbon Reporting (SECR) due to the Group and its subsidiaries not meeting the threshold for reporting.

Consolidated statement of Comprehensive Income

	Notes	Year ended 31 March 2022 £		Year ended 31 March 2021 £
Revenue	5	3,595,803		870,966
Cost of sales		(1,870,238)		(190,036)
Gross profit		1,725,565		680,930
Other income	7	725,545		2,097
Write-off of related party receivable		-		(935,146)
Administrative expenses		(14,110,800)		(7,021,944)
Share option costs	25	(4,406,334)		(5,719,462)
Other administrative expenses	9	(9,704,466)		(1,302,482)
Gain on bargain purchase	29	704,761		-
Operating loss	8	(10,954,929)		(7,274,063)
Finance income	11	5,523		1
Finance expense	11	(104,621)		(23,101)
Net increase in financial liabilities	23	(78,058)		-
Loss before taxation		(11,132,085)		(7,297,163)
Tax credit	12	377,420		304,145
Loss for the year attributable to equity holders of the parent company			(10,754,665)		(6,993,018)
Other comprehensive loss, net of income tax, to be reclassified to profit and loss in subsequent periods
Exchange differences on translation of foreign operations			(27,587)		(352)
Total comprehensive loss for the year			(10,782,252)		(6,993,370)
Basic loss per share in pence 13			(0.14)		(0.15)

The earnings per share calculation relates to both continuing and total operations.

Consolidated statement of financial position

ASSETS	Notes	2022 £	2021 £
Non-current assets Intangible assets	14	8,365,506	3,364,156
Property, plant and equipment	15	3,498,541	198,479
Right-of-use assets	16	2,815,049	433,883
Trade and other receivables	18	734,526	-
Prepayments and accrued income	18	101,825
Total non-current assets		15,515,447	3,996,518
Current assets Inventories	17	2,470,043	116,958
Trade and other receivables	18	5,070,139	659,023
Prepayments and accrued income	18	1,237,197	-
Cash and cash equivalents	18	18,402,055	2,862,470
Total current assets		27,179,434	3,638,451
TOTAL ASSETS		42,694,881	7,634,969
EQUITY AND LIABILITIES Current liabilities Trade and other payables	19	6,819,521	761,399
Borrowings	20	-	176,111
Lease liabilities	21	470,069	114,555
Total current liabilities		7,289,590	1,052,065
Non-current liabilities Borrowings	20	-	2,340,000
Lease liabilities	21	2,380,537	330,426
Provisions	22	168,130	-
Liabilities for financial guarantees	23	41,833	-
Total non-current liabilities		2,590,500	2,670,426
EQUITY Share capital	24	93,557	51,921
Share premium	24	34,671,275	-
Share options reserve	25	12,217,991	7,318,820
Translation reserve		(27,939)	(352)
Accumulated losses		(14,140,093)	(3,457,911)
Total equity		32,814,791	3,912,478
TOTAL EQUITY AND LIABILITIES		42,694,881	7,634,969

Consolidated statement of cash flow

Operating activities		Year ended 31 March 2022 £	Year ended 31 March 2021 £
Losses after taxation		(10,754,665)	(6,993,018)
Adjustments for non-cash items:
Taxation	12	(377,420)	(304,145)
Interest income	11	(5,523)	(1)
Interest expense	11	104,621	23,101
Share-based payments	24	4,406,334	5,174,957
Amortisation of intangible assets	14	72,384	18,976
Depreciation of property, plant and equipment	15	174,451	39,708
Currency translation differences	15	3,204	-
Depreciation of right-of-use assets	16	270,477	107,381
Net increase in financial liabilities	23	41,833	-
Profit on disposal of property, plant and equipment		1,900	(562)
Tax credits received	12	-	104,145
Gain on bargain purchase	29	(704,761)
Cash used in operating activities before changes in working capital		(6,767,165,)	(1,829,458)
Change in working capital
Decrease/ (increase) in inventories		(669,692)	(65,825)
Decrease/ (increase) in receivables		(4,869,032)	1,186,455
Increase/ (decrease) in non-interest bearing liabilities		4,802,519	546,114
Decrease/(increase) in provisions		(279,826)	-
			-
Net cash flow used in operating activities		(7,783,196)	(162,714)
Investing activities
Purchases of intangible assets	14	(515,939)	(34,207)
Capitalised internally generated development costs	14	(3,594,038)	(774,665)
Purchase of property, plant and equipment	15	(3,389,798)	(97,295)
Sale of property, plant and equipment		-	3,109
Acquisition of subsidiary, net of cash	29	(1,427,246)	-
Interest received	11	5,523	1
Net cash used in investing activities		(8,921,498)	(903,057)
Financing activities
Proceeds from borrowings	20	-	2,340,000
Repayment of borrowings	20	(176,111)	(56,235)
Repayment of lease liabilities	21	(281,872)	(94,710)
Proceeds on issue of shares	24	35,241,809	1,434,789
Share issue costs	24	(2,507,409)	-
Interest paid on lease liabilities	11	(18,609)	(21,177)
Interest paid	11	(13,529)	(1,924)
Net cash flow from financing activities		32,244,279	3,600,743
Net change in cash and cash equivalents		15,539,585	2,534,972
Cash and cash equivalents, beginning of year		2,862,470	327,498
Cash and cash equivalents for continuing operations		18,402,055	2,862,470

Notes to the consolidated financial statements

1. General information

The financial information set out above does not constitute the Company's Annual Report and Accounts for the year ended 31 March 2022. The Annual Report and Accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered shortly. The auditor's report for the Company's 2022 Annual Report and Accounts was unqualified but included a material uncertainty due to Going concern due to the uncertainties regarding future financing. The opinion did not contain any statement under Section 498 of the Companies Act 2006.

Whilst the financial information included in this results announcement has been prepared in accordance with UK adopted international accounting standards, this announcement does not itself contain sufficient information to comply with UK adopted international accounting standards.

The Annual Report and Accounts for the year ended 31 March 2022 will be available on the Company's website: www.saietta.com

Saietta Group plc ("the Company") and its subsidiaries are collectively referred to as "the Group". The Company is a public limited company, registered in England and Wales. The address of its registered office is building 210, Heyford Park, Camp Road, Upper Heyford, Oxfordshire, OX25 5HE.

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

a) Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into the UK law and became UK-adopted international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK-adopted international accounting standards in its consolidated financial statements on 1 March 2021. There was no impact or changes in accounting from the transition.

The financial statements have been prepared under the historical cost convention. The presentation currency used is sterling and amounts have been presented rounded to the nearest £.

Preparation of consolidated financial statements

Where the company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

De-facto control exists in situations where the company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the company considers all relevant facts and circumstances, including:

· The size of the company's voting rights relative to both the size and dispersion of other parties who hold voting rights

· Substantive potential voting rights held by the company and by other parties

· Other contractual arrangements

· Historic patterns in voting attendance

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. The subsidiaries are consolidated from the date on which they were incorporated or acquired.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Changes in accounting policies

i. New standards, amendments to standards or interpretations

No new standards, interpretations and amendments adopted in the year have had a material impact on the Group.

ii. New standards, amendments to standards or interpretations not yet applied

There are no new standards, interpretations or amendments not yet applied which the Directors anticipate will have a material impact on the Group.

b) Significant accounting policies

Revenue recognition

Performance obligations and timing of revenue recognition

A portion of the Group's revenue is derived from selling goods with revenue recognised at a point in time when control of the goods has transferred to the customer. This is generally when the goods are delivered to the customer. However, for export sales, control might also be transferred when delivered either to the port of departure or port of arrival, depending on the specific terms of the contract with a customer. There is limited judgement needed in identifying the point control passes: once physical delivery of the products to the agreed location has occurred, the Company no longer has physical possession, usually will have a present right to payment (as a single payment on delivery) and retains none of the significant risks and rewards of the goods in question.

Some goods sold by the Group include warranties which require the Group to either replace or mend a defective product during the warranty period if the goods fail to comply with agreed-upon specifications. In accordance with IFRS 15, such warranties are not accounted for as separate performance obligations and hence no revenue is allocated to them. Instead, a provision is made for the costs of satisfying the warranties in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. On some product lines, a customer is able to take out extended warranties. These are accounted for as separate performance obligations, with the revenue earned recognised on a straight-line basis over the term of the warranty.

The Group's Lightweight and Heavy-duty divisions both carry out design (consultancy-type) services for clients, with revenue recognised typically on an over time basis. This is because the designs created have no alternative use for the Group and the contracts would require payment to be received for the time and effort spent by the Group on progressing the contracts in the event of the customer cancelling the contract prior to completion for any reason other than the Group's failure to perform its obligations under the contract. On partially complete design contracts, the Group recognises revenue based on stage of completion of the project which is estimated by comparing the number of hours actually spent on the project with the total number of hours expected to complete the project (i.e. an input based method). This is considered a faithful depiction of the transfer of services as the contracts are initially priced on the basis of anticipated hours to complete the projects and therefore also represents the amount to which the Group would be entitled based on its performance to date. These design contracts include commitment fees are fees which are payable by customers in order to secure exclusive access to certain goods and services of the company and thus precludes the Company from offering those goods and services to other customers. They are recognised over the period of the commitment.

