REG-Everest Global Plc: Final Results
27/07/2023 07:15
27 July 2023
Everest Global plc
(“Everest” or the “Company”)
Final Results
The Board of Everest is pleased to announce its final results for the year
ended 31 October 2022.
Chief Executive Officer’s Statement
Overview
Following from 2021 and the withdrawal by Comarco from the marine and port
transaction, on 3 October 2022 the Company (Anglo African Agriculture Plc)
entered into a transaction which saw the purchase of 65% of the outstanding
convertible loan notes by Golden Nice International Limited. The remainder of
the convertible loan notes (35%) were converted by the note holders to shares
in the Company. In addition, Golden Nice International Limited invested
£650,000 in the Company to recapitalise it by the subscription of 13 million
new ordinary shares. The company then changed its name to Everest Global Plc
at this time. In addition, both Andrew Monk and Matt Bonner resigned from the
Board and Simon Grant-Rennick and I were appointed to the Board. Robert Scott
remains on the Board. I would like to thank both Andrew Monk and Matt Bonner
for their services to the company.
As mentioned in the previous Annual Financial Statements the Company’s
subsidiary, Dynamic Intertrade (Pty) Limited (“Dynamic”), on its own could
not sustain a London Stock Exchange listing. During the period under review
the Company and VSA NEX Investments Limited (“VSA NEX”) entered into
certain related party arrangements in relation to Dynamic. At the time the
arrangements were entered into VSA NEX was a 100% subsidiary of VSA Capital.
Also at the time the arrangements were entered into Andrew Monk was a director
of the Company, VSA Capital and VSA NEX and is deemed to have significant
influence over VSA Capital and VSA NEX. Pursuant to the arrangements, VSA NEX
subscribed for such number of new shares in the capital of Dynamic resulting
in VSA NEX holding 49% of the enlarged issued share capital of Dynamic for a
consideration of ZAR10,982; the Company agreed to assign certain debts owing
by Dynamic, amounting to £4.2 million which had been fully impaired in prior
years, to the Company and certain other parties to VSA NEX in consideration
for VSA NEX paying to the Company £100,001 and agreeing to fund Dynamic so as
to enable Dynamic to carry on its business in the ordinary course until such
time as the Company ceases to hold any further shares in Dynamic. This
assignment agreement resulted in VSA NEX having a non-controlling interest in
Dynamic and as such its share of the current year profits amounted to £522,
its share of accumulated losses prior to acquisition amounted to £2,305,905.
Additionally, the assignment of the loans resulted in the Group incurring a
finance charge on consolidation of £3.1 million. VSA NEX has signed a
subordination agreement in relation to the loans due by Dynamic to VSA NEX
with an expiry date of 31 October 2023. Should VSA NEX choose to request the
repayment of the loans due by Dynamic this will severely impact the Company's
ability to continue as a going concern. Upon consolidation of the VSA NEX
loans, the borrowings have increased by
£4.1 million. Under a put and call option agreement the Company granted to
VSA NEX the option to acquire 11,430 shares in Dynamic Intertrade, being the
remaining 51% of Dynamic held by the Company, subject to the satisfaction of
certain conditions and subject to certain time restrictions for £1. At 31
October 2022 Dynamic was still controlled by Everest Global and has been
consolidated in the group financial statements
The Company’s present primary operations and source of revenue remains it
51% holding in Dynamic, our Cape Town based spice blender and trader. The
Company was still loss making for the year under review but has since improved
its performance during the six-months ended April 2023. Group turnover
increased by 20.98% (2021: a reduction of 20.8%). Group operating losses
amounted to £1,152,170 (2021: £515,660) for the current year. The total
Group comprehensive loss for the year amounted to £4,570,562 (2021:
£584,633), including the finance charge on consolidation referred to above,
amounting to £3,131,890.
The Company will now be actively looking at new opportunities to bolster its
current operating assets and will no doubt in the near future seeks to raise
more funds and acquire more assets. As announced on the 4(th) July 2023, the
Company announced that it had invested £200,000 by way of a loan into
Precious Link (UK) Limited, a wine retailer, located within the Southeast of
England. The Board believe that Precious Link operates in a complementary
sector and that the loan could assist the Company in expanding its activities
into the wider food and beverage sector.
Post year end our previous auditor resigned as they were no longer in a
position to audit Public Interest Entity (“PIE”) companies and due to
capacity constraints with many other auditors there was a delay in appointing
a PIE registered auditor. As a result, the Company could not complete their
statutory audit, publication of results or statutory filing at Companies House
on time. As such, trading in the Company’s ordinary shares and its listing
on the Official List of the Financial Conduct Authority was suspended pending
the publication of the Company’s audited results for the year ended 31
October 2022. The Company was granted an extension of its filing obligations
by Companies House.
On the 24(th) of January 2023, the Company announced a subscription for
12,726,000 new Ordinary Shares. The Company raised net proceeds totalling
£699,930 at a subscription price of 5.5 pence per share.
COVID-19 which had a devastating effect on the world economy and social
fabric, has now been declared by the head of the UN World Health Organization
(WHO) as no longer a public health emergency, however stressing that it does
not mean the disease is no longer a global threat. As a result the Company
will not report on initiatives or effects of COVID-19 in its Annual Financial
Statements.
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 October 2021 or 2022 within the
meaning of Section 434 of the Companies Act 2006, but is derived from those
accounts. Statutory accounts for 2021 have been delivered to the Registrar of
Companies and those for 2022 will be delivered in due course. The auditor’s
report on the statutory accounts for the years ended 31 October 2021 were
unqualified and the auditor’s report on the statutory accounts for the years
ended 31 October 2022 contained a qualification in respect of inventory as the
auditor was appointed after the year end and therefore could not attend the
stock take.
The audit report also includes a material uncertainty in relation to going
concern. Excerpts of the basis for the qualification in respect of inventory
and the material uncertainty are as follows with the full audit report and
related notes being set out in the body of this announcement:
Basis for qualified opinion
The Group recorded closing inventory of £175,875. We were appointed after the
balance sheet date and were unable to arrange attendance at the year-end
counting of inventory. We were therefore unable to verify the closing value of
inventory and the associated impact on cost of sales.
Material uncertainty related to going concern
We draw attention to note 2a in the financial statements, which indicates
events or conditions identified that may cast significant doubt over the
Company’s ability to continue as a going concern. As stated in note 2a,
these events or conditions, along with other matters set forth in note 2a,
indicate that a material uncertainty exists that may cast significant doubt on
the Company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
The announcement has been prepared on the basis of the accounting policies as
stated in the financial statements for the year ended 31 October 2022. The
information included in this announcement is based on the Company's financial
statements which are prepared in accordance with International Financial
Reporting Standards ("IFRS"). The Company will publish full financial
statements that comply with IFRS on its website in due course.
The annual report and accounts for the year ended 31 October 2022 will be
posted to shareholders in due course. An announcement will be made regarding
the posting of these documents as appropriate.
Once published, hard copies will be available to shareholders upon request to
the Company Secretary at 48 Chancery Lane, London WC2A 1JF, and soft copies
will be available for download and inspection from the Company's website at
www.everestglobalplc.com.
The annual report and accounts for the year ended 31 October 2022 will be made
available from the FCA's National Storage Mechanism
at www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism in
due course, following which, the temporary suspension of the Company’s
listing on the Official List of the FCA of its ordinary shares of 2 pence each
will be lifted and trading on the Main Market of the London Stock Exchange
will recommence.
A further announcement will be made in due course
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018).
The Directors of the Company take responsibility for the contents of this
announcement.
For further information please contact the following:
Everest Global plc
Andy Sui, Chief Executive OfficerRob Scott, Non-Executive Director +44 (0) 776 775 1787+27 (0)84 6006 001
Cairn Financial Advisers LLP
Jo Turner / Emily Staples +44 (0) 20 7213 0885 / +44 (0)20 7213 0897
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
Strategic ReportFor the Year Ended 31 October 2022Overview
The primary objective of the strategic report is to provide information for
the shareholders to help them to assess how the Directors have performed their
duty, under section 172 of the Act, to promote the success of the Company and
to provide context for the related financial statements as well as assist them
in their decision making.
The duty of a director, as set out in section 172 of the Act, is to act in the
way he considers, in good faith, would be most likely to promote the success
of the Company for the benefit of its members, and in doing so have regard
(amongst other matters) to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company's employees;
(c) the need to foster the Company's business relationships with suppliers,
customers and others;
(d) the impact of the Company's operations on the community and the
environment;
(e) the desirability of the Company maintaining a reputation for high
standards of business conduct; and
(f) the need to act fairly as between members of the Company.
As a Board, we must always seek and be open to feedback from anyone affected
by our activities. This enables the Board to understand the impact of its
decisions on key stakeholders, but also ensures that we are aware of any
significant changes in the market or the external environment, including the
identification of emerging risks, which can be fed into our strategy
discussions and our risk management process. The Board considers our strategic
stakeholders as follows:
Customers
We listened to our customers and endeavoured to supply them with relevant
product. This entailed continuous discussions with our existing and potential
customers as well as product development.
Suppliers
We have worked with a number of our suppliers for many years, and any loss of
our sales or product mix impacts their business. We communicated to them where
possible to reduce the impact on their businesses.
Shareholders and Lenders
We have a clear responsibility to engage with shareholders and lenders of our
business and their views are an important driver of our strategy. We keep our
shareholders regularly informed while lenders receive regular updates on the
performance of the organisation.
Staff
During the year under review the Group had 17 (2021-24) staff and Directors.
The Company had 3 male Directors. Noting that there was a total of 5 with 3 at
any one stage. The subsidiary had 1 female and 3 male directors of which 1
male director was a director of both the Company and Dynamic. The subsidiary
had 5 female and 9 male staff excluding managers and directors.
Social, community and human rights issues
The Company and its subsidiary comply with all national and international laws
and regulations pertaining to human rights and social interaction.
Additionally, the South African subsidiary is ensuring, where possible, with
Broad Based Black Economic Empowerment legislation (“BBBEE”) to address
the social, community and economic issues within the South African context.
Review of the Group’s Business
Dynamic Intertrade (Pty) Ltd (“Dynamic”) is based in Cape Town, South
Africa and is involved in the importation, milling, blending and packaging of
products that include herbs, spices, seasonings and confectionary for the
domestic market. On 3 October 2023 a new shareholder, the Company and VSA NEX
Investments Limited (“VSA NEX”) entered into certain related party
arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA
NEX was a 100% subsidiary of VSA Capital. At the time the arrangements were
entered into Andrew Monk was a director of the Company, VSA Capital and VSA
NEX and is deemed to have significant influence over VSA Capital and VSA NEX.
Pursuant to the arrangements, VSA NEX subscribed for such number of new shares
in the capital of Dynamic resulting in VSA NEX holding 49% of the enlarged
issued share capital of Dynamic for a consideration of ZAR10,982; the Company
agreed to assign certain debts owing by Dynamic, amounting to £4.2 million
which had been fully impaired in prior years, to the Company and certain other
parties to VSA NEX in consideration for VSA NEX paying to the Company
£100,001 and agreeing to fund Dynamic so as to enable Dynamic to carry on its
business in the ordinary course until such time as the Company ceases to hold
any further shares in Dynamic. This assignment agreement resulted in VSA NEX
having a non-controlling interest in Dynamic and as such its share of the
current year profits amounted to £522, its share of accumulated losses prior
to acquisition amounted to £2,305,905. Additionally, the assignment of the
loans resulted in the Group incurring a finance charge on consolidation of
£3.1 million. VSA NEX has signed a subordination agreement in relation to the
loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should
VSA NEX choose to request the repayment of the loans due by Dynamic this will
severely impact the Company's ability to continue as a going concern. Under a
put and call option agreement the Company granted to VSA NEX the option to
acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of
Dynamic held by the Company, subject to the satisfaction of certain conditions
and subject to certain time restrictions for £1. At 31 October 2022, the
total amount due by Dynamic to VSA NEX amounted to £4,174,538.
During the year to 31 October 2022, Dynamic recorded an increase of 20.98% in
turnover to £1.698 million (2021: decrease of 20.8). In the subsidiary’s
functional currency of South African Rand, it recorded turnover of R34.8
million, an increase of R6.4 million from the prior year. The required product
mix changed and lower margin commodities saw general price increases which
could not be passed on to customers for our core spice lines of commodity
paprika and chilli-based products as well as our value-added blended products.
Gross profits for the Group increased by 10.68% to £420,358 (2021: decreased
by 10.3% to £379,804) and represents a 24.74% (2021: 27.05%) gross margin.
