REG - APQ Global Limited - Final results for the year to 31 December 2022
06/06/2023 07:00
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RNS Number : 7202B APQ Global Limited 06 June 2023
APQ Global Limited
("APQ Global" or the "Company")
FINANCIAL HIGHLIGHTS
For the year ended 31 December 2022
Book Value at 31 December 2022 was $7.23m, a decrease from $23.59m at the
start of the year. The term "book value" herein includes the assets of APQ
Global Limited and its subsidiaries 1 net of any liabilities, presented in US
dollars.
Book Value per share in the year decreased from 30.07 cents to 9.21 cents.
Loss per share for the year was $0.20843 (2021: $0.09684).
Dividends paid are considered a Key Performance Indicator 2 (KPI) of the
business. No dividends were paid or declared during the year due to dividend
hold in place (2021: nil).
In the year covered by these financial statements, the share price of the
Company has consistently traded at a discount to the Book Value of the
Company.
Since 1 January 2022, the following securities have been admitted to the
Official list of the International Stock Exchange and to trading on AIM:
Entity Type of instrument No. of instruments Date admitted
APQ Global Limited Ordinary shares 26,578 24 January 2022
APQ Global Limited Ordinary shares 26,578 3 May 2022
APQ Global Limited Ordinary shares 26,578 29 July 2022
APQ Global Limited Ordinary shares 26,578 7 October 2022
There have been further AIM market trades since 31 December 2022, details of
these can be found on the London Stock Exchange website by following the link
below. Monthly book values and semi-annual reports are also made available as
they fall due.
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GG00BZ6VP173GGGBXASQ1.html
(http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GG00BZ6VP173GGGBXASQ1.html)
For further enquiries, please contact:
APQ Global Limited 020 3478 9708
Bart Turtelboom - Chief Executive Officer
Singer Capital Markets - Nominated Adviser and Broker
James Maxwell / Justin McKeegan
Carey Group - TISE sponsor 01481 737 279
Claire Torode
Investor Relations
IR@APQGlobal.com (mailto:IR@APQGlobal.com)
Notes to Editors
APQ Global (ticker: APQ LN) is an investment company incorporated
in Guernsey. The Company focuses its investment activities globally
(in Asia, Latin America, Eastern Europe, the Middle East, Africa and
the Channel Islands, particularly).
The objective of the Company is to steadily grow its earnings to seek to
deliver attractive returns and capital growth through a combination of
building growing businesses as well as earning revenue from income generating
operating activities in capital markets*. APQ Global run a well-diversified
and liquid portfolio, take strategic stakes in selected businesses and plan to
take operational control of companies through the acquisition of minority and
majority stakes in companies with a focus on emerging markets.
*Where we refer to revenue from income generating operating activities this
relates to the revenue of our investee companies.
For more information, please visit apqglobal.com (http://apqglobal.com/)
DIRECTORY Company number: 62008
Registered Office and Business Address: Directors:
PO Box 142 Bart Turtelboom
Suite 2 Block C Wayne Bulpitt CBE
Hirzel Court, St Peter Port Philip Soulsby
Guernsey Wadhah Al-Adawi
GY1 3HT
Nominated Adviser and Broker:
Company Secretary and
Corporate Services Provider: Singer Capital Markets Limited
Parish Group Limited 1 Bartholomew Lane
PO Box 142 London
Suite 2 Block C United Kingdom
Hirzel Court, St Peter Port EC2N 2AX
Guernsey
GY1 3HT
Registrar and Transfer Agent: Principal Bankers:
Link Group Credit Suisse
10(th) Floor Paradeplatz 8
Central Square CH-8070
29 Wellington Street Zurich
Leeds Switzerland
LS1 4DL
Solicitors Advocates
As to English law: As to Guernsey law:
Stephenson Harwood LLP Mourant Ozannes
1 Finsbury Circus St Julian's Avenue
London St Peter Port
United Kingdom Guernsey
EC2M 7SH GY1 4HP
CISEA Sponsor: Independent auditor:
Carey Commercial Limited BDO LLP
1st & 2nd Floors 55 Baker Street
Elizabeth House London
Les Ruettes Brayes United Kingdom
St Peter Port W1U 7EU
Guernsey
GY1 4LX
For the latest information, please visit:
www.apqglobal.com
CHAIRMAN'S STATEMENT
For the year ended 31 December 2022
The aim of the Board is to steadily grow the Company's earnings seeking to
deliver attractive returns and capital growth through a combination of
building growing businesses globally as well as earning revenue from income
generating operating activities 3 . Specifically, our goals are to deliver a
dividend yield of 6% per annum (based on capital subscribed) 4 and in
addition to generate returns to grow the Company by a further 5-10% per
annum 5 . The Company focuses its investment activities globally (in Asia,
Latin America, Eastern Europe, the Middle East, Africa, as well as the Channel
Islands).
Book Value per share in the year decreased from 30.07 cents to 9.21 cents. The
Total Return for the year was -69.38% 6 .
Direct Investment Portfolio
In the third quarter of 2022, the company completed the 100% acquisition of
WDM Lex Advisory Limited and WDM Trustees Limited. Lex Advisory provides legal
advisory and corporate services, trustee services and incorporation services
to its clients primarily based in Malta. WDM Trustees Limited provides all
services pertinent to trustees in a trust context and administrators in the
context of private foundations.
This investment is considered an excellent addition to the Corporate Service
package which is held by APQ and complements the jurisdictional cover provided
by the existing investments.
Dividends
As of 31 December 2022, the dividend remains on hold until further notice.
Total Return
Book Value per share in the year decreased from 30.07 cents to 9.21 cents. The
Total Return for the year was -69.38%(6). Further details on the breakdown
of the Total Return are shown on page 6, Under the section 2022 in Review.
Corporate Governance
During 2022 there were no changes to the Board of APQ Global and the Board has
established corporate governance arrangements which are appropriate for the
operation of the Company. Further details of these may be found in the
appropriate sections of this Report.
Conclusion
The Investment performance and outlook for Emerging Markets are discussed in
more detail in the CEO's statement on page 5. Whilst the headwinds have
significantly buffeted our liquid portfolio, the Board are pleased to have
been able to take opportunities to develop the Direct Investment Portfolio
which is now very well positioned to capitalise from several growing trends
globally.
Wayne Bulpitt CBE
Chair, APQ Global Limited
CEO'S STATEMENT
For the year ended 31 December 2022
Following the spike in COVID infections during Q4 2021, Q1 2022 saw a
significant reduction in cases and substantial easing of national and
international restrictions. These events were overshadowed by Russia's
invasion of Ukraine in February which sent shockwaves across global markets.
Both equities and bonds declined, and commodity prices soared. Inflation which
was already on the rise following COVID supply disruptions, hit levels not
seen since the 1980s, prompting many central banks, including the FED to hike
interest rates.
The world's economies responded, with real GDP across the OECD area increasing
an estimated 2.77% throughout 2022 7 .
Following the rollercoaster year of 2021, the S&P 500, MSCI Emerging
Markets and MSCI World Indices decreased -19.4%, -21.78% and -19.46%
respectively over the 12 months ending on 31 December 2022 on a Total Return
basis 8 . The CBOE Volatility Index (VIX) increased 25.84% to 21.7 across the
same period. Emerging Market currencies such as the Russian Rouble, Brazilian
Real appreciated and the South African Rand depreciated against the US Dollar
(1.1%, 5.4%, -6.4% respectively).
The Company suffered a drawdown across the year, with the Book Value
decreasing substantially (for a breakdown of the Total Return on the year,
please see page 6, Under the section 2022 in Review). A decline in the value
of the liquid markets portfolio and currency effects in the valuation of the
direct investment portfolio drove this result.
Despite the above, following the Company's recent acquisitions, I believe our
Direct Investment Portfolio is now very well positioned to benefit from
several growing trends across Emerging Markets globally, particularly with
reference to impact and socially responsible investing. Delphos International
based out of Washington has seen significant growth with many opportune hires
and extremely well-placed mandates being signed. Parish Group, a corporate
service provider, has continued to perform at an excellent level providing a
sustainable return to the group, as well as the newest addition of WDM
providing an increased service offering to Parish Group to widen our corporate
service portfolio.
Bart Turtelboom
CEO, APQ Global Limited
2022 IN REVIEW
Direct Investment Portfolio
As of 31st December 2022, the Company held majority investment stakes in seven
private businesses, with WDM Lex Advisory and WDM Trustees being the most
recent acquisition in Q3 2022. The valuation of the Direct Investment
Portfolio has a net reduction following adverse exchange rate movements as
well as a small reduction in the value of New Markets Media; this is as a
result of adjustments from the Company's external valuation provider. We
expect investments in Parish, New Markets, Palladium and Delphos International
and Delphos FMA to remain stable.
The final approval for the acquisition was given by FINRA, for a US based
broker dealer in January 2023 and the deal was closed in February 2023.
Delphos Holdings Limited
Delphos International and Delphos FMA continued to go from strength to
strength with both businesses showing positive steps for all key performance
indicators as well as financial analysis. Across the group the top line
revenue, Notional of deals raised and average deal size have all increased
year on year as shown in the table below.
Calendar Year No of Clients Notional of Deals ($) Average Deal Size ($)
2019 5 328,320,000 65,664,000
2020 13 880,500,000 67,730,769
2021 49 3,671,900,000 74,936,735
2022 34 3,738,168,552 109,946,134
As well as the financial growth Delphos has continued to grow out its
experience and knowledge base with 100 employees, in house advisors and
strategic partners located across the world.
APQ Corporate Services Limited
The corporate services portion of the direct investment portfolio has seen the
additional acquisition of WDM Lex Advisory and WDM Trustees Limited in 2022,
providing coverage across the Channel Islands, the UK and now Malta. This has
helped provide an additional service offering across the groups.
Calendar Year No of Clients Average per Client (£)
2019 357 4,422
2022 409 3,815
2021 375 4,416
2022 343 4,544
Liquid Market Portfolio
At the end of the fourth quarter our gross exposure was largely unchanged from
the previous quarter. The bulk of the exposure was to equities with minimal
exposure to interest rates and credit markets. As shown in the chart below,
our largest exposure remains to Financials, followed by Materials, Industrials
and Health Care sectors.
After a strong start to 2022, financial markets suffered another difficult
year following the invasion of Ukraine by Russia. The perfect storm of supply
chain disruptions due to Covid and the resulting volatility in commodity
prices due to the Ukraine war, led to inflation reaching multi-decade highs.
Central banks across the globe were prompted to hike interest rates
aggressively to anchor inflation expectations and bond markets suffered their
largest price decline this century.
At the end of December, the audited Book Value Per Share was $0.0921
(equivalent to £0.073) at the end of the period, compared to $0.1063
(£0.0952) at the end of Q3 2022. The Company maintained a very healthy cash
position of 80.0% of the liquid market portfolio assets.
The chart below shows the breakdown of the equity exposure by sector. The
largest exposure at the end of December was to Financials (27.2%), followed by
Materials (21.2%), Information Technology (12.9%) and Industrials (8.9%).
Equity Exposure by Sector % Holding
Financials 27.2%
Materials 21.2%
Information Technology 12.9%
Industrials 8.9%
Health Care 8.2%
Consumer Discretionary 5.2%
Consumer Staples 4.5%
Energy 4.3%
Communication Services 3.8%
Utilities 2.5%
Real Estate 1.3%
At the end of December 2022, 96.8% of the Company's exposure (excluding cash
and FX hedges) was to equities, whilst the rates exposure accounted for a
further 3.2%.
Asset Class Exposure as % Total as of 31(st) December 2022
Credit 0.0%
Equity 96.8%
FX(1) 0.0%
Rates 3.2%
TOTAL 100.0%
(1) excluding FX hedges
BUSINESS MODEL AND STRATEGY
For the year ended 31 December 2022
The objective of the Company is to steadily grow its earnings to seek to
deliver attractive returns and capital growth through a combination of
building growing businesses as well as earning revenue from income generating
operating activities in capital markets 9 .
The Company's strategy is to:
(i) gain exposure to sovereign, corporate and banking entities for
a range of business purposes, including for acquisition financing, working
capital and investment purposes. The terms of any bonds or loans will vary but
are typically expected to range from six months to five years. The Company
expects that the loans will typically be secured;
(ii) invest in different parts of the capital structure, both
public and private, of corporate and banking entities in as well as structured
finance instruments; and
(iii) take operational control of businesses through the acquisition
of minority and majority stakes in public and private companies.
The Company may utilise borrowings in connection with its business activities.
Although there is no prescribed limit in the Company's Articles of
Incorporation (the 'Articles') or elsewhere on the amount of borrowings that
the Company may incur, the Directors will adopt a prudent borrowing policy and
oversee the level and term of any borrowings of the Company and will review
the position on a regular basis.
The Company has no investment restrictions and investing will not be subject
to any maximum exposure limits. No material change will be made to the
Company's objective or investing policy without the approval of Shareholders
by ordinary resolution. The Company may gain exposure to emerging markets by
investing in assets on other, non-emerging markets (such as the London Stock
Exchange) as long as the underlying asset has exposure to emerging markets.
Key performance indicators ("KPIs") for the Company will be the growth of the
earnings of the Company and the Dividend paid. The Company's KPI's have been
selected in accordance with the above strategy to provide both capital gain
and income to the Company's shareholders. These KPIs are:
(i) A sufficient per annum increase in earnings to allow a 6%
dividend to be paid to shareholders. This target was not achieved in 2021 or
2022 and no dividends have been paid in respect of the current or previous
year
(ii) Additional per annum increase in earnings to grow the
Company's Book Value by 5 - 10% per annum. For the year ended 31 December
2022, this KPI was not met as earnings decreased from the prior year (see
consolidated statement of comprehensive income), and hence the Book Value Per
Share fell Year on Year. The main factor driving the earnings decrease was the
performance of the Liquid Market Portfolio. In 2022, the Company did not meet
this criterion, following operating losses at the Company amidst tough trading
conditions in Emerging Markets.
Alternative Performance Measure ("APM") for the Company:
(iii) One of the Company's KPI's is to pay a 6% Dividend Yield
(based on capital subscribed), making income received a key component of the
return on investment. The Company makes use of the Total Return, which factors
in income received, as well as capital growth, when tracking the performance
of the Company and its ability to meet the above KPI. The Total Return for the
year was -69.38%.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties
The Board has carried out a robust assessment of the Company's principal
risks. These are classified as current risks, being those that the company is
currently managing and could impact achieving the Company's objectives, and
emerging risks, being those risks with a future impact from external or
internal opportunities or threats. The Directors believe the risks described
below are the material risks relating to the Company:
Business Area/Process Perceived risk Current or emerging risk Mitigation
Environment Changes in law or regulation or tax legislation may adversely affect the Current and emerging Considered on an ongoing basis by the Board during quarterly board meetings.
Company's ability to carry on its business or adversely impact its tax Further advice comes from the Investment Advisory Committee. Where deemed
position and liabilities. necessary the Directors will engage external legal and professional advisers.
Key man risk The Company's performance is dependent on the performance of key members of Current The Board monitors the dependency of the Company upon any individual on an
management. The departure of any key individual from the management team may ongoing basis and where appropriate plans to reduce the impact from this risk.
adversely affect the returns available to the Company.
FX The Company and its Investees will have an exposure to foreign exchange rate Current The Company has taken the decision not to hedge its foreign currency exposure,
risk as a result of changes, both unfavourable and favourable, in exchange in regards to the Ordinary shares, and thus accepts this risk as part of its
rates between United States Dollars and the currencies in which some assets investment strategy. The Board may engage in currency hedging in the future,
and liabilities are denominated. The Company's functional and presentational seeking to mitigate foreign exchange risk although there can be no guarantees
currency is US Dollars. Therefore, there is currency risk as Ordinary Shares or assurances that the Group will successfully hedge against such risks.
are traded on AIM in Pounds Sterling. Further detail on foreign exchange risks
are discussed in Note 25 of the Financial Statements.
Cyber Security The Company and Service providers will be subject to Cyber Risk in the form of Current The Company makes use of Dual Signing Authority and two factor authentication
both risk of failure of systems and also of the risk of malignant action across its banking and other key functional areas where it is available. The
against the Company by way of Information Technology. Company relies on its service providers to have in place proper cybersecurity
systems and monitors its providers through the annual third-party service
provider review.
Dividend Risk There can be no guarantee that the Group will achieve the target rates of Current The Group monitors its income through its management accounts and targets
return referred to in this document or that it will not sustain any capital investments that provide income in accordance with its strategy, laid out on
losses through its activities. The ability to pay dividends is dependent on a the Strategy section on page 8 above.
number of factors including the level of income returns from the Company's
investee entities.
Financial Risk The Company will, through the implementation of its business model and Current and emerging These risks and the controls in place to mitigate them are reviewed at board
strategy, face financial risks including market risk, credit risk and meetings. Further detail on financial risks are discussed in Note 25 of the
liquidity risk. Further details of these risks can be found in table 2 below. Financial Statements.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
Business Area/Process Perceived risk Current or emerging risk Mitigation
Volatility There may be volatility in the price of the Ordinary Shares and the market Current and emerging To optimise returns, Shareholders may need to hold the Ordinary Shares for the
price of the Ordinary Shares may rise or fall rapidly. The price of the long term.
Ordinary Shares may decline below their respective issue price and
Shareholders may not be able to sell their Ordinary Shares at a price equal to
or greater than their issue price.
Liquidity Shareholders will have no right of redemption and must rely, in part, on the Current The Board monitors the liquidity of the stock during its quarterly board
existence of a liquid market in order to realise their investment. Although meetings. The Company employs market making firms to ensure a live market is
the Ordinary Shares are admitted to trading on AIM, there can be no assurance available in its ordinary shares.
as to the levels of secondary market trading in Ordinary Shares or the prices
at which Ordinary Shares may trade. The Ordinary Shares may trade at a
discount to the Net Asset Value per Ordinary Share.
Leverage The Company has CULS which it is required to repay interest on quarterly, at a Current The Board monitors the leverage present in the Company via its monthly
rate 3.5% pa. The Company must ensure that it has liquid resources available management accounts.
to repay this interest. Furthermore, any CULS not previously redeemed,
purchased or converted will be repaid by the Company on 30 September 2024 at
its nominal amount and thus the Company must ensure it has resources available
at this time to make these repayments.
Brexit The Directors note that the Company's future performance may be adversely Current The Board monitors the ongoing situation and is prepared to respond
affected by the economic and political instability surrounding the impacts of accordingly as situations evolve.
Britain's exit from the EU.