Determining the transaction price

Most of the Group's revenue is derived from fixed price contracts and therefore the amount of revenue to be earned from each contract is determined by reference to those fixed prices.

Allocating amounts to performance obligations

For most contracts for goods, there is a fixed unit price for each product sold, with reductions given for bulk orders placed at a specific time. Therefore, there is no judgement involved in allocating the contract price to each unit ordered in such contracts (it is the total contract price divided by the number of units ordered). Where a customer orders more than one product line, the Group is able to determine the split of the total contract price between each product line by reference to each product's standalone selling prices (all product lines are capable of being, and are, sold separately).

For most contracts for design services, revenue is recognised over time in accordance with percentage completion. Accordingly, the transaction price is allocated in accordance by reference to the actual costs incurred as a proportion of the total expected cost of the products and services to be provided for each performance obligation. Allocation of transaction price may include allocation of discounts, which are applied on a proportionate basis to all performance obligations based on the stand-alone selling price of each performance obligation (observable or estimated).

In order to win significant repeat business with key customers, the Group might enter into contracts entitling them to discounts if it places repeat orders in the future. Such discounts constitute a 'material right' and result in some of the consideration received for the initial sale being deferred and recognised as revenue when subsequent sales are fulfilled or (if later) when the rights to receive a discount expire. The Group estimates both the probability that the customer will take up its future discount offer and the value of future purchases that might be made in order to estimate the value of the rights granted. This has to be done on a contract-by-contract basis for each customer to whom material rights have been granted. The Directors do not consider past experience an appropriate basis for estimating the amount of total contract revenue to allocate to future discount rights for two reasons. Firstly, there is not a significant number of such contracts on which past experience can be extrapolated. And secondly, each customer has unique circumstances which will impact both the probability and value of additional orders being placed. Therefore, the estimates are made by reference to discussions had with the relevant customers as to the extent the discount options will be taken up when the original contracts were negotiated.

Costs of fulfilling contracts

The costs of fulfilling contracts do not result in the recognition of a separate asset because:

· for RetroMotion contracts, where the Group retrofits existing diesel-engine powered buses with in-wheel electric motor technology, revenue is recognised over time by reference to the stage of completion with control of the asset remaining with the customer for the duration of the contract. Consequently, no asset for work in progress is recognised.

· such costs are included in the carrying amount of inventory for contracts involving the sale of goods; and

· for engineering design service contracts, revenue is recognised over time by reference to the stage of completion meaning that control of the asset (the design service) is transferred to the customer on a continuous basis as work is carried out. Consequently, no asset for work in progress is recognised.

Practical expedients

The company has taken advantage of the practical expedients:

· not to account for significant financing components where the time difference between receiving consideration and transferring control of goods (or services) to its customer is one year or less; and

· to expense the incremental costs of obtaining a contract when the amortisation period of the asset otherwise recognised would have been one year or less.

Grant income

The Group enters into consortiums with partners who together will apply for grant income to be paid out against a project that contains defined deliverables, clear outcomes and a set level of expenditure.

Expenditure comprises both capital purchases for equipment and operational expenditure for labour and supplies.

Each partner agrees a set level of expenditure at the start of the project and a level of grant income paid for by the grant provider is allocated for payment against the expenditure incurred, however the deliverables on the project for each partner are linked. Such projects are sought by the Group as they provide funding over one or more work streams that form part of the Group's programme(s) to deliver increased production capacity.

The Group recognises the costs of a project in the period in which they are incurred when related to qualifying expenditure. The grant income that is provided against this total expenditure is recognised as income when received from the issuing authority. Recognition occurs at this point as its release is subject to the issuer's review and confirmation of compliance with all conditions for release. The grant related to assets is deferred and recognised as income in the same period in which the grant-related asset is being depreciated.

Assets acquired for use in such projects are depreciated in accordance with the Group's depreciation policy.

The grant programmes that the Group participates in typically operate on a three month cycle, with recoverable income over each three month period paid in the month following that period.

Expenditure

Expenditure is recognised in respect of goods and services received when supplied in accordance with contractual terms. Provisions are made when a present obligation exists for a future liability relating to a past event and where the amount of the obligation can be reliably estimated.

Foreign currencies

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in 'sterling', which is also the Group's functional currency.

Transactions entered into by the Group in a currency other than the functional currency are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income or expense'.

Intangible assets

Externally acquired intangible assets

Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see section related to critical estimates and judgements below).

The significant externally acquired intangibles recognised by the company and their useful economic lives are as

Intellectual property patents 10% straight line

Software 25% reducing balance

Internally generated intangible assets (development costs)

Expenditure on internally developed products is capitalised if it can be demonstrated that:

• it is technically feasible to develop the product for it to be sold;

• adequate resources are available to complete the development;

• there is an intention to complete and sell the product;

• the company is able to sell the product;

• sale of the product will generate future economic benefits; and

• expenditure on the project can be measured reliably.

Capitalised development costs are subsequently amortised on a straight line basis over the periods the company expects to benefit from selling the products developed, which ranges from 8 to 10 years. The amortisation expense is included within the administrative expenses in the statement of comprehensive income.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in the statement of comprehensive income as incurred.

The aggregate value of the capitalised development expenditure for each product is reviewed at the end of each accounting period and where the circumstances which have justified the deferral of the expenditure set out above no longer apply, or are considered doubtful, the expenditure, to the extent to which it is considered to be irrecoverable, is impaired. Where an impairment loss subsequently reverses, the carrying amount of the asset 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 in prior years. A reversal of an impairment loss is recognised as income immediately.

Property, plant, and equipment

Plant, machinery, fixtures and fittings are stated at cost less accumulated depreciation and accumulated impairment loss.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold Remaining lease term

Plant and machinery 25% reducing balance

Fixtures and fittings 25% reducing balance

Motor vehicles Four years

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Assets under construction

Assets under construction relates to the construction of an automated production line which at 31 March 2022 was not yet ready for use.

Assets under construction are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items.

Any costs not capitalised as part of the factory cost will be expensed to the statement of profit or loss as incurred.

Depreciation on assets under construction does not commence until they are complete and available for use.

When necessary, the entire carrying amount of the assets under construction is tested for impairment in accordance with IAS 36 Impairment of assets as a single asset by comparing its recoverable amount (the higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Weighted average cost is used to determine the cost of ordinarily interchangeable items.

Financial instruments

Financial assets and financial liabilities are recognized in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss

The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Amortised Cost

These assets arise principally from the provision of goods and services to customers (eg trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivable is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within cost of sales in the statement of comprehensive income. On confirmation that the trade debtor will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the statement of comprehensive income (operating profit).

The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the balance sheet. Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss. The Group's accounting policy for each category is as follows:

· Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

· Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method.

Financial guarantee contract liabilities

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of:

· the amount determined in accordance with the expected credit loss model under IFRS 9 Financial Instruments; and

· the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 Revenue from Contracts with Customers.

The fair value of financial guarantees is determined based on the present value of the difference in cash flows between the contractual payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations. Where guarantees in relation to loans or other payables of associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

When the Group exchanges with the existing lender one debt instrument into another one with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

Deferred tax is recognised on the difference between the carrying amount of an asset or liability and the amount at which that asset or liability is assessed for tax purposes (tax base). Historical accumulated tax losses would give rise to a net deferred tax asset for the Group. However, due to the uncertainty on future recovery the Directors considered it prudent not to recognize such asset at this time.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

· The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

· The Group has the right to substantially all of the economic benefits from the use of the asset throughout the period of use; and

· The Group has the right to direct the use of the asset. The Group has this right when it has the decision making rights that are most relevant to changing how and for what purposes the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either:

· The Group has the right to operate the asset; or

· The Group designed the asset in a way that predetermines how and for what purposes it will be used.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is allocated, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method over the shorter of the useful life of the leased asset and the expected lease term. If ownership of the leased asset is automatically transferred at the end of the lease term or the exercise of a purchase option is reflected in the lease payments,the right-of-use asset is amortised on a straight-line basis over the expected useful like of the leased asset.

The lease liability is initially measured at the present value of the lease payments that are not paid at commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as a discount rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Lease payments include fixed payments, i.e. amounts expected to be payable by the Company under residual value guarantee, the exercise price of a purchase option and lease payments in relation to lease extension option if the Company is reasonably certain to exercise purchase or extension options and payment of penalties for terminating the lease if the lease term considered reflects that the Company shall exercise termination option.

The Group applies the practical expedient to not assess whether rent concessions occurring as a direct consequence of the COVID-19 pandemic that meet the following conditions are lease modifications:

· The change in lease payments results in revised consideration that is substantially the same, or less than the consideration for the lease immediately preceding the change;

· Any reduction in lease payments affects only payments originally due on or before 30 June 2021; and

· There no substantive change to other terms and conditions of the lease.

Changes to lease payments for such leases are accounted for as if they are not lease modifications.

Provisions

The Group applies IAS 37 Provisions, Contingent Liabilities and Contingent Assets in accounting for non-financial liabilities. A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. When the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are held for product warranty as detailed in note 22 to the consolidated financial statements

Warranty provisions

Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the directors' best estimate of the expenditure required to settle the Group's obligation.