Group operating losses for the year increased £1,152,170 (2021: £515,660).
Total Group comprehensive loss amounted to £4,570,562 (2021: £584,633) after
incurring a finance charge consolidation, resulting from the assignment of the
loans to VSA NEX, of £3.1 million.
Basic and diluted loss per share from continuing operations for the year was
17.79p (2021:2.66p).
As at 31 October 2022 the Group held £925,814 (2021: £1,109,774) in cash and
cash equivalents.
The Company will now be actively looking at new opportunities to bolster its
current operating assets and will no doubt in the near future seek to raise
more funds and acquire more assets. As announced on 4 July 2023, the Company
invested £200,000 by way of a loan into Precious Link (UK) Limited, a wine
retailer, located within the Southeast of England. The Board believes that
Precious Link operates in a complementary sector and that the loan could
assist the Company in expanding its activities into the wider food and
beverage sector.
Financing And Capital Structure
During the year under review, the Company issued 3,823,627 new ordinary shares
to VSA Capital Limited in settlement of the outstanding fees of £152,945.08.
In addition, the Company issued 13,000,000 new ordinary shares in order to
raise £650,000. As part of this transaction the Company also converted
£581,951.52 owing to the convertible note holders into 7,373,141 new ordinary
shares.
As detailed above, the Company assigned certain debts, amounting to
£4,174,538, due by Dynamic to VSA NEX. In prior years these loan were
eliminated upon consolidation, however with the loans now being due to VSA
NEX, the consolidated values include these loans and represent an increase in
borrowings of £4,174,538.
Acquisition Strategy
The Company will be actively looking for new acquisitions to bolster its
operations and will as a result in all likelihood seek to raise more capital
by way of both debt and equity.
Key Performance Indicators
31 October 31 October
2022 2021
£ £
Turnover 1,698,839 1,404,234
Gross profit 420,368 379,804
Cash on hand and in bank 925,814 1,109,774
Underlying operating loss (1,152,170) (515,660)
Principal Risks and Uncertainties
The Directors consider the following risk factors to be of relevance to the
Group’s activities. It should be noted that the list is not exhaustive and
that other risk factors not presently known or currently deemed immaterial may
apply. The risk factors are summarised below:
i. Development Risk
The Group’s development will be, in part, dependent on the ability of the
Directors to continue to improve the current business, to identify suitable
investment opportunities and to implement the Group’s strategy. There is no
assurance that the Group will be successful in acquiring suitable investments.
ii. Sector Risk
The agriculture and agri-processing sectors are highly competitive markets and
many of the competitors will have greater financial and other resources than
the Company and as a result may be in a better position to compete for
opportunities.
The development of these enterprises involves significant uncertainties and
risks including unusual climatic conditions such as drought, improper use of
pesticides, availability of labour and seasonality of produce, any one of
which could result in security of supply, damage to, or destruction of crops,
environmental damage or pollution. Each of these could have a material adverse
impact on the business, operations and financial performance of the Group.
The market price of agricultural products and crops is volatile and affected
by numerous factors which are beyond the Group’s control. These include
international supply and demand, the level of consumer product demand,
international economic trends, currency exchange rate fluctuations, the level
of interest rates, the rate of inflation, global or regional political events,
as well as a range of other market forces. Sustained downward movements in
agricultural prices could render less economic, or un-economic, any
development or investing activities to be undertaken by the Group. Certain
agricultural projects involve high capital costs and associated risks. Unless
such projects enjoy long term returns, their profitability will be uncertain
resulting in potentially high investment risk.
iii. Political and Regulatory Risk
African countries experience varying degrees of political instability. There
can be no assurance that political stability will persist in those countries
where the Group may have operations going forward. In the event of political
instability or changes in government policies in those countries where the
Group may operate, the operations and financial condition of the Group could
be adversely affected.
iv. Environmental Risks and Hazards
All phases of the Group’s operations are subject to environmental regulation
in the areas in which it operates. Environmental legislation is evolving in a
manner that may require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, Directors and employees.
There is no assurance that existing or future environmental regulation will
not materially adversely affect the Group’s business, financial condition
and results of operations. Environmental hazards may exist on the properties
on which the Group holds interests that are unknown to the Group at present.
The Board manages this risk by working with environmental consultants and by
engaging with the relevant governmental departments and other concerned
stakeholders.
v. Internal Control and Financial Risk Management
The Board has overall responsibility for the Group’s systems of internal
control and for reviewing their effectiveness. The Group maintains systems
which are designed to provide reasonable but not absolute assurance against
material loss and to manage rather than eliminate risk.
The key features of the Group’s systems of internal control are as follows:
* * Management structure with clearly identified responsibilities;
* Production of timely and comprehensive historical management information
presented to the Board;
* Detailed budgeting and forecasting;
* Day to day hands on involvement of the Executive Director and Senior
Management; and
* Regular Board meetings and discussions with the Non-Executive Directors.
The Group’s activities expose it to several financial risks including cash
flow risk, liquidity risk and foreign currency risk.
vi. Environmental Policy
The Group is aware of the potential impact that its subsidiary and associate
companies may have on the environment. The Group ensures that it complies with
all local regulatory requirements and seeks to implement a best practice
approach to managing environmental aspects.
The subsidiary, Dynamic Intertrade operates a Food Safety System
Certification (“FSSC”) compliant facility in Cape Town. The FSSC provides
a framework for effectively managing the organisation's food safety
responsibilities and is fully recognized by the Global Food Safety Initiative
and is based on existing ISO Standards.
1. Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace
safety. In order to achieve this objective, the Group provides ongoing
training and support to employees and sets demanding standards for workplace
safety.
viii. Financing Risk
The development of the Group’s business may depend upon the Group’s
ability to obtain financing primarily through the raising of new equity
capital or debt. The Group’s ability to raise further funds may be affected
by the success of existing and acquired investments. The Group may not be
successful in procuring the requisite funds on terms which are acceptable to
it (or at all) and, if such funding is unavailable, the Group may be required
to reduce the scope of its investments or the anticipated expansion. Further,
Shareholders’ holdings of Ordinary Shares may be materially diluted if debt
financing is not available.
ix. Credit Risk
The Directors have reviewed the forecasts prepared by both the Company and
Dynamic and believe that Dynamic has adequate resources available to meet its
obligations to the Company and its lenders.
x. Liquidity Risk
The Directors have reviewed the working capital requirements of the Company
and Dynamic and believe that, following stress tests and variance analysis on
the forecasts, there is sufficient working capital to fund the business while
expanding turnover. The Directors further highlight the inherent uncertainties
involved in making the assessment that the entity is a going concern.
1. Capital Risk
The Group manages its capital resources to ensure that entities in the Group
will be able to continue as a going concern, while maximising shareholder
return.
The capital structure of the Group consists of equity attributable to
shareholders, comprising issued share capital and reserves. The availability
of new capital will depend on many factors including a positive operating
environment, positive stock market conditions, the Group’s track record, and
the experience of management. There are no externally imposed capital
requirements. The Directors are confident that adequate cash resources exist
or will be made available to finance operations and controls over expenditure
are carefully managed.
To manage the above risks, management are in regular contact with our
customers and are actively exploring new markets and customers in order to
diversify these risks.
Shareholders should refer to Note 2 and Note 29 of the accounts for a summary
of the Group’s use of financial instruments and its exposure to market risk,
credit risk, liquidity risk and cash flow risk.
Going Concern
After making enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future. Further details are given in Note 2 to the financial
statements. For this reason, the Directors continue to adopt the going concern
basis in preparing the financial statements.
During the year, the Group raised additional equity funding of £650,000
(2021: £Nil) in gross funding through share subscriptions to fund working
capital. In addition, the Company converted £581,951.52 of convertible loan
notes into new ordinary shares.
The Directors have prepared cash flow forecasts. These forecasts consider
operating cash flows and capital expenditure requirements for the Company and
Dynamic, available working capital and forecast expenditure, including
overheads and other costs. The Directors are of the opinion that the Group has
sufficient working capital and that no additional funding is required. As part
of the assignment of certain debts to VSA NEX, VSA NEX have agreed to fund
Dynamic so as to enable Dynamic to carry on its business in the ordinary
course until such time as the Company ceases to hold any further shares in
Dynamic. . VSA NEX has signed a subordination agreement in relation to the
loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should
VSA NEX choose to request the repayment of the loans due by Dynamic this will
severely impact the Company's ability to continue as a going concern. However,
post year end the Group did raise £699,930 in additional equity capital.
Based upon the Company’s forecast, it has sufficient cash for the
foreseeable future.
After careful consideration of the matters set out above, the Directors are of
the opinion that the Group will be able to undertake its planned activities
for the period to 31 July 2024 from production and from additional funds
raising and have prepared the consolidated financial statements on the going
concern basis. Nevertheless, due to the uncertainties inherent in meeting its
revenue predictions and obtaining additional fund raising there can be no
certainty in these respects. The financial statements do not include any
adjustments that would result if the Group was unable to continue as a going
concern. For this reason, the Directors believe that there is a material
uncertainty relating to the Group’s going concern.
It the intention of the Directors to look for acquisitions to make the Company
more sustainable.
Directors’ ReportFor the Year Ended 31 October 2022
The Directors present their Report and Financial Statements for the year ended
31 October 2022.
Principal Activities
The principal activity of the Group in the year was investing and trading in
the agriculture and ancillary sectors in Africa.
Emissions
The Group is not an intensive user of fossil fuels or electricity. During the
year Dynamic Intertrade consumed an average of 18,828kwh (2021: 8,418 kwh) per
month based on using actual charges levied by the Cape Town City Council. As
per the University of Cape Town’s assessment of the South African average of
1.015kg/kwh, the Group contributed 229,325kg (2012: 102,539kg) of carbon
emissions during the financial year. Due to the nature of the business, there
is limited scope to reduce emissions materially as all power is sourced from
the Cape Town City Council. There were no operations in the UK and as such no
emissions in the UK.
Investing Policy
The Company was established to invest in or acquire companies engaged in the
agriculture and ancillary sectors in Africa. The Directors intend to use their
collective experience to identify appropriate investment opportunities in the
production, transportation and trading of food and beverage products and
ancillary industries.
Directors
The following Directors have held office in the year:
Robert Scott - Non-Executive Director
Xin ‘Andy’ Sui (Appointed 3 October 2022) – Chief Executive Officer
Simon Grant-Rennick (Appointed 3 October 2022) – Non-Executive Director
Andrew Monk (Resigned 3 October 2022)
Matthew Bonner (Resigned 3 October 2022)
Xin ‘Andy’ Sui Chief Executive Officer
Andy Sui has over 11 years of investment banking experience. Andy started his
career at Barclays Capital under the trading desk. He eventually became Chief
Risk Officer (CRO) at Union Bank of India (UK) managing a balance sheet of
over $1 billion asset. Andy is also a Co-Founder of London Capital Homes Ltd
managing over 120 residential properties and focusing on UK northern cities
property development projects. Andy has a Masters Degree from the London
School of Economics (LSE) in Finance and a number of financial market
qualifications.
Robert Scott, Executive Director
Robert has principal responsibility as being the director responsible for the
overview of the management of Dynamic, the Group’s spice manufacturing
business. He has over 30 years’ financial and investment management
experience with the last twenty years specifically focussed on, executive
management, finance, corporate governance, acquisitions and investor
management. Rob is a Chartered Accountant (CA(SA)) by profession. He served as
Country Manager for Lonrho and has served as the General Manager of Uramin’s
South African operations. He held executive and senior positions with a number
of companies across a number of countries in Southern Africa. He has been
involved in such broad industries as mining, food manufacturing, hotels,
agriculture, shipping, consumer products and construction amongst many other
industries. Robert has been a Director of Dynamic for 12 years and is
responsible for setting the strategy for Dynamic with management and ensuring
implementation. He has an intimate understanding of its day-to-day operations.
He has served on a number of other public and private Company boards. Robert
began his career and qualified with Deloitte South Africa after obtaining his
Certificate of Theory of Accounting (CTA) from the University of Cape Town.
Rob’s broad understanding of finance, markets, acquisitions and corporate
governance will greatly assist the Group in its growth plans.
Simon Grant-Rennick, Non-Executive DirectorSimon graduated from Camborne
School of Mines (BSc Hons Mining Engineering, ACSM) and has been actively
involved in the mining and metal trading industry for over 40 years . He has
also been active in the agriculture space in Southern Africa, from the growing
of Macadamia nuts to Chillies and Paprika, amongst other crops and game
farming with his own game farm Simon has served as Chairman and executive
director of various private and public companies in Australia, America and UK
(LSE, ASX) over various global industries in agriculture, mining, property and
technology. Directors’ remuneration, shareholding and options
The Directors’ remuneration for the year ended 31 October 2022 is set out in
note 8 of the accounts. None of the Directors receive share options, long term
incentives, bonus or the like as part of their remuneration packages.
