REG - APQ Global Limited - Final results for the year to 31 December 2023
15/11/2024 17:30
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RNS Number : 5028M APQ Global Limited 15 November 2024
APQ Global Limited
("APQ Global" or the "Company")
Final Results
FINANCIAL HIGHLIGHTS
For the year ended 31 December 2023
Book Value at 31 December 2023 was $23.65m, an increase from $7.24m at the
start of the year. The term "book value" herein includes the assets of APQ
Global Limited and its consolidated subsidiaries 1 net of any liabilities,
presented in US dollars.
Book Value per share in the year increased from 9.21 cents to 30.10 cents. The
main factor driving the book value increase was the performance of the Direct
Investments Portfolio.
Profit per share for the year was $0.20941 (2022: Loss per share of $0.20843).
Dividends paid are considered a Key Performance Indicator 2 (KPI) of the
business. No dividends were paid or declared during the year due to the
dividend hold in place (2022: nil).
In the year covered by these financial statements, the share price of the
Company has consistently traded at a discount to the actual Book Value of the
Company 3 .
No new securities have been admitted to the Official list of the International
Stock Exchange or to trading on AIM during the year.
There have been further AIM market trades since 31 December 2023, 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)
The Company confirms that the annual report and accounts for the year ended 31
December 2023 will today be posted to shareholders who have requested
information in hard copy.
Following the publication of its audited financial results for the year ended
31 December 2023, the shares will remain suspended from trading on AIM until
the publication of the interim results to 30 June 2024, which the Company
expects to publish by the end of November 2024.
Notwithstanding the ongoing temporary suspension of trading in the Company's
ordinary shares, the Company will continue to make announcements as and when
there are developments that require announcement in accordance with its
obligations under the AIM Rules for Companies.
The Company's consolidated financial position at 31 December 2023 is
summarised as:
USD
Securities and Direct Investments 38,502,687
Fixed assets 141,778
Cash at banks/brokers 14,652,012
Short term receivables 6,299,553
Private loans 860,000
Other assets 900,820
Total assets 61,356,850
Liability in respect of Convertible Unsecured Loan stock ("CULS") 36,710,043
Other liabilities 997,807
Total liabilities 37,707,850
Total equity 23,649,000
FINANCIAL HIGHLIGHTS (continued)
For the year ended 31 December 2023
The group securities and underlying investments are made up of:
USD
ARGTES 15 1/2 10/17/26 Corp 227,610
FX Derivatives (fx hedge) 402,187
Palladium Trust Services (Private Company) 23,213
New Markets Media & Intelligence (Private Company) 472,951
Parish Group (Private Company) 4,760,103
Delphos International Ltd (Private Company) 27,041,000
Delphos Canada Limited (Private Company) 1,482,928
Promethean Trustees (Private Company) 23,472
Promethean Advisory (Private Company) 387,732
Delphos MMJ (Private Company) 1,000,100
Delphos Services Limited (Private Company) 2,159,018
Delphos Milan S.R.L. (Private Company) 307,071
Delphos Design D.o.o. (Private Company) 215,302
Total Securities and Underlying Investments 38,502,687
For further enquiries, please contact:
APQ Global Limited 020 3478 9708
Bart Turtelboom
Singer Capital Markets - Nominated Adviser and Broker 020 7496 3000
James Maxwell / Sam Greatrex
Suntera - TISE sponsor 01481 737 277
Claire Torode
Investor Relations
IR@APQGlobal.com
Notes to Editors
APQ Global Limited
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. For more information, please visit apqglobal.com
(http://www.apqglobal.com/) .
CHAIRMAN'S STATEMENT
For the year ended 31 December 2023
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
investing in growing businesses globally as well as earning revenue from
income generating operating activities 4 in entities forming part of the
Company's investment portfolio. Specifically, our goals are to deliver a
dividend yield of 6% per annum (based on capital subscribed) 5 and in
addition to generate returns to grow the Company by a further 5-10% per
annum 6 . The Company focuses its investment activities globally (in Asia,
Latin America, Eastern Europe, the Middle East, Africa, as well as the Channel
Islands).
Dividends
As of 31 December 2023, the payment of dividends remains on hold until further
notice.
Total Return
Book Value per share in the year increased from 9.21 cents to 30.10 cents. The
Total Return for the year was 226.49% 7 . The main factor driving the book
value increase was the performance of the Direct Investments Portfolio.
Corporate Governance
During 2023 there was one change to the Board of APQ Global, with the
departure of Al-Wadhah Al-Adawi in September 2023. The Board continues to have
in place 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.
Following the 2023 AGM, the board and company engaged with shareholders to
understand the disagreement with the remuneration per resolution 4 as well as
the rationale for voting against the reappointment of directors in resolutions
5-7. The company has ensured that shareholders' concerns about the share price
performance have been taken onboard and the company's key focus is to continue
to value add and provide significant growth to the shareholders and all
decisions are made with this in mind.
Conclusion
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.
Following the passing of the resolution at the CULS holder meeting on the
30(th) September 2024, the company paid £3.5m to CULS holders on the 30(th)
October 2024. The Board also remains committed to the repayment of the
remaining outstanding CULS notional of £26.1m as soon as possible and no
later than the 31(st) March 2025 ("Settlement Date"). The Company is actively
engaged in refinancing discussions with counterparties and Delphos' operations
are forecast to generate sufficient cashflows to repay the CULS no later than
the Settlement Date.
Wayne Bulpitt CBE
Chair, APQ Global Limited
CEO'S STATEMENT
For the year ended 31 December 2023
In 2023, the world witnessed several major geopolitical developments that
shaped the global landscape. One of the significant developments was the
ongoing tensions in the Middle East. The region experienced heightened
conflicts and proxy wars, resulting in increased instability. The struggle for
power and influence between various regional powers, coupled with the
lingering impact of past conflicts, continued to have far-reaching
consequences.
In addition, the Indo-Pacific region emerged as a key focus of global
geopolitics in 2023. The competition for influence between major powers, such
as the United States, China, and India, intensified. This led to the formation
of new alliances and strategic partnerships, as countries sought to secure
their interests and counterbalance perceived threats. The shifting dynamics in
the Indo-Pacific region had implications for trade, security, and regional
stability.
Furthermore, the year 2023 witnessed a significant shift in global climate
politics. With the effects of climate change becoming increasingly apparent,
countries around the world made concerted efforts to address the issue.
International agreements and initiatives were forged to combat climate change,
with a renewed focus on reducing carbon emissions and transitioning to
sustainable energy sources. The recognition of the urgent need for collective
action on climate change marked a turning point in global geopolitics, as
nations acknowledged the interconnectedness of environmental challenges and
the importance of cooperation.
These major geopolitical developments in 2023 highlighted the complex
interplay between power, security, and global challenges. As the world
continued to evolve, nations grappled with the implications of shifting
alliances, regional conflicts, and the need for collective action on pressing
issues like climate change.
Towards the end of 2023, the Company unwound its liquid markets portfolio and
is now fully focused on its two sets of private investments: Corporate
services and Delphos, its emerging markets capital raising and transaction
advisory business. Both pillars are doing well with Delphos in particular
exhibiting accelerating growth.
Separately to the ongoing refinancing discussion with numerous counterparties,
the main support for the CULS repayment comes from Delphos. Delphos is
currently executing around 40 transactions in around 20 countries and the
portfolio is diversified across geographies (Africa, Central Asia, Middle
East, Latin America and South-East Asia) and sectors (infrastructure,
renewables, financial services and funds). The business is growing very
rapidly and is, in the Board's opinion, on the verge of generating significant
cashflows to repay the CULS.
Bart Turtelboom
CEO, APQ Global Limited
2023 IN REVIEW
Direct Investment Portfolio
As of 31st December 2023, 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 and closed in February 2023 following FINRA
approval. The independent third party valuation of the Direct Investment
Portfolio increased significantly (including exchange rate movements) during
the year notably due to an increase in the valuation of Delphos International
Ltd 8 . The independent valuation of New Markets Media & Intelligence and
Promethean Advisory Limited declined in 2023 whilst the Company's other
investments in Parish Group Limited, Delphos International FMA Inc, Delphos
International Ltd all rose.
Delphos Holdings Limited
Delphos International and Delphos FMA continued to grow significantly with
both businesses showing positive steps for all key performance indicators as
well as financial analysis. Across the group the top line revenue, Notional
value of engagements for capital raise and average deal size have all
increased year on year as shown in the table below.
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
2023 44 6,552,000,000 148,909,091
As well as the financial growth, Delphos has continued to grow out its
experience and knowledge base with 102 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.
Liquid Market Portfolio
At the end of the fourth quarter 2023 the Company only held one security in
its Liquid Market Portfolio with the remaining assets held in cash and time
deposits. At the end of December 2023, the Company held cash and time
deposits of $13,946,406 within its Liquid Market Portfolio, with a further
$705,606 held at group level.
At the end of December 2023, the Book Value Per Share was $0.3010 (equivalent
to £0.2503) at the end of the period, compared to $0.0676 (£0.0554) at the
end of Q3 2023. The Company maintained a very healthy cash position of 87.9%
of the liquid market portfolio assets.
At the end of December 2023, 100% of the Company's exposure (excluding cash
and FX hedges) was to Rates exposure.
BUSINESS MODEL AND STRATEGY
For the year ended 31 December 2023
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 9 in entities forming part of the Company's investment
portfolio.
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) in order to enhance investment returns, 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
2 years.
(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
2023, this KPI was met as earnings increased from the prior year (see
consolidated statement of comprehensive income), and hence the Book Value Per
Share rose Year on Year. The main factor driving the earnings increase was the
performance of the Direct Investments 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 226.49% (2022: -69.38%) and equal to the capital
growth as no dividend was paid in the year (or previous year).
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2023
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. The effects of climate change are likely to be felt necessary the Directors will engage external legal and professional advisers
first and more severely in some of the areas where Delphos operates. to ensure the Group is protected to the greatest extent possible.
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 22 of the Financial Statements.