Onerous contract provisions

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

Convertible loans

Convertible loans, where conversion is dependent upon an event such as Listing, are treated as borrowings and recorded in financial liabilities in accordance with the term of the loan. Whilst the loan is recognized at amortised cost, the derivative embedded in the host contract is separated and measured as an option. This element is not considered material.

Convertible loans which do not meet the 'fixed for fixed' criterion due to the contingency of Listing are classified as liabilities with no equity component.

Borrowing costs

Borrowing costs are capitalised, net of interest received on cash drawn down yet to be expended when they are directly attributable to the acquisition, contribution or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.

Employee benefit costs

The Group operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the consolidated income statement in the period to which they relate.

Share-based payments

The Group also enters into arrangements that are equity-settled, share-based payments with certain employees (including directors) in the form of share options. During the period covered by the financial statements, the Group operated a HM Revenue and Customs approved share option scheme. This scheme is an Enterprise Management Incentive scheme where equity options are made to certain qualifying employees to reward and incentivise them. The equity share based payments are measured at the fair value of the equity at the grant date.

The scheme was open to all qualifying employees who are an employee within the Group working 25 hours per week for the Group, or if less, at least 75% of their working time.

The Listing was a necessary condition for exercise.

Employees who leave the Group are entitled to exercise their vested options after they leave the employment of the Group if they meet the requirements of a "good leaver", defined to be exit from the business for grounds other than dismissal.

The value of the share options is determined using the Black Scholes option pricing model and Monte Carlo simulation, and recorded as a share option reserve in the consolidated statements of financial position, with movements in the reserve treated as operating expenditure in the respective year.

The options have varying vesting periods from one month up to four years, with exercise of vested shares immediately in advance of a proposed Listing.

Long-Term Incentive Plan ("LTIP" )

The Group operated a share-based payment LTIP arrangement for certain employees. The scheme awards share options to the employee based on a specific number of shares at grant date and the share price of Saietta Group plc at the vesting date, subject to profitability and employment conditions. These were accounted for as equity-settled arrangements. For these awards, fair value is to be measured at the date of grant and charged to the profit and loss over the vesting period. The vesting period is the period of time before shares in an employee plan are unconditionally owned by an employee. Fair value at the date of grant is determined using the Black-Scholes model or the Monte Carlo Simulation model where appropriate.

Share capital

Financial instruments issued by the company are treated as equity only to the extent that they do not meet the definition of a financial liability. The company's ordinary shares are classified as equity instruments.

Going concern

The financial statements have been prepared on a going concern basis. In adopting the going concern basis, the directors have considered the financial position of the Group and the Company, their cash flows and their liquidity position. The Group and Company's financial risk management objectives and exposures to liquidity and other financial risks and uncertainties are set out on pages 16 to 19. The Group had net assets of £32,814,791 (2021: £3,912,478) as at 31 March 2022 and available liquidity of £18,402,055 comprised of cash and cash equivalents which is a net increase of £15,539,585 compared to the liquidity position of £2,862,470 as at 31 March 2021 which has been achieved through Admission to the AIM which raised gross proceeds of £37.5m and the Group's operational trading activities.

The Group and Company have modelled scenarios for periods up to four years from the March 2022 year end and stress tested its financial position in such scenarios. These stress tests modelled the variability in financial performance and free cash flows when incorporating certain hypothetical events such as a reduction in forecast revenue to include only revenue committed to date, modifications to capital expenditure and variations in gross margins achieved.

The Group and Company operate in markets that are rapidly growing and has strategic plans that respond to such growth. In delivering those plans, the Group is mindful of the ultimate benefits from maintaining control over the deployment of its intellectual property in applications with major OEM's. In order to do so, it recognises that at times it will potentially need to co-invest with certain major OEM's to enhance the future value it can achieve from application of its products directly into OEM customer sales. The Group has prepared forecasts for future scenarios both incorporating such funding needs and excluding such.

These forecasts align to the strategy set out at IPO which were based on the assumption that the Group and Company will significantly increase their revenue and be able to generate significant gross profit in the next 12 months. If the timing of the increased revenue generation is delayed there may be a need for the Group to raise additional financing.

In particular, when looking further ahead, the Directors acknowledge that if it elects to achieve greater participation in future value, the potential then arises for a funds shortfall to arise and that in such circumstances it would need to seek further funding to pursue such a contractual route. In such instances the commercial merits will be weighed in determining whether funding is sought.

The Group and Company have assessed the projected cash flows of the Group and Company for the twelve-month period from the date of authorisation of the financial statements and beyond it later years and have carried out a stress test to determine the under-performance level that would ultimately result in insolvency.

The model takes into account the Group and Company's expectations of external factors including continued supply chain challenges related to semiconductor shortages and prevailing macroeconomic conditions including inflationary pressures. The stress test scenario models the impact of sustained reduction in forecast revenue over the twelve month period and the impact of contractually obliged outflows of cash in respect of capital expenditure.

Whilst acknowledging the direct relationship of commercial decisions with OEM's over needs for future funds beyond the coming twelve months, the Board have concluded, on the basis of all scenarios and of current and forecast trading and related expected cashflows and available sources of finance, that it will be able to continue as a Going Concern for at least twelve months from the date of signing these financial statements and therefore it remains appropriate to prepare the Group and Company's results on the basis of a going concern.

3. Critical Accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances and any further evidence that arises relevant to judgements taken. In the future, actual experience may differ from these estimates and assumptions. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Useful lives of property, plant, and equipment

Property, plant and equipment are depreciated over the estimated useful lives of the assets:

Short leasehold Remaining lease term

Plant and machinery 25% reducing balance

Fixtures and fittings 25% reducing balance

Motor vehicles Four years

Useful lives are based on management's estimates of the period that the assets will generate revenue, which are reviewed annually for continued appropriateness and events which may cause the estimate to be revised. At the end of the initial period, asset lives reach a residual value at which they are either suitable for replacement or extended life after maintenance and overhaul. The key areas of estimation uncertainty regarding depreciation is the determination of the life time capacity; risk of obsolescence from technological and regulatory changes; and required future capital expenditure (refurbishment or replacement of key components).

The carrying amount of property, plant and equipment at 31 March 2022 is £3,489,541 (2021: £198,479) and a reasonable adjustment sensitivity if assets were to have a reduced useful life of a year would be a reduction in carrying value of £366,000.

Accounting for business combinations and fair value - estimates and assumptions

Business combinations are accounted for at fair value. The assessment of fair value is subjective and depends on a number of assumptions. These assumptions include assessment of discount rates, and the amount and timing of expected future cash flows from assets and liabilities. In addition, the selection of specific valuation methods for individual assets and liabilities requires judgment. The specific valuation methods applied will be driven by the nature of the asset or liability being assessed. The consideration given to a seller for the purchase of a business or a company is accounted for at its fair value. When the consideration given includes elements that are not cash, such as shares or options to acquire shares, the fair value of the consideration given is calculated by reference to the specific nature of the consideration given to the seller.

Please refer to Note 29 for further detail.

Useful lives and carrying value of intangible assets

The carrying amount is sensitive to both write-off of any intangible asset that is impaired and to amortisation either before all criteria to amortise are met, or after such criteria have been met. When carrying out impairment tests these are based upon future cash flow forecasts and these forecasts include management estimates.

Future events or changes in the market could cause the assumptions to change, therefore this could also have an adverse effect on the future results of the group.

Recognition of internally generated intangible assets arising from the development phase of a project is dependent upon application of specific criteria detailed in note 2. Management judgement is required as to the extent that each of the criteria is met and to the point where development is complete.

The carrying amount of intangible assets at 31 March 2022 was £8,365,507 (2021: £3,364,156) and a reasonable adjustment sensitivity if intangible assets related to a motor variant were impaired or if the Group were to require amortisation for an additional year for patents and immediately at the start of the year for development costs would have an impact of £72,000.

Research and Development ("R&D") credits

Research and Development credits arising in the United Kingdom under Corporation Tax Act 2009 Section 1308 claims are recognised upon success and recognised within Accrued Income. Successful Section 1308 R&D credits are considered to be UK Government grants arising as a direct result of the Company's investment in its R&D assets and for which no further obligation exists upon the Company. The R&D credits are charged to the P&L at the same time that the asset is expensed to P&L, therefore amortised over 8 years as their benefit is derived over the use of the Company's R&D assets.

Expected credit losses and asset impairment

Expected credit losses are assessed under IFRS9 using reasonable information about past events and current conditions and forecasts of future events. Asset impairment considers the likely returns from financial assets owned by the Group and their recoverability, based on market values and management's judgement of any other relevant factors.

Please refer to Note 27 for further detail.

Carrying value of provisions for onerous contracts

IAS 37 defines an onerous contract as a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. Unavoidable costs are defined as the lower of the cost of fulfilling the contract and any compensations or penalties arising failure to fulfil it.

The Group currently has agreed to fulfil multiple customer contracts that will see unavoidable costs of meeting their obligations exceed the revenues received. As such, these contracts are classified as onerous. The contracts need to be valued at a best estimate of fair value, including the costs directly associated with fulfilling the contract and also the costs from assets used to complete the contracts (Equipment, labour costs, etc). For the purpose of estimating their fair value, the costs are based on the anticipated material, staffing and additional operating expenses. The economic costs are taken as a percentage of the revenue to costs as forecast in 2022.