Ukraine unrest Russia initiated miliary action against Ukraine in February 2022. To deter Current and Emerging The Company and Group does not have any investments that are directly or
these actions, western governments levied sanctions against the Russian indirectly affected by the sanctions levied to date thus the impact of this
government and connected enterprises and individuals. risk is limited to the effect of global uncertainty arising as a result.
Directors continue to monitor the conflict and investment portfolio and will
implement necessary actions where possible to reduce the impact from further
escalation of military actions and sanctions.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
The Directors believe the risks described below are the material risks
relating to the Company through its investment in APQ Cayman Limited:
Business Area/Process Perceived risk Current or emerging risk Mitigation
Emerging Markets APQ Cayman Limited will have investment exposure to emerging markets, which Current The Company engages a team to actively monitor treasury exposures live in
are subject to certain risks and special considerations that are not typically high-end risk management software applications. The team monitors exposure and
associated with more developed markets and economies. uses a comprehensive framework, utilising its administrator, banking
counterparts and other third-party vendors, to ensure exposure levels are
correctly measured and reported daily.
Derivative Risk APQ Cayman Limited will invest in derivative instruments which can be highly Current The Company employs a highly experienced management team that monitors
volatile and may be difficult to value and/or liquidate. Derivatives will be exposure on a daily basis and captures derivative exposure using high-end risk
used for gearing purposes which may expose investors to a high risk of loss. software applications. Daily reports are generated from the software and
reviewed by the team.
Credit Risk APQ Cayman Limited is subject to the risk of the inability of any counterparty Current The Company chooses reputable financial service providers, and uses a spread
to perform with respect to transactions, whether due to insolvency, bankruptcy of counterparties to lessen the impact should one counterparty fail.
or other causes. Where the Company utilises derivative instruments, it is
likely to take credit risk with regard to such counterparties and bear the
risk of settlement default.
Liquidity Risk The Company could suffer losses as a result of a decrease in liquidity in the Current The Company chooses reputable financial service providers, and uses a spread
capital markets in which it invests. A decrease in liquidity could result in of providers to lessen the impact should one be unable to provide a market
higher exit costs for a given investment, such as the commission or spread price.
charged by the counterparties with which it trades.
Third party risk APQ Cayman Limited will be subject to custody risk in the event of the Emerging The Company chooses reputable financial service providers as its
insolvency of any custodian or sub-custodians with which it transacts. counterparties and uses multiple service providers to lessen the impact should
one become insolvent.
The Directors believe the risks described below are the material risks
relating to the Company through its unquoted investments:
Business Area/Process Perceived risk Current or emerging risk Mitigation
Valuation Risk The Company's Direct Investment portfolio comprises unquoted investments Current The Company values its investments in accordance with International Financial
purchased and sold privately, for which there is no market price available. As Reporting Standards, and employs external valuation experts to perform these
a result, management is required to make forecasts and assumptions about valuations.
certain inputs used in the valuation of these investments. The Company could
suffer losses, should these forecasts or assumptions not materialise.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
These risks are mitigated by the control and oversight of the Board. The Board
will consider the risks of the Company as a whole on a regular basis at its
Board meetings and on an annual basis shall review the effectiveness of its
risk management systems, ensuring that all aspects of risk management and
internal control are considered. The processes for its annual reviews includes
reporting and recommendations from the Board as well as adoption and review of
a formal risk matrix documenting the current and emerging risks facing the
Company, as well as the assessed probability and impact of the identified
risks. Other risk mitigation measures include, but are not limited to:
• oversight by Executive Directors and key
management with the requisite knowledge and experience in emerging and credit
markets;
• oversight by Non-Executive Directors;
• dual signing authority on bank accounts;
• business Continuity Plans of the various service
providers;
• ongoing Cyber Risk training; and
• ongoing review of third party service providers
by the Board.
DIRECTORS' REPORT
For the year ended 31 December 2022
The Directors present the consolidated financial statements of APQ Global
Limited (the "Group") for the year ended 31 December 2022. The Group comprises
the Company and its subsidiaries 10 (#_ftn10) .
The Company
The Company was incorporated in Guernsey on 10 May 2016. The Company's shares
("Shares") were admitted to The International Stock Exchange on 11 August 2016
and admitted to trading on the AIM segment of the London Stock Exchange on 26
August 2016. The CULS have been admitted to the Order Book for Fixed Income
Securities on the London Stock Exchange's International Securities Market,
with effect from 7 September 2017.
Principal Activities
The principal activity of the Company is to invest in Companies in emerging
markets through the purchase of a variety of financial instruments, including
equity, bonds and derivatives through the subsidiary APQ Cayman Limited, and
through direct investments in private companies. The Company seeks to earn
revenue from dividends and interest income from these investments and realise
gains on sales of these investments. Additionally, the Company aims to take
majority stakes in private businesses, seeking to earn income throughout the
holding period and capital gains upon resale. The anticipated holding period
between purchase and sale is expected to be three to seven years.
Functional and presentational currency
The Group's functional and presentational currency is US Dollars. The Group's
main activities and returns for the year ended 31 December 2022 are from its
subsidiary APQ Cayman Limited and were in US Dollars.
Results and Dividends
The consolidated results for the year are set out in the consolidated
statement of comprehensive income on page 34 and the Statement of Financial
Position at that date is set out on page 35.
The Company did not pay any dividends during the year (2021: none).
Share Capital
As at 31 December 2022 the Company had in issue 78,559,983 (2021: 78,453,671)
Ordinary Shares of nil par value. During the year 106,312 (2021: 106,312)
Ordinary shares were issued.
Principal Risks and Uncertainties
Principal Risks and Uncertainties are disclosed in the Business Model and
Strategy section
During the first quarter of 2020 and into 2021, the Company experienced
difficult trading conditions in its liquid portfolio due to large market
movements in emerging markets currencies, bonds and equities.
The Company took decisive action to mitigate further risk to the balance
sheet, de-risking its portfolio of liquid market securities, furthermore, due
to ongoing uncertainty, the Board implemented the following cash preservation
measure to facilitate a smooth recovery as the world exited the pandemic.
These measures are still in existence:.
• suspension of dividends paid to ordinary shareholders until
further notice;
• the management bonus scheme to be cut from 20% of profits to 10%
(no bonuses paid in current year or prior year due to losses); and
• significant cost reduction across all of the Group.
In addition to the above a new risk identified as of the start of 2022 was the
ongoing uncertainty caused by Russia's invasion of Ukraine. This direct risk
has been mitigated by ensuring there is no Russian exposure across any
investments by APQ Global.
Going Concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing the Financial Statements since the ultimate assets of the Company
mainly consist of securities which are readily realisable and, accordingly,
the Company has adequate financial resources to continue in operational
existence for at least 12 months from the date of this report. The Company
will be able to meet all its liabilities as they fall due. See below for the
Stress Testing applied in coming to this conclusion.
Stress Testing
After assessing the Company as a Going Concern in normal (poor) economic
conditions across a two year horizon, the Company would maintain a sufficient
expense coverage ratio net of paying all its operating expenses and net of its
financial payment obligations to the CULS. The Company would not breach any
debt covenants and would retain USD 30.0 (+8.3) million in cash as of June 30,
2024 11 (#_ftn11) .
Under normal market assumptions, the Company assumes that it meets all its
financial obligations as well as its operating expenses. It earns a nominal
income/growth yield on its Liquid Market Portfolio based on prevailing market
risk premiums. The Company forecasts to receive dividend income from its
Direct Investment Portfolio ($8 million). Under poor economic conditions, the
earnings assumptions are reduced, and $4.8m dividends are received from the
Company's Direct Investment Portfolio, whilst the financial obligations and
expenses are held constant. There are zero Fair Value Profit or Losses assumed
on the Direct Investment Portfolio throughout the period under review.
Dividend Suspension
The suspension of the dividend paid to ordinary shareholders will increase the
liquidity available to the Company by approximately $6m per annum based on
level of dividends paid prior to implementation of the dividend hold. The
Board reviews the dividend policy quarterly. The dividend remains on hold
until further notice.
Long Term Viability Statement
There is currently no strict regime of Corporate Governance to which the
Company must adhere to, however there are guidelines set out for AIM
companies. The Company complies with the UK code on Corporate Governance,
issued July 2018 for periods beginning on or after 1 January 2019 to the
extent outlined in the Corporate Governance section below on pages 16 and 17.
In accordance with provision 31 of the UK Corporate Governance Code, the
Directors have assessed the prospects of the Company over a longer period than
the 12 months minimum required by the 'Going Concern' provision. Three years
is deemed to be an appropriate time period for management to implement its
medium-term strategic objectives set out in the Business Model and Strategy
section (page 8) of these financial statements.
Further to this page - Going Concern, the Company extends its above analysis
to a three-year cash flow forecast (to June 2026 ) using newly targeted
budgets and concluded that:
Assuming normal (poor) economic conditions 12 (#_ftn12) , the Company would
preserve an expense coverage ratio net of its financial obligations of 143
(96), retaining USD 29 (10) million in cash on its balance sheet as of June
30, 2026 providing considerable headroom to absorb poor conditions. These
figures include the settlement of the CULS of $36m in September 2024. The
group will liquidate the portfolio over the next two years in preparation for
the redemption in addition to dividend generation from the private investment
portfolio.
Based on the Company's processes for monitoring operating costs, share
discount, internal controls, invested asset allocation, risk profile,
liquidity risk and the assessment of the principal risks and uncertainties
facing the Company, the Directors have concluded that there is a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the forecasted period to 31 December
2025.
Directors
The details of the Directors of the Company during the year and at the date of
this Annual Report are set out in the Directors' report.
As of 31 December 2022, and the date of these financial statements, the
following Directors, their close relatives and related trusts, held the
following beneficial interests in the Company:
Director
Shares
held
% of issued share capital
Bart Turtelboom
22,448,953
28.58%
Wayne Bulpitt
237,000
0.30%
International Tax Reporting
For the purposes of the US Foreign Accounts Tax Compliance Act, the Company
registered with the US Internal Revenue Service ("IRS") as a Guernsey
reporting Foreign Financial Institution ("FFI") in November 2016, received a
Global Intermediary Identification Number (B2KS93.99999.SL.831) and can be
found on the IRS FFI list.
The Common Reporting Standard ("CRS") is a standard developed by the
Organisation for Economic Co-operation and Development ("OECD") and is a
global approach for the automatic exchange of tax information. Guernsey has
adopted the CRS which came into effect on 1 January 2016. The CRS replaced the
intergovernmental agreement between the UK and Guernsey to improve tax
compliance that had previously applied.
The Board will take the necessary actions to ensure that the Company is
compliant with Guernsey regulations and guidance in this regard.
Auditor
BDO LLP were reappointed as auditors at the AGM on 9 August 2022 in relation
to the year ended 31 December 2022 audit. BDO LLP will be reconsidered for
appointment for the December 2023 audit at the AGM scheduled for 8 August
2023.
Statement of directors' responsibilities
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable Guernsey law and
regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial
statements for each financial year. Under that law the Directors have elected
to prepare the Group financial statements in accordance with UK adopted
International Accounting Standards ("UK IAS") and the Companies (Guernsey)
Law, 2008.
Under the Companies (Guernsey) Law, 2008 the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and of the profit or loss of the
Group for that period.
The directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies trading securities
on AIM.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have
been followed, subject to any material departures being disclosed and
explained in the financial statements; and
• prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the Group will continue in
business.
Statement of directors' responsibilities (continued)
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group and its results for the year and to enable them to ensure that the
financial statements comply with the Companies (Guernsey) Law, 2008. They are
also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The maintenance and integrity of the company's website is the responsibility
of the directors. The directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Responsibility Statement
The Directors confirm that to the best of their knowledge the Annual Report,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for the shareholders to assess the Group's performance,
business model and strategy.
Disclosure of Information to Auditor
Each of the persons who was a Director at the date of approval of the
financial statements confirms that:
· so far as they are aware, there is no relevant audit
information of which the Company's auditor is unaware; and
· he has taken all steps that he ought to have taken as a
Director to make himself aware of any relevant audit information and to
establish that the Company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the
provision of section 249 of the Companies (Guernsey) Law, 2008.
Corporate Governance
The Directors recognise the importance of robust Corporate Governance and meet
regularly to review corporate strategy, the risk profile of the Group and its
operating businesses and to monitor the performance of the service providers
appointed to the Group. The Board assesses and monitors the culture of the
Company, and reviews the sustainability of the Company's business model and
its impact on external stakeholders. Due to the size of the Company the Board
are able to monitor the culture through regular contact with employees. More
information with respect to the Company's Business Model can be found on page
9.
There is currently no strict regime of Corporate Governance to which the
Directors must adhere over and above the general fiduciary duties and duties
of care, diligence and skill imposed on such directors under the Companies
(Guernsey) Law, 2008; however, there are guidelines set out for AIM companies.
The Directors recognise the importance of sound corporate governance and the
Group will seek to take appropriate measures to ensure that the Group complies
with the UK Code on Corporate Governance to the extent appropriate and taking
into account the size of the Group and the nature of its business. The
Directors, having reviewed the UK Code on Corporate Governance, considers that
it has complied with the Code throughout the period under review with the
exception of the following areas of non-compliance, each of which applied
throughout the period:
Areas of non-compliance with the UK Corporate Governance Code which were
disclosed at the launch of the Company:
• Provision 5 - The Board does not use any of the
methods outlined for engagement with the workforce, further information on the
Board's engagement with the workforce is listed below;
• Provision 9 - The Chairman is not independent;
• Provision 11 - At least half the Board, excluding the
chairman are not independent non-executive directors;
• Provision 12 - The non-executive directors, led by the
senior non-executive director do not meet without the chair at least annually
to appraise his performance or on other such occasions which are deemed
appropriate;
• Provision 13 - The chair does not hold meetings
without the executive directors present;
• Provision 17 - The Company does not have a nominations
committee;
• Provision 20 - The Company did not use open advertising
and/or an external search consultancy when appointing the chair and the
non-executive directors;
• Provision 21 - The Board does not have a regular
externally facilitated board evaluation;
• Provision 24 - The audit committee does not contain
two independent non-executive directors. The chairman of the Company is a
member of the audit committee;
• Provision 23 - The Company does not have a formal
policy on diversity and inclusion; and
• Provision 32, 33 and 41 - The Company does not have a
remuneration committee.
Corporate Governance (continued)
The Directors do not believe that compliance with these sections of the code
are necessary due to the size of the Group and the nature of its business.
Following the resignation of the Aspida Group (formerly Active Group) as
Company Secretary on 10 June 2020 the Company no longer has a material
business relation with the Chairman, and he will be formally deemed to be
independent after three years from this date. With regards to a remuneration
and nomination committee, these responsibilities are undertaken by the full
board as appropriate. The Chair meets with fellow Directors and executives
regularly. The Board has recently undertaken an independent Governance Review
to ensure it continues to meet all appropriate governance standards.
As a Company with its shares admitted to listing on TISE, the Directors comply
with the Model Code of TISE and take all reasonable and proper steps to ensure
compliance by applicable employees as required by the Listing Rules. The
Directors and the Company also comply at all times with the applicable
provisions of the Listing Rules.
The Company has adopted an anti-bribery policy and adheres to the requirements
of the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003 and the UK
Bribery Act 2010.
Board engagement with the workforce and other stakeholders
Due to the size and nature of the business, the directors do not believe that
compliance with Provision 5 of the code is necessary. All members of the
workforce have access to the executive and non-executive directors and the
Board maintains an open dialogue with all members.
The Board considers the impact of the Group's culture, management, and
strategic decisions on both the workforce and other external stakeholders.
These external stakeholders include, but are not limited to suppliers, the
environment and other stakeholders of investments held by the Group.
Internal Audit
The Directors have determined that no internal audit function is required, as
the bookkeeping and valuation of assets are performed by third parties, which
provides checks and balances on the operations of the Group. The Directors
believe that an internal audit function would largely duplicate this oversight
and represent additional cost for no additional benefit. The Directors
reassess this annually.
Role of the
Board
The Board is the Company's governing body and has overall responsibility for
maximising the Company's success by directing and supervising the affairs of
the business and meeting the appropriate interests of Shareholders and
relevant stakeholders, while enhancing the value of the Company and also
ensuring protection of Shareholders. A summary of the Board's responsibilities
is as follows:
• statutory obligations and public disclosure;
• strategic matters and financial reporting;
• risk assessment and management including reporting
compliance, governance, monitoring and control; and
• other matters having a material effect on the Company.
The Board's responsibilities for the Annual Reports are set out in the
Statement of Directors' Responsibilities section.
The Board needs to ensure that the Annual Report and Financial Statements,
taken as a whole, are fair, balanced and understandable and provide the
information necessary for Shareholders to assess the Group's performance,
business model and strategy.
In seeking to achieve this, the Directors have set out the Group's business
strategy and have explained how the Board and its delegated committee operate
and how the directors review the risk environment within which the Company
operates and set appropriate risk controls. Furthermore, throughout the Annual
Report the Board has sought to provide further information to enable
Shareholders to have a fair, balanced and understandable view.
Composition and Independence of the Board
The Board comprises two executive directors, one independent non-executive
director and one non-independent non-executive director.
Role of the Board (continued)
Composition and Independence of the Board (continued)
Wayne Bulpitt is responsible for leadership of the Board and ensuring its
effectiveness as Non-executive Chairman, a role he has held since 20 April
2017.
Bart Turtelboom continues to serve as Chief Executive Officer
Philip Soulsby continues to serve as Finance Director.
Wadhah Al-Adawi continues to serve as Chairman of the Audit Committee.
Board Audit Committee
Held Attended Held Attended
Bart Turtelboom 4 4 2 2
Wayne Bulpitt 4 3 2 2
Phil Soulsby 4 4 2 2
Wadhah Al-Adawi 4 3 2 2
Re-election
At every Annual General Meeting any Director appointed by the Board since the
last annual general meeting or who held office at the time of the two
preceding annual general meetings and who did not retire at either of them
shall retire from office and may offer themselves for re-appointment by the
Shareholders.
Terms and Conditions of Appointment on Non-Executive Directors
Each of the Non-Executive Directors shall be subject to re-elections at the
first annual general meeting of the Company and thereafter in accordance with
the provisions of the Company's articles of incorporation in respect of
re-election and retirement. Neither of the Non-Executive Directors has been
appointed for a fixed term.