Remuneration for all Directors, both executive and non-executive, is £1,000
per month. There are contracts for the new company directors.
Shareholding
As at 31 October 2022, the Directors of the Company held the following shares:
2022 2022 2021 2021
Director Shareholding Percentage of the Company’s Ordinary Share Capital Shareholding Percentage of the Company’s Ordinary Share Capital
David Lenigas (resigned) - 0.00% 1,119,403 2.42%
Andrew Monk (resigned) - 0.00% 1,106,338 5.04%
Robert Scott 552,599 1.20% 213,231 0.97%
Matthew Bonner (resigned) - 0.00% 165,891 0.76%
Simon Grant-Rennick and Xin (Andy) Sui do not have any shares in the Company.
Share options and warrants
As at 31 October 2022 the Directors share options and warrants were:
2022
Warrants @ 5p
Director (expiring
23 March 2023)
Andrew Monk (resigned) 4,240,000
Robert Scott 820,000
Matthew Bonner (resigned) 840,000
5,900,000
2021
Warrants @ 5p
Director (expiring
23 March 2023)
Andrew Monk (resigned) 4,240,000
Robert Scott 820,000
Matthew Bonner (resigned) 840,000
5,900,000
2021 2021 2021 2021
Options at 20p Options @ 11p Warrants @ 20p Warrants @ 5p
Director (expiring (expiring (expiring (expiring
5 September 2022) 5 September 2022) 5 September 2022) 24 July 2022)
Andrew Monk (resigned) 91,952 100,000 69,033 622,233
Robert Scott 50,000 - 128,578
Matthew Bonner (resigned) 180,000 - - 128,578
321,952 100,000 69,033 879,389
The total warrants outstanding for the directors at 31 October 2022 were
5,900,00 (2021: 7,779,844). There are no outstanding options for the directors
as at 31 October 2022 (2021: 421,952). Refer to note 24 for more detail.
Dividends
No dividends will be distributed for the current year (2021 - nil).
Supplier Payment Policy
It is the Group’s payment policy to pay its suppliers in conformance with
industry norms. Trade payables are paid in a timely manner within contractual
terms, which is generally 30 to 45 days from the date an invoice is received.
Substantial Interests
The Group has been informed of the following shareholdings that represent 3%
or more of the 46,162,855 issued Ordinary Shares of the Company as at 31
October 2022:
Substantial Interests @ 31 October 2022
2022 2022 2021 2021
Shareholder Shareholding Percentage of the Company’s Ordinary Share Capital Shareholding Percentage of the Company’s Ordinary Share Capital
Golden Nice International Limited 13,000,000 28.16% - 0.00%
HSBC Global Custody Nominee (UK) Limited 5,315,474 11.51% 1,591,847 7.25%
Interactive Investor Services Nominees Limited 3,311,851 7.17% 2,943,459 13.40%
JIM Nominees Limited 1,597,718 3.46% 1,625,041 7.40%
Lynchwood Nominees Limited 8,773,542 19.01% 5,150,000 23.45%
Pershing Nominees Limited 1,526,172 3.31% 1,026,172 4.67%
Vidacos Nominees Limited 1,950,918 4.23% 1,701,856 7.75%
Vsa Capital Limited 1,754,779 3.80%
Barclays Direct Investing Nominees Limited - 0.00% 726,113 3.31%
CGWL Nominees Limited - 0.00% 1,256,338 5.72%
Hargreaves Lansdown (Nominees) Limited - 0.00% 1,121,892 5.11%
The Group has been informed of the following shareholdings that represent 3%
or more of the issued Ordinary Shares of the Company as at 30(th) of June
2023:
Substantial Interests as at 30 June 2023
Shareholder Shareholding Percentage of the Company’s Ordinary Share Capital
Golden Nice International Limited 19,000,000 29.28%
Lynchwood Nominees Limited 8,773,542 13.52%
Mr Xiangyu An 6,363,000 9.81%
Ms Fangling Chen 6,363,000 9.81%
HSBC Global Custody Nominee (Uk) Limited 5,315,474 8.20%
Interactive Investor Services Nominees Limited 3,204,468 4.94%
Vidacos Nominees Limited 1,958,918 3.02%
Auditors
RPG Crouch Chapman LLP (“RPG”), act as auditor to the Company. The
appointment of RPG follows the resignation of Jeffreys Henry LLP as auditors
to the Company. Section 519 of the Companies Act 2006 (the "Act") requires
Jeffreys Henry LLP to send a statement of the reasons for ceasing to hold
office. They have stated that in accordance with Section 519 of the Act, they
are ceasing to hold office on the grounds that the firm has taken the decision
not to register as an auditor eligible to undertake Public Interest Entity
(PIE) audits.
There are no circumstances connected with Jeffreys Henry LLP ceasing to hold
office as auditor which it considers should be brought to the attention of the
Company’s members or creditors. RPG has expressed its willingness to
continue in office and a resolution to reappoint them will be proposed at the
next Annual General Meeting.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Directors’ Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the United Kingdom. Under Company law
the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the Company and the Group and
of the profit or loss of the Company and the Group for that year. In preparing
these financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and accounting estimates that are reasonable and prudent;
* state whether the Group and Parent Company financial statements have been
prepared in accordance with IFRS as adopted by the United Kingdom, subject to
any material departures disclosed and explained in the Financial Statements;
and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
enough to show and explain the Group and Parent Company's transactions,
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the financial statements
comply with the Companies Act 2006.
The Directors are responsible for safeguarding the assets of the Group and
Parent Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group’s website.
Responsibility Statement
The Directors, whose names and functions are set out in this Directors’
Report under the sub-heading ‘Directors’ with registered office located at
48 Chancery Lane, London WC2A 1JF, accept responsibility for the information
contained in this annual report and accounts for the period ended 31 October
2022.
To the best of the knowledge of the Directors:
* the financial statements are prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of Everest Group Plc and the
undertakings included in the consolidation taken as a whole; and
* the management report includes a fair review of the development and
performance of the business and the position of Everest Group Plc and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
Everest Group Plc acknowledges that it is responsible for all information
drawn up and made public in this report and accounts for the period ended 31
October 2022.
Statement of Disclosure to Auditors
Each person who is a Director at the date of approval of this Annual Report
confirms that:
* so far as the Directors are aware, there is no relevant audit information of
which the Group and Parent Company’s auditors are unaware;
* each Director has taken all the steps he ought as Director, in order to make
himself aware of any relevant audit information and to establish that the
Group and Parent Company’s auditors are aware of that information, and
* each Director is aware of and concurs with the information included in the
Strategic Report.
Branches Outside the UK
The Group head office is in London and Dynamic Intertrade (Pty) Limited’s
office is located in South Africa.
Events after the Reporting Period
Further information on events after the reporting date is set out in note 33.
Strategic Report
In accordance with Section 414C (11) of the Companies Act 2006, the Group
chooses to report the review of the business, the outlook and the risk and
uncertainties faced by the Company in the Strategic Report.. The Directors’
assessment of the risks faced by the Group are set out in the Strategic Report
and in Note 30 to the financial statements.
Directors’ Remuneration ReportFor the Year Ended 31 October 2022Introduction
The information included in this report is not subject to audit other than
where specifically indicated.
Remuneration Committee
The remuneration committee consists of all the Board members. This committee's
primary function is to review the performance of Executive Directors and
senior employees and set their remuneration and other terms of employment.
Simon Grant- Rennick is the Chairman of the committee.
The committee is also responsible for administering any share option schemes
and for granting warrants to the existing directors. The table indicates share
options held by the current directors, Directors of the subsidiary and former
Directors of the Company.
2022 2022 2021 2021
Director Warrants Options Warrants Options
Andrew Monk ** 4,240,000 - 4,931,266 191,952
Robert Scott 820,000 - 820,000 50,000
Matthew Bonner ** 840,000 - 968,578 180,000
Totals 5,900,000 - 7,779,844 421,952
** Director resigned 3 October 2022.
The warrants outstanding as at 31 October 2022 may be exercised by the
directors on or before 23 March 2023 at 5p per share.
The Company has one Executive Director. Robert Scott became a Non-Executive
Director when Xin ‘Andy’ Sui was appointed as Chief Executive Officer.
The remuneration policy
It is the aim of the committee to remunerate Executive Directors competitively
and to reward performance. The remuneration committee determines the Company's
policy for the remuneration of executive directors, having regard to the UK
Corporate Governance Code 2018.
Service agreements and terms of appointment
The two new Directors have service contracts with the Company.
Directors' interests
The Directors' interests in the share capital of the Company are set out in
the Directors’ report.
Directors' emoluments
Salaries and Fees Group Group Company Company
2022 2021 2022 2021
£ £ £ £
David Lenigas ** - 9,000 - 9,000
Robert Scott 12,000 12,000 12,000 12,000
Andrew Monk ** 12,923 13,966 12,923 13,966
Matt Bonner ** 11,000 12,000 11,000 12,000
35,923 46,966 35,923 46,966
* Included in Andrew Monk’s remuneration is £1,923 (2021: £1,966) for
National Insurance.
** Director has resigned.
No pension contributions were made by the Company on behalf of its Directors
other than for Andrew Monk. Andrew Monk’s pension contribution for 2022 was
£330 (2021: £360).
At the year-end a total of £33,587 (2021: £62,126) was outstanding in
respect of Directors’ emoluments.
Approval by shareholders
At the next annual general meeting of the Company a resolution approving this
report is to be proposed as an ordinary resolution.
This report was approved by the Board on 26(th) July 2023.
Corporate Governance StatementFor The Year Ended 31 October 2022
The Directors recognise the importance of sound corporate governance while
taking into account the Group’s size and stage of development. We recognise
that we require the Company to:
* provide details of a recognised corporate governance code that the Board of
Directors has decided to apply
* explain how the Company complies with that code, and where it departs from
its chosen corporate governance code provide an explanation of the reasons for
doing so.
The corporate governance disclosures need to be reviewed annually, and the
Company is also required to state the date on which these disclosures were
last reviewed. This Corporate Governance Statement sets out how Everest Global
Plc seeks to comply with these requirements. The Directors acknowledge that
they have overall responsibility for the Company’s system of internal
control and for reviewing its effectiveness. Such a system is designed to
manage rather than eliminate the risk of failure to achieve business
objectives and even the most effective system can provide only reasonable, and
not absolute, assurance with respect to the preparation of financial
information and the safeguarding of assets. The close involvement of the
Directors in all decisions and actions undertaken by the Company is intended
to ensure that the risks to the Company are minimised.
This Corporate Governance Statement forms part of the Directors’ report for
the purposes of the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority.
OverviewAs Chief Executive Office it is my responsibility to ensure that the
Company has both sound corporate governance and an effective Board. The
Company is admitted to the Official List of the FCA and to trading on the main
market of the London Stock Exchange and its principal activity is as a holding
company for its subsidiary, Dynamic Intertrade (Pty) Limited, which in
involved in the importation, milling, blending and packaging of products that
include herbs, spices, seasonings and confectionary for the domestic market,
being South Africa where Dynamic is located.The Company’s Board has adopted
the principles of the Quoted Companies Alliance Corporate Governance Code 2018
Edition (QCA Code). A copy of the QCA Code is publicly available at
https://www.theqca.com/. The QCA Code identifies ten principles to be followed
in order for companies to deliver growth in long term shareholder value,
encompassing an efficient, effective and dynamic management framework
accompanied by communication to promote confidence and trust. This report
follows the structure of these guidelines and explains how we have applied the
guidance as well as disclosing any areas of non-compliance. We will provide
annual updates on our compliance with the QCA Code. The Board considers that
the Group complies with the QCA Code so far as it is practicable having regard
to the size, nature and current stage of development of the Company, and will
disclose any areas of non-compliance in the text below.The sections below set
out the ways in which the Group applies the ten principles of the QCA Code in
support of the Group’s medium to long-term success and provides reasons for
any departures from the QCA Code.QCA Principles1. Establish a strategy and
business model which promotes long-term value for shareholders
Everest Global Plc is a holding Company with an operating business on the
African continent. The Company currently has a subsidiary in the food sector
in South Africa. The Company is actively seeking allied investments is similar
sectors that will enhance long term shareholder value.