The Company does hedge the foreign currency exposure on the CULS liability
with FX derivatives.
Cyber Security The Company and Service providers are 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 9 above.
number of factors including the level of income returns from the Company's
investee entities.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2023
Principal Risks and Uncertainties (continued)
Business Area/Process Perceived risk Current or emerging risk Mitigation
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 22 of the
liquidity risk. Further details of these risks can be found in table below. Financial Statements.
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 quarterly, at a Current The Board monitors the leverage present in the Company via its monthly
rate of 3.5% pa. The Company must ensure that it has liquid resources management accounts.
available to repay this interest. Furthermore, any CULS not previously
redeemed, purchased or converted were due to be repaid by the Company on 30 At 30 September 2024 the Company did not have the ability to make full
September 2024 at its nominal amount and thus the Company must ensure it has repayments in respect of the CULS.
resources available to make these repayments.
Following the passing of the resolution at the CULS holder meeting on the
30(th) September 2024, the company paid £3.5m to CULS holders on the 30(th)
October 2024. The Board also remains committed to repayment of the remaining
outstanding CULS notional of £26.1m as soon as possible and no later than the
31st March 2025 ("Settlement Date"). The Company is actively engaged in
refinancing discussions with counterparties and Delphos' operations are
forecast to generate sufficient cashflows to repay the CULS no later that the
Settlement Date.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2023
Principal Risks and Uncertainties (continued)
Presidential election 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 outcome of accordingly as situations evolve. The Company has also expanded its investment
the presidential elections in the US, activities into other geographical regions thereby reducing the overall impact
of instability in a specific region,
Civil unrest Military actions in the Middle East and Ukraine have continued over the year Current and Emerging The Company and Group does not have any investments that are directly or
and into the following year which continues to create volatility in economic indirectly affected by the sanctions levied to date thus the impact of this
factors. 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.
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.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2023
Principal Risks and Uncertainties (continued)
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.
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 2023
The Directors present the consolidated financial statements of APQ Global
Limited (the "Group") for the year ended 31 December 2023. The Group comprises
the Company and its subsidiaries 10 .
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 Company seeks to earn revenue from dividends and interest income from its
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 2023 are from its
subsidiary Delphos International 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 36 and the Statement of Financial
Position at that date is set out on page 37.
The Company did not pay any dividends during the year (2022: nil).
Share Capital
As at 31 December 2023 the Company had in issue 78,559,983 (2022: 78,559,983)
Ordinary Shares of nil par value. No ordinary shares were issued during the
year (2022: 106,312).
Principal Risks and Uncertainties
Principal Risks and Uncertainties are disclosed in the Business Model and
Strategy section.
The Company continues 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.
Going Concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing the Financial Statements since a significant percentage of the
assets of the Group consist of cash and, the forecasted distributable
dividends from Delphos Internationals in the next 12 months, provide adequate
financial resources to continue in operational existence for at least 12
months from the date of approval of the financial statements. The Group
expects to be able to meet all its liabilities as they fall due, including the
remaining CULS liability of GBP 26.1 million (as at the date of approval of
the financial statements) now due in March 2025, following the CULS Holders
agreement to the extension of the settlement date for the CULS to March 2025.
See below for the Stress Testing applied in coming to this conclusion.
Despite the confidence of the Directors that the Company should have the
ability to continue for a period of at least 12 months and be able to meet its
liabilities as they fall due the Directors accept this is uncertain. Since
refinancing discussions with counterparties are yet to be concluded and the
timing of forecasted dividends from investee companies, in particular the
Delphos business is dependent on Delphos' operations generating sufficient
cashflows which is not guaranteed, there remains a material uncertainty with
respect to going concern
Stress Testing
After assessing the Group as a Going Concern in normal and poor economic
conditions across a one year horizon, the Group expects to maintain a
sufficient expense coverage ratio net of paying all its operating expenses and
net of its financial payment obligations to the CULS under normal conditions.
The Group does not expect to breach any debt covenants and is forecast to
retain USD 9.69 million in cash as of November 30(th) , 2025.
Under normal market assumptions, the Group assumes that it meets all its
financial obligations as well as its operating expenses. The Group forecasts
to receive USD 44.5 million of dividend income from its Direct Investment
Portfolio between November 2024 and November 2025, albeit there is no
guarantee that these amounts will be received within the time period. Under
poor economic conditions, the earnings assumptions are reduced, and USD 35.8
million of dividends are received from the Company's Direct Investment
Portfolio over the same period, 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.
Despite the confidence of the Directors that the Group should have the ability
to continue for a period of at least 12 months and be able to meet its
liabilities as they fall due, including repayment of the CULS, the Directors
accept this is uncertain. The Group is actively engaged in refinancing
discussions with counterparties; however these discussions are yet to be
concluded. Furthermore, the receipt of forecasted dividends from investee
companies, in particular the Delphos business is dependent on Delphos'
operations generating sufficient cashflows which is not guaranteed; therefore
the amount and timing of forecasted dividends remains uncertain. This
indicates the existence of a material uncertainty, which may cast significant
doubt on the ability of the Group to continue as a going concern. Therefore,
the Group may be unable to realise its assets and settle its liabilities in
the normal course of business.
The Directors have a reasonable expectation that refinancing and/or the
forecasted dividends will be forthcoming. Accordingly, they continue to adopt
the going concern basis in preparing the financial statements. The financial
statements do not include any adjustments should the basis of preparation be
inappropriate.
Dividend Suspension
The continued 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 18 and 19.
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 9) of these financial statements.
Further to this page - Going Concern, the Company extends its above analysis
to a three-year cash flow forecast (to November 2027) using newly targeted
budgets and concluded that:
Assuming normal economic conditions 11 , the Company would preserve an average
12-month expense coverage ratio net of its financial obligations of 3.9 and
retain an average balance of USD 20.4 million in cash on its balance sheet
between November 2024 and November 2027, providing considerable headroom to
absorb poor conditions. These figures include the settlement of the CULS of
GBP 26.1m in March 2025. Under poor conditions, the Company would preserve an
average 12 month expense coverage ratio net of its financial obligations of
3.1 and retain an average balance of USD 14.0 million in cash on its balance
sheet over the same 3 year period.
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 November
2027.
Sustainability of Business Model
The business model, principal risks and uncertainties, and the mitigation
thereof is described on pages 9-13. Evaluation of Going Concern, Stress
Testing and the Long Term Viability Statement are further examined in the
Directors report above. The Directors have conducted a robust assessment of
the principal and emerging risks facing the Group which include a business
model where a substantial part of the essential services are outsourced,
allowing key service providers to be replaced at relatively short notice if
necessary.
The Board's investment philosophy is centred on identifying exciting companies
where we can help management to substantially grow the business by adding or
pooling resources from our Group and allowing them time to succeed. The board
meets regularly to monitor progress in these businesses and consider whether
any adjustments to strategy or actions required to maintain momentum.
Based upon the Company's processes for monitoring operating costs, compliance
with the investment objective, the portfolio risk profile, leverage,
counterparty exposure, liquidity risk, financial controls and operational
resilience, the Board believes that the company is in a strong and sustainable
position.
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 Directory.
As of 31 December 2023, 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 8 August 2023 in relation
to the year ended 31 December 2023 audit. BDO LLP will be reconsidered for
appointment for the December 2024 audit at the next AGM.
Statement of directors' responsibilities
The Directors are responsible for preparing the Annual Report and the
consolidated Financial Statements in accordance with applicable Guernsey law
and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare
consolidated financial statements for each financial year. Under that law the
Directors have elected to prepare the Group consolidated 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
consolidated 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.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group and Company and its results for the year and to enable them to ensure
that the consolidated financial statements comply with the Companies
(Guernsey) Law, 2008. They are also responsible for safeguarding the assets of
the Group and Company 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;
• Since the resignation of Wadhah Al-Adawi on 21
September 2023, the company has not had a senior independent non-executive
director. The board are aware of the pace at which the business is developing
and are looking for a NED with the appropriate skills to support the Group
with its future plans. The search is still at an early stage.
•
• 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.
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 was deemed to be independent after
three years from this date. On 3 June 2024, Beauvoir Limited were appointed as
Company Secretary. The Chairman is also Chairman and a significant shareholder
in Beauvoir Limited, and therefore is no longer considered independent. 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, and one non-independent
non-executive director, following the resignation of Al-Wadhah Al-Adawi.
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.
Al-Wadhah Al-Adawi served as Chairman of the Audit Committee until September
2023.
Board Audit Committee
Held Attended Held Attended
Bart Turtelboom 7 7 2 2
Wayne Bulpitt 7 7 2 2
Phil Soulsby 7 7 2 2
Al -Wadhah Al-Adawi (until resignation in September 2023) 5 4 1 1
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.
To enable this evaluation to take place, the Board has put in place a process
whereby the Company Secretary circulates, on an annual basis, a questionnaire
plus a separate questionnaire for the evaluation of the Chairman. A panel
comprising staff from Beauvoir and APQ Partners, but excluding the Chair and
CEO, collate and summarise the responses before distribution to the Board.
There is a standing annual board agenda point where there results are
discussed and any action required is identified and acted upon.
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 wealth of
Corporate Governance experience amongst the staff at the Company Secretary,
and an informal review of current arrangements will be carried out in the
coming months.
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
Beauvoir Limited were appointed as Company Secretary on 3 June 2024 replacing
Parish Group Limited who were previously appointed. 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. Wayne Bulpitt CBE, Chair of APQ Global is also Chair and
a significant shareholder in Beauvoir Limited.
Committees of the Board
The Board has established the following committees:
Audit committee
Following the departure, of Al-Wadhah Al-Adawi, the audit committee will be
chaired by Wayne Bulpitt, the Chairman, 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 15 November 2024 to review and approve the
accounts. It also met on 8 November 2024. 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
2023 were $214,867 (2022: $161,750). No other fees were paid to the Company's
auditors for non-audit or audit related services during the year. (2022:
none).
BDO LLP has served as the Company's auditor for 7 years. The current audit
partner is Elizabeth Hooper.