The conditions attached to the appointment of the Non-Executive Directors
include the following:
• termination in the event of any serious breach of
obligations to the Company or through any act of dishonesty, fraud or serious
misconduct;
• attendance at quarterly and ad hoc board meetings and
consideration of all board papers pertaining to such meetings;
• compliance with all applicable legal and regulatory
requirements; and
• compliance with all applicable legal and regulatory
requirements including the TISE model share dealing code and the UK Corporate
Governance Code.
Board Evaluation and Succession Planning
The Directors consider how the Board functions as a whole taking into account
the balance of skills, experience and length of service into consideration and
also reviews the individual performance of its members on an annual basis.
Board Evaluation and Succession Planning (continued)
To enable this evaluation to take place, the Board has put in place a process
whereby the Company Secretary circulates a questionnaire plus a separate
questionnaire for the evaluation of the Chairman. Upon completion, the
questionnaires are returned to the Company Secretary for collation and summary
before distribution to the Chairman and the other Directors.
The Board considers that it has a breadth of experience relevant to the
Company's needs and that any changes to the Board's composition can be managed
without undue disruption. Future Directors will undertake an induction
programme.
With regards to board composition and external evaluation, the board has
considered its effectiveness at least annually and composition on a regular
basis. It is both mindful of good practice and the need to continually review
the matter. With regards to external evaluation,
it is considered that the size and the activity of the Company do not justify
such an expense at this stage, however a recent change of service providers
and Company Secretary will allow the company to benefit from a "fresh pair of
eyes" and informal review.
The Board is cognisant of good practice and recent reviews into the
composition of boards. It continually reviews its own composition and believes
that it has available an appropriate range of skills and experience. The Board
will always ensure that the best candidates available are appointed
irrespective of their background, gender or ethnicity.
Company Secretary
Parish Group Limited continues to serve as Company Secretary. All Directors
have direct access to the Company Secretary and the Company Secretary is
responsible for ensuring that Board procedures are followed and that there is
good communication within the Board and between the committees of the Board
listed below and the Board.
Committees of the Board
The Board has established the following committees:
Audit committee
The audit committee is chaired by Wadhah Al-Adawi, the independent Director,
with all the other Directors as members. The audit committee meets no less
than once a calendar year and meetings can also be attended by the Auditors.
The audit committee is responsible for monitoring the integrity of the
financial statements of the company and any formal announcements relating to
the company's financial performance and reviewing significant financial
reporting judgements contained in them before their submission to the Board.
In addition, the audit committee is specifically charged under its terms of
reference to advise the Board on the terms and scope of the appointment of the
Auditors, including their remuneration, independence, objectivity and
reviewing with the Auditors the results and effectiveness of the audit, and in
ensuring that the Company's annual report and financial statements are fair,
balanced and understandable. The audit committee is also responsible for
reviewing the Company's internal financial controls and internal control and
risk management systems. They also consider annually the need for an internal
audit function.
The audit committee last met on 28 September 2022. It also met in May 2022 to
approve / review the accounts. The audit committee met to approve the latest
set of accounts in June 2023. A report of the Audit Committee detailing their
responsibilities is presented in the Audit Committee Report.
The Audit Committee's Terms of Reference state that the Audit Committee shall
review the need for any non-audit services provided by the external auditor
and authorise on a case-by-case basis. The Audit Committee's Terms of
Reference are available from the registered office of the Company.
Audit fees for the external auditor, BDO LLP, for the year ended 31 December
2022 were $161,750 (2021: $168,238). No other fees were paid to the Company's
auditors for non-audit or audit related services during the year. (2021:
none).
BDO LLP has served as the Company's auditor for 6 years. The current audit
partner is Elizabeth Hooper, who replaced Neil Fung-On, for the current year
audit.
Relations with Shareholders
The Board welcomes shareholders' views and places great importance on
communication with its shareholders.
The Board monitors the trading activity on a regular basis and maintains
contact with the Company's Nominated Adviser and Broker to ascertain the views
of the shareholders, with whom they maintain a regular dialogue. Shareholders'
sentiment is also ascertained by the careful monitoring of the
discount/premium that the Shares are traded in the market against the book
value calculation per Share.
The Company reports to shareholders twice a year and produces a semi-annual
update which is posted on the Company's website. In addition, it has an Annual
General Meeting and a notice convening this together with a proxy voting card
is sent with the Annual Report and Financial Statements. The Registrar
monitors the voting of the shareholders and proxy voting is taken into account
when votes are cast at the Annual General Meeting. Shareholders may contact
the Directors via the Company Secretary.
The Chairman and other Directors are available to meet shareholders if
required and the AGM of the Company provides a forum for shareholders to meet
and discuss issues with the Directors.
Further information regarding the Company can be found on its website at
www.apqglobal.com (http://www.apqglobal.com) .
Post Balance Sheet Events
On 18 March 2022, APQ Global Limited incorporated Delphos MMJ 1, LLC and
Delphos MMJ 2, LLC for the purposes of acquiring an investment broker in
United States of America. The acquisition was concluded in FY 2023 for a
consideration of $100.
In April 2023, APQ Global announced a tender offer to all CULS holders for the
repurchase of the company's issued CULS for £2,500 per unit of £5,000
nominal CULS. 80 CULS units were tendered in total at a total cost
approximately of £0.2 million.
Annual General Meeting
The Company's Annual General Meeting is due to be held on 8(th) August 2023.
The last Annual General Meeting was held on 9 August 2022.
Related Party Transactions
Transactions entered into by the Company with related parties are disclosed in
note 27 of the financial statements.
Signed on behalf of the Board of Directors by:
_____________________
_____________________
Wayne
Bulpitt
Philip Soulsby
Chairman
Director
Date: 5 June
2023
AUDIT COMMITTEE REPORT
For the year ended 31 December 2022
On the following we are pleased to present the Audit Committee's Report for
the year ended 31 December 2022, setting out the responsibilities of the Audit
Committee.
Members of the Audit Committee will be available at the AGM to respond to any
shareholder questions on the activities of the Audit Committee.
The Audit Committee was formed on 4 November 2016.
Responsibilities
The Audit Committee reviews and recommends to the Board the Financial
Statements of the Company and is the forum through which the external auditor
reports to the Board of Directors.
The Audit Committee responsibilities include:
• review of the annual financial statements prior to approval,
focusing on changes in accounting policies and practices, major judgemental
areas, significant audit adjustments, going concern and compliance with
accounting standards, listing and legal requirements;
• receiving and considering reports on internal financial
controls, including reports from the auditors and reporting their findings to
the Board;
• considering the appointment and removal of the auditors,
their effectiveness and their remuneration including reviewing and monitoring
of independence and objectivity;
• meeting with the auditors to discuss the scope of the audit,
issues arising from their work and any matters the auditors wish to raise;
• reviewing the Company's corporate review procedures and any
statement on internal control prior to endorsement by the Board; and
• providing advice to the Board upon request as to whether the
annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to
assess the Company's performance, business model and strategy.
The Audit Committee reports its findings, identifying any matters on which it
considers that action or improvement is needed, and make recommendations on
the steps to be taken.
The audit committee met in June 2023 and were joined by the external auditors,
to review the accounts and reports on the operations of the Company. After due
consideration they reported to the Board of the Company that in their view the
accounts were fair, balanced, understandable and presented the information
necessary to allow shareholders to assess the Company's performance, business
model and strategy.
_____________________
Wadhah Al-Adawi
Audit Committee Chairman
Date: 5 June 2023
BOARD MEMBERS
For the year ended 31 December 2022
Bart Turtelboom (Chief Executive Officer and Executive Director)
Bart is Chief Executive Officer of APQ Global Limited and is on the board of
APQ Cayman Limited. Previously he was the co-founder and Chief Investment
Officer and partner of APQ Partners LLP. Prior to APQ Partners LLP, Bart was
Co-Head of the Emerging Markets business at GLG and Co-Portfolio Manager of
the GLG emerging markets funds. He was previously the Global Co-Head of
Emerging Markets at Morgan Stanley, where he ran a multi-billion US Dollar
business spanning Asia, Latin America, the Middle East and Africa, and head of
its Global Capital Markets Group. Prior to that Bart was a Portfolio Manager
at Vega Asset Management and a Director at Deutsche Bank, where he held
several roles culminating in coverage of the bank's largest European clients.
Bart was an Economist for the International Monetary Fund in Washington D.C.
from 1994 until 1997. Bart received a Ph.D. in Economics from Columbia
University.
Wayne Bulpitt CBE (Non-Executive Chairman)
Wayne Bulpitt has over 36 years of experience in business leadership in
banking, investment and administration services. Having left National
Westminster Bank Plc in 1992 to join CIBC Bank & Trust Company, he
developed and launched CIBC Fund Managers (Guernsey) Limited in 1994. As
Managing Director, Wayne spent the next four years managing and developing the
offshore funds and building a third party fund administration capacity.
In 1998 this experience was to prove crucial for the Canadian Imperial Bank of
Commerce where, as Director of Offshore Investment Services Global Private
Banking & Trust Division, his main priority was to restructure the
delivery of their investment management services outside of Canada.
Wayne founded Active Group Limited in 2002, which renamed to Aspida Group
following its merger with Optimus in 2019. Aspida is an innovative provider of
practical and professional support services such as compliance, corporate
secretarial and management services to the finance industry. Wayne is on the
boards of various investment management companies and funds (both listed and
un-listed), overseeing a diverse range of investment activities.
Philip Soulsby (Executive Director and Finance director)
Philip Soulsby is a mathematics graduate. He qualified as a chartered
accountant in London with BDO Binder Hamlyn, before transferring to KPMG in
Guernsey in 1990. There he spent two years specialising in the audit of
financial services companies and offshore mutual funds. In 1992 he joined
Credit Suisse Fund Administration Limited in charge of finance and compliance,
later moving to a role more involved in structuring and marketing mutual fund
services, helping the business grow from 12 staff to over 130. During this
time he acted as director to a number of funds and fund managers, and gained a
broad knowledge of hedge funds, derivatives and risk control. In 2006, he left
Credit Suisse to establish his own business, The Mundi Group Ltd, a fair-trade
and ethical products business. He remains a director of several funds and fund
management companies and was also Douzenier to the Parish of St Martin, his
term of office expired on 31 December 2018.
Wadhah Al-Adawi (Non-executive Director and Chairman of the Audit Committee)
Mr Al Adawi has over '10 years' experience within asset management and equity
trading. In 2017, he joined Hydrocarbon Finder, the oil and gas exploration
and development company in Oman, as Vice Chairman. Between 2012 and 2017, he
was a Portfolio Manager with Harvard Management Company, Boston, in which he
managed a $300 million Long/Short Emerging Market Portfolio. Prior to this,
Wadhah spent 4 years in London with GLG Partners, where he was responsible for
investing and managing Emerging Market equity exposure in both Long/Short and
Long Only strategies. He also has experience in asset management with Morgan
Stanley, EMSO Partners and HSBC. Mr Al Adawi is a CFA Charter holder.
REMUNERATION POLICY
For the year ended 31 December 2022
No advice or services were provided by any external person in respect of the
Board's consideration of the Directors' remuneration.
The Company's policy is that the fees payable to the Directors should reflect
the time spent by the Directors on the Company's affairs and the
responsibilities borne by the Directors and be sufficient to attract, retain
and motivate directors of a quality required to run the Company successfully.
The policy is to review fee rates periodically, although such a review will
not necessarily result in any changes to the rates, and account is taken of
fees paid to directors of comparable companies.
A management share plan was formalised on 7 April 2017 and amended on 17 July
2018. The plan allows for certain members of the management to benefit from
20% of any increase in the year end book value per share for a given year.
Awards can be issued as an allocation of a specified number of shares or as an
option (a right to acquired shares under the plan for nil consideration). Cash
consideration is an option at the Board's discretion. It could disadvantage
other shareholders if cash is taken and cash consideration exceeds the share
price. The vesting period for any awards issued can be up to 5 years and
subject to certain conditions. Share awards were with respect to the
performance period ended 31 December 2017, which have continued to vest over
the period. No awards have been issued with respect to the year ended 31
December 2021 and the year ended 31 December 2022 as the performance criteria
has not been met.
Remuneration
The non-executive directors are remunerated for their services at such a rate
as the Directors determine provided that the aggregate amount of such fees
does not exceed $270,550 per annum. No engagement with the workforce has taken
place to explain how remuneration aligns with wider company pay policy, this
is due to the small size of the Company.
The directors are remunerated in the form of fees, payable monthly in arrears.
Bart Turtelboom agreed to waive his entitlement to director's fees whilst he
was Chairman. From April 2017 Bart Turtelboom received an annual salary of
$148,237 (£120,000) as Chief Executive Officer. From 1 April 2018 the salary
was amended to be settled as £60,000 from the Company and £60,000 from APQ
Cayman Limited.
From 1 May 2020 the salary was amended to be settled as £24,000 from the
Company and £96,000 from APQ Cayman Limited.
The Board considers that the salary is reasonable and commensurate with the
level of the appointment.
Bart Turtelboom is eligible for a grant of share awards in accordance with the
management share plan. For the performance period ended 31 December 2017, Bart
Turtelboom was awarded 467,313 share awards which vest quarterly over a 5 year
period ending 31 December 2022. In order for the shares to vest Bart
Turtelboom must continue to be in employment at each vesting milestone. For
the year ended 31 December 2022, 93,463 shares had vested of which 70,098 had
been issued. The charge for the year ended 31 December 2022 is $15,800
(2021: $46,033) and the remaining portion yet to vest is $nil (2021: $15,800).
No other remuneration has been paid to directors apart from reimbursement of
their expenses.
REMUNERATION POLICY (CONTINUED)
For the year ended 31 December 2021
2022 APQ Global -Limited - Remuneration APQ Global -Limited - Share based remuneration APQ Cayman -Limited - Remuneration APQ Capital Services -Limited - Remuneration APQ Knowledge -Limited - Remuneration APQ Corporate Services -Limited - Remuneration Total
$ $ $ $ $ $ $
Bart Turtelboom Chief Executive Officer 29,618 15,800 118,619 - - - 164,037
Wayne Bulpitt Non-Executive Chairman 40,644 - - - - - 40,644
Philip Soulsby Finance Director 36,998 - - - - - 36,998
Wadhah Al-Adawi Non-Executive Director 24,255 - - - - - 24,255
131,515 15,800 118,619 - - - 265,934
2021 APQ Global -Limited - Remuneration APQ Global -Limited - Share based remuneration APQ Cayman -Limited - Remuneration APQ Capital Services -Limited - Remuneration APQ Knowledge -Limited - Remuneration APQ Corporate Services -Limited - Remuneration Total
$ $ $ $ $ $ $
Bart Turtelboom Chief Executive Officer 32,968 46,033 131,984 - - -
210,985
Wayne Bulpitt Non-Executive Chairman 54,880 - - - - -
54,880
Philip Soulsby Finance Director 32,050 - - 2,062 - -
34,112
Wesley Davis Executive Director 45,000 - 45,000 1,484 1,768 1,863
95,115
Wadhah Al-Adawi Non-Executive Director 14,657 - - - - - 14,657
179,555 46,033 176,984 3,546 1,768 1,863 409,749
At 31 December 2022, $nil (2021: $nil) was payable to the directors.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF APQ GLOBAL LIMITED
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Group's affairs as
at 31 December 2022 and of its loss for the year then ended;
• have been properly prepared in accordance with UK adopted
international accounting standards; and
• have been prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008.
We have audited the financial statements of APQ Global Limited (the 'Parent
Company') and its subsidiaries (the 'Group') for the year ended 31 December
2022 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Consolidated Statement of Cash Flow and notes to the
financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation
is applicable law and UK adopted international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors'
assessment of the Group's ability to continue to adopt the going concern basis
of accounting included:
· Obtaining the Directors' assessment of the going concern status
of the Group and evaluating the method of assessing going concern in light of
market volatility and the present uncertainties such as the impact of the
Russian/Ukraine conflict.
· Challenging the assumptions and judgements made, such as forecast
revenue and expenditure against historic information.
· Assessing the stress testing forecasts which included the impact
of poor economic conditions on income arising from the investment portfolio
and the ability to cover expenditure and interest payments under these
conditions. We considered these stressed scenarios against the performance in
2022 in which poor economic conditions had occurred to determine the
appropriateness of the stress test and the effect on going concern.
· Assessing the Group's current and forecast compliance with
covenants under the base case and stress tested scenarios.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
In relation to the Parent Company's voluntary reporting on how it has applied
the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors' statement in the financial
statements about whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Overview
100% (2021: 100%) of Group profit before tax
Coverage 100% (2021: 100%) of Group revenue
100% (2021: 100%) of Group total assets
2022 2021
Valuation & existence of investments - Cayman Subsidiary and directly held ü ü
listed investments
Valuation & existence of investments -Other investments ü ü
Key audit matters
Investment Entity Status ü ü
Group financial statements as a whole
Materiality
$381,000 (2021: $597,000) based on 1% (2021: 1%) of the gross investment
value.
Materiality
Group financial statements as a whole
$381,000 (2021: $597,000) based on 1% (2021: 1%) of the gross investment
value.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
The group comprises the Parent Company, APQ Global Limited, one subsidiary,
APQ Partners LLP which is consolidated, four 100% owned subsidiaries that are
not consolidated but measured at fair value through profit and loss due to APQ
Global Limited meeting the definition of an investment entity and one 50%
owned entity also valued at fair value through profit and loss. All components
in the group were in scope for our audit with APQ Cayman Limited and Delphos
Holdings Limited deemed significant components due to financial factors. For
the parent company and for the subsidiary that is consolidated a full scope
audit was performed by the group audit team and for the entities that were not
consolidated, the group audit team performed audit procedures over the
investment balances held within these entities.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation & Existence of Investments - Cayman Subsidiary and directly held The Company has an investment in its subsidiary APQ Cayman Limited (the Our procedures included:
listed investments "Cayman subsidiary") which represents the largest balance in the financial
statements. Cash
In respect of the cash balances:
Note 2.6, 2.7, 15 and 25
As described in note 2.6, 2.7, 15 and 25, the fair value of the investment in · 100% of cash balances have been confirmed to third party bank or
the Cayman subsidiary is based on the net asset value (NAV) of the Cayman custodian statements.
subsidiary. The Cayman Subsidiary's NAV is made up of cash balances (81%), a
diverse portfolio of listed equity and derivative instruments (18%) and other · Agreed foreign exchange rates used to convert balances held in
assets and liabilities (1%). foreign currency to independent sources.