The Company may exploit a wide range of investment opportunities within the
target sectors as they arise and, to this end, the Company has complete
flexibility in selecting the specific investment and trading strategies that
it sees fit in order to achieve its investment objective. In this regard, the
Company may seek to gain Board representation and/or managerial control in its
underlying investments if it deems to be the best way of generating value for
Shareholders. Opportunities will be chosen through a careful selection process
which will appraise both the fundamental factors specific to the opportunity
as well as wider economic considerations. Typical factors that will be
considered are the strength of management, the quality of the asset base, the
investment’s scale and growth potential, the commodity price outlook, any
geopolitical concerns, the underlying financial position, future working
capital requirements as well as potential exit routes. Investments may be in
the form of buy-outs, controlling positions (whether initially or as a result
of additional or follow-on investments) or strategic minority investments.
There is no fixed limit on the number of projects or companies into which the
Company may invest, nor the proportion of the Company’s gross assets that
any investment may represent at any time. No material change will be made to
the Company’s investing policy without the approval of Shareholders.
Challenges to delivering strategy, long-term goals and capital appreciation
are uncertain in relation to organisational, operational, financial and
strategic risks, all of which are outlined in the Strategic Report, as well as
steps the Board takes to protect the Company by mitigating these risks and
secure a long-term future for the Company.
1. Seek to understand and meet shareholder needs and expectations
The Board recognises the importance of communication with its stakeholders and
is committed to establishing constructive relationships with investors and
potential investors in order to assist it in developing an understanding of
the views of its shareholders. The Company also maintains a dialogue with
shareholders through formal meetings such as the AGM, which provides an
opportunity to meet, listen and present to shareholders, and shareholders are
encouraged to attend in order to express their views on the Company’s
business activities and performance. Members who have queries regarding the
Company’s AGM can contact the Company’s Registrars, Neville Registrars or
the Company Secretary. The Board welcomes feedback from key stakeholders and
the Chief Executive Officer is the shareholder liaison, who meets shareholders
regularly, and informs other Directors of their views and suggestions.
Analysts provide the Board with updates on the Company’s business and how
strategy is being implemented, as well as to hear views and expectations from
shareholders. The views of the shareholders expressed during these meetings
are reported to the Board, ensuring that all members of the Board are fully
aware of the thoughts and opinions of shareholders. The Company maintains
effective contact with its principal shareholders and welcomes communications
from its private investors. Information on the Investor Relations section of
the Company’s website is kept updated and contains details of relevant
developments, Annual and Interim Results, Regulatory News Service
announcements, presentations and other key information.
1. Take into account wider stakeholder and social responsibilities and their
implications for long-term success
The Board recognises that the long-term success of the Company is reliant upon
the efforts of employees, regulators and many other stakeholders. The Board
has put in place a range of processes and systems to ensure that there is
close oversight and contact with its key resources and relationships. The
Company prepares and updates its strategic plan regularly together with a
detailed rolling budget and financial projections which consider a wide range
of key resources including staffing, consultants and utility providers. The
Board is kept updated on questions / issues raised by stakeholders and
incorporates information and feedback into future decision making. The Group
fully abides by the provisions of the 2015 Modern Slavery Act. In accordance
with its Code of Business Conduct and Ethics, the Company opposes the crime of
slavery in all of its forms, including child labour, servitude, forced or
compulsory labour and human trafficking.
All employees within the Group are valued members of the team, and the Board
seeks to implement provisions to retain and incentivise all its employees. The
Group offers equal opportunities regardless of race, gender, gender identity
or reassignment, age, disability, religion or sexual orientation. The
Directors are in constant contact with employees and seek to provide continual
opportunities in which issues can be raised allowing for the provision of
feedback. This feedback process helps to ensure that new issues and
opportunities that arise may be used to further the success of the Company.
The Company complies fully with all employment legislation where it has
operations.
1. Embedded effective risk management, considering both opportunities and
threats, throughout the organisation
The Board recognises the need for an effective and well-defined risk
management process and it oversees and regularly reviews the current risk
management and internal control mechanisms. The Board regularly reviews the
risks facing the Company as detailed in the Strategic Report and seeks to
exploit, avoid or mitigate those risks as appropriate. The Board is
responsible for the monitoring of financial performance against budget and
forecast and the formulation of the Company’s risk appetite including the
identification, assessment and monitoring of the Company’s principal risks.
Additionally, the Board reviews the mechanisms of internal control and risk
management it has implemented on an annual basis and assesses both for
effectiveness. On the wider aspects of internal control, relating to
operational and compliance controls and risk management, the Board, in setting
the control environment, identifies, reviews, and regularly reports on the key
areas of business risk facing the Group.
The Group Board and subsidiary Boards maintain close day to day involvement in
all of the Group’s activities which enables control to be achieved and
maintained. This includes the comprehensive review of both management and
technical reports, the monitoring of interest rates, environmental
considerations, government and fiscal policy issues, employment and
information technology requirements and cash control procedures. In this way,
the key risk areas can be monitored effectively, and specialist expertise
applied in a timely and productive manner.
The effectiveness of the Group’s system of internal financial controls, for
the year to 31 October 2022 and for the period to the date of approval of the
financial statements, has been reviewed by the Directors. Whilst they are
aware that although no system can provide for absolute assurance against
material misstatement or loss, they are satisfied that effective controls are
in place. The Group’s internal controls are primarily detailed oversight by
the Directors of the transactions of both the Company and the Subsidiary in
addition there are monthly management reports detailing actual versus budget
which are reviewed by the Directors.
1. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board recognises the QCA code recommendation for a balance between
Executive and Non-Executive Directors and the recommendation that there be at
least two Independent Non-Executives. The Board currently comprises of one
Executive Director, two Non-Executive Directors, of which, Simon
Grant-Rennick, is deemed independent. The Board will take this into account
when considering future appointments. It is the Company’s intention to
appoint a Chairman when its size warrants it. However, all Directors are
encouraged to use their judgement and to challenge matters, whether strategic
or operational, enabling the Board to discharge its duties and
responsibilities effectively. The Board maintains that the Board’s
composition will be frequently reviewed as the Company develops. The Company
is small and as a result has only two committees, an audit and risk committee
and a remuneration and nominations committee, all of which comprise the entire
Board as its members. The Company does not have a separate nominations
committee at this time. The Board does not deem it appropriate to have more
committees.
The Group is controlled and led by the Board of Directors with an established
schedule of matters reserved for their specific approval. The Board meets
regularly throughout the year and is responsible for the overall Group
strategy, acquisition and divestment policy, approval of major capital
expenditure and consideration of significant financial matters. It reviews the
strategic direction of the Company and its individual subsidiaries, their
annual budgets, their progress towards achievement of these budgets and their
capital expenditure programmes. The role of the CEO (Chairman once appointed)
is to supervise the Board and to ensure its effective control of the business,
and that of the Executive Director is to manage the Group on the Board’s
behalf. All Board members have access, at all times, to sufficient information
about the business, to enable them to fully discharge their duties. Also,
procedures exist covering the circumstances under which the Directors may need
to obtain independent professional advice. The Board meets regularly and is
responsible for formulating, reviewing and approving the Group’s strategy,
budgets, performance, major capital expenditure and corporate actions.
Detailed biographies of the Board members can be found on the website and
summaries can be found in the Directors’ Report.
Throughout the year, there have been seventeen Board meetings, with all
meetings being quorate. The Directors of the Company are committed to sound
governance of the business and each devotes enough time to ensure this
happens.
Directors’ conflict of interest
The Board is aware of the other commitments and interests of its Directors,
and changes to these commitments and interests are reported to and, where
appropriate, agreed with the rest of the Board.
1. Ensure that between them the Directors have the necessary up-to-date
experience, skills and capabilities
The Company believes that the current balance of skills in the Board as a
whole reflects a very broad range of personal, commercial and professional
skills, and notes the range of financial and managerial skills. The
Non-Executive Directors maintain ongoing communications with the Executive
between formal Board meetings. Biographical details of the Directors can be
found on the Company’s website and in the Directors’ Report of this
report.
Stephen Clow is the Company Secretary and helps the Company comply with all
applicable rules, regulations and obligations governing its operation. The
Company can also draw on the advice of its solicitors and corporate and
financial advisors Cairn Financial Advisers LLP (who were appointed post
period end). The Directors have access to all advisers, Company Secretary,
lawyers and auditors as and when required and are able to obtain advice from
other external bodies when necessary. If required, the Directors are entitled
to take independent legal advice and if the Board is informed in advance, the
cost of the advice will be reimbursed by the Company. Board composition is
always a factor for consideration in relation to succession planning. The
Board will seek to consider any Board imbalances for future nominations, with
areas considered including Board independence and gender balance. The Group
considers however that at this stage of its development and given the current
size of its Board, it is not necessary to establish a formal Nominations
Committee. Instead, the appointments to the Board are made by the Board as a
whole and this position is reviewed on a regular basis by the Board.
1. Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
The Directors consider that the Company and Board are not yet of a sufficient
size for a full Board evaluation to make commercial and practical sense. In
the frequent Board meetings/calls, the Directors can discuss any areas where
they feel a change would benefit the Company, and the Company Secretary
remains on hand to provide impartial advice. As the Company grows, it expects
to expand the Board and with the Board expansion, re-consider the need for
Board evaluation. The Board continues to conduct internal and external Board
evaluations which consider the balance of skills, experience, independence and
knowledge of the Company. The evaluation process, the Board refreshment, use
of third-party search companies and succession planning elements are
discussed. The Board evaluation of the Executives’ performance is carried
out on a regular basis. Given the level of activity and size of the Company,
no other evaluation is seen as appropriate. In view of the size of the Board,
the responsibility for proposing and considering candidates for appointment to
the Board as well as succession planning is retained by the Board. All
Directors submit themselves for re-election at the AGM at regular intervals.
1. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions regarding strategy and risk will
impact the corporate culture of the Company as a whole and that this will
impact the performance of the Company. The Board is aware that the tone and
culture set by the Board will greatly impact all aspects of the Company as a
whole and the way that employees behave. The corporate governance arrangements
that the Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders, and that shareholders have the
opportunity to express their views and expectations for the Company in a
manner that encourages open dialogue with the Board. Therefore, the importance
of sound ethical values and behaviours is crucial to the ability of the
Company to successfully achieve its corporate objectives. The Board places
great importance on their responsibility for producing accurate financial
statements. The Board also places great importance on accuracy and honesty and
seeks to ensure that this aspect of corporate life flows through all that the
Company does. A large part of the Company’s activities is centred upon an
open and respectful dialogue with employees, clients and other stakeholders.
Therefore, the importance of sound ethical values and behaviours is crucial to
the ability of the Company to successfully achieve its corporate objectives.
The Directors consider that the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and constructive
challenge. Whilst the Company has a small number of employees, the Board
maintains that as the Company grows it intends to maintain and develop strong
processes which promote ethical values and behaviours across all hierarchies.
The Board has adopted an anti-corruption and bribery policy (Bribery Policy).
The Bribery Policy applies to all Directors and employees of the Group, and
sets out their responsibilities in observing and upholding a zero-tolerance
position on bribery and corruption, as well as providing guidance to those
working for the Company on how to recognise and deal with bribery and
corruption issues and the potential consequences.
The Board complies with Rules relating to dealings in the Company’s
securities by the Directors and other such persons discharging managerial
responsibility. To this end, the Company has adopted a code for Directors’
dealings appropriate for a Company whose shares are admitted to trading on the
London Stock Exchange and takes all reasonable steps to ensure compliance by
the Directors and any relevant employees.
1. Maintain governance structures and processes that are fit for purpose and
support good decision-making by the Board
The Board is committed to, and ultimately responsible for, high standards of
corporate governance. The Board reviews the Company’s corporate governance
arrangements regularly and expect to evolve this over time, in line with the
Company’s growth.
The Board would delegate responsibilities to committees and individuals as it
sees fit. However due to the size of the Board and Company the Board considers
it appropriate that all committees, namely the audit and remuneration
committee are populated by the full Board with invitees as and when. The
auditors as an example are invited to the audit committee.
The Boards’ principal responsibility is to ensure that the Company and its
Board are acting in the best interests of shareholders.
The Executive Director is responsible for the general day-to-day running of
the business and developing corporate strategy.
The Executive Director has, through powers delegated by the Board, the
responsibility for leadership of the management team in the execution of the
Group’s strategies and policies and for the day-to-day management of the
business. He is responsible for the general day-to-day running of the business
and developing corporate strategy while the Non-Executive Directors are tasked
with constructively challenging the decisions of executive management and
satisfying themselves that the systems of business risk management and
internal financial controls are robust.
