31 July 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.

FRAGRANT PROSPERITY HOLDINGS LIMITED

("FPP" or "the Company")

Annual Results for the year ended 31 March 2024

Fragrant Prosperity Holdings Limited (LSE: FPP) announces its audited annual financial results for the financial year ended 31 March 2024.

I have pleasure in presenting the financial statements of Fragrant Prosperity Holdings Limited (the "Company" or "FPP") for the financial year ended 31 March 2024.

During the year, the Company ceased its exclusivity period with Hi 55 Ventures and the intended refinancing and acquisition did not proceed, due to adverse market conditions. 

The Board continued to review a number of potential acquisition opportunities across the sector but none of which met the necessary criteria for selection as at the end of the year. It is expected that with the potential improvement in the market conditions for raising capital and undertaking reverse takeovers in the UK along with the changes to the UK listing regime recently announced by the FCA that the Company will have improved prospects for identifying a potential target. The last 2 years have been difficult across the public capital markets globally, but specifically the UK and with limited cash available it has been challenging to consummate potential deals. The Company will therefore explore a recapitalisation of the balance sheet to improve the position for consummating any potential acquisitions.

During the financial year, the Company reported a net loss of £111,877 (2023: £126,237) which represents ongoing administrative expenses and due diligence costs regarding the identification of potential targets. As at 31 March 2024, the Company had cash in bank balance of £109,688 (2023: £195,395).

The Board would provide further updates to shareholders in due course.

Chairman

30 July 2024

Enquires:

FRAGRANT PROSPERITY HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024

Directors' report

The Directors present their report together with the audited financial statements, for the financial year ended 31 March 2024.

The Company was incorporated on 28 January 2016 in the British Virgin Islands, as a company limited by shares under the BVI Business Companies Act, 2004. The registered office of the Company is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.

Its issued share capital, consisting of Ordinary Shares, are currently admitted to a Standard Listing on the Official List in accordance with Chapter 14 of the Listing Rules and to trading on the London Stock Exchange's main market for listed securities.

On 12 December 2017 the company changed its name from Vale International Group Ltd to Fragrant Prosperity Holdings Ltd.

The Company's nature of operations is to act as a special purpose acquisition company.

Results and dividends

The results for the year are set out in the Statement of Comprehensive Income on page 15. The Directors do not recommend the payment of a dividend on the ordinary shares.

Company objective and future developments

The Company was formed to undertake an acquisition of a target company or business. The Company does not have any specific acquisition under consideration and does not expect to engage in substantive negotiations with any target company or business in the immediate future. The Directors believe that their network, and the Company's cash resources and profile following Admission, mean that the Company will target an Acquisition where the target company has a value of up to £100 million. The Company expects that consideration for the Acquisition will primarily be satisfied by issue of new Shares to a vendor (or vendors), but that some cash may also be payable by the Company. Any funds not used in connection with the Acquisition will be used for future acquisitions, internal or external growth and expansion, and working capital in relation to the acquired company or business.

Following completion of the Acquisition, the objective of the Company will be to operate the acquired business and implement an operating strategy with a view to generating value for its Shareholders through operational improvements as well as potentially through additional complementary acquisitions following the Acquisition. Following the Acquisition, the Company intends to seek re-admission of the enlarged group to listing on the Official List and trading on the London Stock Exchange or admission to another stock exchange.

The Company's efforts in identifying a prospective target company or business will not be limited to a

particular industry or geographic region. However, given the experience of the Directors, the Company expects to focus on acquiring a company or business in the technology sector (in particular focussing on technology and/or intellectual property that is used in the financial services industry) or the medicinal cannabis and CBD Wellness sector with either all or a substantial portion of its operations in Europe or Asia. The Directors' initial search will focus on businesses based in or with operations in Hong Kong, Malaysia, or the United Kingdom.

Principal risks and uncertainties

Currently the principal risks relate to the completion of the Acquisition, and whether, if unsuccessful, the Company could find sufficient suitable investments to ensure compliance with the requirements of its continued listing on the standard market.