Valuation of Listed Equity Investments
The Cayman subsidiary has a portfolio of level 1 and level 2 investments that In respect of 100% of the quoted investment valuations:
are recognised at fair value and there is a risk these may not be
appropriately stated and/or title over these investments may not exist. · Confirmed year end prices to independent sources and verified that
there are no contra indicators, such as liquidity considerations, to suggest
year end prices are not the most appropriate indication of fair value.
Furthermore, the Group holds direct listed investments. There is a risk that Valuation of Derivative Investments
the prices used for these listed investments are not reflective of fair value
and the risk that errors made in the recording of investment holdings result Derivative investments comprised bonds, futures and forwards. For 100% of the
in the incorrect reflection of investments owned directly by the Group. derivative investment valuations:
· Recalculated the derivative contracts using external sources (e.g.
Bloomberg).
Valuation and existence of these investments were considered to be a key audit
matter due to the significance of the balance and the level of audit effort · Checked that the aggregate valuation of each reconciled to the fair
required. value of the investment in the Cayman subsidiary financial statements.
Existence of Investments
For 100% of investments held either directly by APQ Global limited or by the
Cayman subsidiary we obtained evidence to support existence by obtaining
independent confirmations from custodians and brokers.
Other Assets and Liabilities
Concerning the other assets and liabilities that make up the NAV of the Cayman
subsidiary we performed a combination of analytical procedures and detailed
testing as appropriate agreeing to supporting documentation including supplier
invoices and independent confirmations.
Key Observations
Based on the procedures performed we considered management's valuations of
these investments to be appropriate and that there is appropriate title
supporting the existence of investments.
Valuation & Existence of Investments - Other investments The Group holds investments in a number of other entities either directly or For all investments we:
indirectly through subsidiary holding companies.
· Challenged whether the valuation methodology was the most
As described in note 2.6, 2.7, 15 and note 25, the fair values of the appropriate in the circumstances under the International Private Equity and
Note 2.6, 2.7, 15 and 25 investments are determined by a variety of techniques. These unquoted Venture Capital Valuation ("IPEV") Guidelines and IFRSs;
investments are recognised at fair value and there is a risk these may not be
appropriately valued through utilising inappropriate valuation methodologies · Inspected the share purchase agreements or share certificates, as
or assumptions. well as the investee company's filings and correspondence between the Group
and their management expert to confirm existence and ownership of investments;
There is also the risk that errors made in the recording of investment and
holdings result in the incorrect reflection of investments owned by the Group.
· Recalculated the fair value attributable to the Group, having
For these reasons we considered this to be a key audit matter. regard to the application of enterprise value across the capital structures of
the investee companies.
For 100% of investments that were valued using more subjective techniques
(discounted cash flow forecasts, revenue multiples and earnings multiples) we:
· Reviewed the valuations prepared by management's expert,
challenged and corroborated the inputs to the valuation with reference to
management information on investee companies, market data and our own
understanding;
· Considered the competence, capabilities and expertise of
management's expert through consideration of the qualifications held by the
expert and the position held in the firm employing the expert. We also
considered the services provided by the firm which employs the expert. We
considered the independence and objectivity of the expert through review of
the independence declaration made by the expert to the Group in its valuation
report. We considered the appropriateness of the methodology and assumptions
employed by the expert through review of the accounting framework and
valuation guidelines followed;
· Reviewed management information available to support assumptions
about maintainable revenues, expenditure, working capital and tax which formed
the basis of the cash flow forecasts used in the valuations. In order to gain
further comfort over this management information we:
o Agreed a sample of revenue per the investee companies management accounts
back to invoice to support the existence of revenue in the current year;
o Considered the ability of management to forecast accurately by comparing
the 2022 actual figures to the 2022 forecasts produced in 2021 and received as
part of our 2021 audit;
o Obtained an understanding for management's forecasts for revenue and
considered that against our knowledge of the entity and the wider market;
o Obtained management's forecast EBITDA margins, depreciation and working
capital and reviewed for reasonableness based on current year actuals and the
forecast for revenue;
o Considered management's forecast tax rate and considered this against the
tax rates in place and future tax rates announced for the relevant
jurisdictions.
· Considered the discount rate applied to the cash flow forecasts
by reference to venture capital discount rates and where relevant performed a
recalculation of the cost of equity calculation and validated the inputs
utilised, which included stress testing;
· Considered the appropriateness of the cash flow forecast period
with reference to our knowledge of the subsidiaries and industry norms; and
· Considered the appropriateness of the comparator market and
transaction multiples used with regards to the operating activities of these
companies.
We assessed the impact of the estimation uncertainty concerning the
assumptions by, where appropriate, performing sensitivity analysis by
developing our own point estimate where we considered that alternative input
assumptions could reasonably have been applied. We considered the overall
impact of such sensitivities on the portfolio of investments in determining
whether the valuations as a whole are reasonable and free from bias.
For 100% of investments that were valued using less subjective techniques
(cost and price of recent investment reviewed for changes in fair value) we:
· Verified the cost or price of recent investment to supporting
documentation;
· Considered indicators that the cost or price of recent investment
were no longer representative of fair value considering, inter alia, the
current performance of the investee company and the milestones and assumptions
set out in the investment proposal; and
· Considered whether the price of recent investment is supported by
alternative valuation techniques under the revised IPEV guidelines.
For 100% of investments held at nil we:
· Considered the rationale for a nil valuation and obtained
confirmation that the entities are newly set up and have not been trading
during 2022 and therefore have no management accounts as they have no assets,
liabilities, income or expenses.
Key Observations
Based on the procedures performed considered management's valuations of these
investments to be appropriate and that there is appropriate title supporting
the existence of investments.
Investment Entity Status As described in note 3 to the financial statements, the Directors have We reviewed the Group's listing documents, financial statement disclosures and
determined that the Group continues to meet the definition of an Investment website publications to confirm that the Group's business purpose, objectives
Entity and therefore holds certain subsidiaries at fair value through profit and strategy were congruous with those of an Investment entity.
and loss as opposed to consolidating them.
Note 2.5, 3 and 15
We obtained management's memorandum which details the rationale for why APQ
Global Limited continues to meet the definition of an Investment entity and
checked that the rationale applied was consistent with the requirements of
The assessment of whether the Group continues to meet the definition of an IFRS 10. We also checked that the explanations and rationale were consistent
investment entity under IFRS 10 Consolidated Financial Statements is with our understanding of the Group and its activities.
judgemental and must be reconsidered at each reporting date, taking into
account changes in the portfolio and the Group's activities. We obtained management's memorandum in respect of each of the underlying
investments which detailed the rationale for acquiring each of these
investments and the exit strategy for each investment. We considered whether
the rationale for acquiring these investments was in accordance with our
Due to acquisitions in unquoted investments through the subsidiaries understanding obtained throughout the audit and was consistent with that of an
continuing to occur year on year, there is a continuing need to spend investment entity.
additional time and effort re-assessing whether the Group continues to meet
the definition of an investment entity. Therefore, this together with the Where appropriate we agreed the details included in management's memoranda to
related disclosures were considered to be a key audit matter. supporting evidence such as Board meeting minutes, publications for investors
and fair value assessments.
We reviewed management's fair value assessment of each of the investments and
checked that all of the investments were evaluated on a fair value basis at
the year end.
We reviewed the key disclosures in respect of this matter to test that they
were complete, accurate, and appropriate in the context of the requirements of
IFRS 10.
Key Observations
Based on the procedures performed we consider management's view regarding the
Group's investment entity status to be appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements
2022 2021
Materiality $381,000 $597,000
Basis for determining materiality 1% of the Gross investment value as at the audit planning phase. 1% of the Gross investment value
Rationale for the benchmark applied As an Investment entity, investments are the key balance in the financial As an Investment entity, investments are the key balance in the financial
statements and a key balance of interest to the users. 1% was selected based statements and a key balance of interest to the users. 1% was selected based
on the nature of the portfolio and the level of judgement inherent in the on the nature of the portfolio and the level of judgement inherent in the
valuation. valuation.
Performance materiality $247,000 $358,000
Basis for determining performance materiality 65% of materiality 60% of materiality
When setting performance materiality we considered a number of factors When setting performance materiality we considered a number of factors
including the expected misstatements, the history of misstatements and brought including the expected misstatements, the history of misstatements and brought
forward adjustments from the prior years as well as the areas of the financial forward adjustments from the prior years as well as the areas of the financial
statements subject to estimation uncertainty. statements subject to estimation uncertainty.
Component materiality
We set materiality for each significant component of the Group based on a
percentage of between 70% and 95% (2021: 70% and 95%) of Group materiality due
to the size and our assessment of the risk of material misstatement of the
Group. Component materiality was set between $266,000 and $361,000 (2021:
$418,000 and $567,000). In the audit of each component, we further applied
performance materiality levels of 65% (2021: 60%) of the component materiality
to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of $7,000 (2021: $11,000). We also agreed to
report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the Annual Report and Consolidated
Financial Statements other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
As the Group has voluntarily adopted the UK Corporate Governance Code 2018 we
are required to review the Directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the Parent Company's compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit.
Going concern and longer-term viability · The Directors' statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material uncertainties
identified set out on page 41; and
· The Directors' explanation as to their assessment of the Group's
prospects, the period this assessment covers and why the period is appropriate
set out on page 42.
Other Code provisions · Directors' statement on fair, balanced and understandable set out
on page 13;
· Board's confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 8;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
9; and
· The section describing the work of the Audit and Risk Committee
set out on page 21.
Other Companies (Guernsey) Law, 2008 reporting
We have nothing to report in respect of the following matters where the
Companies (Guernsey) Law, 2008 requires us to report to you if, in our
opinion:
· proper accounting records have not been kept by the Parent
Company; or
· the Parent Company financial statements are not in agreement with
the accounting records; or
· we have failed to obtain all the information and explanations
which, to the best of our knowledge and belief, are necessary for the purposes
of our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities, the
Directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
· Our understanding of the Group and the industry in which it
operates;
· Discussion with management and those charged with governance; and
· Obtaining and understanding of the Group's policies and
procedures regarding compliance with laws and regulations,
we considered the significant laws and regulations to be Companies (Guernsey)
Law, 2008, UK-adopted international accounting standards, the AIM listing
rules and the TISE listing rules.
The Group is also subject to laws and regulations where the consequence of
non-compliance could have a material effect on the amount or disclosures in
the financial statements, for example through the imposition of fines or
litigations. We identified such laws and regulations to be US Foreign Accounts
Tax Compliance Act, Employment law and Health & safety and UK Bribery Act
2010.
Our procedures in respect of the above included:
· Review of minutes of meeting of those charged with governance for
any instances of non-compliance with laws and regulations;
· Enquiries of management, the Directors, and the Audit Committee,
as to whether they were aware of any non-compliance with laws and regulations;
· Obtaining an understanding of the control environment in
monitoring compliance with laws and regulations.
· Review of financial statement disclosures and agreeing to
supporting documentation; and
· Review of legal invoice and legal correspondence to identify
potential non-compliance with laws and regulations or undisclosed
contingencies and commitments.
Fraud
We assessed the susceptibility of the financial statements to material
misstatement, including fraud. Our risk assessment procedures included:
· Enquiry with management and those charged with governance
including management, the Directors, and the Audit Committee, regarding any
known or suspected instances of fraud;
· Obtaining an understanding of the Group's policies and procedures
relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
· Review of minutes of meeting of those charged with governance for
any known or suspected instances of fraud;
· Discussion amongst the engagement team as to how and where fraud
might occur in the financial statements; and
· Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material misstatement due
to fraud.
Based on our risk assessment, we considered the area's most susceptible to
fraud to be Management override of Controls, Valuation of Unquoted Investments
and Revenue Recognition.
Our procedures in respect of the above included:
· Testing a sample of journal entries throughout the year, which
met a defined risk criteria, by agreeing to supporting documentation;
· Agreeing revenue to supporting documentation such as; bank
statements, management accounts of investee companies, and subsidiary company
Board approvals for dividend income as appropriate to gain assurance over the
existence of revenue; and
· the procedures outlined in our key audit matters above in respect
of unquoted investment valuations.
We also communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members who were all deemed to have
appropriate competence and capabilities and remained alert to any indications
of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we are
to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a body, in
accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit
work has been undertaken so that we might state to the Parent Company's
members those matters we are required to state to them in an auditor's report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Parent Company and
the Parent Company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor's
opinion is Elizabeth Hooper.
BDO LLP
Chartered accountants
London, UK
Date: 5(th) June 2023
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
2022 2021
Note $ $
Revenue 5 7,198,826 6,897,187
Net loss on financial assets at fair value through profit and loss 15 (20,202,661) (8,242,268)
Administrative expenses 6 (303,405) (4,186,954)
Other income 9 - 647,912
Operating loss for the year before tax (13,307,240) (4,884,123)
Interest receivable 10 15,165 13,748
Interest payable 11 (2,360,017) (2,722,318)
Impairment of financial assets at amortised cost 16 (712,660) -
Loss on ordinary activities before taxation (16,364,752) (7,592,693)
Tax on loss from ordinary activities - -
Total loss for the year (16,364,752) (7,592,693)
Other comprehensive income - -
Total comprehensive loss for the year (16,364,752) (7,592,693)
Basic losses per share 12 (0.20843) (0.09684)
Diluted losses per share 12 (0.20843) (0.09684)
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Company No. 62008
As at 31 December 2022
2022 2021
Note $ $
Assets
Non-current assets
Property, plant and equipment 14 26,982 34,168
Right of use assets 23 82,872 80,187
Investments 15 38,162,574 59,734,052
Total non-current assets 38,272,428 59,848,407
Current assets
Trade and other receivables 16 3,055,956 940,428
Cash and cash equivalents 586,040 670,644
Total current assets 3,641,996 1,611,072
Total assets 41,914,424 61,459,479
Current liabilities
Trade and other payables 17 (756,296) (840,406)
Total current liabilities (756,296) (840,406)
Long term liabilities
3.5% Convertible Unsecured Loan Stock 18 (33,922,606) (37,025,083)
6% Convertible preference shares 19 - -
Lease liabilities 23 - -
Total long term liabilities (33,922,606) (37,025,083)
Net assets 7,235,522 23,593,990
Equity
Share capital 20 100,141,648 100,005,450
Equity component of 3.5% Convertible Unsecured Loan Stock 18 6,919,355 6,919,355
Equity component of 6% Convertible preference shares 19 - -
Other capital reserves 21 37,417 167,331
Share warrants reserve 22 - -
Accumulated losses (94,935,385) (78,570,633)
Exchange reserve 2.15 (4,927,513) (4,927,513)
Total equity 7,235,522 23,593,990
Net asset value per ordinary share 9.21c 30.07c
The Financial Statements on pages 34 to 73 were approved by the Board of
Directors of APQ Global Limited and signed on 5 June 2023 on its behalf by:
___________________
___________________
Bart Turtelboom
Phil Soulsby
Chief Executive Officer
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2022
Notes Share capital Convertible preference shares equity component Accumulated losses Exchange reserve Total
CULS equity component Other capital reserves
Share warrants
$ $ $ $ $ $ $ $
As at 1 January 2021 99,869,252 6,919,355 100,813 107,702 259,460 (71,085,642) (4,927,513) 31,243,427
Comprehensive loss for the year
Loss for the year - - - - - (7,592,693) - (7,592,693)
Equity after total comprehensive loss for the year 99,869,252 (78,678,335) (4,927,513) 23,650,734
6,919,355 259,460
100,813 107,702
Contributions by and distributions to owners
Share warrants cancelled 22 - - - (107,702) - 107,702 - -
Repurchase of Convertible Preference Shares 19 - - (100,813) - - - - (100,813)
Share based payments 21 - - - - 57,541 - - 57,541
Share based payments 21 - - - - (13,472) - - (13,472)
settled in cash
Issue of share awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - - - -
As at 31 December 2021 100,005,450 6,919,355 - - 167,331 (78,570,633) (4,927,513) 23,593,990
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
As at 31 December 2022
Notes Share capital Convertible preference shares equity component Accumulated losses Exchange reserve Total
CULS equity component Other capital reserves
Share warrants
$ $ $ $ $ $ $ $
As at 1 January 2022 100,005,450 6,919,355 - - 167,331 (78,570,633) (4,927,513) 23,593,990
Comprehensive loss for the year
Loss for the year - - - - - (16,364,752) - (16,364,752)
Equity after total comprehensive loss for the year 100,005,450 6,919,355 - - 167,331 (94,935,385) (4,927,513) 7,229,238
Contributions by and distributions to owners
Share based payments 21 - - - - 19,756 - - 19,756
Share based payments 21 - - - - (13,472) - - (13,472)
settled in cash
Issue of share awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - - - -
As at 31 December 2022 100,141,648 6,919,355 - - 37,417 (94,935,385) (4,927,513) 7,235,522
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2022
2022 2021
Cash flow from operating activities Note $ $
Cash generated from operations
Loss for the financial year (16,364,752) (7,592,693)
Adjustments for non-cash income and expenses
Equity settled share-based payments 21 19,756 57,541
Depreciation on property, plant and equipment 14 17,083 11,295
Depreciation on right of use assets 23 80,187 80,189
Net loss on financial assets at fair value through profit and loss 15 20,202,661 8,242,268
Gain on repurchase of 6% convertible preference shares - (647,912)
Exchange rate fluctuations (4,214,851) (360,458)
Changes in operating assets and liabilities
Increase in trade and other receivables 16 (492,077) (95,727)
(Decrease)/increase in trade and other payables 17 (77,456) 85,355
(Increase)/decrease in receivables from group undertakings 16 (1,623,451) 260,533
(Decrease)/increase in payables from group undertakings 17 (5,746) 282,526
Cash (utilised by)/generated from operations (2,458,646) 322,917
Interest received 10 (15,165) (13,748)
Interest paid 11 2,360,017 2,722,318
Net cash (outflow)/inflow from operating activities (113,794) 3,031,487
Cash flow from investing activities
Payments to acquire investments (538,404) (612,310)
Payments to acquire property, plant and equipment 14 (9,897) (31,963)
Proceeds from disposal of investments 1,907,221 203,371
Interest received 10 15,165 13,748
Net cash inflow/(outflow) from investing activities 1,374,085 (427,154)
Cash flow from financing activities
Preference share dividends paid 11 - (120,600)
Repurchase of convertible preference shares - (800,000)
Interest on CULS 18 (1,268,504) (1,436,939)
Cash settled share-based payments 21 (13,472) (13,472)
Principal paid on lease liabilities 23 (79,490) (88,016)
Net cash outflow from financing activities (1,361,466) (2,459,027)
Net (decrease)/increase in cash and cash equivalents (101,175) 145,306
Cash and cash equivalents at beginning of year 670,644 509,928
Exchanged rate fluctuations on cash and cash equivalents 16,571 15,410
Cash and cash equivalents at end of year 586,040 670,644
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2022 (continued)
2022 2021
$ $
Reconciliation of cash flows to debt
Brought forward 37,108,863 37,734,253
Cash flows used in servicing interest payments of CULS (1,268,504) (1,436,939)
Cash flows used in principal payments of lease liabilities (79,490) (88,016)
Cash flows used in repurchase of convertible preference shares - (800,000)
Non cash flows - recognition of lease liability 82,872 -
Non cash flows - net impact of (derecognition) of convertible preference - (547,099)
shares
Non cash flows - amortisation of discount on CULS issue 2,356,754 2,590,378
Non cash flows - amortisation of discount on lease liabilities 3,263 10,773
Exchange differences (4,198,280) (354,487)
Closing balance 34,005,478 37,108,863
Net debt comprises the following:
Convertible Unsecured Loan Stock 2024 33,922,606 37,025,083
6% convertible preference shares - -
Lease liabilities 82,872 83,780
34,005,478 37,108,863
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022
1. Corporate information
The financial statements of APQ Global Limited (the "Group") for the year
ended 31 December 2022 were authorised for issue in accordance with a
resolution of the Board of Directors on 5 June 2023. The Company is
incorporated as a limited company in Guernsey. The Company was incorporated on
10 May 2016 for an unlimited duration in accordance with the Companies
(Guernsey) Law, 2008. The Company's registered office is at PO Box 142, Suite
2 Block C, Hirzel Court, St Peter Port, Guernsey, GY1 3HT.
The objective of the Company is to steadily grow its earnings to seek to
deliver attractive returns and capital growth through a combination of
building growing businesses in emerging markets as well as earning revenue
from income generating operating activities 13 .