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
In September 2024, an agreement was reached with the holders of the
Convertible Unsecured Loan Stock, whereby a payment of £3,499,996 was made to
reduce the nominal value per unit to £4,408,79. The repayment for the
remaining CULS has been extended to March 2025 with an increased coupon of 6%
pa from 30 September 2024 plus a redemption premium of 1% per month.
Annual General Meeting
The Company's Annual General Meeting is due to be held on 16 December 2024.
The last Annual General Meeting was held on 8 August 2023.
Related Party Transactions
Transactions entered into by the Company with related parties are disclosed in
note 24 of the financial statements.
Signed on behalf of the Board of Directors by:
_____________________
_____________________
Wayne
Bulpitt
Philip Soulsby
Chairman
Director
Date: 15 November 2024
AUDIT COMMITTEE REPORT
For the year ended 31 December 2023
We are pleased to present the Audit Committee's Report for the year ended 31
December 2023, 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 had numerous discussions with external auditors including
status update meetings and a final completion meeting which was held on 8
November 2024, 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.
_____________________
Wayne Bulpitt
Audit Committee Chairman
Date: 15 November 2024
BOARD MEMBERS
For the year ended 31 December 2023
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.
Al-Wadhah Al-Adawi (Non-executive Director and Chairman of the Audit Committee
- until September 2023)
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 2023
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, 31 December 2022 and the year ended 31 December 2023 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.
No other remuneration has been paid to directors apart from reimbursement of
their expense, details of which have been included on page 26.
REMUNERATION POLICY (CONTINUED)
For the year ended 31 December 2023
2023 APQ Global -Limited - Remuneration APQ Global -Limited - Share based remuneration APQ Cayman -Limited - Remuneration Total
$ $ $ $
Bart Turtelboom Chief Executive Officer 29,948 - 119,795 149,743
Wayne Bulpitt Non-Executive Chairman 49,915 - - 49,915
Philip Soulsby Finance Director 37,436 - - 37,436
Wadhah Al-Adawi Non-Executive Director 12,410 - - 12,410
129,709 - 119,795 249,504
-
2022 APQ Global -Limited - Remuneration APQ Global -Limited - Share based remuneration APQ Cayman -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
At 31 December 2023, $nil (2022: $nil) was payable to the directors with and
$85,782 (2022: $209,000) receivable from a director for an expense advance. A
total amount of $1,558,944 (2022: $482,169) of general corporate expenses such
as travel and business development were incurred by a director which the
Company reimbursed and , which does not constitute a director emolument.
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 2023 and of the Group's profit 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 (together "the Group") for the year ended 31
December 2023 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 material 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.
Material uncertainty related to going concern
We draw attention to Note 2.2 of the financial statements, which indicates
that despite the confidence of the Directors that the Group should have the
ability to continue for a period of at least 12 months and be able to meet its
liabilities as they fall due, including repayment of the convertible unsecured
Loan Stock ("CULS"), the Directors accept this is uncertain. The Group is
actively engaged in refinancing discussions with counterparties, however these
discussions are yet to be concluded. Furthermore, the receipt of
forecasted dividends from investee companies, in particular the Delphos
business is dependent on Delphos' operations generating sufficient cashflows
which is not guaranteed, therefore the amount and timing of forecasted
dividends remains uncertain.
As stated in Note 2.2, these events or conditions, along with other matters as
set forth in Note 2.2, indicate that a material uncertainty exists that may
cast significant doubt on the Group's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Given the conditions and uncertainty disclosed in note 2.2, we considered
going concern to be a Key Audit Matter. Our evaluation of the Directors'
assessment of the Group's ability to continue to adopt the going concern basis
of accounting and in response to the Key Audit Matter included:
· Understanding the outcome of the meeting with the CULS holders
regarding the extension of the settlement date to 31 March 2025 for repayment
of the CULS and reviewing the amended Trust Deed to understand the terms of
the extension;
· Obtaining the Directors' going concern assessment and evaluating
the method in light of market conditions and the uncertainties surrounding the
timing of forecasted cash flows;
· Reviewing and challenging the forecasted cash flows, such as
forecast revenue and expenditure. We assessed the Directors forecasting
ability by comparing the prior year forecasts against the actual results. We
also corroborated a sample of forecast revenue expected to be received within
underlying investee companies to supporting agreements;
· Assessing the timing of forecast future cash flows and
challenging the ability to repay the CULS and other liabilities based on the
stress tested cashflow projections produced by management which include the
impact of poor economic conditions;
· Considering the potential availability of other sources of
financing available to repay the CULS by reviewing correspondence with
counterparties, if the dividend income expected to be received before the
settlement date does not materialise.
· Assessing the Group's current and forecast compliance with
covenants under the base case and stress tested scenarios for any covenant
breach.
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 responsibilities and the
responsibilities of the Directors with respect to going concern are described
in the relevant sections of this report.
Overview
2023 2022
Valuation and existence of investments - Cayman Subsidiary and directly held X
listed investments
Valuation of investments X X
Key audit matters
Investment Entity Status X X
Going concern X
The Cayman subsidiary no longer holds a portfolio of listed investments nor
are there any directly held by the parent company, therefore this key audit
matter has been removed in the current year.
Going concern is a key audit matter in 2023 due to the conditions existing as
described under the heading "material uncertainty related to going concern"
above.
Group financial statements as a whole
Materiality
$788,000 (2022: $381,000) based on 1.5% (2022: 1%) of the gross investment
value
The Cayman subsidiary no longer holds a portfolio of listed investments nor
are there any directly held by the parent company, therefore this key audit
matter has been removed in the current year.
Going concern is a key audit matter in 2023 due to the conditions existing as
described under the heading "material uncertainty related to going concern"
above.
Materiality
Group financial statements as a whole
$788,000 (2022: $381,000) based on 1.5% (2022: 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 directly held 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, one 50% owned entity also valued at fair value through
profit and loss as well as a number of indirectly held subsidiaries. All
components in the group were in scope for our audit. 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 audited each of the investment valuations for these
investments held at fair value through profit and loss.
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.
In addition to the matter described in the material uncertainty related to
going concern section of our report, we have determined the matters described
below to be the key audit matters to be communicated in our report.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of Investments The Group holds investments in a number of entities (directly or indirectly) For all investments we:
and measures its investments at fair value. (2023: $52.5m, 2022: $38.2m)
· Challenged whether the valuation methodology was the most
As described in notes 2.6, 2.7, 3, 14 and 22, the fair values of the appropriate in the circumstances under the International Private Equity and
Note 2.6, 2.7, 3, 14 and 22 investments are determined by a variety of techniques. The Directors engaged Venture Capital Valuation ("IPEV") Guidelines and International Financial
an expert in valuing some of these investments. These unquoted investments are Reporting Standards ("IFRSs");
recognised at fair value and subject to a high degree of estimation
uncertainty. There is a risk these may not be appropriately valued through · Recalculated the fair value attributable to the Group, having
utilising inappropriate valuation methodologies or assumptions. 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
(such as discounted cash flow forecasts and earnings multiples) we:
· Reviewed the valuations prepared by management's expert and
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 the
management expert through consideration of the qualifications held by the
expert and the position held by the expert 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 Company in its
valuation report.
· 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 contracts, invoice or bank statement to support the existence and
accuracy of revenue in the current year;
o Considered the ability of management to forecast accurately by comparing
the 2023 actual figures to the 2023 forecasts produced and received as part of
our prior year audit;
o Obtained an understanding of management's forecasted revenue and earnings
and considered that against our knowledge of the entity and the wider market
as well as performance post year end;
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 third party data sources as well as consultation with internal
valuation experts;
· 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 estimation uncertainty concerning specific
assumptions and where appropriate, performing sensitivity analysis 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 (NAV
and cost) 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
· Where applicable we agreed a sample of cash and other assets and
liabilities forming part of the NAV to supporting documents, to corroborate
the existence and accuracy of these amounts.
For 100% of investments held at nil we:
Considered the rationale for a nil valuation and where necessary obtained
evidence to support that the entities were newly incorporated and had not been
trading during the year.
Key Observations
Based on the procedures performed we considered management's valuations of
these investments to be reasonable considering the level of estimation
uncertainty.
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 14
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.
investment entity under IFRS is judgemental and must be reconsidered at each
reporting date, taking into account changes in the portfolio and the Group's Furthermore we challenged management on the explanations and rationale and
activities. considered whether these were consistent with our understanding of the entity,
its operations and activities.
We obtained management's memorandum in respect of each of the underlying
Due to acquisitions in unquoted investments through the subsidiaries investments which detailed the rationale for acquiring each of these
continuing to occur year on year as well as changes to overall operational and investments and the exit strategy for each investment. We considered whether
cash management , there is a continuing need to spend time and effort the rationale for acquiring these investments was in accordance with our
re-assessing whether the Group continues to meet the definition of an understanding obtained throughout the audit and was consistent with that of an
investment entity. investment entity.
Where appropriate we agreed the details included in management's memoranda to
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
2023 2022
Materiality $788,000 $381,000
Basis for determining materiality 1.5% of the Gross investment balance 1% of the Gross investment balance
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. 1.5% 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. The percentage has increased from prior year given the higher valuation.
portion of unquoted investments.
Performance materiality $512,000 $247,000
Basis for determining performance materiality 65% of materiality 65% of materiality
When setting performance materiality we consider a number of factors including When setting performance materiality we consider a number of factors including
the expected misstatements, the history of misstatements and brought forward the expected misstatements, the history of misstatements and brought forward
adjustments from the prior years as well as the areas of the financial 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 the consolidated component of the Group based on 95%
(2022: 95%) of Group materiality due to the size and our assessment of the
risk of material misstatement of the Group. Component materiality was set at
$749,000 (2022: $361,000). In the audit of the component, we further applied a
performance materiality level of 65% (2022: 65%) 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 $15,000 (2022: $7,000). 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 15; 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 15.