An explanation of the Company's financial risk management objectives, policies and strategies is set out in note 8.

Key events

At the year end the Company had cash of approximately £109,688 and continues to keep administrative costs to a minimum so that the majority of funds can be dedicated to the review of and potentially investment in, suitable projects. The company is likely to receive additional funds in order to continue its activities.

Directors

The Directors of the Company during the year were:

Mahesh s/o Pulandaran

Simon James Retter

Richard Samuel

Daniel Reshef

Director's interest

Mahesh s/o Pulandaran holds 1 share of the Company

Stonedale Management and Investments Ltd (a company which is under control of Simon James Retter), holds an option to subscribe for 2,500,000 shares for nil consideration.

Craig Marshak holds options to subscribe for 2,500,000 shares for nil consideration.

Substantial shareholders

The Company has been notified or is aware of the following interests of 3 per cent or more in its issued share capital as at 29 July 2024: 

Capital and returns management

The Directors believe that, following an acquisition, further equity capital raisings may be required by the Company for working capital purposes as the Company pursues its objectives. The amount of any such additional equity to be raised, which could be substantial, will depend on the nature of the acquisition opportunities which arise and the form of consideration the Company uses to make the acquisition and cannot be determined at this time.

The Company expects that any returns for Shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy.

Dividend policy

The Company is primarily seeking to achieve capital growth for its Shareholders.

It is the Board's intention during the current phase of the Company's development to retain future distributable profits from the business, to the extent any are generated. As a holding company, the Company will be dependent on dividends paid to it by its subsidiaries.

The Board does not anticipate declaring any dividends in the foreseeable future but may recommend dividends at some future date after the completion of the Acquisition and depending upon the generation of sustainable profits and the Company's financial position.

The Board can give no assurance that it will pay any dividends in the future, nor, if a dividend is paid, what the amount of such dividend will be.

The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws.

Section 172 Statement

The Directors of the Company, as those of all UK compa-nies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Compa-nies Act 2006 which is summarized as follows:

"A director of a company must act in the way he consid-ers, in good faith, would be most likely to promote the success of the company for the benefit of its stakehold-ers as a whole, and in doing so have regard (amongst other matters) to:

(a) the likely consequences of any decision in the long term;

(b) the interests of the company's employees;

(c) the need to foster the company's business relation-ships with suppliers, customers and others;

(d) the impact of the company's operations on the com-munity and the environment;

(e) the desirability of the company maintaining a reputa-tion for high standards of business conduct; and

(f) the need to act fairly as between stakeholders of the Company"

As part of their induction, all Directors are briefed on their duties and they can access professional advice on these, either from the Company Secretary or, if they judge it necessary, from an independent adviser. The Directors fulfil their duties partly through a governance framework that delegates day-to-day decision-making to employees of the Company and details of this can be found in our Governance section of the Directors Report.

The following paragraphs summarise how the Directors fulfil their duties:

Risk Management

The Company is currently undertaking due diligence and working towards executing an acquisition of a target. It is therefore vital that we effectively identify, evaluate, manage and mitigate the risks we face, and that we continue to evolve our approach to risk management.

For details of our principal risks and uncertainties and how we manage our risk environment, please see page 4.

Our People

Our Company is committed to being a responsible business. Our behaviour is aligned with the expectations of our people, clients, investors, communities and society as a whole. We must also ensure we share common values that inform and guide our behaviour so we achieve our goals in the right way. The only employees are currently the Directors of the company, who strive to adhere to the highest ethical standards.

Shareholders

The Board is committed to openly engaging with our shareholders, as we recognize the importance of contin-uing effective dialogue. It is important to us that share-holders understand our strategy and objectives, so these must be explained clearly, feedback heard and any issues or questions raised properly considered. Our board members, especially Simon Retter, holds a series of shareholders meetings several times a year on the back of financial and operational reporting.

Community and Environment

The Company's approach is to use our strengths to cre-ate positive change for the people and communities with which we interact. We want to leverage our expertise and enable colleagues to support the communities around us.