The Company and its subsidiaries 14 have no investment restrictions and no
maximum exposure limits will apply to any investments made by the Group,
unless otherwise determined and set by the Board from time to time. No
material change will be made to the Company's or subsidiaries objective or
investing policy without the approval of Shareholders by ordinary resolution.
The Group's investment activities are managed by the Board.
The shares are quoted on The International Stock Exchange for informational
purpose. The ordinary shares are admitted to trading on AIM.
2. Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance UK adopted International Accounting Standards (UK IAS) and
applicable law. The financial statements have been prepared on a
historical-cost basis, except for financial assets and financial liabilities
held at fair value through profit or loss (FVTPL) that have been measured at
fair value. The financial statements have been prepared on a going concern
basis.
The principal accounting policies are set out below.
2.2 Going concern
Going Concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing the Financial Statements since the ultimate assets of the Company
mainly consist of securities which are readily realisable and, accordingly,
the Company has adequate financial resources to continue in operational
existence for at least 12 months from the date of this report. The Company
will be able to meet all its liabilities as they fall due. See below for the
Stress Testing applied in coming to this conclusion.
Stress Testing
After assessing the Company as a Going Concern in normal (poor) economic
conditions across a two year horizon, the Company would maintain a sufficient
expense coverage ratio net of paying all its operating expenses and net of its
financial payment obligations to the CULS. The Company would not breach any
debt covenants and would retain USD 30.0 (+8.3) million in cash as of June
30th, 2024 15 (#_ftn15) .
Under normal market assumptions, the Company assumes that it meets all its
financial obligations as well as its operating expenses. It earns a nominal
income/growth yield on its Liquid Market Portfolio based on prevailing market
risk premiums. The Company forecasts to receive dividend income from its
Direct Investment Portfolio ($7.9 million). Under poor economic conditions,
the earnings assumptions are reduced, and $4.8m dividends are received from
the Company's Direct Investment Portfolio, whilst the financial obligations
and expenses are held constant.
2.2 Going concern (continued)
Dividend Suspension
The suspension of the dividend paid to ordinary shareholders will increase the
liquidity available to the Company by approximately $6m per annum based on
level of dividends paid prior to implementation of the dividend hold. The
Board reviews the dividend policy quarterly. The dividend remains on hold
until further notice.
Long Term Viability Statement
There is currently no strict regime of Corporate Governance to which the
Company must adhere to, however there are guidelines set out for AIM
companies. The Company complies with the UK code on Corporate Governance,
issued July 2019 for periods beginning on or after 1 January 2020 to the
extent outlined in the Corporate Governance section above on pages 16 and 17.
In accordance with provision 31 of the UK Corporate Governance Code, the
Directors have assessed the prospects of the Company over a longer period than
the 12 months minimum required by the 'Going Concern' provision. Three years
is deemed to be an appropriate time period for management to implement its
medium-term strategic objectives set out in the Business Model and Strategy
section (page 8) of these financial statements.
Further to this page - Going Concern, the Company extends its above analysis
to a three-year cash flow forecast (to June 2026) using newly targeted budgets
and concluded that:
Assuming normal (poor) economic conditions 16 , the Company would preserve an
expense coverage ratio net of its financial obligations of 143, retaining USD
29 (10)million in cash on its balance sheet as of June 30, 2026 providing
considerable headroom to absorb poor conditions. These figures include the
settlement of the CULS of $36m in September 2024. The group will if necessary
liquidate the portfolio over the next two years in preparation for the
redemption,
Based on the Company's processes for monitoring operating costs, share
discount, internal controls, invested asset allocation, risk profile,
liquidity risk and the assessment of the principal risks and uncertainties
facing the Company, the Directors have concluded that there is a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the forecasted period to 30 June 2026
2.3 Functional and presentational currency
The Group's presentational and functional currency is US Dollars.
2.4 Standards issued
Standards, amendments and interpretations effective for the current year
The following standards, interpretations and amendments were effective for the
current year however did not have a significant impact on the financial
position or performance of the Group:
Amendments to IFRS 3 Reference to the Conceptual Framework (effective for
financial years beginning on or after 1 January 2022).
Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended
Use (effective for financial years beginning on or after 1 January 2022).
Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract
(effective for financial years beginning on or after 1 January 2022).
Amendments to References to the Conceptual Framework in IFRS Standards
(effective for financial years beginning on or after 1 January 2022).
2.4 Standards issued (continued)
Standards, amendments and interpretations effective for the current year
(continued)
Amendments to interest rate benchmark reform in IFRS 9 Financial Instruments,
IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial
Instruments: Disclosures, IFRS 4 Insurance contracts and IFRS16 Leases
(effective for financial years beginning on or after 1 January 2021).
Amendments to IFRS 16, COVID-19-Related Rent Concessions (effective for
financial years beginning on or after 30 June 2021).
Early adoption of standards
The Group did not adopt new or amended standards in the year that are yet to
become effective.
Standards issued but not yet effective
IFRS 17 Insurance contracts Supersedes IFRS 4 Insurance contracts Effective 1 January 2023
Amendments to standards issued but not yet effective
IAS 1 Presentation of Financial Statements Classification of liabilities as current or non-current Effective 1 January 2023
Disclosure of material accounting policies Effective 1 January 2023
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors Definition of accounting estimates Effective 1 January 2023
IAS 12 Taxation Deferred tax related to assets and liabilities arising from a single Effective 1 January 2023
transaction.
The impact of these standards is not expected to be material to the reported
results and financial position of the Group. The Group has not adopted any of
these standards early.
2.5 Basis of consolidation
The Directors have concluded that APQ Global Limited has all the elements of
control as prescribed by IFRS 10 "Consolidated Financial Statements" in
relation to its subsidiaries and that the Company satisfies the criteria to be
regarded as an investment entity. For a detailed analysis of the assessment
of the criteria please refer to note 3; Significant accounting judgements,
estimates and assumptions. Based on this, the subsidiaries listed in Note 15
are therefore measured at fair value through profit or loss (FVTPL), in
accordance with IFRS 13 "Fair Value Measurement" and IFRS 9 "Financial
Instruments".
Notwithstanding this, IFRS 10 requires subsidiaries that provide services that
relate to the investment entity's investment activities to be consolidated.
The subsidiary APQ Partners LLP assists the Board with implementation of its
business strategy, provides research on business opportunities in emerging
markets and provides support for cash management and risk management
purposes. Accordingly, the consolidated financial statements of the Group
include the results of the Company, APQ Partners LLP and APQ Capital Services
Limited, whilst APQ Cayman Limited, APQ Corporate Services Limited, Delphos
Holdings Limited, Evergreen Impact Limited and APQ Knowledge Limited are
measured at FVTPL. The results of APQ Partners LLP are consolidated from the
date control commenced. Intra-group balances and transactions and any
unrealised income and expenses arising from intra-group transactions are
eliminated in preparing these consolidated financial statements.
2.6 Financial instruments
The Group classifies its financial assets and financial liabilities at initial
recognition into the following categories, in accordance with IFRS 9 Financial
Instruments.
2.6 Financial instruments
Financial assets at FVTPL
The investments listed in note 15 are designated at fair value through profit
or loss upon initial recognition on the basis that they are part of a group of
financial assets that are managed and have their performance evaluated on a
fair value basis, in accordance with risk management and investment strategies
of the Company, as set out in the Company's offering document.
In accordance with the exception under IFRS 10 Consolidated Financial
Statement for an investment entity, the Company does not consolidate its
investments in the subsidiaries listed in note 15 and has designated the
investments as fair value through profit or loss in the financial statements.
The investments in APQ Cayman Limited, APQ Corporate Services Limited, Delphos
Holdings Limited and APQ Knowledge Limited are subsequently measured at fair
value with movements in fair value recognised as net loss on financial assets
at fair value through profit and loss in the consolidated statement of
comprehensive income.
Financial assets held at amortised cost
The Group recognises trade debtors, accrued income and other debtors as
financial assets classified as amortised cost. These assets are held in order
to collect the contractual cash flows and the contractual cash flows are
solely payments of principal and interests. These are classified, at initial
recognition, as receivables at fair value plus transaction costs and are
subsequently measured at amortised cost. The Group has adopted the simplified
approach to the credit loss model. Under the simplified credit loss model
approach a provision is recognised based on the expectation of default rates
over the full lifetime of the financial assets without the need to identify
significant increases on credit risk on these assets.
A financial asset (or, where applicable, a part of a financial asset or a part
of a group of similar financial assets) is derecognised where the rights to
receive cash flows from the asset have expired, or the Group has transferred
its rights to receive cash flows from the asset, or has assumed an obligation
to pay the received cash flows in full without material delay to a third party
under a pass-through arrangement and either:
(a) the Group has transferred substantially all of the risks and rewards of
the asset; or
(b) the Group has neither transferred nor retained substantially all the risks
and rewards of the asset but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset
(or has entered into a pass-through arrangement), and has neither transferred
nor retained substantially all of the risks and rewards of the asset nor
transferred control of the asset, the asset is recognised to the extent of the
Group's continuing involvement in the asset. In that case, the Group also
recognises an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations
that the Group has retained.
Further detail of the Group's financial assets held at amortised cost are
disclosed in Note 16 and Note 25 in these financial statements.
Financial liabilities held at amortised cost
The Group recognises trade creditors, other creditors, accruals liability
component of convertible preference shares, and the liability component of
convertible loan stock as other financial liabilities. Other financial
liabilities are classified, at initial recognition, as payables at fair value
net of transaction costs and are subsequently measured at amortised cost using
the effective interest method. Further details are disclosed in Note 17, Note
18, Note 19, Note 23 and Note 25 in these financial statements.
The Group derecognises a financial liability when the obligation under the
liability is discharged, cancelled or expired.
2.7 Fair value measurement
The Company measures its investments in the subsidiaries listed in note 15 at
fair value at each reporting date.
For APQ Cayman Limited this is considered to be the carrying value of the net
assets of APQ Cayman Limited. APQ Cayman Limited measures its underlying
investments at fair value.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either in the principal market for the asset or liability or, in the absence
of a principal market, in the most advantageous market for the asset or
liability. The principal or the most advantageous market must be accessible to
the Company. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best
interest.
The fair value for financial instruments traded in active markets at the
reporting date is based on their quoted price (bid price for long positions
and ask price for short positions), without any deduction for transaction
costs.
For all other financial instruments, not traded in an active market, including
the subsidiaries listed in note 15, the fair value is determined by using
valuation techniques deemed to be appropriate in the circumstances. These have
been determined in accordance with the International Private Equity and
Venture Capital Valuation (IPEV) Guidelines. These guidelines require the
valuer to make judgements with regards to the most appropriate valuation
method to be used and the results and inputs used to determine these
valuations.
Valuation methods that may be used include:
· the income approach - valuation through discounted cash flow
forecast of future cash flows or earnings, using appropriate discount rates.
· the market approach - valuation by comparing the asset being
valued to comparable assets for which price information is readily available.
This price information can be in the form of transactions that have occurred
or market information on companies operating in a similar industry.
The use of these guidelines requires management to make judgements in relation
to the inputs utilised in preparing these valuations. These include but are
not limited to:
· determination of appropriate comparable assets and benchmarks;
and
· adjustments required to existing market data to make it more
comparable to the asset being valued.
The use of these guidelines additionally requires management to make
significant estimates in relation to the inputs utilised in preparing these
valuations. These include but are not limited to:
· future cash flow expectations deriving from these assets; and
· appropriate discount factors to be used in determining the
discounted future cash flows.
For assets and liabilities that are measured at fair value on a recurring
basis, the Company identifies transfers between levels in the hierarchy by
re-assessing the categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) and deems transfers to
have occurred at the beginning of each reporting period.
2.8 6% Convertible preference shares
APQ Capital Services Limited, a subsidiary of the Company, issued 6%
convertible preference shares ("CPS"). The CPS contain a perpetual 6% dividend
rate and a conversion option for ordinary shares of APQ Global Limited. On
initial issue the CPS were recognised as a liability comprising a liability
held at amortised cost and a derivative conversion option held at fair value
through profit and loss.
At the date of issue, the fair value of the liability component held at
amortised cost was estimated by assuming that an equivalent non-convertible
obligation of the Company would have a coupon rate of 7.9%. The fair value of
the derivative component, containing a variable conversion rate, is derived
from the difference between the value of the consideration determined for the
acquisition of Parish Group Limited and the fair value assigned to the
liability held at amortised cost.
The terms of the CPS were amended on the 30 June 2020, to amend the conversion
option to a fixed ratio of CPS to ordinary shares. Subsequent to this
amendment to the CPS are regarded as a compound instrument, comprising of a
liability component and an equity component. Due to the significant change
in the terms of the CPS the initial instrument was derecognised and then
recognised at the new fair value. The gain of $661,581 on the derecognition of
the liability is recognised within other income in the statement of
comprehensive income.
On amendment, the fair value of the liability component was estimated by
assuming that an equivalent non-convertible obligation of the Company would
have a coupon rate of 11.9%. The fair value of the equity component was
determined in based on the present value of the average gain on conversion
based on a range of simulated share prices.
The dividends on the convertible preference shares are taken to the statement
of comprehensive income as finance costs.
The convertible preference shares were repurchased during 2021 as detailed in
note 19.
2.9 Share warrants
Share warrants issued are measured at fair value at the date of issue using
the Black-Scholes pricing model, which incorporates certain input assumptions
including the warrant price, risk-free interest rate, expected warrant life
and expected share price volatility. The fair value is included as a component
of equity and is transferred from the share warrant equity reserve to share
capital on exercise. If the warrants expire then the fair value is transferred
from the share warrant equity reserve to retained earnings. The share warrants
were cancelled during 2021 as detailed in note 22.
2.10 Foreign currency translations
Transactions during the year, including purchases and sales of securities,
income and expenses, are translated at the rate of exchange prevailing on the
date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency rate of exchange ruling at the
reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value was determined.
Foreign currency transaction gains and losses on financial instruments
classified as at FVTPL are included in profit or loss in the statement of
comprehensive income as part of the 'net (loss) or gain on financial assets at
fair value through profit or loss'.
2.11 Share capital
In the event of the liquidation of the Company the Ordinary Shares entitle the
holder to a pro rata share of the Company's net assets. Shares are issued
net of transaction costs, which are defined as incremental costs directly
attributable to the equity transaction that otherwise would have been
avoided.
2.12 3.5% Convertible Unsecured Loan Stock 2024
3.5% Convertible Unsecured Loan Stock 2024 ("CULS") issued by the Company is
regarded as a compound instrument, comprising of a liability component and an
equity component. At the date of issue, the fair value of the liability
component was estimated by assuming that an equivalent non-convertible
obligation of the Company would have a coupon rate of 6.5%. The fair value of
the equity component, representing the option to convert liability into
equity, is derived from the difference between the issue proceeds of the CULS
and the fair value assigned to the liability. The liability component is
subsequently measured at amortised cost using the effective interest rate.
Direct expenses associated with the CULS issue are allocated to the liability
and equity components in proportion to the split of the proceeds of the issue.
Expenses allocated to the liability component are amortised over the life of
the instrument.
The interest expense on the CULS is calculated according to the effective
interest rate method by applying the assumed rate of 6.5% at initial
recognition to the liability component of the instrument. The difference
between this amount and the actual interest paid is added to the carrying
amount of the CULS.
2.13 Share-based payments
On 19 April 2017, and amended on 17 July 2018, the Company formalised a
management share plan. The plan allows for certain members of the management
to benefit from 20% of any increase in the year end book value per share for a
given year (a performance period). Awards can be issued as an allocation of a
specified number of shares or as an option (a right to acquired shares under
the plan for nil consideration). Since any awards granted are to be settled
by the issuance of equity, they are deemed to be equity settled share-based
payments accounted for in accordance with IFRS 2.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed over the vesting period, together with a
corresponding increase in other capital reserves, based upon the Group's
estimate of the shares that will eventually vest, which involves making
assumptions about any performance and service conditions over the vesting
period. The vesting period is determined by the period of time the relevant
participant must remain in the Group's employment before the rights to the
shares transfer unconditionally to them. The total expense is recognised over
the vesting period, which is the period over which all the specified vesting
conditions are to be satisfied. At the end of each period, the Group revises
its estimates on the number of awards it expects to vest based on service
conditions.
Where the terms of an equity-settled transaction are modified, as a minimum an
expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of the transaction as a
result of the modification, as measured at the date of modification.
Where an equity-settled transaction is cancelled, it is treated as if it had
vested on the date of the cancellation, and any expense not yet recognised for
the transaction is recognised immediately. However, if a new transaction is
substituted for the cancelled transaction and designated as a replacement
transaction on the date that it is granted, the cancelled and new transactions
are treated as if they were a modification of the original transaction, as
described in the previous paragraph.