All Directors participate in the key areas of decision-making, including the
following matters:
* Strategy
* Budgets
* Performance
* Major Capital Expenditure
* Corporate Actions
The Board would normally delegate authority to a number of specific Committees
to assist in meeting its business objectives, and the Committees, comprising
of at least two independent Non-Executive Directors, would meet independently
of Board meetings.
However, the current Board structure does not permit this, and the Directors
will seek to take this into account when considering future appointments. As a
result, matters that would normally be referred to the Nominations Committee
are dealt with by the combined Remuneration and Nominations Committee.
The CEO and the Board continue to monitor and evolve the Company’s corporate
governance structures and processes, and maintain that these will evolve over
time, in line with the Company’s growth and development.
1. Communicate how the Company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Board is committed to maintaining effective communication and having
constructive dialogue with its stakeholders. The Company intends to have
ongoing relationships with both its private and institutional shareholders
(through meetings and presentations), and for them to have the opportunity to
discuss issues and provide feedback at meetings with the Company. In addition,
all shareholders are encouraged to attend the Company’s Annual General
Meeting. The Board already discloses the result of General Meetings by way of
announcement and discloses the proxy voting numbers to those attending the
meetings. In order to improve transparency, the Board has committed to
publishing proxy voting results on its website in the future.
The Company communicates with shareholders through the Annual Report and
Accounts, full-year and half-year results announcements and the Annual General
Meeting (AGM). Information on the Investor Relations section of the Group’s
website is kept updated and contains details of relevant developments,
regulatory announcements, financial reports and shareholder circulars. A range
of corporate information (including all Company announcements and
presentations) is also available to shareholders, investors and the public on
the Company’s corporate website.
Shareholders with a specific enquiry can contact us on the website contact
page. The Company uses electronic communications with shareholders in order to
maximise efficiency.
Corporate Governance ReportFor the Year Ended 31 October 2022Introduction
The Board continues to recognise that an effective governance framework is
fundamental in ensuring that the Group’s ability to deliver long term
shareholder value. The Group continues to comply with the principles of the
QCA Code .
Board composition
It is critical that the Board has the right composition, so it can provide the
best possible leadership for the Group and discharge its duties to
shareholders. This includes the right balance of skills and experience,
ensuring that all Directors have a good working knowledge of the Group’s
business and that the Board retains its independence and objectivity.
The Board currently comprises of two Non-Executive Directors, of which one,
being Simon Grant-Rennick, is considered to be independent, and one executive
director. Xin (Andy) Sui was appointed CEO on 3 October 2022. At that time it
was decided that due to the size of the Board and the business a Chairman
would not be appointed.
The articles of association require a third, but not greater than a third, of
the Directors to retire by rotation each year.
There are regular Board meetings each year and other meetings are held as
required to direct the overall Company strategy and operations. Board meetings
follow a formal agenda covering matters specifically reserved for decision by
the Board. These cover key areas of the Company's affairs including overall
strategy, acquisition policy, approval of budgets, major capital expenditure
and significant transactions and financing issues.
The Board has delegated certain responsibilities, within defined terms of
reference, to the audit committee and the remuneration committee as described
below. The appointment of new Directors is made by the Board as a whole.
During the year ended 31 October 2022, there were seventeen Board meetings,
two audit committee meeting and no remuneration committee meetings. All
meetings were fully attended and quorate.
The Board undertakes an annual evaluation of its own performance and that of
its committees and individual Directors, through discussions and one-to-one
reviews.
Board effectiveness
The Board is unanimous in its view that the Board appointments have a range of
experience, skills and strength of leadership. The Company’s procedures for
new Directors include undergoing a full induction process, and will continue
with ongoing training, tailored to their knowledge and previous experience. A
short biography of all Directors can be found in the Directors’ Report
herein.
Shareholder engagement
As CEO, I am responsible for the effective communication between shareholders
and the Company and for ensuring the Board understands the views of major
shareholders.
I look forward to listening to the views of our shareholders at the
Company’s next AGM. Directors regularly meet with a cross section of the
Company shareholders to ensure an ongoing dialogue is maintained and report to
the Board on feedback received from shareholders. I also make myself available
to meet any of our shareholders who wish to discuss matters regarding the
Company.
Audit committee
The audit committee is currently headed by Robert Scott, the Chairman of the
committee, and comprises Xin (Andy) Sui and Simon Grant-Rennick. The
committee's terms of reference are in accordance with the UK Corporate
Governance Code. The committee reviews the Company's financial and accounting
policies, interim and final results and annual report prior to their
submission to the Board, together with management reports on accounting
matters and internal control and risk management systems. It reviews the
auditor’s management letter and considers any financial or other matters
raised by both the auditors and employees.
During the year under review the Company announced the appointment of RPG
Crouch Chapman (“RPG”) Jones, as auditor to the Company. The appointment
of RPG will be subject to approval by shareholders at the next Annual General
Meeting of the Company. The appointment of RPG follows the resignation of
Jeffreys Henry LLP as auditors to the Company. Section 519 of the Companies
Act 2006 (the "Act") requires Jeffreys Henry LLP to send a statement of the
reasons for ceasing to hold office. They have stated that in accordance with
Section 519 of the Act, they are ceasing to hold office on the grounds that
the firm has taken the decision not to register as an auditor eligible to
undertake Public Interest Entity audits.
There are no circumstances connected with Jeffreys Henry LLP ceasing to hold
office as auditor which it considers should be brought to the attention of the
Company’s members or creditors.
While searching for a PIE registered auditor the committee approached many
auditors to perform the audit however by and large each one had capacity
constraints and could not accept the appointment. The Company further notes
that it announced on 15 December 2022 that Jones Hunt & Keelings ("JH&K") had
been appointed as auditor of the Company however their registration as a
Public Interest Entity auditor has not come through and as such, they were not
in a position to accept the audit.
Due to delays in appointing a PIE registered auditor, the Company could not
complete its statutory audit or publication of results or statutory filing at
Companies House on time. As such, trading in the Company’s ordinary shares
and its listing on the Official List of the Financial Conduct Authority was
suspended pending the publication of these audited results. The Company was
granted an extension of its filing obligations by Companies House.
The committee considers the independence of the external auditors and ensures
that, before any non-audit services are provided by the external auditors,
they will not impair the auditor’s objectivity and independence. During the
year, non-audit services totalled £Nil (2021: £Nil).
There is currently no internal audit function within the Group. The Directors
consider that this is appropriate of a Group of this size.
The committee has primary responsibility for making recommendations to the
Board in respect of the appointment, re-appointment and removal of the
external auditors.
Independent Auditor’s ReportTo the Members of Everest Global Plc
Qualified Opinion
We have audited the financial statements of Everest Global Plc (the
‘Company’) and its subsidiaries (the ‘Group’) for the year ended 31
October 2022 which comprise the Group and Company statements of comprehensive
income, statements of changes in equity, statements of financial position,
statements of cash flows and notes to the financial statements, and notes to
the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards
as adopted in the United Kingdom (IFRS).
In our opinion, except for the matter described in the “Basis for qualified
opinion” section of our report, the financial statements:
* give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 31 December 2022 and of the Group’s loss for the
year then ended;
* have been properly prepared in accordance with IFRS; and;
* have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for qualified opinion
The Group recorded closing inventory of £175,875. We were appointed after the
balance sheet date and were unable to arrange attendance at the year-end
counting of inventory. We were therefore unable to verify the closing value of
inventory and the associated impact on cost of sales.
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 are independent of
the group 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. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion.
Material uncertainty related to going concern
We draw attention to note 2a in the financial statements, which indicates
events or conditions identified that may cast significant doubt over the
Company’s ability to continue as a going concern. As stated in note 2a,
these events or conditions, along with other matters set forth in note 2a,
indicate that a material uncertainty exists that may cast significant doubt on
the Company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s ability to
continue to adopt the going concern basis of accounting included:
* Review budgets and cash flows projections up to 31 December 2024;
* Comparison of budget to past performance;
* Sensitise cash flows for variations in trading performance and working
capital requirements;
* Consider if there is any other information brought to light during the audit
that would impact on the going concern assessment;
* Review of working capital facilities and assess headroom available in the
projections; and
* Review of adequacy and completeness of disclosures in the financial
statements in respect of the going concern assumption.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular, we looked at
where the directors made subjective judgements, for example in respect of
significant accounting estimates. As in all of our audits, we also addressed
the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to issue an opinion on the financial statements as a whole, taking
into account the structure of the group and the parent company, the accounting
processes and controls, and the industry in which they operate.
We performed the audit of the Company and reviewed the work performed by the
component auditor in addition to performing our own tests on the Company’s
subsidiary.
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 we identified (whether or not due to fraud), 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.
The matter identified was 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. The use of the Going Concern
basis of accounting was assessed as a key audit matter and has already been
covered in the previous section of this report. The other key audit matters
identified are listed below.
Key audit matter How our work addressed this matter
Revenue recognitionRevenue recognition is a presumed risk of fraud under International Auditing Standards.Given the subjectivity of estimates involved, we consider the carrying value of property to be a key audit matter. Our work included: * Reviewing accounting policies adopted and ensuring these are in accordance with IFRS;
* Confirming revenue has been recognised in accordance with the accounting policies;
* Reconciling expected income for a sample of contracts to amounts reported in the accounts.
* Reviewing settlement of contract values after the period end; and
* Where no post year end settlement has occurred, for amounts agreed in the period consider the accuracy of past estimates.
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.
We consider gross assets to be the most significant determinant of the
Group’s financial performance used by the users of the financial statements.
We have based materiality on 1.5% of gross assets for each of the operating
components. Overall materiality for the Group was therefore set at £28,000.
For each component, the materiality set was lower than the overall group
materiality.
We agreed with the Audit Committee that we would report on all differences
in excess of 5% of materiality relating to the Group financial statements. We
also report to the Audit Committee on financial statement disclosure matters
identified when assessing the overall consistency and presentation of the
consolidated financial statements.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, 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. In connection with our audit of the financial
statements, 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 audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
* the information given in the strategic report and the directors’ report
for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
* the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors’ remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out
in the Directors’ Report, 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 and the parent company’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.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
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 our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not 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 aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
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:
* We obtained an understanding of the legal and regulatory frameworks within
which the Group operates focusing on those laws and regulations that have a
direct effect on the determination of material amounts and disclosures in the
financial statements.
* We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment
of the risks of irregularities, sample testing on the posting of journals and
reviewing accounting estimates for biases.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor's Report.
Other matters that we are required to address
We were appointed on 12 April 2023 and this is the first year of our
engagement as auditors for the Group.
We confirm that we are independent of the Group and have not provided any
prohibited non-audit services, as defined by the Ethical Standard issued by
the Financial Reporting Council.
Our audit report is consistent with our additional report to the Audit
Committee explaining the results of our audit.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the 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 company and the company’s
members, as a body, for our audit work, for this report, or for the opinions
we have formed.
Paul Randall FCA (Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered
Accountants
Registered Auditor
5(th) Floor, 14-16 Dowgate Hill
London
EC4R 2SU
26 July 2023
Statement of Comprehensive IncomeFor the Year Ended 31 October 2022
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
Notes 2022 2021 2022 2021
£ £ £ £
Revenue from contracts with customers 5 1,698,839 1,404,234 - -
Cost of sales (1,278,471) (1,024,430) - -
Gross profit 420,368 379,804 - -
Other income 6 1,264 - - -
Administrative expenses 9 (1,573,802) (895,464) 21,587 (345,735)
Impairments 10 - - (227,939) (161,091)
Operating loss (1,152,170) (515,660) (206,352) (506,826)
Finance costs 11 (3,418,549) (224,631) (135,775) (99,785)
Finance income 12 157 155,658 20,439 158,568
Loss for the year from continuing operations (4,570,562) (584,633) (321,688) (448,043)
Tax on loss on ordinary activities 13
Loss for the year from continuing operations (4,570,562) (584,633) (321,688) (448,043)
Other comprehensive income - - - -
Total comprehensive loss for the year from continuing operations (4,570,562) (584,633) (321,688) (448,043)
Loss attributable to ordinary shareholders (4,571,084) (584,633) (321,688) (448,043)
Loss attributable to non-controlling interest 522 - - -
Total comprehensive loss attributable to ordinary shareholders (4,570,562) (584,633) (321,688) (448,043)
Total comprehensive loss attributable to non-controlling interest - - - -
Basic and diluted earnings per share 14 (17.79p) (2.66p)
All amounts relate to continuing operations.