If the total unavoidable costs of meeting the unavoidable obligations under these contracts were to be 10% higher, this would cause the provision to increase by £9,330 with the corresponding movement recognised as an expense in the Statement of Comprehensive Income. The total provision is expected to be utilised in its entirety before the end of the financial year ended 31 March 2023.

Please refer to Note 22 for further detail.

Incremental borrowing rate used to measure lease liabilities

Where the interest rate implicit in the lease cannot be readily determined, lease liabilities are discounted at the lessee's incremental borrowing rate. This is the rate of interest that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. This involves assumptions and estimates, which would affect the carrying value of the lease liabilities (note 21) and the corresponding right-of-use assets (note 16).

To determine the incremental borrowing rate the company uses recent third-party financing as a starting point, and adjusts this for conditions specific to the lease such as its term and security. The company used incremental borrowing rates specific to each lease which ranged between 4.1% and 4.5%. A 5% increase in the rate would cause the lease liability to reduce by £413,014 with a corresponding movement in the 'cost' of the right-of-use asset which would reduce the associated amortisation.

Share Options - estimates and assumptions

The valuation of share options issued in the year has been based on a Black Scholes model for options with no market based vesting conditions and a Monte Carlo simulation for options with market based vesting conditions. The inputs to both models represent the Director's best estimates for the likely exercise behaviour of the option holders. The expected future share price volatility was estimated based on the historical volatility of the Company's share price and a representative peer group of similar companies. For the share options with market based vesting conditions an independent specialist consultant was engaged to simulate the impact on the market-based conditions on the fair value of the options issued.

4. Alternative Performance Measures

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 this Annual Report 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 exceptional 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.
Gross proceeds raised through placing	Gross proceeds are the amount that a seller receives from the sale of a shares. These proceeds include all costs and expenses.
Working capital	Changes in assets and liabilities as presented in the Consolidated Statement of Cash Flows. This comprises movements in assets and liabilities excluding movements relating to financing or investing cash flows or non-cash items that are not included in adjusted EBIT or adjusted EBITDA.

Adjusted EBITDA

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.

Working capital is considered by the Group to be a key measure in assessing short-term assets and liabilities that are expected to be converted into cash within the next 12-month period.

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

Adjusted EBITDA		Year ended 31	Year ended 31
		March 2022	March 2021
		£	£
Adjusted EBITDA		(4,404,039)	(997,895)
Depreciation and amortization		(509,895)	(166,065)
Finance income		5,523	1
Finance expense		(104,621)	(23,101)
Share-based payment charges	Note 25	(4,406,334)	(5,174,957)
Gain on bargain purchase recognised as part of subsidiary acquisition	Note 29	704,761	-
Costs related to Saietta Group plc's admission to the AIM		(1,219,296)	-
Costs related to the acquisition of e-Traction Europe B.V.		(358,358)	-
Costs related to the co-operation with Padmini VNA		(95,510)	-
IPO-dependent staff expenses		(361,157)	-
M&A support fees		(101,569)
One-off legal fees in respect of share option advice pre-IPO		(75,000)	-
One-off legal fees in respect of company reorganisation		(44,176)	-
Net increase in financial liabilities		(78,058)	-
Contractor fees to secure grants		(73,432)
One-off enterprise resource planning consultancy fees Write-off of related party receivables		(10,925) -	(935,146)
Loss before taxation		(11,132,085)	(7,297,163)
Taxation		377,420	304,145
Loss for the year		(10,754,665)	(6,993,018)

A reconciliation from Gross Proceeds raised through placing to proceeds on issue of shares per Consolidated Cash Flow Statement is detailed below:

Proceeds on issue of shares	£ 35,241,809
Commission and corporate finance fees	£ 2,125,000
Other fees	£ 133,191
Gross proceeds from settled shares	£ 37,500,000

5. Segment information

The Group operates through three distinct business divisions:

a. Lightweight mobility which focuses on AFT developments particularly low voltage two and three wheelers;

b. Heavy-duty commercial which covers the truck, bus and coach markets; and

c. Marine division, fronted by Propel, which is the Group's marine division selling inboard and outboard motors both via distributors and direct to customers.

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer, Executive Chairman and Chief Financial Officer.

Measurement of operating segment profit or loss, assets and liabilities

The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS but excluding non-recurring losses, such as goodwill impairment, and the effects of share-based payments.

Inter-segment sales are priced along the same lines as sales to external customers, with an appropriate discount being applied to encourage use of group resources at a rate acceptable to local tax authorities. This policy was applied consistently throughout the current and prior period.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities and defined benefit liabilities. Loans and borrowings are allocated to the segments based on relevant factors (e.g. funding requirements). Details are provided in the reconciliation from segment assets and liabilities to the Group position.

Year ended 31 March 2022
				All other
	Lightweight	Heavy- duty	Marine	segments	Total
Revenue	£	£	£	£	£
Revenue from Apollo Future Mobility Group Limited	635,984 - -				635,984
Revenue from Consolidated Metco, Inc.	400,000 - -			-	400,000
Revenue from Sloepmakerij B.V.	- - 1,261,008			-	1,261,008
Revenue from other customers	555,266	952,018	-	-	1,507,284
Inter-segmental revenue	(186,407)	(22,066)	-	-	(208,473)
Groups' revenue per consolidated statement of	1,404,843	929,952	1,261,008	-	3,595,803
comprehensive income
Depreciation	300,017	98,766	38,728	-	437,511
Costs associated with Listing	1,006,323	-	-	-	1,006,323
	1,306,340	98,766	38,728	-	1,443,834
Segment loss	(6,243,109)	(993,005)	(296,416)	(446,371)	(7,978,901)
Share based payments					(4,406,334)
Gain on bargain purchase					704,761
Other income					725,545
Finance income					5,523
Finance expense					(104,621)
Net increase in financial liabilities					(78,058)
Group loss before tax and discontinued operations					(11,132,085)
Year ended 31 March 2021
				All other
	Lightweight	Heavy- duty	Marine	segments	Total
Revenue	£	£	£	£	£
Revenue from Apollo Future Mobility Group Limited	624,110	-	-	-	624,110
Revenue from Consolidated Metco, Inc.	-	-	-	-	-
Revenue from Sloepmakerij B.V.	-	-	-	-	-
Revenue from other customers	246,856	-	-	-	246,856
Inter-segmental revenue	-	-	-	-	-
Groups' revenue per consolidated statement of	870,966	- - -			870,966
comprehensive income
Depreciation	(147,089)	- - -			(147,089)
Costs associated with Listing	-	-	-	-	-
	(147,089)	- - -			(147,089)
Segment loss	(2,869,826)	- - -			(2,869,826)
Share based payments					(4,406,334)
Other income					2,097
Finance income					1
Finance expense					(23,101)
Group loss before tax and discontinued operations					(7,297,163)

Year ended 31 March 2022
				All other
	Lightweight	Heavy- duty	Marine	segments	Total
Additions to non-current assets	£ 6,980,426	£ 3,107,667	£ 1,320,308	£ -	£ 11,408,401
Inventories	297,585	1,943,775	-	-	2,241,360
Reportable segment assets	33,962,388	5,827,677	3,055,995	48,821	42,894,881

Total group assets					42,894,881
Reportable segment liabilities	7,503,370	1,507,903	901,228	125,756	9,838,257
Loans and borrowings					-
Liabilities for financial guarantees					41,833
Deferred tax liabilities					-
Total group liabilities					9,880,090
Year ended 31 March 2021
				All other
	Lightweight	Heavy- duty	Marine	segments	Total
	£	£	£	£	£
Additions to non-current assets	906,167	- - -			906,167
Inventories	116,958	- - -			116,958
Reportable segment assets	7,634,969	- - -			7,634,969

Total group assets					7,634,969
Reportable segment liabilities	1,206,380	- - - 1,206,380
Loans and borrowings		2,516,111
Liabilities for financial guarantees		-
Deferred tax liabilities		-
Total group liabilities		3,722,491

Non-current assets by geography
	Year ended 31	Year ended 31
	March 2022	March 2021
	£	£
UK	13,162,815	3,993,009
European Union	2,352,632	3,509
Rest of World	-	-
Total	15,515,447	3,996,518

Contract assets and contract liabilities arise from the Group's Lightweight and Heavy-duty divisions, which enter into contracts that can take a few years to complete, because cumulative payments received from customers at each balance sheet date do not necessarily equal the amount of revenue recognised on the contracts.

6. Revenue analysis


Revenue by category and by geography is as follows:
Revenue by category
Lightweight division	Year ended 31 March 2022 £ 1,404,843	Year ended 31 March 2021 £ 870,966
Heavy-duty division	929,952	-
Marine division	1,261,008	-
Total	3,595,803	870,966
Revenue by geography
UK	Year ended 31 March 2022 £ 1,221,049	Year ended 31 March 2021 £ 810,840
European Union	2,161,518	15,000
Rest of World	213,236	45,126
Total	3,595,803	870,966

Under one design contract entered into during the year, £200,000 (2021: £nil) was received in advance of performance and not recognised as revenue during the year. The balance is included within accruals and deferred income.