The Group retains the right to settle the share award in cash. The transaction
is accounted for as an equity settled payment and vested over the life of the
award. At the point the Group elects to settle the share award in cash, or an
expectation that the award will be settled in cash, the value of the portion
to be settled in cash is reclassified from the share-based payment reserve to
liabilities. Any difference between the value recorded in the share-based
payment reserve and the value of the cash to be paid is recognised as an
expense in the statement of comprehensive income.
Per the management share plan the vesting period for any awards issued can be
up to 5 years and subject to certain conditions. The first awards were issued
in the year with respect to the performance period ended 31 December 2017.
2.14 Accumulated losses
Accumulated losses consists of profit or losses for the financial year and
prior years as disclosed in the statement of comprehensive income less foreign
currency translation differences.
2.15 Exchange reserve
During the year ended 31 December 2017, the Company changed the functional and
presentational currency in which it presents its financial statements from
Pounds Sterling to US Dollars. A change in presentational currency is a change
in accounting policy which is accounted for retrospectively. The financial
information for the period ended 31 December 2016 was previously reported in
Pounds Sterling and was restated in US Dollars using differing exchange rates.
The retained earnings were converted using an average rate for the period they
related to. Equity shares were converted using the historical date which was
the date of issue of the shares. The assets and liabilities were converted at
the closing exchange date at 31 December 2016. Therefore, an exchange reserve
is included in the Statement of Financial Position to reflect the fact this
change in presentational currency from the functional currency to 31 December
2016.
2.16 Distributions to shareholders
Dividends are at the discretion of the Company. A dividend to the Company's
shareholders is accounted for as a deduction from retained earnings. An
interim dividend is recognised as a liability in the period in which it
becomes irrevocable, which is following its payment. A final dividend is
recognised as a liability in the period when it becomes irrevocable, which is
once it has been approved at the annual general meeting of shareholders.
2.17 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
on hand and short-term deposits in banks that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value, with original maturities of three months or less.
Short-term investments that are not held for the purpose of meeting short-term
cash commitments and restricted margin accounts are not considered as 'cash
and cash equivalents'.
For the purpose of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined .
2.18 Property, plant and equipment
Property, plant and equipment is recorded at historical cost less accumulated
depreciation and impairment losses.
Depreciation is provided on all property, plant and equipment at rates
calculated to write off the cost or valuation of each asset on a straight-line
basis over its expected useful life to estimated residual values, as follows:
Office equipment over 3 years
Furniture and fixtures over 4 years
Leasehold improvements over 2 years
Residual values, useful lives and depreciation method are reviewed, and
adjusted if appropriate, at each year end.
2.19 Impairment of receivables from group undertakings
Impairment provisions for receivables from group undertakings 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, no impairment is recognised. For
those that are determined to be credit impaired, lifetime expected credit
losses along with interest income on a net basis are recognised.
2.20 Interest revenue and expenses
Interest revenue and expenses are recognised in the statement of comprehensive
income for all interest-bearing financial instruments using the effective
interest method.
2.21 Dividend income
Dividend income is recognised on the date when the Company's right to receive
the payment is established. This is ordinarily at the ex-dividend date.
2.22 Net gain or loss on financial assets and liabilities at fair value
through profit or loss
Net gains or losses on financial assets and liabilities at FVTPL are changes
in the fair value of financial assets and liabilities held for trading or
designated upon initial recognition as at FVTPL and exclude interest and
dividend income and expenses.
Unrealised gains and losses comprise changes in the fair value of financial
instruments for the period and from reversal of the prior period's unrealised
gains and losses for financial instruments which were realised in the
reporting period. Realised gains and losses on disposals of financial
instruments classified as at FVTPL are calculated using the first-in,
first-out (FIFO) method. They represent the difference between an instrument's
initial carrying amount and disposal amount, or cash payments or receipts made
on derivative contracts (excluding payments or receipts on collateral margin
accounts for such instruments).
2.23 Fee expense
Fees are recognised on an accrual basis. Refer to Note 6 for details of fees
and expenses paid in the period.
2.24 Taxes
The Company is taxable in Guernsey at the company standard rate of 0% (2021:
0%).
2.25 Leases
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
· leases of low value assets; and
· leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are expensed in the period to which they relate.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased asset.
2.25 Leases (continued)
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made.
Right-of-use assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts
recognised in the financial statements and disclosure of contingent
liabilities. However, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in future periods.
Judgements
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the financial statements:
Assessment as investment entity
Entities that meet the definition of an investment entity within IFRS 10 are
required to measure their subsidiaries at fair value through profit or loss
rather than consolidate them, except to the extent that the subsidiary
provides services that relate to the investment entity's investment
activities. The criteria which define an investment entity are, as follows:
• an entity that obtains funds from one or more investors for
the purpose of providing those investors with investment management services;
• an entity that commits to its investors that its business
purpose is to invest funds solely for returns from capital appreciation,
investment income, or both; and
• an entity that measures and evaluates the performance of
substantially all of its investments on a fair value basis.
The Company's listing document details its objective of providing investment
management services to investors which includes investing in equities, fixed
income securities, private equity and property investments for the purpose of
returns in the form of investment income and capital appreciation. This is via
its subsidiary APQ Cayman Limited. The Company also holds several private
investments either directly or through its other subsidiaries for the purpose
of investment income and capital appreciation.
The Company reports to its investors via quarterly investor information, and
to its management, via internal management reports, on a fair value basis. All
investments are reported at fair value to the extent allowed by UK IAS in the
Company's annual reports. The Company has an exit strategy for all of its
underlying investments.
The Board has concluded that the Company meets additional characteristics of
an investment entity, in that it has more than one investment; the Companies
ownership interests are predominantly in the form of equities and similar
securities; it has more than one investor and its investors are all not
related parties.
The Board has therefore concluded that the Company meets the definition of an
investment entity. These conclusions will be reassessed on an annual basis, if
any of these criteria or characteristics change. The Board therefore
recognises its investment listed in note 15 at fair value through profit or
loss. The Board has also concluded that since APQ Partners LLP provides
services related to the Company's investment activities, these subsidiaries
should be consolidated.
Valuation of investments
There are a range of methods for determining the fair value of the unquoted
investments held by the Group. Determination of the most appropriate method
for valuing these is a key judgement of the Board, and the use of different
methods will result in variations in the fair value determined for each
investment. The Board determines the most appropriate method based of the life
stage of the investment and available comparisons to existing companies
operating in the same investments. The Board utilises qualified third parties
to assist in deciding the most appropriate valuation technique.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, 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. The Group based its assumptions
and estimates on parameters available when the financial statements were
prepared. However, existing circumstances and assumptions about future
developments may change due to market changes or circumstances arising beyond
the control of the Group. Such changes are reflected in the assumptions when
they occur.
Fair value of investments
The Directors consider that the fair value of the investment in APQ Cayman
Limited should be based on the NAV of APQ Cayman Limited, please refer to note
2.6 and note 15 for further discussion regarding the fair value of
investments.
The Directors measure the investments listed in note 15 in accordance with the
IPEV guidelines. As these investments are unlisted, their fair value is
determined through a range of inputs using external comparisons and management
generated forecasts. Forecasts are by their nature estimated expectations and
this leads to uncertainty with respect to the valuation of these investments.
The forecast future cash flows are a key estimate in the determination of
these valuations and are subject to uncertainty. These forecasts are
determined at the Statement of Financial Position date and do not reflect
changes in these forecasts from events after the reporting periods.
4.
Information
For management purposes, the Group is organised into one main operating
segment, which invests in equities and credit, government and local currency
bonds. All of the Group's activities are interrelated, and each activity is
dependent on the others. Accordingly, all significant operating decisions are
based upon analysis of the Group as one segment. The financial results from
this segment are equivalent to the financial statements of the Group as a
whole.
The following table analyses the Group's assets by geographical location. The
basis for attributing the assets are the place of listing for the securities
or for non-listed securities, country of domicile.
2022 2021
Group $ $
Cayman 26,197,356 44,555,286
United Kingdom 530,371 480,794
Guernsey 15,184,847 13,215,073
Europe - 3,208,326
41,912,574 61,459,479
5. Analysis of revenue
2022 2021
$ $
Dividends received from APQ Cayman Limited 7,128,826 6,707,714
Dividends received from APQ Knowledge Limited 70,000 189,473
7,198,826 6,897,187
6. Analysis of administrative expenses
2022 2021
Notes $ $
Personnel expenses 8 790,277 1,145,728
Depreciation of property, plant and equipment 14 17,083 11,295
Depreciation of right of use assets 23 80,187 80,189
Payments on short term leases 168,172 21,329
Auditor's remuneration - Audit fees 161,750 168,238
Nominated advisor fees 62,369 70,689
Administration fees and expenses 204,751 193,761
Directors' remuneration 7 131,515 200,272
Other expenses 769,612 301,889
Professional fees 2,355,235 2,703,067
Share based payment expenses 21 19,755 57,541
Insurance 17,478 13,848
Bad debt expenses - -
Recharge of expenses to APQ Cayman Limited (342,630) (442,521)
Net exchange gains (4,132,149) (338,371)
303,405 4,186,954
7. Directors' remuneration
2022 2021
$ $
Directors' remuneration 131,515 200,272
Share based payment expenses 15,800 46,033
147,315 246,305
The highest paid director was Bart Turtelboom (2021: Bart Turtelboom) 45,418 17 (#_ftn17) 79,001
Average number of directors in the year 4 4
8. Personnel expenses
2022 2021
$ $
Short term benefits - wage and salaries 361,903 424,132
Short term benefits - social security costs 30,046 46,215
Short term benefits - other benefits 387,325 657,322
Short term benefits - Share based payment expenses 3,955 11,508
Post-employment benefits 11,003 18,059
794,232 1,157,236
Personnel expenses include expenses per note 6 and the portion of share based
payments relating to individuals who are not directors of the Company.
Key management personnel expenses, excluding Directors' remuneration detailed
in note 7, is as follows:
2022 2021
$ $
Short term benefits - other benefits 365,338 620,789
Short term benefits - Share based payment expenses 3,955 11,508
369,293 632,297
Other benefits include drawings paid to the members of APQ Partners LLP and
staff benefits such as healthcare.
9. Other income
2022 2021
$ $
Gain on repurchase of 6% convertible preference shares - 647,912
- 647,912
10. Interest receivable
2022 2021
$ $
Loan interest receivable from Palladium Trust Services Limited 13,609 13,748
Loan interest receivable from WDM Lex Advisory Limited 1,404 -
Bank interest receivable 152 -
15,165 13,748
11. Interest payable
2022 2021
$ $
Interest on 3.5% Convertible Unsecured Loan Stock 2024 2,356,754 2,590,378
Interest on lease liabilities 3,263 11,340
Dividend paid on 6% convertible preference shares - 120,600
2,360,017 2,722,318
12. Losses Per Share
The basic and diluted losses per share are calculated by dividing the loss by
the average number of ordinary shares outstanding during the year.
2022 2021
$ $
Total comprehensive loss for the year (16,364,752) (7,592,693)
Weighted average number of shares in issue 78,514,452 78,408,067
Losses per share (0.20843) (0.09684)
Diluted losses per share (0.20843) (0.09684)
The Group had share awards vested but not yet issued, which are not dilutive
in 2022 or 2021, as the impact of dilution would be to decrease the loss per
share. The impact of these share awards would have no impact on the total
comprehensive loss for the year. They would increase the weighted average
number of shares by 23,366 (2021: 116,828).
The Group has 6,000 (2021: 6,000) units of Convertible Loan Stock which are
potentially dilutive if converted into ordinary shares. This would increase
the weighted average number of shares by 6,000 (2021: 6,000) exercise price on
these conversion options currently exceeds the traded share price of APQ
Global. These are not currently dilutive (2021: not dilutive).
13. Dividends
No dividends were declared in the year ended 31 December 2022 (2021: none)
The stated dividend policy of the Company is to target an annualised dividend
yield of 6% based on the Placing Issue Price. Due to the impact of Covid-19,
and continuing negative performance, the Company has ceased all dividends
until further notice.
There is no guarantee that any dividends will be paid in respect of any
financial year. The ability to pay dividends is dependent on a number of
factors including the level of income returns from the Company's investee
entities. There can be no guarantee that the Group will achieve the target
rates of return referred to in this document or that it will not sustain any
capital losses through its activities.
14. Property, plant and equipment
Office Furniture and fixtures Leasehold
equipment improvements Total
$ $ $ $
Cost
At 1 January 2022 104,703 20,251 34,588 159,542
Additions during the year 9,897 - - 9,897
At 31 December 2022 114,600 20,251 34,588 169,439
Accumulated depreciation
At 1 January 2022 71,689 19,097 34,588 125,374
Charge for the year 16,354 729 - 17,083
At 31 December 2022 88,043 19,826 34,588 142,457
Net book value
At 31 December 2022 26,557 425 - 26,982
At 31 December 2021 33,014 1,154 - 34,168
15. Investments
APQ APQ Corporate Services Limited Delphos Holdings Limited Evergreen Impact Limited BARTR Holdings Limited
Cayman Limited APQ Knowledge Limited
Listed Investments
Total
$ $ $ $ $ $ $ $
At 1 January 2021 53,586,488 9,168,732 1,330,042 - - - 3,679,429 67,764,691
Additions - 340,000 - 75,000 - - - 415,000
Fair value movement (9,031,202) (4,673,141) 107,029 5,826,149 - - (471,103) (8,242,268)
Disposal - (203,371) - - - - - (203,371)
At 31 December 2021 44,555,286 4,632,220 1,437,071 5,901,149 - - 3,208,326 59,734,052
Additions - 538,404 - - - - - 538,404
Fair value movement (18,357,930) (918,557) (692,476) 1,067,407 - 1 (1,301,106) (20,202,661)
Disposal - - - - - (1) (1,907,220) (1,907,221)
At 31 December 2022 26,197,356 4,252,067 744,595 6,968,556 - - - 38,162,574
The above table refers to direct group investments and holding companies with
all other indirect investment holdings noted below. The Company meets the
definition of an investment entity, it is therefore required to measure its
investments, including its subsidiary undertakings at fair value. Subsidiary
undertakings whose primary purpose is to support the investment activities of
the Company are consolidated on a line for line basis. Subsidiary undertakings
which act as an investment holding company are valued based on the underlying
trading investment companies they hold. These investments are held solely for
capital appreciation and investment income and measured at fair value through
profit and loss ("FVTPL").
Investments in subsidiaries
The following table outlines the subsidiary undertakings of the Company:
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
APQ Partners LLP England and Wales 22a St. James's Square, London, SW1Y 4JH APQ Global Limited 100 10 August 2016 Investment support Consolidated
15. Investments (continued)
Investments in subsidiaries (continued)
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
APQ Cayman Limited Cayman Islands Mourant Ozannes Corporate Services (Cayman) Limited, 94 Solaris Avenue, Camana APQ Global Limited 100 10 August 2016 Investment entity FVTPL
Bay, PO Box 1348, Grand Cayman KY1-1108
APQ Corporate Services Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Global Limited 100 10 January 2019 Investment holding company FVTPL
APQ Knowledge Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, Rohais, St Peter Port, GY1 3HT APQ Global Limited 100 1 March 2019 Investment holding company FVTPL
New Markets Media & Intelligence Ltd England and Wales 22a St. James's Square, London, SW1Y 4JH APQ Knowledge Limited 100 26 February 2019 Trading investment company FVTPL
Palladium Finance Group Limited Seychelles Global Gateway 8, Rue de la Perle, Providence, Seychelles APQ Corporate Services Limited 100 22 February 2019 Trading investment company FVTPL
Palladium Trust Company (NZ) Limited New Zealand Level 8, AIG APQ Corporate Services Limited 100 22 February 2019 Trading investment company FVTPL
Building, 41 Shortland Street, Auckland, New Zealand, 1010
Palladium Trust Services Ltd England and Wales 22a St. James's Square, London, SW1Y 4JH APQ Corporate Services Limited 100 22 February 2019 Trading investment company FVTPL
Delphos International, Ltd United States 2121 K St, NW STE 620, Suite 1020, Washington, DC 20037 Delphos Holdings Limited 100 3 March 2020 Trading investment company FVTPL
Parish Corporate Services Limited(1) Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Corporate Services Limited 100 29 January 2020 Trading investment company FVTPL
15. Investments (continued)
Investments in subsidiaries (continued)
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
Parish Group Limited(1) Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Corporate Services Limited 100 29 January 2020 Trading investment company FVTPL
Parish Nominees Limited(1) Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Corporate Services Limited 100 29 January 2020 Trading investment company FVTPL
Parish Trustees Limited(1) Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Corporate Services Limited 100 29 January 2020 Trading investment company FVTPL
Delphos FMA - Frontier Markets Advisors Inc(2) Canada 202-230 ch. du Golf, Montreal, QC H3E 2A8, Canada Delphos Holdings Limited 70 20 January 2021 Trading investment company FVTPL
Delphos Holdings Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Global Limited 100 13 August 2021 Investment holding company FVTPL
Delphos Capital Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT Delphos Holdings Limited 100 18 August 2021 Trading investment company FVTPL
Evergreen Impact Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT APQ Global Limited 50 10 August 2021 Trading management consultancy FVTPL
Delphos Partners LLP England and Wales 22a St. James's Square, London, England, SW1Y 4JH Delphos Holdings Limited 97 6 October 2021 Trading investment company FVTPL
15. Investments (continued)
( )
Investments in subsidiaries (continued)
( )
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
Delphos Services Limited Guernsey PO Box 142, Suite 2, Block C, Hirzel Court, St Peter Port, GY1 3HT Delphos Holdings Limited 100 27 September 2021 Trading services company FVTPL
Promethean Trustees Limited (previously WDM Trustees Limited)(3) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta APQ Corporate Services Limited 100 4 July 2022 Trading investment company FVTPL
Promethean Advisory Limited (previously WDM Lex Advisory Ltd)(3) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta Promethean Trustees Limited 100 4 July 2022 Trading services company FVTPL
Delphos MMJ 1, LLC(4) United States of America The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 Delphos Holdings Limited 100 18 March 2022 Trading investment company FVTPL
Delphos MMJ 2, LLC(4) United States of America The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 Delphos Holdings Limited 100 18 March 2022 Trading investment company FVTPL
( )
(1)Parish Group Limited is a fiduciary and corporate services provider. In
consideration to the sellers for the acquisition the Company, via its wholly
owned subsidiary, APQ Corporate Services, paid a net amount of $4,095,630 cash
consideration to the sellers. APQ Capital Services Limited, a wholly owned
subsidiary of the Company, issued 268,000 Convertible Preference Shares
(convertible into ordinary shares in APQ Global) to the sellers at price of
$10 per share. The Company additionally issued 1.0 million warrants in APQ
Global with an exercise price equal of 40.19 pence, to the sellers. Total
consideration is valued at $6,883,332 which the Company invested in APQ
Corporate Services Limited to facilitate this investment. The share warrants
and convertible preference shares were cancelled during the prior year as set
out in notes 19 and 22.