Group Statement of Changes in Equity For the Year Ended 31 October 2022 Group Share Share premium Share based payments reserve Equity portion of convertible loan notes Retained earnings Total Non-controlling interest Total
capital equity equity
£ £ £ £ £ £ £ £
Balance at 31 October 2020 439,322 2,571,247 83,377 - (3,831,894) (737,948) - (737,948)
Equity portion of Convertible Loan Notes issued during the year - - - 74,935 - 74,935 - 74,935
Loss for the year - - - - (584,633) (584,633) - (584,633)
Balance at 31 October 2021 439,322 2,571,247 83,377 74,935 (4,416,527) (1,247,646) - (1,247,646)
Shares issued 260,000 390,000 - - - 650,000 - 650,000
Shares issued on conversion of Convertible Loan Notes 147,463 221,194 - - - 368,657 - 368,657
Settlement of debt by the issue of shares 76,473 76,473 - - - 152,946 - 152,946
Extension of date of conversion of the Convertible Loan Notes - - - (32,396) - (32,396) - (32,396)
Warrants issued during the year - (218,799) 218,799 - - - - -
Loss attributable to non-controlling interest on disposal of 49% of subsidiary - - - - 2,305,905 2,305,905 (2,305,905) -
Loss for the year - - - - (4,571,084) (4,571,084) 522 (4,570,562)
Balance at 31 October 2022 923,258 3,040,115 302,176 42,539 (6,681,706) (2,373,618) (2,305,383) (4,679,001)
Share capital is the amount subscribed for shares at nominal value.
The share premium has arisen on the issue of shares at a premium to their
nominal value.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
Retained earnings represent the cumulative loss of the Group attributable to
equity shareholders.
Company Statement of Changes in EquityFor the Year Ended 31 OCTOBER 2021
Company Share Share premium Share based payments reserve Equity portion of convertible loan notes Retained earnings Total Non-controlling interest Total
capital equity equity
£ £ £ £ £ £ £ £
Balance at 31 October 2020 439,322 2,571,247 83,377 - (3,469,230) (375,284) - (375,284)
Equity portion of Convertible Loan Notes issued during the year - - - 74,935 - 74,935 - 74,935
Loss for the year - - - - (448,043) (448,043) - (448,043)
Balance at 31 October 2021 439,322 2,571,247 83,377 74,935 (3,917,273) (748,392) - (748,392)
Shares issued 260,000 390,000 - - - 650,000 - 650,000
Shares issued on conversion of Convertible Loan Notes 147,463 221,194 - - - 368,657 - 368,657
Settlement of debt by the issue of shares 76,473 76,473 - - - 152,946 - 152,946
Extension of date of conversion of the Convertible Loan Notes - - - (32,396) - (32,396) - (32,396)
Warrants issued during the year - (218,799) 218,799 - - - - -
Loss for the year - - - - (321,688) (321,688) - (321,688)
Balance at 31 October 2022 923,258 3,040,115 302,176 42,539 (4,238,961) 69,127 - 69,127
Statement of the Financial Position
As at 31 October 2022
Group Group Company Company
Notes 2022 2021 2022 2021
£ £ £ £
Assets
Non-current assets
Investment in subsidiaries 15 - - - -
Long term intercompany loans 16 - - - -
Property, plant and equipment 17 13,884 13,769 - -
Right of use asset 28 250,446 341,905 - -
Total non-current assets 264,330 355,674 - -
Current assets
Investment in associate 15 6,154 6,154 6,154 6,154
(held for sale)
Inventories 18 175,875 42,682 - -
Trade and other receivables 19 282,529 297,800 11,219 28,737
Cash and cash equivalents 20 925,814 1,109,774 922,613 1,108,476
Total current assets 1,390,372 1,456,410 939,986 1,143,367
Total assets 1,654,702 1,812,084 939,986 1,143,367
Equity and liabilities
Share capital 22 923,258 439,322 923,258 439,322
Share premium 22 3,040,115 2,571,247 3,040,115 2,571,247
Share-based payments reserve 23 302,176 83,377 302,176 83,377
Equity portion of convertible loan notes 25 42,539 74,935 42,539 74,935
Retained earnings (6,681,706) (4,416,527) (4,238,961) (3,917,273)
Total owners' equity (2,373,618) (1,247,646) 69,127 (748,392)
Non-controlling interest 24 (2,305,383) - - -
Total equity (4,679,001) (1,247,646) 69,127 (748,392)
Non-current liabilities
Non-current lease liabilities 28 166,070 269,215 - -
Borrowings 27 4,732,492 466,064 - -
Convertible loan notes 26 710,274 778,065 710,274 778,065
Total non-current liabilities 5,608,836 1,513,344 710,274 778,065
Current liabilities
Current lease liabilities 28 100,485 77,887 - -
Trade and other payables 21 624,382 1,468,499 160,585 1,113,694
Total current liabilities 724,867 1,546,386 160,585 1,113,694
Total equity and liabilities 1,654,702 1,812,084 939,986 1,143,367
Statement of Cash Flow For the year ended 31 October 2022 Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
Notes 2022 2021 2022 2021
£ £ £ £
Cash flows from operating activities
Operating loss (1,152,170) (515,660) (206,352) (506,826)
Adjustments for:
Add: Depreciation 17,28 84,960 78,109 - -
Add: Impairment of investment 10 - - 227,939 161,091
Add: (Profit)/loss on disposal of property, plant and equipment 17 - 139 - -
Add: unrealised foreign exchange loss (41,293) (65,301) - -
Finance costs paid 11 (124,889) (93,378) - -
Interest received 12 157 155,658 - 149,359
Profit on disposal of loans 1 - 1 -
receivable
Changes in working capital
(Increase)/Decrease in inventories (133,193) 137,401 - -
Decrease/(Increase) in receivables 15,271 (8,363) 17,518 (16,574)
(Decrease) / Increase in payables (538,038) 262,565 (647,030) 212,409
Net cash flow from operating activities (1,889,194) (48,830) (607,924) (541)
Investing activities
Acquisition of property, plant and equipment 17 (5,541) (8,767) - -
Foreign exchange movements 17 (7) 433 - -
Increase in Intercompany Loans Receivable - - (227,939) (80,611)
Loans Receivable repaid 18 - 944,004 - 944,004
Net cash flow from investing activities (5,548) 935,670 (227,939) 863,393
Cash flows from financing activities:
Net proceeds from issue of shares 23 650,000 - 650,000 -
Convertible loan notes issued 26 - 220,000 - 220,000
Increase / (decrease) in borrowings 29 1,134,015 32,973 - -
Foreign exchange movements 29 - (8,043) - -
Capital repayments of lease liability (73,233) (67,071) - -
Net cash flow from financing activities 1,710,782 177,859 650,000 220,000
Net cash flow for the period 29 (183,960) 1,064,699 (185,863) 1,082,852
Opening cash and cash equivalents 1,109,774 45,251 1,108,476 25,624
Foreign exchange movements 29 - (176) - -
Closing cash and cash equivalents 21/29 925,814 1,109,774 922,613 1,108,476
Notes to Group Annual Financial StatementsFor the Year Ended 31 October 20221.
General Information
Everest Global plc is a company incorporated in the United Kingdom. Details of
the registered office, the officers and advisers to the Company are presented
on the Directors and Advisers page at the beginning of the annual report. The
Company is admitted to the Official List (by way of a Standard Listing under
Chapter 14 of the Listing Rules) and to trading on the London Stock
Exchange’s Main Market for listed securities. The information within these
financial statements and accompanying notes has been prepared for the year
ended 31 October 2022 with comparatives for the year ended 31 October 2021.
1. Basis of Preparation and Significant Accounting Policies
The consolidated financial statements of Everest Global Plc have been prepared
in accordance with International Financial Reporting Standards as adopted by
the United Kingdom (IFRS as adopted by the UK), IFRS Interpretations Committee
and the Companies Act 2006 applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared under the historical
cost convention in the Group’s reporting currency of Pound Sterling.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgment or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 3. The preparation of financial
statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies
and reported amounts of assets, liabilities, income and expenses. Although
these estimates are based on management’s experience and knowledge of
current events and actions, actual results may ultimately differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the year in which the
estimates are revised if the revision affects only that year or in the year of
the revision and future year if the revision affects both current and future
year.
a. Going Concern
These consolidated financial statements are prepared on the going concern
basis. The going concern basis assumes that the Group will continue in
operation for the foreseeable future and will be able to realise its assets
and discharge its liabilities and commitments in the normal course of
business. The Group has incurred significant operating losses and negative
cash flows from operations as the Group continued to expand its operations
during the year under review.
There remains an active and liquid market for the Group’s shares.
As at 31 October 2022 the Group held £925,814 (2021: £1,109,774) in cash and
cash equivalents.
During the year, the Group raised additional equity funding of £650,000
(2021: £Nil) in gross funding through share subscriptions to fund working
capital. In addition, the Company converted £581,951.52 of convertible loan
notes into new ordinary shares. As part of the assignment of certain debts to
VSA NEX, VSA NEX have agreed to fund Dynamic so as to enable Dynamic to carry
on its business in the ordinary course until such time as the Company ceases
to hold any further shares in Dynamic. VSA NEX has signed a subordination
agreement in relation to the loans due by Dynamic to VSA NEX with an expiry
date of 31 October 2023. Should VSA NEX choose to request the repayment of the
loans due by Dynamic this will severely impact the Company's ability to
continue as a going concern.
VSA NEX have agreed to subordinate the loans due to themselves. The
subordination agreement expires on 31 October 2023. In the event that VSA NEX
do not extend their subordination agreement and ask for repayment of their
loans, this would cast significant doubt on the Group’s ability to continue
as a going concern.
The Directors have prepared cash flow forecasts. These forecasts consider
operating cash flows and capital expenditure requirements for the Company and
Dynamic, available working capital and forecast expenditure, including
overheads and other costs. The Directors are of the opinion that the Group has
sufficient working capital and that no additional funding is required.
However, post year end the Group did raise £700,000 in additional capital.
Based upon the Company’s forecast, it has sufficient cash for the
foreseeable future.
After careful consideration of the matters set out above, the Directors are of
the opinion that the Group will be able to undertake its planned activities
for the period to 31 July 2024 from production and from additional fund
raising and have prepared the consolidated financial statements on the going
concern basis. Nevertheless, due to the uncertainties inherent in meeting its
revenue predictions and obtaining additional fund raising there can be no
certainty in these respects. The financial statements do not include any
adjustments that would result if the Group was unable to continue as a going
concern. For this reason, the Directors believe that there is a material
uncertainty relating to the Group’s going concern.
b. New and Amended Standards Adopted by the Company
The Group has implemented IFRS as adopted by the UK. At the point of
transition from IFRS as adopted by the EU the underlying requirements were
identical. The following standards, amendments and interpretations are new and
effective for the year ended 31 October 2022 and have been adopted. None of
the IFRS standards below had a material impact on the financial statements.
Reference Title Summary Application date of standard (Periods commencing on or after)
IFRS 16 Leases COVID-19 related rent concessions Extension of the practical expedient 1 April 2021
IFRS 4, Interest rate benchmark reform – Phase 2. 1 January 2021
IAS 7 and The Phase 2 amendments address issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one. The Phase 2 amendments provide additional temporary reliefs from applying specific IAS 39 and IFRS 9 hedge accounting requirements to hedging relationships directly affected by IBOR reform.
IFRS 16
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 November
2022 and have not been early adopted:
Reference Title Summary Application date of standard (Periods commencing on or after)
IFRS 3 Business Combinations Updating a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements 1 January 2022
for business combinations.
IAS 16 Property, Plant and Equipment Prohibits a Company from deducting from the cost of property, plant and equipment amounts received from selling items produced 1 January 2022
while the Company is preparing the asset for its intended use. Instead, a Company will recognise such sales proceeds and related
cost in profit or loss.
IAS 37 Provisions, contingent liabilities and contingent assets Specifies which costs a Company includes when assessing whether a contract will be loss-making. 1 January 2022
IAS 1 Presentation of Financial Statements Clarifies that liabilities are classified as either current or noncurrent, depending on the rights that exist at the end of the 1 January 2023
reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (for
example, the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the
‘settlement’ of a liability.
IAS 1 and IAS 8 ‘Presentation of Financial Statements’ and ‘Accounting policies, changes in accounting estimates and errors’ Amendments to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes 1 January 2023
in accounting estimates and changes in accounting policies.
IAS 12 Deferred Taxation These amendments require companies to recognise deferred tax on transactions that, on initial recognition give rise to equal 1 January 2023
amounts of taxable and deductible temporary differences.
IFRS17 Insurance contracts This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts. IFRS 1 January 2023
17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with
discretionary participation features.