Other Code provisions · Directors' statement on fair, balanced and understandable set out
on page 17;
· Board's confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 10;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
10;
· 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 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 the
Parent Company 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 an 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 with legislation could have a material effect on the amount or
disclosures in the financial statements, for example through the imposition of
fines or litigations. Such laws and regulations cover tax, Employment and
compliance litigation including the Prevention of Corruption (Bailiwick of
Guernsey) Law 2003.
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 statements 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 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:
- Detecting and responding to the risks of fraud; and
- 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 among 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, revenue recognition and the appropriate recognition of
expenditure.
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;
· testing a sample of low value journals to incorporate an element
of unpredictability into our testing;
· 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 and appropriate recognition of revenue;
· Tested a sample of expenditure and obtained confirmation from the
Board regarding the nature and validity of expenditure incurred; 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 wo were all deemed to have
appropriate competence and capabilities and remained alert to any indications
of fraud or non-compliance with legislation 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.
The engagement partner on the audit resulting in this independent auditors
opinion is Elizabeth Hooper.
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.
BDO LLP
Chartered accountants
London, UK
November 2024
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 2023
2023 2022
Note $ $
Revenue 5 14,182,711 7,198,826
Net gain/(loss) on financial assets at fair value through profit and loss 14 10,456,111 (20,202,661)
Administrative expenses 6 (6,166,003) (303,405)
Operating profit/(loss) for the year before tax 18,472,819 (13,307,240)
Interest receivable 9 272,415 15,165
Interest payable 10 (2,519,207) (2,360,017)
Impairment of financial assets at amortised cost - (712,660)
Gain on partial settlement of CULS 17 224,868 -
Profit/(loss) on ordinary activities before taxation 16,450,895 (16,364,752)
Tax on profit/(loss) from ordinary activities - -
Total profit/(loss) for the year 16,450,895 (16,364,752)
Other comprehensive income - -
Total comprehensive profit/(loss) for the year 16,450,895 (16,364,752)
Basic Profit/ (losses) per share 11 0.20941 (0.20843)
Diluted Profit/ (losses) per share 11 0.20941 (0.20843)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company No. 62008
As at 31 December 2023
2023 2022
Note $ $
Assets
Non-current assets
Property, plant and equipment 13 26,421 26,982
Investments 14 52,538,656 38,162,574
Right of use assets 21 115,357 82,872
Total non-current assets 52,680,434 38,272,428
Current assets
Trade and other receivables 15 7,970,810 3,055,956
Cash and cash equivalents 705,606 586,040
Total current assets 8,676,416 3,641,996
Total assets 61,356,850 41,914,424
Current liabilities
Trade and other payables 16 (980,222) (756,296)
3.5% Convertible Unsecured Loan Stock 17 (36,710,043) -
Total current liabilities (37,690,265) (756,296)
Long term liabilities
3.5% Convertible Unsecured Loan Stock 17 - (33,922,606)
Lease liabilities 21 (17,585) -
Total long term liabilities (17,585) (33,922,606)
Net assets 23,649,000 7,235,522
Equity
Share capital 18 100,141,648 100,141,648
Equity component of 3.5% Convertible Unsecured Loan Stock 17 6,823,671 6,919,355
Other capital reserves 23 - 37,417
Accumulated losses (78,388,806) (94,935,385)
Exchange reserve 2.13 (4,927,513) (4,927,513)
Total equity 23,649,000 7,235,522
Net asset value per ordinary share 19 30.10c 9.21c
The Financial Statements on pages 36 to 77 were approved by the Board of
Directors of APQ Global Limited and signed on 15 November 2024 on its behalf
by:
___________________
___________________
Bart Turtelboom
Phil Soulsby
Chief Executive Officer
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2023
Notes Share capital Accumulated losses Exchange reserve Total
CULS equity component Other capital reserves
$ $ $ $ $ $
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 20 - - 19,756 - - 19,756
Share based payments 20 - - (13,472) - - (13,472)
settled in cash
Issue of share awards 18 136,198 - (136,198) - - -
Dividends 12 - - - - - -
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 CHANGES IN EQUITY (continued)
As at 31 December 2023
Notes Share capital Accumulated losses Exchange reserve Total
CULS equity component Other capital reserves
$ $ $ $ $ $
As at 1 January 2023 100,141,648 6,919,355 37,417 (94,935,385) (4,927,513) 7,235,522
Comprehensive profit for the year
Profit for the year - - - 16,450,895 - 16,450,895
Equity after total comprehensive profit for the year 100,141,648 6,919,355 37,417 (78,484,490) (4,927,513) 23,686,417
Contributions by and distributions to owners
Share based payments 20 - - (34,049) - - (34,049)
Share based payments settled in cash 20 - - (3,368) - - (3,368)
Transfer to reserves on settlement of CULS 17 - (95,684) - 95,684 - -
Dividends 12 - - - - - -
As at 31 December 2023 100,141,648 6,823,671 - (78,388,806) (4,927,513) 23,649,000
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2023
2023 2022
Cash flow from operating activities Note $ $
Cash generated from operations
Profit/(loss) for the financial year 16,450,895 (16,364,752)
Adjustments for non-cash income and expenses
Equity settled share-based payments 20 (34,049) 19,756
Depreciation on property, plant and equipment 13 18,996 17,083
Depreciation on right of use assets 21 82,872 80,187
Net (gain)/loss on financial assets at fair value through profit and loss 14 (10,456,111) 20,202,661
Gain on partial settlement of CULS via tender 17 (224,868) -
Exchange rate fluctuations 6 2,000,422 (4,214,851)
Changes in operating assets and liabilities
Increase in trade and other receivables 15 (94,459) (492,077)
Increase/(decrease) in trade and other payables 16 254,638 (77,456)
Increase in receivables from group undertakings 15 (4,820,395) (1,623,451)
Decrease in payables from group undertakings 16 (45,612) (5,746)
Cash generated from/(utilised by) operations 3,132,329 (2,458,646)
Interest received 9 (272,415) (15,165)
Interest paid 10 2,519,207 2,360,017
Net cash inflow/(outflow) from operating activities 5,379,121 (113,794)
Cash flow from investing activities
Payments to acquire investments 14 (3,919,971) (538,404)
Payments to acquire property, plant and equipment 13 (18,435) (9,897)
Proceeds from disposal of investments - 1,907,221
Interest received 9 272,415 15,165
Net cash (outflow)/inflow from investing activities (3,665,991) 1,374,085
Cash flow from financing activities
Interest on CULS 17 (1,297,894) (1,268,504)
Partial settlement of CULS via tender 17 (249,380) -
Cash settled share-based payments 20 (3,368) (13,472)
Principal paid on lease liabilities 21 (89,128) (79,490)
Net cash outflow from financing activities (1,639,770) (1,361,466)
Net increase/(decrease) in cash and cash equivalents 73,360 (101,175)
Cash and cash equivalents at beginning of year 586,040 670,644
Exchanged rate fluctuations on cash and cash equivalents 46,206 16,571
Cash and cash equivalents at end of year 705,606 586,040
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2023 (continued)
At 1 January 2023 Movements arising from cash flows Non- cash movements At 31 December 2023
$ $ $ $
Reconciliation of net debt
Cash and cash equivalents
Cash at bank 586,040 73,360 46,206 705,606
Debt:
Convertible Unsecured Loan Stock (33,922,606) 1,547,274 (4,334,711) (36,710,043)
Lease liabilities (82,872) 89,128 (121,613) (115,357)
(34,005,478) 1,636,402 (4,456,324) (36,825,400)
Net debt (33,419,438) 1,709,762 (4,410,118) (36,119,794)
Movements arising from cash flows Non- cash movements Total
$ $ $
Movements on debt balances comprise:
Cash flows used in principal payments of lease liabilities 89,128 - 89,128
Recognition of lease liability - (115,357) (115,357)
Amortisation of discount on lease liabilities - (3,537) (3,537)
Exchange differences on lease liability - (2,719) (2,719)
Cash flows used in servicing interest payments of CULS 1,297,894 - 1,297,894
Cash flows used in partial settlement of CULS 249,380 - 249,380
Gain on partial settlement of CULS - 224,868 224,868
Amortisation of discount on CULS issue - (2,515,670) (2,515,670)
Exchange differences on CULS liability - (2,043,909) (2,043,909)
1,636,402 (4,456,324) (2,819,922)
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
1. Corporate information
The financial statements of APQ Global Limited (the "Group") for the year
ended 31 December 2023 were authorised for issue in accordance with a
resolution of the Board of Directors on 15 November 2024. 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 1(st) Floor, Tudor
House, Le Bordage, St Peter Port, Guernsey, GY1 1DB.
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 12 (#_ftn12) .
The Company and its subsidiaries 13 (#_ftn13) 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. Material 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 a significant percentage of the
assets of the Group consist of cash and, the forecasted distributable
dividends from Delphos Internationals in the next 12 months, provide adequate
financial resources to continue in operational existence for at least 12
months from the date of approval of the financial statements. The Group
expects to be able to meet all its liabilities as they fall due, including the
remaining CULS liability of GBP 26.1 million (as at the date of approval of
the financial statements) now due in March 2025, following the CULS Holders
agreement to the extension of the settlement date for the CULS to March 2025.
See below for the Stress Testing applied in coming to this conclusion. See
below for the Stress Testing applied in coming to this conclusion.
Despite the confidence of the Directors that the Company should have the
ability to continue for a period of at least 12 months and be able to meet its
liabilities as they fall due the Directors accept this is uncertain. Since
refinancing discussions with counterparties are yet to be concluded and the
timing of forecasted dividends from investee companies, in particular the
Delphos business is dependent on Delphos' operations generating sufficient
cashflows which is not guaranteed, there remains a material uncertainty with
respect to going concern
Stress Testing
After assessing the Group as a Going Concern in normal and poor economic
conditions across a one year horizon, the Group expects to maintain a
sufficient expense coverage ratio net of paying all its operating expenses and
net of its financial payment obligations to the CULS under normal conditions.
The Group does not expect to breach any debt covenants and is forecast to
retain USD 9.69 million in cash as of November, 30(th), 2025.