Corporate governance

As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. Although the Company does not comply with the UK Corporate Governance Code, the Company intends to adopt corporate governance procedures as are appropriate for the size and nature of the Company and the size and composition of the Board. These corporate governance procedures have been selected with due regard to the provision of the UK Corporate Governance Code insofar as is appropriate. A description of these procedure is set out below:

·    until an Acquisition is made, the Company will not have nominations, remuneration, audit or risk committees. The Board as a whole will instead review its size, structure and composition, the scale and structure of the Directors' fees (taking into account the interests of Shareholders and the performance of the Company), take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements on the Company's financial performance. Following the Acquisition, the Board intends to put in place nomination, remuneration, audit and risk committees;

·    the Board has adopted a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities shall comply with the share dealing code since the date of Admission; and

·    Following the Acquisition and subject to eligibility, the Directors may, in future, seek to transfer the Company from a Standard Listing to either a Premium Listing or other appropriate listing venue, based on the track record of the company or business it acquires, subject to fulfilling the relevant eligibility criteria at the time. However, in addition to or in lieu of a Premium Listing, the Company may determine to seek a listing on another stock exchange. Following such a Premium Listing, the Company would comply with the continuing obligations contained within the Listing Rules and the Disclosure and Transparency Rules in the same manner as any other company with a Premium Listing.

The Company has not chosen to apply a particular corporate governance code, as the directors consider that the most widely recognised codes are not appropriate for companies with limited board resources.

The Directors are responsible for internal control in the Company and for reviewing its effectiveness. Due to the size of the Company, all key decisions are made by the Board in full. The Directors have reviewed the effectiveness of the Company's systems during the period under review and consider that there have been no material losses, contingencies or uncertainties due to the weakness in the controls. The Board will be responsible for taking all proper and reasonable steps to ensure compliance with the Model Code by the Directors.

Emissions, Environmental & Social matters

The Company currently is not responsible for any emissions other than indirectly through travel for undertaking due diligence on target businesses. It is therefore not practical to quantify the total emissions of the Company. Likewise, as the nature of the Company is an acquisition company, it is the opinion of the Directors that it has no direct social, community and human rights issues are environmental matters on which it should disclose information. Presently all of the Directors of the Company are male, the Directors are actively seeking to balance the board with some female representation although this would likely occur upon a change in the board composition upon the completion of an acquisition. 

Responsibility Statement

The directors are responsible for preparing the annual report and the non-statutory financial statements. The directors are required to prepare financial statements for the Company in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom.

International Accounting Standard 1 requires that financial statements present fairly for each financial period the Company's financial position, financial performance and cash flows. This requires the faithful representation of transactions, other events and conditions in accordance with the definitions and recognition criteria for the assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the Preparation and Presentation of Financial Statements". In virtually all circumstances, a fair representation will be achieved by compliance with all IFRS as adopted by the United Kingdom. Directors are also required to:

-     select suitable accounting policies and then apply them consistently;

-     present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and

-     provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the United Kingdom is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Company. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The maintenance and integrity of the Fragrant Prosperity Holdings Ltd website (http://www.fragrantprosperityholdings.com/) is the responsibility of the Directors; work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website.

Legislation in the British Virgin Islands governing the preparation and dissemination of the financial statements and the other information included in annual reports may differ from legislation in other jurisdictions.

The Directors are responsible for preparing the Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ('DTR') and with International Financial Reporting Standards as adopted by the United Kingdom.

The directors confirm, to the best of their knowledge that:

·    the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

·    the Chairman's Statement and Directors' Report include a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

Auditors and disclosure of information

The directors confirm that:

·    there is no relevant audit information of which the Company's non-statutory auditor is unaware; and

·    each Director has taken all the necessary steps 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 non-statutory auditor is aware of that information.

Going Concern

During the year the Company worked hard to keep its administrative costs to a minimum in order to preserve capital whilst seeking to identify potential targets to acquire.  Due to the limited cash balance as at the period end the Company is in the process of seeking additional funding in order to purse its strategy of making an acquisition to seek re-admission of the enlarged group to listing on the Official List and trading on the London Stock Exchange or admission to another stock exchange.