The Directors anticipate that the adoption of these standards and the
interpretations in future periods will not have a material impact on the
financial statements of the Group.
c. Basis of Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 31 October each year. Control is achieved where the Company has the power
to govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated statement of comprehensive income from the
effective date of acquisition or up to the effective date of disposal, as
appropriate. Where necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with those used
by other members of the Group. All intra-Group transactions, balances, income
and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from the
Group’s equity therein. Those interests of non-controlling shareholders that
are present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value
or at the non-controlling interests’ proportionate share of the fair value
of the acquiree’s identifiable net assets. The choice of measurement is made
on an acquisition-by-acquisition basis. Other non-controlling interests are
initially measured at fair value. Subsequent to acquisition, the carrying
amount of non-controlling interests is the amount of those interests at
initial recognition plus the non-controlling interests’ share of subsequent
changes in equity.
Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests. Total
comprehensive income of the subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Changes in the Group’s ownership interests in subsidiaries that do not
result in the Group losing control over the subsidiaries are accounted for as
equity transactions. The carrying amounts of the Group’s interests and the
non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries.
When the Group loses control of a subsidiary, the profit or loss on disposal
is calculated as the difference between (i) the aggregate of the fair value of
the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests. Where certain
assets of the subsidiary are measured at revalued amounts or fair values and
the related cumulative gain or loss has been recognised in other comprehensive
income and accumulated in equity, the amounts previously recognised in other
comprehensive income and accumulated in equity are accounted for as if the
Company had directly disposed of the related assets (i.e. reclassified to
profit or loss or transferred directly to retained earnings). The fair value
of any investment retained in the former subsidiary at the date when control
is lost is regarded as the fair value on initial recognition for subsequent
accounting under IFRS 9 “Financial Instruments: Recognition and
Measurement” or, when applicable, the cost on initial recognition of an
investment in an associate or a jointly controlled entity.
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. The
consideration transferred in a business combination is measured at fair value,
which is calculated as the sum of the acquisition-date fair values of the
assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised
in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired, and the liabilities
assumed are recognised at their fair value at the acquisition date, except
that:
* deferred tax assets or liabilities and liabilities or assets related to
employee benefit arrangements are recognised and measured in accordance with
IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
* liabilities or equity instruments related to share-based payment
transactions of the acquiree or the replacement of an acquiree’s share-based
payment transactions with share-based payment transactions of the Group are
measured in accordance with IFRS 2 Share-based Payment at the acquisition
date; and
* assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that standard.
Goodwill
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree, and
the fair value of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after
assessment, the net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in the acquiree
(if any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
Joint Ventures and Associates
A joint venture is a contractual agreement under which two or more parties
conduct an economic activity and unanimous approval is required for the
financial and operating policies. Associates are all entities over which the
Group has significant influence but not control, generally accompanying a
shareholding between 20% and 50% of the voting rights. Joint ventures and
associates are accounted for using the equity method, which involves
recognition in the consolidated income statement of EG’s share of the net
result of the joint ventures and associates for the year. Accounting policies
of joint ventures and associates have been changed where necessary to ensure
consistency with the policies adopted by the Group. EG’s interest in a joint
venture or associate is carried in the statement of financial position at its
share in the net assets of the joint venture or associate together with
goodwill paid on acquisition, less any impairment loss. When the share in the
losses exceeds the carrying amount of an equity-accounted Company (including
any other receivables forming part of the net investment in the Company), the
carrying amount is written down to nil and recognition of further losses is
discontinued, unless we have incurred legal or constructive obligations
relating to the Company in question.
d. Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less subsequent
accumulated depreciation and accumulated impairment losses, if any. Historical
cost includes expenditure that is directly attributable to the acquisition of
the items. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably. All other repairs and
maintenance are charged to profit or loss during the financial year in which
they are incurred. Depreciation on property, plant and equipment is calculated
using the straight-line method to write off their cost over their estimated
useful lives at the following annual rates:
Leasehold improvements 33.3%
Furniture, fixtures and equipment 17%
Plant and machinery 20% and 33.3%
Useful lives and depreciation method are reviewed and adjusted if appropriate,
at the end of each reporting year.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the relevant asset and is recognised
in profit or loss in the year in which the asset is derecognised.
e. Leased assets
The Group leases various offices and equipment. Rental contracts are typically
made for fixed periods of 3 years but may have extension options for an
additional 2 years. Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions. The lease agreements
do not impose any covenants, but leased assets may not be used as security for
borrowing purposes.
The right-of use asset is depreciated over the shorter of the asset's useful
life and the lease term as per the table below:
1(st) year of the lease 15%
2(nd) year of the lease 17%
3(rd) year of the lease 20%
4(th) year of the lease 22%
5(th) year of the lease 26%
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
* fixed payments (including in-substance fixed payments), less any lease
incentives receivable.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be determined, the lessee's incremental borrowing
rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
* the amount of the initial measurement of lease liability
* any lease payments made at or before the commencement date less any lease
incentives received any initial direct costs, and
* restoration costs.
Payments associated with short term leases and leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise moving equipment rented on a day to day basis.
f. Investments in Subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate,
provisions for impairment.
g. Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is
determined using specific identification and in the case of work in progress
and finished goods, comprises the cost of purchase, cost of conversion and
other costs incurred in bringing the inventories to their present location and
condition. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and applicable
selling expenses.
When the inventories are sold, the carrying amount of those inventories is
recognised as an expense in the year in which the related revenue is
recognised. The amount of any write-down of inventories to net realisable
value and all losses of inventories are recognised as an expense in the year
in which the write-down or loss occurs. The amount of any reversal of any
write-down of inventories is recognised as an expense in the year in which the
reversal occurs.
h. Impairment
Non-derivative financial assets
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at
amortised cost and debt securities at Fair Value through Other Comprehensive
Income (“FVOCI”) are credit-impaired. A financial asset is
“credit-impaired” when one or more events that have a detrimental impact
on the estimated future cash flows of the financial assets have occurred.
Evidence that a financial asset is credit-impaired includes the following
observable data:
• significant financial difficulty of the borrower or issuer;
• a breach of contract such as a default or being more than 90
days past due;
• the restructuring of a loan or advance by the Group on terms
that the Group would not consider otherwise;
• it is probable that the borrower will enter bankruptcy or
other financial reorganisation; or
• the disappearance of an active market for a security because
of financial difficulties.
A 12 month approach is followed in determining the Expected Credit Loss
(“ECL”).
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss
and is recognised in Other Comprehensive Income (“OCI”).
Write-off
The gross carrying amount of a financial asset is written off when the Group
has no reasonable expectations of recovering a financial asset in its entirety
or a portion thereof. For corporate customers, the Group individually makes an
assessment with respect to the timing and amount of write-off based on whether
there is a reasonable expectation of recovery from the amount written off.
However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures of
recovery of the amounts due.
i. Financial Instruments
The Group classifies non-derivative financial assets into the following
categories: loans and receivables and Fair Value through Profit and Loss
(“FVTPL”) and Fair Value through OCI (“FVTOCI”) financial assets.
The Group classifies non-derivative financial liabilities into the following
category: other financial liabilities.
i. Non-derivative financial assets and financial liabilities –
Recognition and derecognition
The Group initially recognises loans and receivables on the date when they are
originated. All other financial assets and financial liabilities are initially
recognised on the trade date when the entity becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred, or it
neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control over the transferred asset. Any interest
in such derecognised financial assets that is created or retained by the Group
is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire. Gains or losses on derecognition of
financial liabilities are recognised in profit or loss as a finance charge.
Financial assets and financial liabilities are offset, and the net amount
presented in the statement of financial position when, and only when, the
Group currently has a legally enforceable right to offset the amounts and
intends either to settle them on a net basis or to realise the asset and
settle the liability simultaneously.
ii. Loans and receivables- Measurement
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are
measured at amortised cost using the effective interest method.
iii. Assets at FVOCI - Measurement
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are
measured at fair value and changes therein, other than impairment losses, are
recognised in OCI and accumulated in the revaluation reserve.
When these assets are derecognised, the gain or loss accumulated in equity is
reclassified to profit or loss.
iv. Non-derivative financial liabilities – Measurement
Other non-derivative financial liabilities are initially measured at fair
value less any directly attributable transaction costs. Subsequent to initial
recognition, these liabilities are measured at amortised cost using the
effective interest method.
v. Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting purposes is
governed by IAS 32 and IFRS 9. These standards require the loan notes to be
separated into two components:
• a derivative liability; and
• a debt host liability.
This is because the loan notes are convertible into an unknown number of
shares, therefore failing the ‘fixed-for-fixed’ criterion under IAS 32.
This requires the ‘underlying option component’ of the loan note to be
valued first (as an embedded derivative), with the residual of the face value
being allocated to the debt host liability (refer financial liabilities policy
above).
Compound financial instruments issued by the Group comprise convertible notes
denominated in British pounds that can be converted to ordinary shares at the
option of the holder, when the number of shares to be issued is fixed and does
not vary with changes in fair value.
The liability component of compound financial instruments is initially
recognised at the fair value of a similar liability that does not have an
equity conversion option. The equity component is initially recognised at the
difference between the fair value of the compound financial instrument as a
whole and the fair value of the liability component. Any directly attributable
transaction costs are allocated to the liability and equity components in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound
financial instrument is measured at amortised cost using the effective
interest method. The equity component of a compound financial instrument is
not remeasured.
Interest related to the financial liability is recognised in profit or loss.
On conversion at maturity, the financial liability is reclassified to equity
and no gain or loss is recognised.
The Group’s financial liabilities include amounts due to a director, trade
payables and accrued liabilities. These financial liabilities are classified
as FVTPL are stated at fair value with any gains or losses arising on
re-measurement recognised in profit or loss. Other financial liabilities,
including borrowings are initially measured at fair value, net of transaction
costs.
j. Borrowings
Borrowings are presented as current liabilities unless the Group has an
unconditional right to defer settlement for at least 12 months after the
reporting period, in which case they are presented as non-current liabilities.
Borrowings are initially recorded at fair value, net of transaction costs and
subsequently carried for at amortised costs using the effective interest
method. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the year of the
borrowings using the effective interest method. Borrowings which are due to be
settled within twelve months after the reporting period are included in
current borrowings in the statement of financial position even though the
original term was for a period longer than twelve months and an agreement to
refinance, or to reschedule payments, on a long-term basis is completed after
the reporting period and before the financial statements are authorised for
issue.
k. Revenue Recognition
Performance obligations and service recognition policies
Revenue is measured based on the consideration specified in a contract with a
customer. The Group recognises revenue when it transfers control over of goods
or services to a customer.
The following table provides information about the nature and timing of the
satisfaction of performance obligations in contracts with customers, including
significant payment terms, and the related revenue recognition policies.
Type of product/ service Nature and timing of satisfaction of performance obligations, including significant payment terms Revenue recognition under IFRS 15
Sale of goods Customers obtain control of the goods when the goods have been delivered to them and have been accepted at their premises or the agreed point of delivery. Invoices are Revenue is recognised when the goods are delivered and have been accepted by the customers at their premises or the agreed point of delivery.
generated at that point in time net of rebates and discounts. Invoices are generally payable within 30 days. No settlement discounts are provided for. The sale of the
goods are not subject to a return policy.
Interest revenue Interest income is recognised in the income statement for all interest-bearing instruments (whether classified as held-to-maturity, FVTOCI, FVTPL, derivatives or other Once a financial asset has been written down to its estimated recoverable amount, interest income is thereafter recognised based on the effective interest rate that was used to discount the future cash flows for the purpose of measuring the recoverable amount.
assets) on an accrual basis using the effective interest method based on the actual purchase price including direct transaction costs.
l. Cost of Sales
Cost of sales consists of all costs of purchase and other directly incurred
costs.
Cost of purchase comprises the purchase price, import duties and other taxes
(other than those subsequently recoverable by the Group from the taxing
authorities), if any, and transport, handling and other costs directly
attributable to the acquisition of goods. Trade discounts, rebates and other
similar items are deducted in determining the costs of purchase. Cost of
conversion primarily consists of hiring charges of subcontractors incurred
during conversion.
m. Finance Income and Finance Costs
The Group’s finance income and finance costs include:
• interest income;
• interest expense; and
• dividend income.
Interest income and expense is recognised using the effective interest method.
Dividend income is recognised in profit or loss on the date on which the
Group’s right to receive payment is established.