Under normal market assumptions, the Group assumes that it meets all its
financial obligations as well as its operating expenses. The Group forecasts
to receive USD 44.5 million of dividend income from its Direct Investment
Portfolio between November 2024 and November 2025, albeit there is no
guarantee that these amounts will be received within the time period. Under
poor economic conditions, the earnings assumptions are reduced, and USD 35.8
million of dividends are received from the Company's Direct Investment
Portfolio over the same period, 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.
Despite the confidence of the Directors that the Group should have the ability
to continue for a period of at least 12 months and be able to meet its
liabilities as they fall due, including repayment of the CULS, the Directors
accept this is uncertain. The Group is actively engaged in refinancing
discussions with counterparties, however these discussions are yet to be
concluded. Furthermore, the receipt of forecasted dividends from investee
companies, in particular the Delphos business is dependent on Delphos'
operations generating sufficient cashflows which is not guaranteed; therefore
the amount and timing of forecasted dividends remains uncertain. This
indicates the existence of a material uncertainty, which may cast significant
doubt on the ability of the Group to continue as a going concern. Therefore,
the Group may be unable to realise its assets and settle its liabilities in
the normal course of business.
The Directors have a reasonable expectation that refinancing and/or the
forecasted dividends will be forthcoming. Accordingly, they continue to adopt
the going concern basis in preparing the financial statements. The financial
statements do not include any adjustments should the basis of preparation be
inappropriate.
Dividend Suspension
The continued 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.
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 amendments are effective for the period beginning 1 January
2023:
· IFRS 17 Insurance Contracts;
· Disclosure of material Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements);
· Definition of Accounting Estimates (Amendments to IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors);
· Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 Income Taxes); and
· International Tax Reform - Pillar Two Model Rules (Amendment to
IAS 12 Income Taxes) (effective immediately upon the issue of the amendments
and retrospectively).
These amendments to various IFRS Accounting Standards are mandatorily
effective for reporting periods beginning on or after 1 January 2023. See the
applicable notes for further details on how the amendments affected the Group.
2.4 Standards issued (continued)
Standards, amendments and interpretations effective for the current year
(continued)
IFRS 17 Insurance Contracts
IFRS 17 was issued by the IASB in 2017 and replaces IFRS 4 for annual
reporting period beginning on or after 1 January 2023. IFRS 17 introduces an
internationally consistent approach to the accounting for insurance contracts.
Prior to IFRS 17, significant diversity has existed worldwide relating to the
accounting for and disclosure of insurance contracts, with IFRS 4 permitting
many previous accounting approaches to be followed. Since IFRS 17 applies to
all insurance contracts issued by an entity (with limited scope exclusions),
its adoption may have an effect on non-insurer. The Group carried out an
assessment of its contracts and operations and concluded that the adoption of
IFRS 17 has had no effect on its annual financial statements.
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of
Financial Statements and IFRS Practice Statement 2 Making Materiality
Judgements)
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice
Statement 2. The amendments aim to make accounting policy disclosures more
informative by replacing the requirement to disclose 'significant accounting
policies' with 'material accounting policy information'. The amendments also
provide guidance under what circumstance, the accounting policy information is
likely to be considered material and therefore requiring disclosure. These
amendments have no effect on the measurement or presentation of any items in
the Group's financial statements but affect the disclosure of the Group's
accounting policies.
Definition of Accounting Estimates (Amendments to IAS 8 Accounting policies,
Changes in Accounting Estimates and Errors)
The amendments to IAS 8, which added the definition of accounting estimates,
clarify that the effects of a change in an input or measurement technique are
changes in accounting estimates, unless resulting from the correction of prior
period errors. These amendments clarify how entities make the distinction
between changes in accounting estimate, changes in accounting policy and prior
period errors.
These amendments had no effect on the Group's financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12 Income Taxes)
In May 2021, the IASB issued amendments to IAS 12, which clarify whether the
initial recognition exemption applies to certain transactions that result in
both an asset and a liability being recognised simultaneously (e.g. a lease in
the scope of IFRS 16). The amendments introduce an additional criterion for
the initial recognition exemption, whereby the exemption does not apply to the
initial recognition of an asset or liability which at the time of the
transaction, gives rise to equal taxable and deductible temporary differences.
These amendments had no effect on the Group's financial statements.
International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income
Taxes)
In December 2021, the Organisation for Economic Co-operation and Development
(OECD) released a draft legislative framework for a global minimum tax that is
expected to be used by individual jurisdictions. The goal of the framework is
to reduce the shifting of profit from one jurisdiction to another in order to
reduce global tax obligations in corporate structures. In March 2022, the OECD
released detailed technical guidance on Pillar Two of the rules. Stakeholders
raised concerns with the IASB about the potential implications on income tax
accounting, especially accounting for deferred taxes, arising from the Pillar
Two model rules. The IASB issued the final Amendments (the Amendments)
International Tax Reform - Pillar Two Model Rules, in response to stakeholder
concerns on 23 May 2023.
The Amendments introduce a mandatory exception to entities from the
recognition and disclosure of information about deferred tax assets and
liabilities related to Pillar Two model rules. The exception is effective
immediately and retrospectively. The Amendments also provide for additional
disclosure requirements with respect to an entity's exposure to Pillar Two
income taxes.
The directors have determined that the Group is not within the scope of OECD's
Pillar Two Model Rules and the exception to the recognition and disclosure of
information about deferred tax assets and liabilities related to Pillar Two
income taxes is not applicable to the Group.
2.4 Standards issued (continued)
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January
2024:
· Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);
· Classification of Liabilities as Current or Non-Current
(Amendments to IAS 1 Presentation of Financial Statements);
· Non-current Liabilities with Covenants (Amendments to IAS 1
Presentation of Financial Statements); and
· Supplier Finance Arrangements (Amendments to IAS 7 Statement of
Cash Flows and IFRS 7 Financial Instruments: Disclosures)
The following amendments are effective for the period beginning 1 January
2025:
· Lack of Exchangeability (Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates)
The Group is currently assessing the impact of these new accounting standards
and amendments. The Group does not believe that the amendments to IAS 1 will
have a significant impact on the classification of its liabilities, as the
conversion feature in its convertible debt instruments is classified as an
equity instrument and therefore, does not affect the classification of its
convertible debt as a non-current liability. The Group does not expect any
other standards issued by the IASB, but are yet to be effective, to have a
material impact on its financial statements.
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 directly held subsidiaries APQ
Cayman Limited, APQ Corporate Services Limited, Delphos Holdings Limited,
Evergreen Impact Limited and APQ Knowledge Limited, along with indirectly held
subsidiaries, 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 and APQ Partners LLP, whilst APQ Cayman
Limited, APQ Corporate Services Limited, Delphos Holdings Limited, Evergreen
Impact Limited and APQ Knowledge Limited are directly held subsidiaries
measured at FVTPL. The results of APQ Partners LLP are consolidated from the
date control commences. 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.
Financial assets at FVTPL
The investments in APQ Cayman Limited, APQ Corporate Services Limited, Delphos
Holdings Limited, Evergreen Impact Limited and APQ Knowledge Limited 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.
2.6 Financial instruments (continued)
Financial assets at FVTPL (continued)
In accordance with the exception under IFRS 10 Consolidated Financial
Statement for an investment entity, the Company does not consolidate its
investments in APQ Cayman Limited, APQ Corporate Services Limited, Delphos
Holdings Limited, Evergreen Impact Limited and APQ Knowledge Limited 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, Evergreen Impact Limited and APQ
Knowledge Limited are subsequently measured at fair value with movements in
fair value recognised as net gain 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 15 and Note 22 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 16, Note
17, Note 21 and Note 22 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 APQ Cayman Limited, APQ Corporate
Services Limited, Delphos Holdings Limited, Evergreen Impact Limited and APQ
Knowledge Limited 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, which has held cash,
marketable equities and other tradeable positions, measures its underlying
investments at fair value.
2.7 Fair value measurement (continued)
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
APQ Corporate Services Limited, Delphos Holdings Limited, Evergreen Impact
Limited and APQ Knowledge Limited, 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 cost approach - valuation based on the cost of reproducing or
replacing the asset being valued.
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 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.
2.8 Foreign currency translations (continued)
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'.
2.9 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.
2.10 3.5% Convertible Unsecured Loan Stock
3.5% Convertible Unsecured Loan Stock ("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.
2.11 Accumulated losses
Accumulated losses consist of profit or losses for the financial year as
disclosed in the statement of comprehensive income less foreign currency
translation differences. Dividends declared by the Board of Directors are
accounted for as an increase in accumulated losses.
2.12 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.
2.13 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.
2.14 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.
2.15 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.
2.16 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.
2.17 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.
2.18 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).
2.19 Fee expense
Fees are recognised on an accrual basis. Refer to Note 6 for details of fees
and expenses paid in the period.
2.20 Taxes
The Company is taxable in Guernsey at the company standard rate of 0% (2022:
0%).
2.21 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.
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.
Assessment as investment entity (continued)
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 not all
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 in APQ Cayman Limited, APQ Corporate Services
Limited, APQ Knowledge Limited, Delphos Holdings Limited, and Evergreen Impact
Limited 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, this subsidiary 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 off 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 for trading
entities and entities that do not hold quoted assets.
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 14 for further discussion regarding the fair value of
investments.
The Directors measure the investments in APQ Corporate Services Limited, APQ
Knowledge Limited, Delphos Holdings Limited and Evergreen Impact Limited in
accordance with the IPEV guidelines based on the value of the indirect
subsidiaries held by those entities. 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 material estimation uncertainty with respect to
the valuation of these investments. The Directors engage qualified third party
valuation specialists to assist with valuation of some indirect subsidiaries
who use a combination of valuation techniques to determine fair value. Other
indirect subsidiaries, where inputs are not available to facilitate a
valuation based on future forecasts are valued based on the net asset value at
year end. The valuation methodology applied to each subsidiary is detailed in
note 14.
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.
4. Information
(continued)
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.