Year ended 31

March 2022

March 2021

Grant income

725,545

2,097

The Group received development government grants from the Advanced Propulsion Centre against qualifying expenditure of £661,122 (2021: £2,097) in the years ended 31 March 2022 and 31 March 2021 respectively, which has been recorded as grant income. There are no unfulfilled conditions or other contingent liabilities attached to the grant, however, as is customary the final instalment claim amount of £330,326 (2021: £39,225) remains due, subject to submitted assessment. This has been treated as a contingent gain at the year ended 31 March 2022.

The remaining £64,423 (2021: £nil) balance included within 'Other income' relates to individually immaterial grants received by subsidiaries during the year.

8. Operating loss


	Year ended 31	Year ended 31
	March 2022	March 2021
Operating loss has been stated after:	£	£
Cost of inventories recognised as expense	1,971,725	68,007
Depreciation of right-of-use assets	270,477	107,381
Depreciation of property, plant and equipment	174,451	39,708
Amortisation of intangible assets	72,384	18,976
Profit on disposal of fixed assets	2,160	(562)
Auditor's remuneration:
Fees payable to the Group's auditor for the audit of the Group's accounts	108,750	90,000
Fees payable to the Group's auditor for the audit of the subsidiaries accounts	77,766	-
Fees payable to the Group's auditor for other services:
- Other fees	153,176	-
Share-based payment expense	4,406,334	5,174,957
Foreign exchange differences	(52,957)	4,562

The presentation of the Statement of Comprehensive Income has been amended to show the share option expense as part of administrative expenses based on the business's operations.

9. Significant administrative expenses

Wages and salaries excluding share-based employee expense	Year ended 31 March 2022 £ 4,800,640	Year ended 31 March 2021 £ 781,236
Share-based employee expense	4,406,334	5,040,848
Costs related to Saietta Group plc's admission to the AIM	1,219,296	-
Costs related to the acquisition of e-Traction Europe B.V.	358,358	-
Other individually immaterial expenses	3,326,172	1,199,860
Total	14,110,800	7,021,944

10. Employee benefit expenses (including directors)

	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Wages and salaries	3,768,729	604,553
Social security costs	797,796	153,185
Employer's pension contributions	234,115	23,498
Share-based employee expense	4,406,334	5,040,848
Total	9,206,974	5,822,084

Average number of employees during the year was as follows:	Year ended 31 March 2022 No.	Year ended 31 March 2021 No.
Technical	70	18
Procurement	4	2
Sales and marketing	12	1
Finance and administration	14	4
Total	100	25
The remuneration of department heads who are the key management personnel is as follows:
	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Short term employee benefits	1,297,568	183,584
Unexercised share options awarded in the year	2,768,709	736,377
	4,066,277	919,961

Directors	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Remuneration	623,277	393,600
Unexercised share options awarded in the year	2,366,492	3,639,703
	2,989,769	4,033,303
Highest paid director The highest paid director's emoluments were as follows:
£ Directors' emoluments and amounts receivable under long-term incentive schemes	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Defined contribution schemes:	2,223,689	2,171,670
Accrued pension at the end of the year	7,762	-
	2,231,451	2,171,670

11. Finance income and expense


	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Finance income Deposit account interest	5,523	1
Finance expense
Interest on lease liabilities	18,609	21,117
Other interest	86,012	1,924
	104,621	23,101

12. Taxation
	Year ended 31	Year ended 31
	March 2022	March 2021
	£	£
UK tax (credit) for the current year	(377,420)	(304,145)
Deferred tax	-	-
Tax credit for the year	(377,420)	(304,145)

A reconciliation of the tax credit to the elements of loss before tax for the consolidated income statement is as follows:

(Loss) before income tax	Year ended 31 March 2022 £ (11,132,085)	Year ended 31 March 2021 £ (7,297,163)
Tax at UK rate of 19%	2,115,096	1,386,461
Reconciling tax charges for: Non-deductible expenses	98,898	-
Capital allowances	400,000	55,000
R&D tax credit	71,710	200,000
Gain on bargain purchase	133,905	-
Share based payments	(837,203)	(983,241)
Deferred tax asset not recognised	(1,604,985)	(354,075)
Tax credit for the year	377,420	304,145
Effective tax rate for the year	(3.4%)	(4.2%)

The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as permitted by IAS 12) during the period are shown below:

	Asset	Liability	Net
Accelerated capital allowances	2022 £ -	2022 £ (714,498)	2022 £ (714,498)
Leases	-	(60,185)	(60,185)
Tax losses	774,683	-	774,683
Net tax assets / liabilities	774,683	(774,683)	-
	Asset	Liability	Net
Accelerated capital allowances	2021 £ -	2021 £ (480,475)	2021 £ 480,475
Leases	2,220	-	2,220
Tax losses	478,255	-	478,255
Net tax assets / liabilities¹	480,475	(480,475)	-

1. This table disclosure was not included in the prior year accounts and did not present the deferred tax asset offset against the deferred tax liability in the 2021 financial year. The deferred tax asset is not recognised, but to the extent the Group has deferred tax liabilities. This disclosure had no impact on the primary financial statements.

The Group has recognised the deferred tax assets to the extent that it can be offset against the deferred tax liability. The deferred tax asset over and above this utilisation has not been recognised as the business is developing its products. When there is clear visibility of the profits, the Group will recognize the net deferred tax assets. Losses carried forward were £31,013,764 in the year ended 31 March 2022 (2021 restated1: £4,043,664).

13. 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.

	Year ended 31	Year ended 31
	March 2022	March 2021
Loss per share	£	£
- Basic	(0.14)	(0.15)
The calculation of the basic loss per share is based on the following data:
	Year ended 31		Year ended 31
	March 2022		March 2021
Loss for the year - Attributable to equity shareholders (£)	£ (10,754,665)		£ (6,993,018)
Number of shares
- Weighted average number of Ordinary Shares outstanding	74,884,548		45,738,690

The loss attributable to ordinary shareholders and weighted average number of Ordinary Shares for the purpose of calculating the diluted earnings per Ordinary Share are identical to those used for basic earnings per share. This is because the exercise of share options would have the effect of reducing the loss per Ordinary Share and is therefore not dilutive.

At 31 March 2022, there were 9,273,161 options outstanding (2021: 10,826,072) as detailed in note 25.

14. Intangible assets


	Patents and Development			Software	Total
	licenses	costs
	£ £			£	£
Cost
At 1 April 2021	79,168 3,253,554			110,231	3,442,953
Additions	377,181 3,755,989			128,842	4,262,012
Additions acquired through business combination	- 815,231			27,080	842,311
Disposals	- -			-	-
Currency translation differences	- (30,903)			344	(30,559)
At 31 March 2022	456,349		7,793,871	266,497	8,516,717
Accumulated amortisation
At 1 April 2021	24,168		-	54,629	78,797
Amortisation for the year	27,552		11,931	32,901	72,384
Amortisation eliminated on disposal	-		-	-	-
Currency translation differences	-		(31)	61	30
At 31 March 2022	51,720		11,900	87,591	151,211
Net book value Net book value at 31 March 2022	404,629		7,781,971	178,906	8,365,506
Net book value at 31 March 2021	55,000		3,253,554	55,602	3,364,156

15. Property, plant and equipment

	Short leasehold £	Plant & machinery £	Fixtures & fittings £	Motor vehicles £	Assets under construction £	Total £
Cost
At 1 April 2021	290,932	113,156	323,838	110,044	-	837,970
Additions	248,892	315,158	388,695	74,424	1,938,441	2,965,610
Additions acquired through business	-	250,064	-	255,691	-	505,755
combination
Disposals	-	-	-	(2,400)	-	(2,400)
Currency translation differences	(125)	3,523	(59)	3,700	-	7,039
At 31 March 2022	539,699	681,901	712,474	439,880	1,938,441	4,312,395
Accumulated depreciation
At 1 April 2021	290,932	70,078	177,574	100,907	-	639,491
Depreciation for the year	8,394	58,711	87,781	19,565	-	174,451
Depreciation eliminated on disposal	-	-	-	(500)	-	(500)
Currency translation differences	-	378	(3)	37	-	412
At 31 March 2022	299,326	129,167	265,352	120,009 - 813,854
Net book value
Net book value at 31 March 2022	240,373	552,734	447,122	319,871 1,938,441 3,498,541

Net book value at 31 March 2021	-	43,078	146,264	9,137 - 198,479

16. Right-of-use assets


			Motor
	Buildings	Equipment	vehicles	Total
	£	£	£	£
Cost
At 1 April 2021	530,867	27,021	-	557,888
Additions	2,125,113	-	169,120	2,294,233
Additions acquired through business combination	221,223	-	141,437	362,660
Currency translation differences	(3,292)	-	(1,616)	(4,908)
At 31 March 2022	2,873,911	27,021	308,941	3,209,873
Accumulated amortisation
At 1 April 2021	105,185	18,820	-	124,005
Depreciation for the year	237,244	2,052	31,181	270,477
Currency translation differences	174	-	168	342
At 31 March 2022	342,603	20,872	31,349	394,824
Net book value Net book value at 31 March 2022	2,531,308	6,149	277,592	2,815,049
Net book value at 31 March 2021	425,682	8,201	-	433,883
17. Inventories
		Year ended 31		Year ended 31
		March 2022		March 2021
		£		£
Raw materials		2,438,533		64,463
Finished goods		31,510		52,495
		2,470,043		116,958

18. Financial and non-financial assets

(a) Cash and cash equivalents	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Cash in hand and at bank	18,402,055	2,862,470
(b) Trade and other receivables Non-current assets:	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Other receivables	734,526	-
Current:	734,526	-
Trade receivables	2,422,019	273,978
Other receivables	1,742,568	-
R&D tax credit	574,368	200,000
VAT recoverable	331,184	41,476
	5,270,139	515,454
	5,804,665	515,454
(c) Prepayments and accrued income Non-current assets:	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Prepayments and accrued income	101,825	-
Current:	101,825	-
Prepayments and accrued income	1,237,197	143,569
	1,237,197	143,569
	1,339,022	143,569

None of the Group's cash equivalents or other financial assets, are past due or impaired. Regarding other financial assets that are neither past due nor impaired, there were no indications as at 31 March 2022 (2021, 2020: no indications) that defaults in payment obligations will occur. However, as required under IFRS 9, the Company has assessed other financial assets for expected credit losses.