(2)On 20 January 2021, APQ Corporate Services Limited, a wholly owned
subsidiary of the Company, entered into an agreement to purchase 70% of the
FMA- Frontier Markets Advisors Inc a company incorporated and domiciled in
Canada which provide investment and financing services. The total cash
consideration of this purchase agreement was $260,000. During the year ended
31 December 2021, a further $155,000 was invested in Delphos FMA - Frontier
Markets Advisors Inc.
15. Investments (continued)
Investments in subsidiaries (continued)
(3)On 4 July 2022, APQ Corporate Services Limited, a wholly owned subsidiary
of the Company, acquired 100% of the equity in Promethean Trustees Limited
(previously WDM Trustees Limited) and its subsidiary Promethean Advisory
Limited (previously WDM Lex Advisory Ltd) for a cash consideration of
€500,000 ($538,404).
(4)On 18 March 2022, APQ Global Limited incorporated Delphos MMJ 1, LLC and
Delphos MMJ 2, LLC for the purposes of acquiring an investment broker in
United States of America. The acquisition was concluded in FY 2023 for a
consideration of $100.
Investments in subsidiaries - disposals
On 23 December 2021, APQ Capital Services Limited was put into voluntary
strike off.
Other investments
On the 19 November 2018, APQ Global Limited acquired a capital interest
represents a 40% shareholding and equivalent voting rights BARTR Holdings
Limited, a company incorporated in England and Wales, whose registered office
is Suite 13 Durham Tees Valley Business Centre, Orde Wingate Way,
Stockton-On-Tees, England, TS19 0GD. BARTR Holdings Limited wholly owns two
subsidiaries, BARTR Connect Limited, whose registered office is Suite 13
Durham Tees Valley Business Centre, Orde Wingate Way, Stockton-On-Tees,
England, TS19 0GD, and BARTR Technologies Limited, whose registered office is
Suite 13 Durham Tees Valley Business Centre, Orde Wingate Way,
Stockton-On-Tees, England, TS19 0GD. On 19 May 2020, the capital interest was
converted from ordinary shares to preference shares which have no voting
rights, but preferential dividends and preferential rights on assets on wind
up of BARTR Holdings Limited. BARTR Holdings Limited was held as an investment
at fair value through profit or loss. On 3 February 2022, APQ Global exited
its investment in BARTR Holdings Limited for a total consideration of £1.
The Company has made direct investments in equities that are freely traded on
international stock exchanges. These investments are highly liquid and
measured at fair value through profit and loss.
Valuation techniques
APQ Cayman Limited has a portfolio of tradable assets and liabilities which it
values at fair value using the same policies as the Company. The Company is
able to redeem its holding of APQ Cayman Limited at its net asset value.
Fair value of the investment in APQ Cayman Limited is therefore measured at
its Net Asset Value ("NAV"). NAV is determined based on the observable market
values of its portfolio of assets and liabilities.
Fair value of the investment in APQ Corporate Services Limited, has been
determined by determining the valuation of its underlying investments. The
underlying investments have been valued through the income approach,
incorporating comparison with external sources and the expected cash flows of
the investment. The income approach was determined to be the most appropriate
as the underlying investments are revenue generating businesses.
Fair value of the investment in Delphos Holdings Limited, has been determined
by determining the valuation of its underlying investments. The underlying
investments have been valued through the income approach, incorporating
comparison with external sources and the expected cash flows of the
investment. The income approach was determined to be the most appropriate as
the underlying investments are revenue generating businesses.
The investment in APQ Knowledge Limited was completed on 1 March 2019. Fair
value has been determined by determining the valuation of its underlying
investments. The underlying investments have been valued through the income
approach, incorporating comparison with external sources and the expected cash
flows of the investment. The income approach was determined to be the most
appropriate as the underlying investments are revenue generating businesses.
Listed investments are measured at fair value using the current market bid
price for the underlying equity as quoted on the applicable stock exchange the
security is traded on.
15. Investments (continued)
Unlisted managed funds
The Company classifies its investments into the three levels of the fair value
hierarchy based
on:
Level 1: Quoted prices in active markets for identical assets or
liabilities;
Level 2: Those involving inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices); and
Level 3: Those with inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Company has classified its investments in APQ Corporate Services Limited,
Delphos Holdings Limited, Evergreen Impact and APQ Knowledge Limited as level
3 as the inputs utilised in valuing the investments are deemed to be
unobservable, as they are private investments. The most significant
unobservable input used in the fair value of the investments in APQ Corporate
Services Limited, Delphos Holdings Limited and APQ Knowledge Limited are the
future expected cash flows of the investments these companies hold, used in
deriving a valuation using discounted cash flows.
Valuation is determined for these holding companies by the value of the
underlying investments held.
The unobservable inputs of future cash flows could not be reliably determined
due to the pre-revenue nature of the business and therefore the most reliable
fair value to be determined was $nil. The movements in the investments in the
year are shown above. Sensitivity to these inputs are discussed in Note 25.
The Company has classified its investments in APQ Cayman Limited as level 3.
Valuation is determined based on the NAV. The majority of underlying assets
and liabilities of APQ Cayman Limited are held at fair value based on
observable markets.
The listed investments are designated as Level 1 instruments in the fair value
hierarchy as fair value can be determined by the quoted market price for these
assets. The movement of investments classified by level is as per the below.
Level 1 Level 2 Level 3 Total
$ $ $ $
At 1 January 2021 3,679,429 - 64,085,262 67,764,691
Fair value movement (471,103) - (7,559,536) (8,030,639)
At 1 January 2022 3,208,326 - 56,525,726 59,734,052
Additions - - 538,404 538,404
Fair value movement (1,301,106) - (18,901,555) (20,202,661)
Disposal (1,907,220) - (1) (1,907,221)
At 31 December 2022 - - 38,162,574 38,162,574
16. Trade and other receivables
2022 2021
$ $
Trade debtors 554,265 128,526
Amounts due from group undertakings 2,341,708 718,257
Prepayments and accrued income 45,255 50,138
Other debtors 114,728 43,507
3,055,956 940,428
No expected credit losses adjustments are included in the above balances, as
the majority of the balances relate to group undertakings over which the
Company has significant oversight, to determine recoverability. There are no
Bad debts in 2022 (2021: $nil) to be recognised in the statement of
comprehensive income for the year.
17. Trade and other payables
2022 2021
$ $
Trade creditors 127,716 146,060
Amounts due to group undertakings 18 310,022 315,768
Other creditors 23,862 21,605
Accruals 211,824 273,193
Lease liabilities 82,872 83,780
756,296 840,406
18. 3.5% Convertible Unsecured Loan Stock 2024
Nominal number Liability Equity
of CULS component component
$ $ $
As at 1 January 2021 41,446,167 36,226,778 6,919,355
Amortisation of discount on issue and issue expenses - 2,590,378 -
Interest paid during the year - (1,436,939) -
Exchange differences - (355,134) -
As at 31 December 2021 41,446,167 37,025,083 6,919,355
Amortisation of discount on issue and issue expenses - 2,356,754 -
Interest paid during the year - (1,268,504) -
Exchange differences - (4,190,727) -
As at 31 December 2022 41,446,167 33,922,606 6,919,355
At an Extraordinary General Meeting held on 4 September 2017, Resolutions were
passed approving the issue of 4,018 3.5 per cent. convertible unsecured loan
stock 2024 ("CULS") to raise £20,090,000 before expenses. The CULS were
admitted to trading on the International Securities Market, the London Stock
Exchange's market for fixed income securities and dealings commenced at 8.00
a.m. on 5 September 2017.
Following Admission there were 4,018 CULS in issue. Holders of the CULS are
entitled to convert their CULS into Ordinary Shares on a quarterly basis
throughout the life of the CULS, commencing 31 December 2017, and all
outstanding CULS will be repayable at par (plus any accrued interest) on 30
September 2024. The initial conversion price is 105.358 pence, being a 10
percent. premium to the unaudited Book Value per Ordinary Share on 31 July
2017. Following conversion of 80 percent. or more of the nominal amount of the
CULS originally issued, the Company will be entitled to require remaining CULS
Holders to convert their outstanding CULS into Ordinary Shares after they have
been given an opportunity to have their CULS redeemed.
On 22 January 2018, the Company raised a further £10,207,300 ($14,492,418)
before expenses through the issue of 1,982 units of 3.5 percent. convertible
unsecured loan stock 2024 in denominations of £5,000 ($7,099) nominal each,
at an issue price of £5,150 ($7,312) per unit.
19. 6% convertible preference shares
Nominal number
of preference shares Liability Liability Equity
held at amortised cost held at fair value through profit and loss component
$ $ $ $
As at 1 January 2021 268,000 1,347,099 - 100,813
Repurchase of preference shares (268,000) (1,347,099) - (100,813)
As at 1 January 2022 and 31 December 2022 - - - -
The 268,000 convertible preference shares, issued on 29 January 2020, were
repurchased on 9 November 2021 at a rate of 2.9851 US dollars per
convertible preference share. This resulted in a gain on repurchase of
$647,912 which has been recognised in the profit and loss for the year ended
31 December 2021. The convertible preference shares were cancelled subsequent
to repurchase.
20. Share Capital
The authorised and issued share capital of the Company is 78,559,983 ordinary
shares of no par value listed on The International Stock Exchange and AIM. All
shares are fully paid
up.
Quantitative information about the Company's capital is provided in the
statement of changes in equity and in the tables below.
Holders of ordinary shares are entitled to dividends when declared and to
payment of a proportionate share of the Companies net asset value on any
approved redemption date or upon winding up of the Company. They also hold
rights to receive notice, attend, speak and vote at general meetings of the
Company.
The Company's objectives for managing capital
are:
• To invest the capital in investments meeting the
description, risk exposure and expected return indicated in its listing
documents.
• To maintain sufficient liquidity to meet the expenses of the
Company, pay dividends and to meet redemption requests as they arise.
• To maintain sufficient size to make the operation of the
Company cost-efficient.
• The Board has authority to purchase up to 14.99 percent. of
the issued Ordinary Share capital of the Company. The Board intends to seek a
renewal of this authority at each annual general meeting of the Company. No
buy backs occurred during the period under review.
Ordinary
shares
No £ $
As at 1 January 2021 78,347,359 76,898,497 99,869,252
Shares issued from share awards during the year 106,312 100,682 136,198
At 31 December 2021 78,453,671 76,999,179 100,005,450
Shares issued from share awards during the year 106,312 100,682 136,198
At 31 December 2022 78,559,983 77,099,861 100,141,648
During the year ended 31 December 2022, 106,312 (2021: 106,312) shares were
issued as part of the share award scheme as detailed in note 21.
21. Share awards
On 19 April 2017 (and amended 17 July 2018), the Company established a share
award scheme for the employees of the Company. The scheme grants the Board the
authority to allot share awards or share options with service conditions
attached. Share awards or options can only be awarded for performance periods
whereby the book value per share (excluding dividend transactions) exceeds the
book value per share for all previous performance period ends. The maximum
amount of share awards or options is determined by reference to 20% of the
increased performance of the current book value per share against all previous
performance periods. The Board retains the right to settle these awards in
either shares or cash. As the Company does not have a present obligation to
settle in cash the awards are all recognised as equity settled share awards.
The first share awards were granted in 2019 with respect to the performance
period ended 31 December 2017.
Grant date Type of award No. of instruments Fair value of instrument granted Vesting conditions Final vesting date
cents
1 January 2018 Shares 584,141 Awards vest quarterly over 5 years provided the employee is still in service 31 December 2022
of the Group.
128.11
Fair value for the award dated 1 January 2018 is calculated by reference to
the fixed value of cash per share that the Board is at discretion to pay
rather than settle the award in shares.
2022 2021
Number of awards Weighted average of fair value of instrument Number of awards Weighted average of fair value of instrument
cents cents
Outstanding at 1 January 146,036 128.11 262,864 128.11
Settled in equity (106,312) 128.11 (106,312) 128.11
Settled in cash (10,516) 128.11 (10,516) 128.11
Outstanding at 31 December 29,208 128.11 146,036 128.11
Charge for awards to be settled in Equity Charge for awards settled in Cash Total charge for share based awards
$ $ $
Year ended 31 December 2021 44,071 13,472 57,541
Year ended 31 December 2022 6,283 13,472 19,755
The unvested portion of the share awards currently granted is $nil (2021:
$19,750). Of the awards outstanding the number vested that are available for
settlement amount to 23,366 (2021: 23,366).
22. Share
warrants
On 29 January 2021, the Company issued 1,000,000 warrants as part of the
acquisition of Parish Group Limited. The fair value of the warrants issued as
part of the consideration for this investment was determined using the Black
Scholes option pricing model. The assumptions used in the valuation are as
follows:
Assumptions
Share price on issue (cents) 68.50
Exercise price of share warrants (cents) 70.94
Volatility 10.45%
Duration 6.6 years
Risk free rate 1.00%
Dividend yield 0.00%
Issue date Warrants outstanding at 1 January 2021 Warrants cancelled during the year Warrants outstanding at 1 January 2022 Warrants outstanding at 31 December 2022 Exercise price Expiry Date
cents
29 January 2020 1,000,000 (1,000,000) - - 70.94 30 August 2026
1,000,000 (1,000,000) - -
The weighted average remaining life of the warrants outstanding is nil (2021:
nil) years.
The share warrants were cancelled during 2021 with an amount of £107,702
transferred to retained earnings from the share warrants reserve.
23. Leases
The Company's subsidiary, APQ Partners LLP, leases an office in London from
which support functions are conducted. The lease has a full term of 24 months
and ends on 24 December 2023. The lease has been capitalised, as set out
below, based on an incremental borrowing rate of 9%.
Right of use asset Land and buildings
$
Cost
At 1 January 2022 295,392
Addition 82,872
At 31 December 2022 378,264
Accumulated depreciation
At 1 January 2022 215,205
Charge for the year 80,187
At 31 December 2022 295,392
Net book value
At 31 December 2022 82,872
At 31 December 2021 80,187
23. Leases (continued)
Lease liability 2022 2021
$ $
Leased asset on 1 January 83,780 160,376
Interest on lease liability 3,263 10,773
Payments for lease (79,490) (88,016)
Exchange differences (7,553) 647
New lease commitment 82,872 -
At 31 December 82,872 83,780
The lease falls due:
Within 1 year 82,872 83,780
82,872 83,780
The undiscounted cashflows on the lease are disclosed in note 25.
24. Net asset value per ordinary share
The net asset value per ordinary share is calculated by dividing the net
assets of the Group by the number of ordinary shares outstanding at the
statement of financial position date.
2022 2021
$ $
Net assets at 31 December 7,235,522 23,593,990
Shares in issue at 31 December 78,559,983 78,453,671
Net asset value per ordinary share 9.21c 30.07c
25. Financial risk and management objectives and policies
The Group's objective in managing risk is the creation and protection of
shareholder value. Risk is inherent in the Group's activities, but it is
managed through a process of ongoing identification, measurement and
monitoring, subject to risk limits and other controls. The process of risk
management is critical to the Group's continuing profitability. Further
details of the principal business risks are included on page 9. The Group is
exposed to market risk (which includes interest rate risk, currency risk and
price risk), liquidity risk, credit risk and investment holding period risk
arising from the financial instruments it holds.
25. Financial risk and management objectives and policies (continued)
The following table analyses the Group's financial assets and liabilities in
accordance with IFRS 9, which are exposed to these market risks:
Financial Assets 2022 2021
Fair value through profit and loss Amortised cost Total Fair value through profit and loss Amortised cost Total
$ $ $ $ $ $
Investments 38,162,574 - 38,162,574 59,734,052 - 59,734,052
Trade debtors - 554,265 554,265 - 128,526 128,526
Amounts due from group undertakings - 2,341,708 2,341,708 - 718,257 718,257
Prepayments and accrued income - 45,255 45,255 - 50,138 50,138
Other debtors - 114,728 114,728 - 43,507 43,507
Cash and cash equivalents - 586,040 586,040 - 670,644 670,644
Total 38,162,574 3,641,996 41,914,424 59,734,052 1,611,072 61,345,124
Financial Liabilities 2022 2021
Fair value through profit and loss Amortised cost Total Fair value through profit and loss Amortised cost Total
$ $ $ $ $ $
Trade creditors - 127,716 127,716 - 146,060 146,060
Amounts due to group undertakings - 310,022 310,022 - 315,768 315,768
Other creditors - 23,862 23,862 - 21,605 21,605
Accruals - 211,824 211,824 - 273,193 273,193
Lease liabilities - 82,872 82,872 - 83,780 83,780
CULS liability - 33,922,606 33,922,606 - 37,025,083 37,025,083
Total - 34,678,902 34,678,902 - 37,865,489 37,865,489
Market risk
Market price risk arises from uncertainty about the future prices and
valuations of financial instruments held in accordance with the Company's
investment objectives. It represents the potential loss that the Company might
suffer through market price movements in respect of quoted investments and
also changes in the fair value of unquoted investments that it holds.
Market price risk
Equity price risk arises from equity securities held as part of the Group's
portfolio of investments. The Group's investments comprise unquoted
investments via its subsidiaries (see note 15). APQ Cayman Limited has
investments in quoted equities and debt instruments whose value is dependent
on movements in markets. The unquoted investments in the Group's other
subsidiaries are subject to fluctuations in markets which may impact their
profitability and the realisable value on exit from the investments.
25. Financial risk and management objectives and policies (continued)
Market price risk (continued)
The Board seeks to manage this risk whilst also attempting to maximise
returns. The Board regularly reviews the portfolio of investments and utilises
an investment advisory committee to help manage the risks of the portfolio.
The most significant input used in the fair value of APQ Cayman Limited is the
valuations of its underlying portfolio of assets and liabilities. A reasonable
change of 40% in the NAV based on these valuations will have an impact of
$10,478,942 (2021: $17,822,114) on the profit of the business.
The valuation of the investments of the Group's other subsidiaries make use of
multiple independent unobservable inputs and it is impractical to perform
sensitivity analysis on one input utilised in the calculation of the
valuations. Estimates and underlying assumptions are reviewed for
reasonableness however these inputs are highly subjective. Changes in any one
of the variables, earnings or revenue multiples or illiquidity discounts could
potentially have a significant effect on valuation.