2023 2022
Group $ $
Cayman 14,665,766 26,197,356
United Kingdom 708,023 530,371
Guernsey 45,983,061 15,184,847
61,356,850 41,912,574
5. Analysis of revenue
2023 2022
$ $
Dividends received from APQ Cayman Limited 14,182,711 7,128,826
Dividends received from APQ Knowledge Limited - 70,000
14,182,711 7,198,826
6. Analysis of administrative expenses
2023 2022
Notes $ $
Personnel expenses (excluding share-based payments) 8 701,043 790,277
Depreciation of property, plant and equipment 13 18,996 17,083
Depreciation of right of use assets 21 82,872 80,187
Payments on short term leases 94,587 168,172
Auditor's remuneration - Audit fees 214,867 161,750
Nominated advisor fees 124,523 62,369
Administration fees and expenses 279,048 204,751
Directors' remuneration 7 135,556 131,515
Other expenses 800,582 769,612
Travel and subsistence 1,471,990 -
Professional fees 473,158 2,355,235
Share based payment expenses 20 (34,049) 19,756
Insurance 13,883 17,478
Recharge of expenses to APQ Cayman Limited (281,893) (342,630)
Net exchange losses/(gains) 2,070,840 (4,132,149)
6,166,003 303,405
Travel and subsistence include the corporate travel costs incurred in respect
of establishment of the Delphos network and branding. These general corporate
expenses such as travel and business development were incurred by a director
on behalf of the company and subsequently re-imbursed.
7. Directors' remuneration
2023 2022
$ $
Directors' remuneration 135,556 131,515
Share based payment expenses (34,049) 15,800
101,507 147,315
The highest paid director was Bart Turtelboom (2022: Bart Turtelboom) 29,948 45,418
Average number of directors in the year 4 4
In addition to the remuneration received from the Company, Bart Turtelboom
also received $119,795 (2022: $131,984) from APQ Cayman Limited.
8. Personnel expenses
2023 2022
$ $
Short term benefits - wage and salaries 342,549 361,903
Short term benefits - social security costs 21,907 30,046
Short term benefits - other benefits 327,108 387,325
Short term benefits - Share based payment expenses - 3,955
Post-employment benefits 9,479 11,003
701,043 794,232
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:
2023 2022
$ $
Short term benefits - other benefits 320,417 365,338
Short term benefits - Share based payment expenses - 3,955
320,417 369,293
Other benefits include drawings paid to the members of APQ Partners LLP and
staff benefits such as healthcare.
9. Interest receivable
2023 2022
$ $
Loan interest receivable from Palladium Trust Services Limited - 13,609
Loan interest receivable from Promethean Advisory Limited 7,886 1,404
Loan interest receivable from Delphos International Limited 36,675 -
Loan interest receivable from Delphos Holdings Limited 226,667 -
Bank interest receivable 1,187 152
272,415 15,165
10. Interest payable
2023 2022
$ $
Interest on 3.5% Convertible Unsecured Loan Stock 2024 2,515,670 2,356,754
Interest on lease liabilities 3,537 3,263
2,519,207 2,360,017
11. Profits/(losses) per share
The basic and diluted profits/(losses) per share are calculated by dividing
the profit/(loss) by the average number of ordinary shares outstanding during
the year.
2023 2022
$ $
Total comprehensive profit/(loss) for the year 16,450,895 (16,364,752)
Weighted average number of shares in issue 78,559,983 78,514,452
Profits/(losses) per share 0.20941 (0.20843)
Diluted profits/(losses) per share 0.20941 (0.20843)
The Group has 5,920 (2022: 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 5,920 (2022: 6,000) exercise price on
these conversion options currently exceeds the traded share price of APQ
Global. These are not currently dilutive (2022: not dilutive).
12. Dividends
No dividends were declared in the year ended 31 December 2023 (2022: 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.
13. Property, plant and equipment
Office Furniture and fixtures
equipment Total
$ $ $
Cost
At 1 January 2023 114,600 20,251 134,851
Additions during the year 18,435 - 18,435
At 31 December 2023 133,035 20,251 153,286
Accumulated depreciation
At 1 January 2023 88,043 19,826 107,869
Charge for the year 18,771 225 18,996
At 31 December 2023 106,814 20,051 126,865
Net book value
At 31 December 2023 26,221 200 26,421
At 31 December 2022 26,557 425 26,982
14. 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 2022 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
Additions - - - 3,919,971 - - - 3,919,971
Fair value movement (11,531,590) 942,453 (271,644) 21,316,892 - - - 10,456,111
At 31 December 2023 14,665,766 5,194,520 472,951 32,205,419 - - - 52,538,656
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. Directly held subsidiary undertakings, included in the above table,
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 directly and indirectly held 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
14. 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 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey APQ Global Limited 100 10 January 2019 Investment holding company FVTPL based on value of indirect subsidiaries
APQ Knowledge Limited Guernsey 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey APQ Global Limited 100 1 March 2019 Investment holding company FVTPL based on net asset value
New Markets Media & Intelligence Ltd England and Wales 22a St. James's Square, London, SW1Y 4JH APQ Knowledge Limited 100 26 February 2019(2) Trading investment company FVTPL based on a combination of income and market approaches
Palladium Finance Group Limited Seychelles Global Gateway 8, Rue de la Perle, Providence, Seychelles APQ Corporate Services Limited 100 22 February 2019(3) Trading investment company FVTPL based on net asset value
Palladium Trust Company (NZ) Limited New Zealand Level 8, AIG APQ Corporate Services Limited 100 22 February 2019 Trading investment company FVTPL based on net asset value
Building, 41 Shortland Street, Auckland, New Zealand, 1010
14. Investments (continued)
Investments in subsidiaries (continued)
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
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 based on net asset value
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 based on a combination of income and market approaches
Parish Corporate Services Limited 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 based on net asset value
Parish Group Limited 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 based on a combination of income and market approaches
Parish Nominees Limited 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 based on net asset value
Parish Trustees Limited 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 based on net asset value
14. Investments (continued)
( )
Investments in subsidiaries (continued)
( )
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
Delphos FMA - Frontier Markets Advisors Inc Canada 202-230 ch. du Golf, Montreal, QC H3E 2A8, Canada Delphos Holdings Limited 70 20 January 2021 Trading investment company FVTPL based on a combination of income and market approaches
Delphos Holdings Limited Guernsey 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey APQ Global Limited 100 13 August 2021 Investment holding company FVTPL based on value of indirect subsidiaries
Delphos Impact Limited Guernsey 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey Delphos Holdings Limited 100 18 August 2021 Trading investment company FVTPL based on net asset value
Evergreen Impact Limited Guernsey 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey APQ Global Limited 50 10 August 2021 Management consultancy (dormant) FVTPL based on net asset value
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 based on net asset value
Delphos Services Limited Guernsey 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, GY1 2JP, Guernsey Delphos Holdings Limited 100 27 September 2021 Trading services company FVTPL based on net asset value
14. Investments (continued)
( )
Investments in subsidiaries (continued)
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
Promethean Trustees Limited (1) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta APQ Corporate Services Limited 100 4 July 2022 Trading investment company FVTPL based on net asset value
Promethean Advisory Limited (1) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta Promethean Trustees Limited 100 4 July 2022 Trading services company FVTPL based on a combination of income and market approaches
Delphos MMJ 1, LLC(2) 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 based on value of direct subsidiaries
Delphos MMJ 2, LLC(2) 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 based on value of direct subsidiaries
Delphos MMJ LP United States of America The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 Delphos MMJ 1, LLC 100 18 March 2022 Trading investment company FVTPL based on recent cost
Delphos Capital Limited England and Wales 22a St. James's Square, London, England, SW1Y 4JH Delphos Holdings Limited 100 17 November 2023 Dormant FVTPL based on net asset value
( )
14. Investments (continued)
Investments in subsidiaries (continued)
Name Country of incorporation Registered Office Immediate Parent Company Holding % Acquisition/ Incorporation Date Activity Recognition
Promethean Trustees Limited (1) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta APQ Corporate Services Limited 100 4 July 2022 Trading investment company FVTPL based on net asset value
Promethean Advisory Limited (1) Malta 35/14 Salvu Psaila Street, Birkirkara, BKR 9072, Malta Promethean Trustees Limited 100 4 July 2022 Trading services company FVTPL based on a combination of income and market approaches
Delphos Milan S.r.l Italy Via San Raffele, 1 20121 Milano (MI), Italia Delphos Holdings Limited 100 15 February 2023 Trading services company Cost
Delphos Design D.o.o Croatia Miramarska 24 Delphos Holdings Limited 100 16 February 2023 Trading services company Cost
HR - 10000 Zagreb, Croatia
14. Investments (continued)
Investments in subsidiaries (continued)
(1)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).
(2)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.
Delphos Milan S.r.l and Delphos Design D.o.o were incorporated during the
year. These companies are in the process of establishing revenue generating
channels however these are not at a state when revenue can be confirmed and
thus cost has been used as an approximation of fair value.
Investments in subsidiaries - disposals
No investments were disposed of during the year.
Valuation techniques
At year end APQ Cayman Limited had cash and bonds 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 cash held along with the observable market
values of its Argentinian bond.
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 1) a combined income and market multiple
based approach, incorporating comparison with external sources and the
expected cash flows of the investment 2) net asset value where the investment
entities have not get developed a predicable source of income and 3) costs for
those newly incorporated/acquired entities where the Company is still in the
process of creating revenue generating opportunities. The valuation
methodology applicable to each entity is included in the table above.
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.
Evergreen Impact Limited has not commenced trading and as such has a nil net
value.
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.
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. The sensitivities to these
unobservable inputs are set out in note 22.
14. Investments (continued)
Unlisted managed funds (continued)
Valuation is determined for these holding companies by the value of the
underlying investments held.