Any potential additional funding could include the capitalisation of any convertible loan notes or other debts on the balance sheet.

Should the raising of new capital be unsuccessful then the Company faces significant uncertainty over its ability to continue as a going concern. The Company has reduced its cash expenditure to a minimum whilst it works on the recapitalisation of the business.

Climate risk management

The Board oversees and has ultimate responsibility for the Company's sustainability initiatives, disclosures, and reporting. This includes, but is not limited to, climate risks and opportunities. As a shell company, the Company is exempt from providing the disclosures required by the Taskforce on Climate-related Financial Disclosures ("TCFD"). However, this section provides an overview of the Company's approach to managing the very limited climate risks it currently faces.

The executive management team have day-to-day responsibility for assessing and managing climate-related risks and opportunities. We are committed to minimising the Company's impact on the environment. As it is presently constituted, the Company's environmental impact is minimal and climate-related risks and opportunities are extremely limited until it acquires another business. At present, the Company has no operating investments, and its only employees are the directors. These employees perform largely information-based roles, and they all work from home as the Company no longer maintains business premises.

The only environmental impact currently is from business travel, which has been extremely limited in the past two years and is expected to continue to be lower than previously as a result of the post-pandemic shift towards virtual tools. The Company's overall environmental impact is therefore minimal The Company's approach is therefore to seek to maintain lean working arrangements, use technology to minimise business travel and encourage employees to recycle, minimise energy wastage, and do their part to ensure that the Company acts responsibly. If the Company continues to operate as it is presently constituted it is therefore difficult to identify any climate related risks in the short, medium or long term that could significantly impact the business. For this reason, the Company does not presently feel it is appropriate or necessary to apply metrics or targets to assess climate related risks beyond the Greenhouse gas reporting presented below.

Clearly, the Company does not intend to continue operating in its present form indefinitely, we intend to make acquisitions that will profoundly change the scale and climate-related risk profile of the business and the process for identifying and managing them. It is not possible to reach any sensible conclusions today about which risks the Company may be exposed to in the) future without knowing what businesses it will acquire.

While it is not possible to know today what climate related risks it will inherent, the Company is conscious that such risks and opportunities will exist in any potential acquisition and considers that the most important objective is to ensure these are properly understood in the due diligence phase of any transaction so appropriate decisions can be taken on risk mitigation tools. The Company's Board have concluded that the most appropriate way to address this is to ensure that climate-related risks are specifically scoped in when undertaking due diligence on acquisition targets.

Greenhouse gas emissions

Considering the non-material environmental impacts of the Company's business as described in this report, management takes the view that greenhouse gas emissions are the most important metric to track and against which future targets may be set. We have compiled our greenhouse gas ("GHG") emissions in accordance with the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 ("SECR").

Calculations follow the GHG Protocol Corporate Accounting and Reporting Standard (revised edition). The GHG reporting period aligns with the financial statements and boundaries are defined using the financial control approach. GHG emissions are broken down into three categories; reporting is required only on scope 1 and 2: Scope 1 emissions: Direct emissions from sources owned or controlled by the Company. Scope 2 emissions: Indirect emissions attributable to the Company due to its consumption of purchased electricity. Scope 3 emissions: Other indirect emissions associated with activities that support or supply the Company's operations.

The Company has no Scope 1 emissions. The Company's Scope 2 and Scope 3 emissions for the year to 31 March 2024 or the prior period. No further energy and carbon information is disclosed as the Company is exempt on the grounds of being a low energy user within the meaning of SECR. At the present time, the Company does not consider it appropriate to set emissions reduction targets, particularly given the low levels of emissions already achieved.

The Company does not currently hold any investments. When investments are held, the Company will keep under review whether it would be appropriate to support investee companies in tracking metrics and setting targets.

Events after the reporting date

Events after the reporting date have been disclosed in note 13 to the financial statements.

This responsibility statement was approved by the Board of Directors on 30 July 2024 and is signed on its behalf by;

Simon Retter

Director

30 July 2024