See note 27 for further detail.

19. Financial liabilities

	Year ended 31	Year ended 31
Trade and other payables	March 2022	March 2021
	£	£
Current:
Trade payables	1,672,548	302,643
Social security and other taxes	1,684,705	54,589
Pension due	15,807	8,625
Accruals and deferred income	1,157,142	219,431
Other payables	2,289,319	-
Borrowings	-	176,111
	6,819,521	761,399

Included within 'Other payables' is an amount of £1,706,498 (2021: £nil) in respect of deferred consideration for the acquisition of Saietta Europe B.V. (formerly e-Traction Europe B.V.). For more details, see note 29.

Lease liabilities Lease liabilities		Year ended 31 March 2022 £ 470,069	Year ended 31 March 2021 £ 114,555
		470,069	114,555
20. Non-current financial liabilities
Lease liabilities		Year ended 31 March 2022 £ 2,380,537	Year ended 31 March 2021 £ 330,426
Borrowings		-	2,340,000
Provisions	Note 22	168,130	-
Liabilities for financial guarantees	Note 23	41,833	-
		2,590,500	2,670,426
Included within lease liabilities are the following amounts:		Year ended 31	Year ended 31
Due within one year		March 2022 £ 470,069	March 2021 £ 114,555
Due in more than one but not more than two years		656,840	110,142
Due in more than two but not more than five years		968,423	220,284
Due after five years		755,274	-
		2,850,606	444,981
Movement in net borrowings
Borrowings at 1 April		Year ended 31 March 2022 £ 2,516,111	Year ended 31 March 2021 £ 231,945
Loan notes converted into equity		(2,340,000)	-
Convertible loan notes issued		-	2,340,000
Repayments in the year		(176,111)	(55,834)
Borrowings at 31 March		-	2,516,111

In March 2021 the Group issued 2,340 convertible loan notes to Amati Global Investors Limited with a nominal value of £2,340,000. The loan notes had a term until 2026 and a coupon rate of 8%. Upon admission to the AIM market on 7th July 2021, the convertible loan notes issued by the Company were automatically converted into 3,000,0000 new Ordinary shares (the "Conversion Shares") of £0.0011 each at a conversion price of £0.78 per share, pursuant to the terms of the convertible loan notes. See note 25 for more detail.

In January 2019 Mr. L. Marazzi provided a non-interest bearing loan to the company of £25,000 repayable in equal instalments over 36 months. In March 2019 Mr. L. Marazzi provided a non-interest bearing loan to the company of £250,000 repayable in equal instalments over 36 months. The entire balance owed to Mr. L. Marazzi was repaid during the year.

21. Leases

In the capacity as lessee

The Group's leases are for offices and manufacturing space as well as the purchase of capital equipment used in the day to day operating activities of the business. For all property leases, the period rent is fixed over the lease term.

The company also leases certain items of plant and equipment. In some contracts for services with distributors, those contracts contain a lease of vehicles. Leases of plant, equipment and vehicles comprise only fixed payments over the lease terms.

All current lease payments are fixed in nature and not subject to any clauses which allow these payments to vary under certain conditions.

The total cash outflow for leases during the year was comprised of the following:
Interest expense	Year ended 31 March 2022 £ 18,609	Year ended 31 March 2021 £ 21,177
Principal payments	263,263	73,533
	281,872	94,710

The company sometimes negotiates break clauses in its property leases. On a case-by-case basis, the company will consider whether the absence of a break clause would exposes the company to excessive risk. Typically factors considered in deciding to negotiate a break clause include:

· the length of the lease term;

· the economic stability of the environment in which the property is located; and

· whether the location represents a new area of operations for the company.

At 31 March 2022 the carrying amounts of lease liabilities are reduced by the amount of payments that would be avoided from exercising break clauses because on both dates it was considered reasonably certain that the company would not exercise its right to exercise any right to break the lease.

The aggregate undiscounted commitments for short-term leases not recognised in the balance sheet at year end is £nil (2021: £nil).

22. Provisions

Warranty provisions £		Onerous contracts provisions £	Total £
Provisions at 1 April 2021	-	-	-
Amounts provided in the year	42,407	526,700	569,107
Amounts utilised in the year	(4,241)	(396,736)	(400,977)
Provisions at 31 March 2022	38,166	129,964	168,130

Warranty provisions

The Group offers warranty cover in respect of manufacturing defects, which become apparent one to eight years after purchase, dependent on the market in which the purchase occurred and the vehicle/product purchased. The group offers warranties of up to eight years on batteries in electric vehicles. The estimated liability for product warranty is recognised when products are sold or when new warranty programmes are initiated. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future warranty claims, customer goodwill and recall complaints. The discount on the warranty provision is calculated using a risk-free discount rate as the risks specific to the liability, such as inflation, are included in the base calculation. The timing of outflows will vary as and when a warranty claim will arise, being typically up to eight years.

The Group considered the impact of the COVID-19 pandemic on its product warranty offerings and associated provisions, and determined that its existing methodology remained applicable for the year ended 31 March 2022.

Onerous contracts provisions

Onerous contract provisions comprise an estimate of unavoidable costs involved with fulfilling the terms and conditions of contracts net of any expected benefits to be received.

Estimates and assumptions

The group has recognised provisions for liabilities of uncertain timing or amount including those for onerous leases and warranty claims. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted at a pre-tax rate reflecting current market assessments of the time value of money and risks specific to the liability.

23. Liabilities for financial guarantees
		Year ended 31 March 2022 £
Balance at 31 March 2021 & 31 March 2022		-
Additions to financial liabilities during the year		78,058
Payments against financial liabilities		(36,255)
Balance at 31 March 2022		41,833

On 1 December 2021, the Group entered into an agreement to guarantee the obligations of its transport provider, Livingstone Aviation Limited in exchange for preferential access to their services.

Under IFRS9, the financial guarantee contracts was treated as a financial liability and was initially recognised at fair value. Subsequently, the financial guarantee contract was measured at the higher of the IFRS 9 expected credit loss (ECL) allowance and the amount initially recognised less any cumulative amount of income/amortisation recognised.

24. Share capital and share premium

Share capital and share premium

Allotted, issued and fully paid:

Year ended 31

March 2022

Year ended 31

March 2021

Number:	Type:	Nominal value:	£		£
	85,051,953 Ordinary Shares	£0.0011	93,557		-
	519,205,742 Ordinary Shares	£0.0001	-		51,921
			Number	Share capital	Share premium	Total
			of shares	£	£	£
Balance at 1 April 2020			43,579,955	4,358	10,641,597	10,645,955
Issue of shares			475,625,787	47,563	1,387,226	1,434,789
Cancellation of share premium			-	-	(12,028,823)	(12,028,823)
Balance at 31 March 2021			519,205,742	51,921	-	51,921
Consolidation of shares			(472,005,220)	-	-	-
Issue of shares			29,320,940	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	6,091	58,165	64,256
Shares issued on conversion of convertible loan notes			3,000,000	3,300	2,336,700	2,340,000
Balance at 31 March 2022			85,051,953	93,557	34,671,275	34,764,832

The cancellation of share premium was approved by shareholder resolution on 25 March 2021.

In March 2021 the Group issued 2,340 convertible loan notes to Amati Global Investors Limited with a nominal value of £2,340,000. The loan notes had a term until 2026 and a coupon rate of 8%. Upon admission to the AIM market on 7 July 2021, the convertible loan notes issued by the Company were automatically converted into 3,000,0000 new Ordinary shares (the "Conversion Shares") of

£0.0011 each at a conversion price of £0.78 per share, pursuant to the terms of the convertible loan notes. The nominal value of the Conversion Shares was credited to share capital, with the proceeds raised in excess of this being credited to share premium. The shares will rank pari passu with the existing Ordinary shares which were admitted to trading on AIM.