The Company has classified its investments in APQ Cayman Limited as level 3 as
the valuation is determined based on the that entities NAV. The majority of
underlying assets and liabilities of APQ Cayman Limited, comprising cash and
debt instruments, 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 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 1 January 2023 - - 38,162,574 38,162,574
Additions - - 3,919,971 3,919,971
Fair value movement - - 10,456,111 10,456,111
At 31 December 2023 - - 52,538,656 52,538,656
15. Trade and other receivables
2023 2022
$ $
Trade debtors 529,270 554,265
Amounts due from group undertakings 7,162,103 2,341,708
Prepayments and accrued income 61,959 45,255
Other debtors 217,478 114,728
7,970,810 3,055,956
An amount of $162,662 (2022: $162,662) has been deducted from the balances
above in respect of amounts that are not considered recoverable. Bad debts of
$nil (2022: $nil) have been recognised in the statement of comprehensive
income for the year. Amounts due from group undertakings are included in
related party disclosures in note 24.
16. Trade and other payables
2023 2022
$ $
Trade creditors 139,988 127,716
Amounts due to group undertakings 264,410 310,022
Other creditors 4,365 23,862
Accruals 473,687 211,824
Lease liabilities 97,772 82,872
980,222 756,296
17. 3.5% Convertible Unsecured Loan Stock 2024
Nominal number Liability Equity
of CULS component component
$ $ $
As at 1 January 2022 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
Amortisation of discount on issue and issue expenses - 2,519,620 -
Interest paid during the year - (1,297,894) -
Partial settlement via tender (552,616) (474,248) (95,684)
Exchange differences - 2,039,959 -
As at 31 December 2023 40,893,551 36,710,043 6,823,671
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 ("CULS") to raise £20,090,000 ($26,953,749) 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.
During April 2023, the Company announced a tender offer for up to 100% of the
Company's CULS at a discount of 50%. 80 of the 6,000 units of CULS with a
nominal value of $474,248 were validly tendered and were settled for an amount
of $249,380 resulting in a gain on settlement of $224,868. An amount of
$95,864 was transferred from the CULS equity to retained earnings on
settlement of the CULS representing the value assigned to the conversion
option of the CULS settled during the year.
18. 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.
18. Share Capital (continued)
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 2022 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
Shares issued from share awards during the year - - -
At 31 December 2023 78,559,983 77,099,861 100,141,648
During the year ended 31 December 2023, nil (2022: 106,312) shares were issued
as part of the share award scheme as detailed in note 20.
19. 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.
2023 2022
$ $
Net assets at 31 December 23,649,000 7,235,522
Shares in issue at 31 December 78,559,983 78,559,983
Net asset value per ordinary share 30.10c 9.21c
20. 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.
20. Share awards (continued)
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.
2023 2022
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 29,208 128.11 146,036 128.11
Settled in equity - 128.11 (106,312) 128.11
Settled in cash (2,629) 128.11 (10,516) 128.11
Adjusted as noted below (26,579) 128.11 - -
Outstanding at 31 December - 128.11 29,208 128.11
The share vesting period was initially calculated to end in Q1 2023 however
the final vesting of the scheme occurred in Q4 of 2022. As a result, the
vested cost of $34,049 and award of 26,579 units has been reversed to the
statement of comprehensive income.
Charge for awards to be settled in Equity Charge for awards settled in Cash Total charge for share based awards
$ $ $
Year ended 31 December 2022 6,283 13,473 19,756
Year ended 31 December 2023 (34,049) - (34,049)
The unvested portion of the share awards currently granted is $nil (2022:
$nil). Of the awards outstanding the number vested that are available for
settlement amount to nil (2022: 23,366).
21. Leases
The Company's subsidiary, APQ Partners LLP, leases an office in London from
which support functions are conducted. The lease had a full term of 24 months
and ended on 24 December 2023. This has been extended to 28 February 2025
after which there is no certainty as to whether the Group will renew the lease
or move to other offices as appropriate.
21. Leases (continued)
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 2023 378,264
Addition 115,357
At 31 December 2023 493,621
Accumulated depreciation
At 1 January 2023 295,392
Charge for the year 82,872
At 31 December 2023 378,264
Net book value
At 31 December 2023 115,357
At 31 December 2022 82,872
Lease liability 2023 2022
$ $
Leased asset on 1 January 82,872 83,780
Interest on lease liability 3,537 3,263
Payments for lease (89,128) (79,490)
Exchange differences 2,719 (7,553)
New lease commitment 115,357 82,872
At 31 December 115,357 82,872
The lease falls due:
Within 1 year 97,772 82,872
After 1 year but within 5 years 17,585 -
115,357 82,872
The undiscounted cashflows on the lease are disclosed in note 22.
22. 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 10. 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.
22. 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 2023 2022
Fair value through profit and loss Amortised cost Total Fair value through profit and loss Amortised cost Total
$ $ $ $ $ $
Investments 52,538,656 - 52,538,656 38,162,574 - 38,162,574
Trade debtors - 529,270 529,270 - 554,265 554,265
Amounts due from group undertakings - 7,162,103 7,162,103 - 2,341,708 2,341,708
Prepayments and accrued income - 61,959 61,959 - 45,255 45,255
Other debtors - 217,478 217,478 - 114,728 114,728
Cash and cash equivalents - 705,606 705,606 - 586,040 586,040
Total 52,538,656 8,676,416 61,215,072 38,162,574 3,641,996 41,804,570
Financial Liabilities 2023 2022
Fair value through profit and loss Amortised cost Total Fair value through profit and loss Amortised cost Total
$ $ $ $ $ $
Trade creditors - 139,988 139,988 - 127,716 127,716
Amounts due to group undertakings - 264,410 264,410 - 310,022 310,022
Other creditors - 4,365 4,365 - 23,862 23,862
Accruals - 473,687 473,687 - 211,824 211,824
Lease liabilities - 115,357 115,357 - 82,872 82,872
CULS liability - 36,710,043 36,710,043 - 33,922,606 33,922,606
Total - 37,707,850 37,707,850 - 34,678,902 34,678,902
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 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 14). APQ Cayman Limited has
investments in a debt instrument whose value is dependent on movements in
markets and cash holdings which are not subject to significant fluctuation.
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.
22. 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 sensitivity of the investments held by the Company to variations in inputs
used in the valuation is as follows:
Investment Valuation methodology Input Base Sensitivity Change in fair value of investments
$
APQ Cayman Limited NAV comprising cash and debt instruments with certain balance quoted in NAV $14,665,766 +5% 733,288
foreign currencies
-5% (733,288)
APQ Knowledge Limited Valuation of New Markets Media and Intelligence Limited(1) Revenue and EBITDA forecasts £166,193/ +50% 186,746
£40,220 -50% (184,594)
Earnings multiple 1.4 and 8.7 +0.5% 2,933
-0.5% (781)
GBP;USD Exchange rate 0.784436 10% 52,550
-10% (42,996)
APQ Corporate Limited Valuation of Palladium Trust Services Ltd NAV $23,212 +5% 1,161
-5% (1,161)
Valuation of Promethean Trustees Limited NAV $23,471 +5% 1,174
-5% (1,174)
Valuation of Parish Group Limited(1) Revenue and EBITDA forecasts £1,381,599/ +25% 1,174,158
£288,378 -25% (1,170,791)
Earnings multiple 28 and 12.1 +0.5% 25,133
-0.5% (21,766)
GBP:USD Exchange rate 0.784436 10% 528,901
-10% (432,737)
Valuation of Promethean Advisory Limited(1) Revenue and EBITDA forecasts €244,180/ €63,615 +50% 339,410
-50% (339,646)
Earnings multiple 1.9 and 6.4 +0.5% 3,278
-0.5% (3,513)
EUR:USD Exchange rate 0.905778 10% 43,056
-10% (35,228)
Delphos Holdings Limited Valuation of Delphos Services Limited NAV $2,159,018 +5% 107,951
-5% (107,951)
Valuation of Delphos FMA - Frontier Markets Advisors Inc(1) Revenue and EBITDA forecasts CAD493,250/ CAD175,101 +50% 374,460
-50% (374,551)
Earnings multiple 1.7 and 8.7 +0.5% 6,196
-0.5% (6,288)
CAD:USD Exchange rate 1.32441 10% 164,769
-10% (134,811)
22. Financial risk and management objectives and policies (continued)
Market price risk (continued)
Investment Valuation methodology Input Base Sensitivity Change in fair value of investments
$
Delphos Holdings Limited Valuation of Delphos International Limited(1) Revenue and EBITDA forecasts $9,943,360/ +30% 8,208,904
$4,976,225 -30% (8,208,904)
Earnings multiple 1.4 and 8.2 +0.5% 142,964
-0.5% (142,964)
Valuation of Delphos MMJ LP(2) Cost $1,000,000 +30% 300,030
-30% (300,030)
Valuation of Delphos Milan S.r.L(2) Cost $307,071 +30% 92,121
-30% (92,121)
Valuation of Delphos Design D.o.o(2) Cost $215,302 +30% 64,591
-30% (64,591)
The most significant input used in the fair value of APQ Cayman Limited is the
valuations of its underlying cash which in not susceptible to significant
fluctuations and as such a 5% sensitivity has been applied to the NAV.
For the other entities valued based on NAV these valuations tend to consist
primarily of cash and receivables. These are not considered to be susceptible
to significant fluctuations and as such a 5% sensitivity has been applied to
the NAV.
(1) These entities are valued using a 50:50 weighting of a discounted cash
flow method and a markets method(s) (Guideline Company / Guideline Transaction
method). In most cases these valuations have produced a similar value for each
method. As such, for the purposes of this sensitivity note the inputs into the
market method only have been sensitized. Inputs sensitised are revenue and
EBITDA as well as the multiple and the exchange rate. For revenue and EBITDA
where this trend is considered observable, a sensitivity of 30% has been
applied with 50% sensitivity applied for other trading entities.
Whilst the sensitivity provided above is based on the market method approach
we note that the discount rates applied in the discount cash flow approach
range from 17 to 29%. The discount rate on the DCF methods have not been
sensitized as part of this sensitivity analysis.
The fluctuations specified above for unquoted investments are fluctuations
that could reasonably occur given the nature of the entities and the
volatility arising from external market factors that could impact revenue and
earnings.
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)
and 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.