A change of 25% in the value of the investment of APQ Corporate Services
Limited will have an impact of $1,063,017 (2021: $1,158,055) on the profit of
the business.
A change of 50% in the value of the investment of APQ Knowledge Limited will
have an impact of $372,298 (2021: $718,536) on the profit of the business.
A change of 15% in the value of the investment of Delphos Holdings Limited
will have an impact of $1,045,283 (2021: $885,172) on the profit of the
business.
A change in the market price of the directly held listed equities of 20% will
have an impact of $nil (2021: $641,665) on the profit of the business.
The fluctuations specified above for unquoted and quoted investments are
fluctuations that could reasonably occur given the nature of the entities
and the volatility arising from external market factors. These fluctuations
have been revised over those used in prior years and are based on the actual
fluctuations observed on the respective investments.
Interest rate risk
The bank accounts of APQ Global Limited are not interest bearing and so there
is limited exposure to interest rate risk. In addition, the CULS are at a
fixed interest rate so there is no exposure to interest rate risk on these
instruments. The Board does not feel it needs to actively manage this risk.
Interest rate benchmark reform
The Financial Conduct Authority have transitioned away from the London
InterBank Offered Rate (LIBOR) to the Sterling OverNight Index Average (SONIA)
from the end of the 2021 year and will no longer persuade, or compel, banks to
submit to LIBOR.
The Group does not have any derivative or financial instruments that are
valued and recognised using the LIBOR rate and thus is not exposed to any
risks from the Interest rate benchmark reform.
Currency risk
The Group's functional and reporting currency is denominated in US Dollars.
The Group's Ordinary Shares are denominated in Sterling. Through its
activities in emerging markets the Group will have underlying exposure to a
range of emerging market currencies. Accordingly, the Group's earnings may be
affected favourably or unfavourably by fluctuations in currency rates. The
Board may engage in the future in currency hedging in seeking to mitigate
foreign exchange risk although there can be no guarantees or assurances that
the Group will successfully hedge against such risks. The Board therefore does
not feel it needs to actively manage this risk at this time.
25. Financial risk and management objectives and policies (continued)
Currency risk
The Group holds assets and liabilities in foreign currencies at year end. The
following table details the Group's assets and liabilities and the currency
exposure to the Group:
2022 2021
Pound sterling Euro Total Pound sterling Euro Total
$ $ $ $ $ $
Cash and cash equivalents 428,156 49,672 477,828 470,838 113,761 584,599
Trade debtors 28,405 - 28,405 128,526 - 128,526
Other debtors 93,466 21,262 114,728 43,507 - 43,507
Amounts due from group undertakings - 159,302 159,302 168,257 - 168,257
Trade creditors (12,522) (6,604) (19,126) (146,060) - (146,060)
Other creditors (23,862) - (23,862) (21,605) - (21,605)
Amounts due to group undertakings (45,612) - (45,612) (315,768) - (315,768)
Accruals (211,824) - (211,824) (273,193) - (273,193)
Lease liabilities (82,872) - (82,872) (83,780) - (83,780)
CULS (33,922,606) - (33,922,606) (37,025,083) - (37,025,083)
(33,749,271) 223,632 (33,525,639) (37,054,361) 113,761 (36,940,600)
A reasonable change of 5% in the Group's foreign currency net liabilities
(2021: liability) will have an impact of $1,676,282 (2021: $1,847,030) on the
value of the net assets. This level of change is considered to be reasonable
based on observations of current conditions.
Liquidity risk
Liquidity risk is the risk that the Group and the Company may not be able to
meet a demand for cash or fund an obligation when due. The Board continuously
monitor forecast and actual cash flows from operating, financing and investing
activities to consider payment of dividends, repayment of the Group's
outstanding debt or further investing activities.
The Group may employ borrowings in connection with its business activities.
Prospective investors should be aware that in the event that the Group's
income falls for whatever reason, the use of borrowings will increase the
impact of such a fall on the net revenue of the Group.
The Group will pay interest on any borrowing it incurs. As such, the Group is
exposed to interest rate risk due to fluctuations in the prevailing market
rates. Interest rate movements may affect the level of income receivable by
the Group and the interest payable on the Group's variable rate borrowings.
25. Financial risk and management objectives and policies (continued)
Liquidity risk (continued)
The following table details the Group's expected maturity for its financial
liabilities together with the contractual undiscounted cash flow amounts:
31 December 2022 Less than 1 year 1 - 5 years 5 + years Total
$ $ $ $
Liabilities
Trade creditors 127,716 - - 127,716
Amounts due to group undertakings 310,022 - - 310,022
Other creditors 23,862 - - 23,862
Accruals 211,824 - - 211,824
Lease liabilities 82,872 - - 82,872
CULS 981,105 37,350,045 - 38,331,150
1,737,401 37,350,045 - 39,087,446
31 December 2021 Less than 1 year 1 - 5 years 5 + years Total
$ $ $ $
Liabilities
Trade creditors 146,060 - - 146,060
Amounts due to group undertakings 315,768 - - 315,768
Other creditors 21,605 - - 21,605
Accruals 273,193 - - 273,193
Lease liabilities 83,780 - - 83,780
CULS 1,104,712 43,477,844 - 44,582,556
1,945,118 43,477,844 - 45,422,962
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
cause a financial loss for the Group by failing to discharge an obligation.
The Group generates its returns through its investments (See Note 15) and is
thus exposed to the risk of credit-related losses primarily through its
investments. The risk of default from the investment in APQ Cayman is
considered minimal because the Group is able to redeem its investment in APQ
Cayman Limited at any time. The underlying assets within APQ Cayman Limited
are readily tradable and thus liquid. The credit risk of its other subsidiary
investments are managed by those entities and the credit risk on these
receivables are factored into the fair value of these investments held by the
Group.
The Group's primary credit risk on its own assets are primarily related to
amounts due from group undertakings. These are deemed to be low risk as the
Group has significant oversight of these entities and therefore does not
recognise any expected credit losses unless the group undertaking no longer
has the facility to repay these amounts. The Company will then provide against
these amounts in full and once confirmed they are irrecoverable these are
written off.
Other significant assets exposed to credit risk are the Group's cash and cash
equivalents. The Group banks with Credit Suisse, JPMorgan Chase & Co, HSBC
and Barclays. As per Fitch ratings, Credit Suisse has a credit rating of BBB+
(with UBS the new parent company of Credit Suisse holding AA- credit rating),
JPMorgan Chase & Co has a credit rating of AA-, HSBC has a credit rating
of AA- and Barclays has a credit rating of A+.
The Group's maximum exposure to credit risk in relation to the financial
assets is the carrying amount as disclosed in the statement of financial
position.
25. Financial risk and management objectives and policies (continued)
Credit risk (continued)
The Group is also exposed to the following risks through its investment in APQ
Cayman Limited "Cayman"):
• Cayman has investment exposure to emerging
markets, which are subject to certain risks and special considerations that
are not typically associated with more developed markets and economies.
• Cayman invests in derivative instruments which
can be highly volatile and may be difficult to value and/or
liquidate.
• Cayman seeks exposure to emerging markets through
the use of structured products which carry additional credit risks, are
inherently difficult to value, illiquid and subject to counterparty risk on
maturity.
• Cayman is subject to the risk of the inability of
any counterparty to perform with respect to transactions, whether due to
insolvency, bankruptcy or other causes. Where Cayman utilises derivative
instruments, it is likely to take credit risk with regard to such
counterparties and bear the risk of settlement default.
• Cayman is subject to custody risk in the event of
the insolvency of the custodian or any sub-custodians.
The Group intentionally exposes itself to these risks as part of its
operations. These risks are managed on an ongoing basis by performance
reviews of the underlying portfolio on a quarterly basis by the Board of the
Group.
26. Capital Management
The Group can raise new capital which may be implemented through the issue of
a convertible debt instrument or such other form of equity or debt as may be
appropriate. It also has a buy-back authority subject to a maximum buy-back
of 14.99 percent of the issued Ordinary Shares.
The Group's objectives for managing capital are:
• To invest the capital into investments through
its subsidiaries.
• To maintain sufficient liquidity to meet the
expenses of the Group and pay dividends.
• To maintain sufficient size to make the
operation of the Group cost-effective.
The Board reviews and approves the investment of capital into illiquid
investments and regularly reviews its dividend policy to ensure it remains in
accordance with its capital aims.
The Group may utilise borrowings in connection with its business activities.
Although there is no prescribed limit in the Articles or elsewhere on the
amount of borrowings that the Group may incur, the Directors will adopt a
prudent borrowing policy and oversee the level and term of any borrowings of
the Group and will review the position on a regular basis. The Group's capital
comprises:
2022 2021
$ $
Share capital 100,141,648 100,005,450
Equity component of 3.5% Convertible Unsecured Loan Stock 2024 6,919,355 6,919,355
Other capital reserves 37,417 167,331
Accumulated deficit (94,935,385) (78,570,633)
Exchange reserve (4,927,513) (4,927,513)
Total shareholders' funds 7,235,522 23,593,990
27. Related party transactions
Wayne Bulpitt founded the Active Group, now renamed the Aspida Group, who
acted as administrator until 10 June 2020; he is also a shareholder of the
Company.
Bart Turtelboom founded APQ Partners LLP and is also a director of APQ Cayman
Limited as well as the largest shareholder of the Company.
27. Related party transactions (continued)
The Directors are remunerated from the Company in the form of fees, payable
monthly in arrears. Bart Turtelboom was entitled to an annual salary of
£120,000 as Chief Executive Officer of the Company. This is split between the
Company and APQ Cayman Limited.
2022 APQ Global Limited - Remuneration APQ Global Limited - Share based remuneration APQ Cayman Limited - Remuneration APQ Capital Services Limited - Remuneration APQ Knowledge Limited - Remuneration APQ Corporate Services Limited - Remuneration Total
$ $ $ $ $ $ $
Bart Turtelboom Chief Executive Officer 29,618 15,800 118,619 - - -
164,037
Wayne Bulpitt Non-Executive Chairman 40,644 - - - - -
40,644
Philip Soulsby Executive Director 36,998 - - - - -
36,998
Wadhah Al-Adawi Non-Executive Director 24,255 - - - - - 24,255
131,515 15,800 118,619 - - - 265,934
2021 APQ Global Limited - Remuneration APQ Global Limited - Share based remuneration APQ Cayman Limited - Remuneration APQ Capital Services Limited - Remuneration APQ Knowledge Limited - Remuneration APQ Corporate Services Limited - Remuneration Total
$ $ $ $ $ $ $
Bart Turtelboom Chief Executive Officer 32,968 46,033 131,984 - - -
210,985
Wayne Bulpitt Non-Executive Chairman 54,880 - - - - -
54,880
Philip Soulsby Executive Director 32,050 - - 2,062 - -
34,112
Wesley Davis Executive Director 45,000 - 45,000 1,484 1,768 1,863
95,115
Wadhah Al-Adawi Non-Executive Director 14,657 - - - - - 14,657
179,555 46,033 176,984 3,546 1,768 1,863 409,749
27. Related party transactions (continued)
The directors represent key management personnel. Additional key management
personnel are the partners of the LLP, details of their remuneration is
disclosed in Note 8.
APQ Global Limited has incurred $129,454 (2021: $105,537) of fees and expenses
to Parish Group Limited as administrator of the Company. As at 31 December
2022 the balance owed to Parish Group Limited was $nil (2021: $nil).
As described in the Listing Document, and under the terms of the Services
Agreement, APQ Partners LLP assist the Board and the Group's management based
in Guernsey with the implementation of its business strategy, provide research
on business opportunities in emerging markets and provide support for cash
management and risk management purposes. APQ Partners LLP are entitled to the
reimbursement of expenses properly incurred on behalf of APQ Global Limited in
connection with the provision of its services pursuant to the agreement.
APQ Partners LLP has recharged expenses of $1,050,377 (2021: $1,093,313) to
APQ Global Limited during the year. As at 31 December 2022, APQ Global Limited
owed $83,736 to APQ Partners LLP (2021: $32,891 due from APQ Partners LLP). In
the current and prior year amounts have been eliminated on consolidation.
During the year, the Group recharged expenses to APQ Cayman Limited of
$361,450 (2021: $459,025) and was recharged expenses of $42,653 (2021:
$16,504) from APQ Cayman Limited. The Company received dividends of $7,128,826
(2021: $6,707,714). At 31 December 2022, an amount of $27,202 was due from APQ
Cayman Limited (2021: $1,355 was due to APQ Cayman Limited).
During the year, APQ Global Limited received funding of $nil (2021: $264,410)
from APQ Corporate Services Limited. As at 31 December 2022, an amount of
$264,410 (2021: $264,410) was due to APQ Corporate Services Limited (See note
17).
During the year, the company received dividends of $70,000 (2021: $189,473)
from APQ Knowledge Limited.
During the year, APQ Global Limited paid $nil (2021: $120,600) as dividends to
the holders of the convertible preference shares on behalf of APQ Capital
Services Limited.
During the year, APQ Global Limited provided a loan to Palladium Trust
Services Limited, a group undertaking, of $nil (2021: $20,619). In addition,
the loan attracts interest at a rate of 10%. During the year, APQ Global
Limited charged interest of $13,608 (2021: $13,748). As at year end, APQ
Global Limited was owed $162,662 (2021: $168,257) from Palladium Trust
Services Limited (See note 16). The balance owing has been provided for in
full as irrecoverable.
During the year, New Markets Media & Intelligence Ltd provided funding to
APQ Global Limited of $nil (2021: $19,014). The loan is provided at a 10%
interest fee. As at year end, APQ Global Limited owed $45,612 (2021: $51,358)
to New Markets Media & Intelligence Ltd with the balance being included
with the Amount due to Group undertakings. (See note 17).
During the year, APQ Global Limited provided funding of $nil (2021: $550,000)
to Delphos Holdings Limited, the balance from the prior year was written off
in the current year. As at 31 December 2022, an amount of $nil (2021:
$550,000) was due from Delphos Holdings Limited (See note 16).
During the year, APQ Global Limited paid expenses totalling $363,779 (2021:
$nil) on behalf of Delphos Partners LLP. At 31 December 2022, an amount of
$363,779 (2021: $nil) was due to APQ Global Limited. The balance is interest
free and repayable on demand.
During the year, APQ Global Limited provided funding of $151,246 (2021: $nil)
to Delphos International Limited. At 31 December 2022, an amount of $151,246
(2021: $nil) was due to APQ Global Limited. The balance is interest free and
repayable on demand.
During the year, APQ Global Limited paid expenses totalling $1,098,814 (2021:
$nil) on behalf of Delphos Impact Limited and provided funding to Delphos
Impact Limited of $850,000. At 31 December 2022, an amount of $1,948,814
(2021: $nil) was due to APQ Global Limited. The balance is interest free and
repayable on demand.
During the year, APQ Global Limited paid expenses totalling $240,349 (2021:
$nil) on behalf of Delphos Services Limited. At 31 December 2022, an amount of
$240,349 (2021: $nil) was due to APQ Global Limited. The balance is interest
free and repayable on demand.
27. Related party transactions (continued)
During the year, APQ Global Limited made a subordinated loan to Promethean
Advisory Limited amounting to $99,355 which bears interest at 5%. Interest of
$1,404 (2021: $nil) accrued on the loan during the year. APQ Global Limited
also paid expenses on behalf of Promethean Advisory Limited amounting to
$51,115 (2021: $nil). At 31 December 2022, a total amount of $159,302 (2021:
$nil) was due to APQ Global Limited. The balance is interest free and
repayable on demand.
28. Events after the reporting period
Subsequent to year end APQ Global, via its subsidiaries Delphos MMJ 1, LLC and
Delphos MMJ 2, LLC acquired 100% of MMJ Partners LP, a limited partnership
incorporated in United States of America for a total consideration of $100 and
made further capital contributions to that entity totalling $200,000.
In April 2023, APQ Global announced a tender offer to all CULS holders for the
repurchase of the company's issued CULS for £2,500 per unit of £5,000
nominal CULS. 80 CULS units were tendered in total at a total cost
approximately of £0.2 million.
1 In accordance with IFRS 10, the Company, as an Investment Entity, is
required to follow certain accounting rules regarding its Subsidiaries. Please
refer to Note 15 for further details.
2 See Page 8 for further details of the Company's KPI's.
(( 3 )) Where we refer to revenue from income generating operating activities
this relates to the revenue of our investee companies.
(( 4 )) The Capital Subscribed on One Ordinary Share of the Company being
£1.00 and thus equivalent to £0.06 in dividends per share.
5 The dividend paid to ordinary shareholders and capital growth rate of the
Company are Key Performance Indicators (KPI's), discussed further on Page 8.
6 The Total Return of the Company is a KPI and an Alternative Performance
Measure in accordance with International Financial Reporting Standards, The
Total Return for a given month is calculated as (Book Value Per Share
(BVPS) at end of month + Dividends received during month) divided by BVPS at
end of previous month. The Total Return on the YTD is then the compounded MTD
Total Return for each month in the year. The Company KPI's are discussed
further on Page 8.
7 Using Data from Bloomberg Finance LP.
8 Using Data from Bloomberg Finance LP.
9 Where we refer to revenue from income generating operating activities this
relates to the revenue of our Investee companies.
10 See Note 15 for further details.
11 Further details on the debt covenants are available on the Company's
website here:
https://www.apqglobal.com/wp-content/uploads/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf
(https://www.apqglobal.com/wp-content/uploads/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf)
- section 5.
(#_ftnref12) (15)Normal (Poor) economic conditions are as stated in the Stress
Testing section above. There are no planned acquisitions or disposals in the
Direct Investment Portfolio during the period.
13 Where we refer to revenue from income generating operating activities
this relates to the revenue of our investee companies.
14 See Note 15.
15 Further details on the debt covenants are available on the Company's
website here:
https://wp-apqglobal-2020.s3.eu-west-2.amazonaws.com/media/2017/08/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf
(https://wp-apqglobal-2020.s3.eu-west-2.amazonaws.com/media/2017/08/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf)
- section 5.
(#_ftnref16) (16)Normal (Poor) economic conditions are as stated in the Stress
Testing section above. There are no planned acquisitions or disposals in the
Direct Investment Portfolio during the period.
17 Full breakdown of Director remuneration shown in note 27 including
director remuneration from other group entities.
18 Amounts due to Group undertakings relates to payments made by
subsidiaries on behalf of the Parent company.
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