On 18 June 2021, the Group passed a resolution to consolidate its Ordinary share capital. Prior to the consolidation, there were 519,205,742 Ordinary shares with a nominal value of £0.0001 per share. In exchange for these share, existing shareholders were issued 47,200,522 Ordinary shares with a nominal value of £0.0011.

On 7 July 2021, the Group raised gross proceeds of £35,177,628 through the placing of 29,314,690 new Ordinary shares (the "Placing Shares") with new and existing investors at a price of £1.20 per Placing 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.

On 7 July 2021, upon admission to the AIM market, 9,919,457 share options automatically vested pursuant to the terms of their issue. Of these shares, a total of 5,530,491 shares ("New Ordinary Shares") were exercised immediately by the option holders. Of these, 4,437,821 options were exercised by the option holders at a strike price of £0.012 resulting in the issue of 4,437,821 new Ordinary shares with a nominal value of £0.011p. As a result, £4,882 was credited to share capital and the amount received in excess of the nominal value, £48,372, was credited to share premium.

The remaining 1,092,670 options were exercised by the option holders at a strike price of £0.01 resulting in the issue of 1,092,670 new Ordinary shares with a nominal value of £0.011p. As a result, £1,202 was credited to share capital and the amount received in excess of the nominal value, £9,725, was credited to share premium.

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

On 30 March 2022, 6,250 share options vested pursuant to the terms of their issue. These options were exercised by the option holders at a strike price of £0.012 resulting in the issue of 6,250 new Ordinary shares with a nominal value of £0.011p. As a result, £7 was credited to share capital and the amount received in excess of the nominal value, £68, was credited to share premium.

25. Share-based payments

	Share option reserve £
Balance at 1 April 2020 (Unaudited)	1,599,328
Share based payments	5,719,492
Balance at 31 March 2021 (Unaudited)	7,318,820
Share based payments	4,899,171
Balance at 31 March 2022 (Audited)	12,217,991

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 year ended 31 March 2022

For the year ended 31 March 2021

	Number	Weighted average exercise price	Number	Weighted average exercise price
	#	£	#	£
Outstanding at beginning of year	10,826,072	0.010	1,592,670	0.01
Granted	8,577,394		9,233,402
Lapsed	(616,370)		-
Vested	(12,553,823)		-
Outstanding at end of year	6,233,273	0.012	10,826,072	0.012

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

	Year ended 31	Year ended 31
	March 2022	March 2021
	£	£
Exercise price at grant date	£0.01	£0.012
Expected life (in years)	3	1
Risk-free interest rate	0.58%	0.55%
Expected volatility	87.05%	86.03%
Weighted average share price	92.56 pence	92.56 pence

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

The risk-free interest rate is based on the average return on 10 year UK Gilts.

Year ended 31

March 2022

March 2021

Cost of options vesting in the year

4,899,171

5,719,462

In the year ended 31 March 2022 an amount of £161,951 (2021: £544,505), representing the charge for options related to employees whose costs are allocated to research and development and capitalized as internally generated development costs was included in additions to intangible assets, whilst the remainder of the cost of options vesting was charged to the profit and loss account. A further amount of £330,886 (2021: £nil) was debited in respect of share issue costs against share premium.

The total cost of options vesting in the period has been classified as a movement in the share option reserve.

26. Reserves

The following describes the nature and purpose of each reserve within equity:

Reserve : Description and purpose

Share capital: Nominal value of share capital subscribed for.

Share premium : Amount subscribed for share capital in excess of nominal value.

Share options reserve Share options reserve : Used to record the assessed fair value of equity-settled options issued as share based payment for services received by the consolidated entity.

Translation reserve Translation reserve : the currency translation reserve represents the cumulative gains and losses on the retranslation of the Group's net investment in foreign operations.

Accumulated losses Accumulated losses : All other net gains and losses and transactions with owners (e.g. dividends) not recognized elsewhere.

27. Financial instruments

Risk Management objective

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. All funding requirements and financial risks are managed based on policies and procedures adopted by the Board of Directors.

The Group is exposed to the following financial risks:

a) Credit risk

b) Liquidity risk

c) Interest rate risk

(i) Principal financial instruments

The Group is exposed to risks that arise from its use of financial instruments. The principal financial instruments used by the company, from which financial instrument risk arises, are as follows:

a. Trade and other receivables

b. Cash and cash equivalents

c. Trade and other payables

d. Fixed rate hire purchase agreement (classified within lease liabilities)

e. Investments in unquoted equity securities

(ii) Financial instruments by category

Financial instruments

Amortised cost 2022			2021
£			£
Cash and cash equivalents	18,402,055 2,862,470
Trade and other receivables	4,899,113 273,978
Total financial assets	23,301,168 3,136,448
Financial liabilities	Amortised cost			Fair value through profit and loss
Trade and other payables	2022 2021 £ £ 3,961,867 302,643			2022 £ -		2021 £ -
Lease liabilities	2,850,606 444,981			-		-
Loans and borrowings	- 2,516,111			-		-
Liabilities for financial guarantees	- -			41,833		-
Total financial liabilities	6,812,473	3,263,735			41,833	-

(iii) Financial instruments not measured at fair value

Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and loans and borrowings.

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, and trade and other payables approximates their fair value.

The details of the fair value hierarchy, valuation techniques, and significant unobservable inputs related to determining the fair value of loans and borrowings, which are classified in level 3 of the fair value hierarchy, are outlined in this note.

(iv) Financial instruments measured at fair value

The fair value hierarchy of financial instruments measured at fair value is provided below.

Financial liabilities

Level 1

Level 2

Level 3

2022 2021

2022

2021

2022

2021

Liabilities for financial guarantees

£ £

- -

41,833

There were no transfers between levels during the year.

The valuation techniques and significant unobservable inputs used in determining the fair value measurement of level 2 and level 3 financial instruments, as well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below.

Financial instrument

Valuation technique used

Significant unobservable inputs

Inter-relationship between key unobservable inputs

and fair value

Equity investments

Recognised at cost and adjusted thereafter for the post- acquisition change in the investor's share of the investee's net assets.

Not applicable.

Liabilities for financial guarantees

Discounted cashflow model using the difference between market rates of interest and the rate per the loan note instrument adjusted for probability of default.

Not applicable.

There were no changes to the valuation techniques during the year.

The reconciliation of the opening and closing fair value balance of level 3 financial instruments is provided below:

Liabilities for financial guarantees

	£
At 1 April 2020 Purchases, disposals and reclassifications	- -
At 31 March 2021	-
At 1 April 2021	-
Purchases, disposals and reclassifications	41,833
At 31 March 2022	41,833

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The Board receives monthly reports from the Group Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The Group's internal auditors also review the risk management policies and processes and report their findings to the Audit Committee.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The ability to do this relies on the Group expanding its customer base, collecting its trade receivable, completing financings in a timely manner and by maintaining sufficient cash and cash equivalents on hand.

The Group monitors its payables on a periodic basis and uses the credit terms to manage the timing of payments to suppliers.

The following tables show the contractual maturities of financial liabilities:

As at 31 March 2022 Trade and other payables	Total £ 3,961,867	Less than 1 year £ 3,961,867	Between 1 and 5 years £ -	Over 5 years £ -
Accrued liabilities	1,157,142	1,157,142	-	-
Loans and borrowings	-	-	-	-
Liabilities for financial guarantees	41,833	-	41,833	-
	5,160,842	5,119,009	41,833	-
As at 31 March 2021 Trade and other payables	Total £ 302,643	Less than 1 year £ 302,643	Between 1 and 5 years £ -	Over 5 years £ -
Accrued liabilities	219,431	395,542	-	-
Loans and borrowings	2,516,111	176,111	2,340,000	-
Liabilities for financial guarantees	-	-	-	-
	3,038,185	874,296	2,340,000	-

Liquidity risk arises from the company's management of working capital and the continued availability of its other funding facilities. It is the risk that the company will encounter difficulty in meeting its financial obligations as they fall due. The company actively manages its cash generation and maintains sufficient cash holdings to cover its immediate obligations but is always in close contact with key shareholders who would assist the company if required.

Market risk

The Group's products are focused on meeting certain current or expected requirements of individual markets and these requirements could evolve before the Group is able to complete its licensing agreements.

The Group periodically reviews the markets, and demands expected of products to minimize the risk to its business. It also reviews new markets to identify future demand outside of the initial intended markets. As the Group releases products, it will continue to carry out an assessment of the market risk it is exposed to and will carry out sensitivity analysis on the impact that each risk will have on the product(s)' performance and the wider impact on the Group's income statement and its financial position.

Credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument or customer contract fails to meet its obligations. The company is mainly exposed to credit risk from credit sales. At 31 March 2022 the company has net trade receivables of £2,622,019 (2021: £273,978).

The company is exposed to credit risk in respect of credit sales such that, if one or more customers encounter financial difficulties, this could materially and adversely affect the company's financial results. The company attempts to mitigate credit risk by assessing the creditworthiness of customers and closely monitoring payment history. In a limited number of customer contracts, an initial payment is secured which helps to mitigate the overall credit risk of a project.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on similar credit risk and aging. The contract assets have similar risk characteristics to the trade receivables for similar types of contracts.