22. 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:
2023 2022
Pound sterling Euro Total Pound sterling Euro Total
$ $ $ $ $ $
Cash and cash equivalents 537,785 83,872 621,657 428,156 49,672 477,828
Trade debtors 3,410 - 3,410 28,405 - 28,405
Other debtors 163,642 21,262 184,904 93,466 21,262 114,728
Amounts due from group undertakings 2,549 380,038 382,587 - 159,302 159,302
Trade creditors (31,390) (31,193) (62,583) (12,522) (6,604) (19,126)
Other creditors (4,365) - (4,365) (23,862) - (23,862)
Amounts due to group undertakings - - - (45,612) - (45,612)
Accruals (218,414) (15,000) (233,414) (211,824) - (211,824)
Lease liabilities (115,357) - (115,357) (82,872) - (82,872)
CULS (36,710,043) - (36,710,043) (33,922,606) - (33,922,606)
(36,372,183) 438,979 (35,933,204) (33,749,271) 223,632 (33,525,639)
A reasonable change of 5% in the Group's foreign currency net liabilities
(2022: liability) will have an impact of $1,796,660 (2022: $1,676,282) 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.
22. 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 2023 Less than 1 year 1 - 5 years 5 + years Total
$ $ $ $
Liabilities
Trade creditors 139,988 - - 139,988
Amounts due to group undertakings 264,410 - - 264,410
Other creditors 4,365 - - 4,365
Accruals 473,687 - - 473,687
Lease liabilities 97,772 17,585 - 115,357
CULS 38,517,770 - - 38,517,770
39,497,992 17,585 - 39,515,577
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
The options available to the Company to manage the expected maturity is set
out in the long term viability statement on page 15.
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 14) 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
comprise cash and other readily tradable positions and are 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 A,
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.
23. 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:
2023 2022
$ $
Share capital 100,141,648 100,141,648
Equity component of 3.5% Convertible Unsecured Loan Stock 2024 6,823,671 6,919,355
Other capital reserves - 37,417
Accumulated deficit (78,388,806) (94,935,385)
Exchange reserve (4,927,513) (4,927,513)
Total shareholders' funds 23,649,000 7,235,522
24. 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. He is also Chair and a significant shareholder in Beauvoir Limited,
the Company Secretary that was appointed on 3 June 2024 to replace Parish
Group Limited.
Bart Turtelboom is a designated member of APQ Partners LLP and is also a
director of APQ Cayman Limited as well as the largest shareholder of the
Company.
24. 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.
2023 APQ Global Limited - Remuneration APQ Global Limited - Share based remuneration APQ Cayman Limited - Remuneration Total
$ $ $ $
Bart Turtelboom Chief Executive Officer 29,948 - 119,795 149,743
Wayne Bulpitt Non-Executive Chairman 49,915 - - 49,915
Philip Soulsby Finance Director 37,436 - - 37,436
Wadhah Al-Adawi Non-Executive Director 12,410 - - 12,410
129,709 - 119,795 249,504
2022 APQ Global Limited - Remuneration APQ Global Limited - Share based remuneration APQ Cayman 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
At 31 December 2023, $nil (2022: $nil) was payable to the directors with and
$85,782 (2022: $209,000) receivable from a director for an expense advance. A
total amount of $1,558,944 (2022: $482,169) of general corporate expenses such
as travel and business development were incurred by a director which the
Company reimbursed and , which does not constitute a director emolument.
The directors represent key management personnel. Additional key management
personnel are the partners of the LLP, details of their remuneration is
disclosed in Note 7.
Parish Group Limited:
APQ Global Limited has incurred $177,861 (2022: $129,454) of fees and expenses
to Parish Group Limited as administrator of the Company, who were the Company
Secretary during the year until they were replaced post year end on 3 June
2024. As at 31 December 2023 the balance owed to Parish Group Limited was $nil
(2022: $nil).
APQ Partners LLP:
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 $1,214,003 (2022: $1,050,377) to
APQ Global Limited during the year. As at 31 December 2023, APQ Global Limited
owed $144,085 (2022: $83,736) to APQ Partners LLP. In the current and prior
year amounts have been eliminated on consolidation.
APQ Cayman Limited:
During the year, the Group recharged expenses to APQ Cayman Limited of
$296,867 (2022: $361,450) and was recharged expenses of $14,974 (2022:
$42,653) from APQ Cayman Limited. The Company received dividends of
$12,867,293 (2022: $7,128,826). At 31 December 2023, an amount of $17,209 was
due from APQ Cayman Limited (2022: $27,202 was due from APQ Cayman Limited).
24. Related party transactions (continued)
APQ Corporate Services Limited:
During the year, APQ Global Limited received funding of $nil (2022: $nil) from
APQ Corporate Services Limited. As at 31 December 2023, an amount of $264,410
(2022: $310,022) was due to APQ Corporate Services Limited (See note 16). The
balance is interest free and repayable on demand.
APQ Knowledge Limited:
During the year, the company received dividends of $nil (2022: $70,000) from
APQ Knowledge Limited.
Palladium Trust Services Limited:
APQ Global Limited has provided a loan to Palladium Trust Services Limited, a
group undertaking in 2021 which attracts interest at a rate of 10%. During the
year, APQ Global Limited charged interest of $nil (2022: $13,608). As at year
end, APQ Global Limited was owed $162,662 (2022: $162,662) from Palladium
Trust Services Limited (See note 15). The balance owing has been provided for
in full as irrecoverable.
New Markets Media & Intelligence Ltd:
During the year, APQ Global Limited repaid the loan taken in previous years.
The loan is provided at a 10% interest fee. As at year end, APQ Global Limited
was owed $2,549 (2022: $45,612 owed to New Markets) by New Markets Media &
Intelligence Ltd (See note 16).
Delphos Holdings Limited:
During the year, APQ Global Limited provided funding of $561,633 (2022: $nil)
to Delphos Holdings Limited which has been capitalised to the cost of the
investment in the Delphos Holdings group. As at 31 December 2023, an amount of
$nil (2022: $nil) was due from Delphos Holdings Limited.
Delphos Partners LLP:
During the year, APQ Global Limited paid expenses totalling $nil (2022:
$363,779) on behalf of Delphos Partners LLP. At 31 December 2023, an amount of
$nil (2022: $363,779) was due to APQ Global Limited. The balance is interest
free and repayable on demand.
Delphos International Limited:
During the year, APQ Global Limited provided funding of $1,757,061 (2022:
$151,246) to Delphos International Limited which has been capitalised to the
cost of the investment in the Delphos Holdings group. It also provided loan
funding of $1,040,000 (2022: $nil) on which the Company charged $36,675 (2022:
$nil) in interest at a rate of 4.5%. The loan has no fixed repayment date. At
31 December 2023, an amount of $1,476,675 (2022: $151,246) was due to APQ
Global Limited. The balance is interest free and repayable on demand.
Delphos Impact Limited:
During the year, APQ Global Limited paid expenses totalling $809,494 (2022:
$1,098,814) on behalf of Delphos Impact Limited and provided funding to
Delphos Impact Limited of $850,000. At 31 December 2023, an amount of
$2,758,307 (2022: $1,948,814) was due to APQ Global Limited. The balance is
interest free and repayable on demand.
Delphos Services Limited:
During the year, APQ Global Limited paid expenses totalling $3,107,525 (2022:
$240,349) on behalf of Delphos Services Limited. At 31 December 2023, an
amount of $3,070,392 (2022: $240,349) was due to APQ Global Limited. The
balance is interest free and repayable on demand.
Promethean Advisory Limited:
During the year, APQ Global Limited made a subordinated loan to Promethean
Advisory Limited amounting to $131,396 (2022: $99,355) which bears interest at
5%. Interest of $7,886 (2022: $1,404) accrued on the loan during the year. APQ
Global Limited also paid expenses on behalf of Promethean Advisory Limited
amounting to $124,697 (2022: $51,115). At 31 December 2023, a total amount of
$380,038 (2022: $159,302) was due to APQ Global Limited. The balance is
interest free and repayable on demand.
Delphos Milan S.r.l:
During the year, APQ Global Limited provided funding of $307,071 (2022: $nil)
to Delphos Milan S.r.l which has been capitalised to the cost of the
investment in the Delphos Holdings group. As at 31 December 2023, an amount of
$nil (2022: $nil) was due from Delphos Milan S.r.l.
24. Related party transactions (continued)
Delphos Design Doo:
During the year, APQ Global Limited provided funding of $215,302 (2022: $nil)
to Delphos Design Doo which has been capitalised to the cost of the investment
in the Delphos Holdings group. As at 31 December 2023, an amount of $nil
(2022: $nil) was due from Delphos Design Doo.
25. Subsequent events
On 3 June 2024, Beauvoir Limited was appointed as company secretary to replace
Parish Group Limited.
In September 2024, an agreement was reached with the holders of the
Convertible Unsecured Loan Stock, whereby a payment of £3,499,996 was made to
reduce the nominal value per unit to £4,408,79. The repayment for the
remaining CULS has been extended to March 2025 with an increased coupon of 6%
pa from 30 September 2024 plus a redemption premium of 1% per month.
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 14 for further details.
2 See Page 9 for further details of the Company's KPI's.
3 The average discount over the financial year was 44%.
(( 4 )) Where we refer to revenue from income generating operating activities
this relates to the revenue of our investee companies.
(( 5 )) The Capital Subscribed on One Ordinary Share of the Company being
£1.00 and thus equivalent to £0.06 in dividends per share.
6 The dividend paid to ordinary shareholders and capital growth rate of the
Company are Key Performance Indicators (KPI's), discussed further on Page 9.
7 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 9.
8 The independent valuation report attributes the increase in valuation to
the significant year on year growth in top line revenue, profitability and
forecasted continued future growth in revenue from capital raise mandates.
9 Where we refer to revenue from income generating operating activities this
relates to the revenue of our Investee companies.
10 See Note 14 for further details.
(#_ftnref11) (11) 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.
12 Where we refer to revenue from income generating operating activities
this relates to the revenue of our investee companies.
13 See Note 14.
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