The following provision matrix is used to determine the initial expected credit losses. The historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group's customers. The Group has identified the gross domestic product (GDP), unemployment rate and inflation rate as the key macroeconomic factors in the countries where the Group operates.

None past due: 1% of carrying value (2021: 0.0%)

30 days past due: 8.6% of carrying value (2021: 0.5%)

30-60 days past due: 9.6% of carrying value (2021: 1.0%)

60-90 days past due: 100% of carrying value (2021: 5.0%)

>90 days past due: 100% of carrying value (2021: 10.0%)

Although the Group has its own terms and conditions with a 30 day payment expectation, under some contracts it accepts longer terms with suitable customers. Should a trade debtor exceed the payment terms, then the Group engages to ensure swift payment.

The maximum exposure to loss arising from trade accounts receivable is equal to their total carrying value as the loss allowance not recognised is considered to be immaterial to the financial statements

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.

Credit risk (continued) The maximum exposure to credit risk is as follows:
Cash on deposit	Year ended 31 March 2022 £ 18,402,055	Year ended 31 March 2021 £ 2,862,470
Trade receivables	2,422,019	273,978
Other receivables	2,477,094	385,045
	23,301,168	3,521,493
The ageing of trade receivables at the year-end date was:
Current	Year ended 31 March 2022 £ 2,219,626	Year ended 31 March 2021 £ 214,516
More than 30 days past due	145,652	-
More than 60 days past due	28,700	-
More than 120 days past due	28,041	59,462
	2,422,019	273,978

Capital risk management

The Group's objectives when maintaining capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

All working capital requirements are financed from existing cash.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Interest rate risk

The Group's activities expose it to the financial risks of interest rates. The Group reviews its risk management strategy on a regular basis and if appropriate it will enter into derivative financial instruments in order to manage interest rate risk. At present, the Group does not have any financial leases or borrowings that have a floating interest rate, however should it take on such facilities where this is the case, then it will review the risk exposure that it has.

The Group analyses the interest rate exposure on at regular intervals. A sensitivity analysis is performed by applying a simulation technique to the liabilities that represent major interest-bearing positions. Various scenarios are run taking into consideration refinancing, renewal of the existing positions, alternative financing and hedging. Based on the simulations performed, the impact on profit or loss and net assets of a 100 basis-point shift (being the maximum reasonable expectation of changes in interest rates) would not have any financial impact as the Group does not have any interest-bearing debt.

All borrowing is approved by the Board of Directors.

Foreign currency risk

Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency. The Group's policy is, where possible, to allow group entities to settle liabilities denominated in their functional currency) with the cash generated from their own operations in that currency. Where group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.

In order to monitor the continuing effectiveness of this policy, the Board receives a monthly forecast, analysed by the major currencies held by the Group, of liabilities due for settlement and expected cash reserves.

The Group aims to fund expenses and investments in the respective currency and to manage foreign exchange risk at a local level by matching the currency in which revenue is generated and expenses are incurred.

The following table sets forth information relating to foreign currency exposure as at 31 March 2022:

	Year ended 31	Year ended 31
	March 2022	March 2021
	Euros	Euros
Financial assets	2,270,011	-
Financial liabilities	(1,450,128)	-
Net exposure asset	819,883	-

The following entities are included in the consolidated financial information of Saietta Group Plc:

Country ofRegisteredPrincipalShareholding

Investment	Country of incorporation	Registerd office	Principal activity	2022	2021
Saietta Motorcycles Limited	England and Wales	Building 210 Heyford Park, Camp Road, Upper Heyford, Oxfordshire, OX25 5HE	Dormant	100%	100%
Saietta Racing Limited	England and Wales	Building 210 Heyford Park, Camp Road, Upper Heyford, Oxfordshire, OX25 5HE	Dormant	100%	100%
Propel B.V. (formerly Saietta Europe B.V.)	Netherlands	Moleneind 23-A, 1241NG Kortenhoef,Netherlands	Trading	100%	100%
Saietta Holding B.V.	Netherlands	Moleneind 23-A, 1241NG Kortenhoef,Netherlands	Trading	100%	N/A
Saietta Traction Holdings B.V.	Netherlands	Moleneind 23-A, 1241NG Kortenhoef,Netherlands	Trading	100%	N/A
Saietta RetroMotion B.V. (formerly Saietta Refit B.V.)	Netherlands	Moleneind 23-A, 1241NG Kortenhoef,Netherlands	Trading	100%	N/A
Saietta Europe B.V. (formerly e-Traction Europe B.V.)	Netherlands	Watermanstraat 40, 7324AH Apeldoorn, Netherlands	Trading	100%	N/A

29. Business combinations

On 11 November 2021, Saietta Traction Holdings B.V., a company incorporated in the Netherlands and in which Saietta Group Plc has a controlling shareholding, acquired 100% of the Ordinary share capital of Saietta Europe B.V. (formerly e-Traction Europe B.V) ("acquired company"), a company incorporated in the Netherlands, for consideration of €2,000,000.

The purpose of this acquisition was to accelerate Saietta's growth strategy by adding new commercial and technical capabilities and an established power electronics production facility.

On the 8 December 2021, the acquired company was renamed Saietta Europe B.V.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows (note that fair value was not used as the measurement basis for assets and liabilities that require a different basis, which includes leases, contingent liabilities, income taxes and defined benefit pension plans):

	Book value £	Adjustment £	Fair value £
Intangible fixed assets	2,184,143	(1,341,832)	842,311
Right-of-use assets	362,660	-	362,660
Property, plant and equipment	505,755	-	505,755
Inventories and work-in-progress	1,777,264	(93,871)	1,683,393
Accounts receivable	21,285	-	21,285
Taxes and social security charges	93,615	-	93,615
Other receivables	638,350	-	638,350
Cash and cash equivalents	279,252	-	279,252
Provisions	(42,662)	-	(42,662)
Lease liabilities	(362,661)	-	(362,661)
Long-term debt	-	-	-
Trade creditors	(366,762)	-	(366,762)
Taxes and social security charges	(112,537)	-	(112,537)
Other liabilities	(725,446)	-	(725,446)
Provision for onerous contracts	(405,294)	-	(405,294)
	3,846,962	(1,435,703)	2,411,259

A gain on bargain purchase of £704,761 (2021: £nil) was recognised in respect of the excess of the fair value of consideration transferred over the fair value of the acquired company's net assets.

This gain on bargain purchase was recognised immediately as a gain in the Statement of Consolidated Income.

Fair value of consideration paid

£
Cash	1
Contingent cash consideration	1,706,498
Total consideration	1,706,498
Gain on bargain purchase recognised	704,761

Acquisition costs of £358,358 arose as a result of the transaction. These have been recognised as part of administrative expenses in the statement of comprehensive income.

The consideration settled in cash is contingent on:

(a) the seller not being subject to any insolvency proceedings at any time prior to 1 May 2023 or other date as agreed in writing between both parties; and

(b) favourable legal opinions issued by first class reputable legal counsels, based in Hong Kong and China, in respect of legal matters pertaining to the acquisition.

The fair value of the contingent consideration has deemed to be equivalent to the total contingent cash consideration. The favourable legal opinions referenced in point (b) above were both received in June 2022. At 31 March 2022, the contingent consideration was held in escrow with the Group's solicitors.

The main factors leading to the recognition of a gain on bargain purchase are:

- The acquisition price being substantially lower than the carrying value of the entity's net assets.

- The presence of certain intangible assets in respect of previously unrecognised which had a fair value in excess of their carrying value.

The gain on bargain purchased recognised will not be considerable taxable for tax purposes.

Since the acquisition date, Saietta Europe B.V. has contributed £952,018 to the Group's revenues and £883,550 to the Group's losses, excluding the gain on bargain purchase recognised. If the acquisition had occurred on 1 April 2022, group revenue would have been £2,643,785 and group loss for the period would have been £4,941,128.

Fair value adjustment to intangible fixed assets

The fair value adjustment to intangibles at acquisition was determined by assessing each individual intangible asset separately. The best estimate of each intangibles' fair value was calculated to be equivalent to the time and costs of resources required to recreate them.

Fair value adjustment to inventories

Management assessed the fair value of inventories was assessed to be equal to their replacement cost. Based on management's prior experience of the markets within which the entity operates, it was estimated that inventory, which was held at a cost £1,952,937, could be sold to existing and new customers. The remainder was assessed as being obsolete and having a net realisable value of £nil.

30. Related party transactions

During the year, the company repaid an amount totalling £176,111 (2021: £40,833) to Mr. L Marazzi, a shareholder of the company, reducing the outstanding balance that was included within creditors due within one year at the year end to £nil (20201: £176,111).

During the year, the company paid £131,193 (2021: £nil) in respect of commission payable to Verto AGO BV, a company in which W Kist is a director and is considered to have significant influence over. The amount payable to Verto AGO BV at the end of the year was £64,012 (2021: £nil).

31. Subsequent events

In June 2022 Saietta Group plc was notified of its successful application for a £2 million grant from the UK Government's Automotive Transformation Fund under the Scale up Readiness Validation (SuRV) to support Saietta's investment in commercial vehicle e-axle pilot production and preparation for scale-up at the Sunderland facility.

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