The “effective interest rate” is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial
instrument to:
• the gross carrying amount of the financial asset; or
• the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit-impaired) or to the amortised cost of the liability. However, for
financial assets that have become credit-impaired subsequent to initial
recognition, interest income is calculated by applying the effective interest
rate to the amortised cost of the financial asset, if the asset is no-longer
credit-impaired, then the calculation of interest income reverts to the gross
basis.
n. Taxation
Income tax expense represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the statement of comprehensive
income because it excludes items of income and expense that are taxable or
deductible in other years, and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of
the reporting year.
Deferred tax is recognised on temporary differences between the carrying
amount of assets and liabilities in the consolidated financial statements and
the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary
differences.
Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not recognised if the
temporary differences arise from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
associated with investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such
investments are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the benefits of
the temporary differences and they are expected to reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting year and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year in which the liability is settled or the asset
realised. The measurement of deferred tax assets and liabilities reflects the
tax consequences that would follow from the manner in which the Group expects,
at the end of the reporting year, to recover or settle the carrying amount of
its assets and liabilities.
Current or deferred tax for the year is recognised in profit or loss, except
when it relates to items that are recognised in other comprehensive income or
directly in equity, in which case the current and deferred tax is also
recognised in other comprehensive income or directly in equity respectively.
Where current tax or deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the accounting for the
business combination.
o. Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits
with banks and other financial institutions, and short-term, highly liquid
investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value, having been within
three months of maturity at acquisition. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are also
included as a component of cash and cash equivalents for the purpose of the
consolidated statement of cash flows.
p. Provisions and Contingencies
Provisions are recognised when the Group has a present obligation as a result
of a past event, and it is probable that the Group will be required to settle
that obligation. Provisions are measured at the Directors’ best estimate of
the expenditure required to settle the obligation at the statement of
financial position date and are discounted to present value where the effect
is material. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of
obligations may be small.
When the effect of discounting is material, the amount recognised for a
provision is the present value at the reporting date of the future
expenditures expected to be required to settle the obligation. The increase in
the discounted present value amount arising from the passage of time is
included in finance costs in the statement of comprehensive income.
Contingent liabilities are not recognised in the financial statements. They
are disclosed unless the possibility of an outflow of resources embodying
economic benefits is remote. A contingent asset is not recognised in the
financial statements but disclosed when an inflow of economic benefits is
probable.
q. Share Capital
Ordinary shares are classified as equity. Proceeds from issuance of ordinary
shares are classified as equity. Incremental costs directly attributable to
the issuance of new ordinary shares are deducted against share capital and
share premium.
r. Foreign Currencies
In preparing the financial statements of each individual group entity,
transactions in currencies other than the functional currency of that entity
(foreign currencies) are recorded in the respective functional currency (i.e.
the currency of the primary economic environment in which the entity operates)
at the rates of exchanges prevailing on the dates of the transactions. At the
end of the reporting year, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the fair value was
determined. Non-monetary items that are measured in terms of historical costs
in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on
translation of monetary items, are recognised in profit or loss in the year in
which they arise. Exchange differences arising on the retranslation of
non-monetary items carried at fair value are included in profit or loss for
the year except for differences arising on the retranslation of non-monetary
items in respect of which gains, and losses are recognised directly in other
comprehensive income, in which cases, the exchange differences are also
recognised directly in other comprehensive income.
For the purposes of presenting the consolidated financial statements, assets
and liabilities of the Group’s foreign operations are translated from South
African Rand into the presentation currency of the Group of Pound Sterling at
the rate of exchange prevailing at the end of the reporting year, and their
income and expenses are translated at the average exchange rates for the year,
unless exchange rates fluctuate significantly during that year, in which case,
the exchange rates prevailing at the dates of transactions are used. Exchange
differences arising, if any, are recognised in other comprehensive income and
accumulated in equity.
The principal exchange rates during the year are set out in the table below:
Rate compared to £ Year End Rate 2022 Year End Rate 2021
South African Rand 21.04 20.83
US Dollar 1.15 1.37
s. Employee Benefits
Salaries, annual bonuses, paid annual leave and the cost to the Group of
non-monetary benefits are accrued in the year in which employees of the Group
render the associated services. Where payment or settlement is deferred and
the effect would be material, these amounts are stated at their present
values.
t. Segmental Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Director who makes strategic decisions.
1. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
In the application of the Group’s accounting policies, which are described
above, management is required to make estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and assumptions that had a significant risk of
causing a material adjustment to the carrying amount of assets and liabilities
are discussed below.
a. Inventory Valuation
Inventory is valued at the lower of cost and net realisable value. Net
realisable value of inventories is the estimated selling price in the ordinary
course of business, less estimated costs of completion and selling expenses.
These estimates are based on the current market conditions and the historical
experience of selling products of a similar nature. It could change
significantly as a result of competitors’ actions in response to severe
industry cycles. The Group reviews its inventories in order to identify
slow-moving merchandise and uses markdowns to clear merchandise. Inventory
value is reduced when the decision to markdown below cost is made.
b. Impairment of long term Inter-Company Receivables
The Group’s management reviews long-term inter-Company receivables on a
regular basis to determine if any provision for impairment is necessary. The
policy for the impairment of long-term inter-Company receivables of the Group
is based on, where appropriate, the evaluation of collectability, the trading
performance of the relevant subsidiary and on management’s judgement. A
considerable amount of judgement is required in assessing the ultimate
realisation of these outstanding amounts, including the current and estimated
future trading performance of the relevant subsidiary. If the financial
conditions of inter-Company debtors of the Group were to deteriorate,
resulting in an impairment of their ability to make payments, a provision for
impairment may be required.
c. Impairment of Receivables
The Group’s management reviews receivables on a regular basis to determine
if any provision for impairment is necessary. The policy for the impairment of
receivables of the Group is based on, where appropriate, the evaluation of
collectability and ageing analysis of the receivables and on management’s
judgement. A considerable amount of judgement is required in assessing the
ultimate realisation of these outstanding amounts, including the current
creditworthiness and the past collection history of each debtor. If the
financial conditions of debtors of the Group were to deteriorate, resulting in
an impairment of their ability to make payments, provision for impairment may
be required.
d Incremental borrowing cost of Right of Use Assets and Lease
Liabilities
In assessing the Group’s right of use assets and lease liabilities, the
Group has to assess its incremental borrowing costs. As an approximation of
the Group’s incremental long term borrowing costs, the Group estimated the
borrowing costs associated with similar long term, asset based financing
arrangements. The Group based the implied incremental borrowing costs on the
South African prime lending rate applicable at the date of commencement of the
agreement and added an appropriate lending premium that would be typically
applied by lenders. At the year end the estimated incremental borrowing costs
used amounted to 8.5% (2021: 8.5%).
e. Income Taxes
The Group is subject to income taxes in South Africa and the UK. The South
African income taxes are administered by South African accountants.
Significant judgement is required in determining the provision for income
taxes and the timing of payment of the related tax. There are certain
transactions and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax based on estimates of whether additional taxes
will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the
income tax provision in the year in which such determination is made.
f. Share Based Payments
The fair value of share-based payments recognised in the income statement is
measured by use of the Black Scholes model, which considers conditions
attached to the vesting and exercise of the equity instruments. The expected
life used in the model is adjusted; based on management’s best estimate, for
the effects of non-transferability, exercise restrictions and behavioural
considerations. The share price volatility percentage factor used in the
calculation is based on management’s best estimate of future share price
behaviour based on past experience, future expectations and benchmarked
against peer companies in the industry.
g. Equity portion of Convertible Loan Notes
The Group provides for the equity portion of convertible loan notes by
applying an estimated interest rate in determining the present values of the
convertible loan notes and the interest payable thereon over the life of the
convertible loan notes.
h. Depreciation and Amortisation
The Group depreciates property, plant and equipment and amortises the
leasehold buildings and land use rights on a straight-line method over the
estimated useful lives. The estimated useful lives reflect the Directors’
estimate of the years that the Group intends to derive future economic
benefits from the use of the Group’s property, plant and equipment.
1. Segmental Reporting
In the opinion of the Directors, the Group has one class of business, being
the trading of agricultural materials. The Group’s primary reporting format
is determined by the geographical segment according to the location of its
establishments. There is currently only one geographic reporting segment,
which is South Africa. All revenues and costs are derived from the single
segment.
1. Revenue
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Major product/service lines
Sale of agricultural materials 1,698,839 1,404,234 - -
Primary geographic markets
South Africa 1,698,839 1,404,234 - -
Timing of revenue recognition
Products transferred at a point in time 1,698,839 1,404,234 - -
1. Other Income
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Settlement discounts received (1) - (1) -
Profit on disposal of loan to subsidiary 1 1
Profit on disposal of property plant and equipment 1,264 - - -
1,264 - - -
1. Personnel Expenses and Staff Numbers (Including Directors)
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
Number 31 October 31 October 31 October 31 October
2022 2021 2022 2021
The average number of employees in the year were:
Directors 3 4 3 4
Management 3 2 - -
Accounts and administration 2 2 - -
Sales 1 3 - -
Manufacturing/warehouse 8 13 - -
Total 17 24 3 4
£ £ £ £
The aggregate payroll costs for these
persons were: 232,273 278,499 59,032 68,681
Average ratio of executive pay verses average employee pay 0.85 1.01
Average Directors 11,974 11,742
Average of all employees 13,663 11,604
Average of non-director employees 14,025 11,577
1. Directors’ Remuneration
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
Salaries and Fees 2022 2021 2022 2021
£ £ £ £
David Lenigas (resigned) - 9,000 - 9,000
Robert Scott 12,000 12,000 12,000 12,000
Andrew Monk (resigned)* 12,923 13,966 12,923 13,966
Matt Bonner (resigned) 11,000 12,000 11,000 12,000
35,923 46,966 35,923 46,966
* Included in Andrew Monk’s remuneration is £1,923 for National Insurance.
No pension contributions were made by the Company on behalf of its directors
other than for Andrew Monk. Included in Andrew Monk’s remuneration are
pension contributions amounting to £330 (2021: £360).
At the year-end a total of £33,587 (2021: £62,126) was outstanding in
respect of directors’ emoluments.
1. Expenses - Analysis by Nature
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Auditor's remuneration for audit services: Parent 45,000 27,256 45,000 27,256
Auditor's remuneration for audit related services - 1,500 - 1,500
Under-provision of prior year audit fee 11,530 - 11,530 -
Auditor's remuneration for audit services: Subsidiary 17,308 3,536 - -
Brokership fees 15,000 39,724 15,000 39,724
Legal and professional fees (269,522) 36,089 (269,522) 34,261
Registrar fees 3,034 5,138 3,034 5,138
Depreciation on property, plant and equipment (Note 17) 5,419 10,590 - -
Depreciation on IFRS 16 Right of Use Asset (Note 28) 79,541 67,519 - -
(Gain) /loss on exchange 1,061,452 145,055 305 50,725
Personnel expenses (Note 7) 232,273 278,499 59,032 68,681
Other administrative expenses 372,767 280,558 114,034 118,450
Subtotal 1,573,802 895,464 (21,587) 345,735
Admission and regulatory expenses - - - -
Total administrative expenses 1,573,802 895,464 (21,587) 345,735
1. Impairments
During the financial year, the recoverability of the investment was evaluated
and in management’s estimation, it was considered necessary to impair the
goodwill on consolidation, the investment in the subsidiary and the
intercompany loans receivable.
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Impairment of goodwill - - - -
Impairment of investment in subsidiary - - - -
Impairment of inter-company loans receivable - - 227,939 161,091
- - 227,939 161,091
1. Finance Costs
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Interest paid on borrowings 124,889 93,378 - -
Interest accrued on convertible loan notes 135,775 99,785 135,775 99,785
Lease liability 25,995 31,468 - -
Finance charges associated with disposal of intercompany loan to VSA NEX Investments Limited (note 1) 3,131,890 - -
3,418,549 224,631 135,775 99,785
Finance costs represent interest and charges in respect of the discounting of
invoices, the interest accrual for the Convertible Loan Notes issued and the
interest charged on capitalised right-of use lease liability.
Note 1: These finance charges relate to the disposal of an inter-company loan
to VSA NEX. Refer to Note 30 for more information.
1. Finance Income
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Interest earned on loan receivable - 149,359 - 149,359
Interest earned on intercompany loan receivable - - 20,439 9,209
Interest earned on favourable bank balances 157 6,299 - -
157 155,658 20,439 158,568
1. Taxation
The charge for the year can be reconciled to the profit before taxation per
the consolidated statement of comprehensive income as follows:
Taxation
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Tax Charge - - - -
Factors affecting the tax charge
Loss on ordinary activities before taxation (584,633) (584,633) (389,553) (389,553)
Loss on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 19,00% (2019: 19,00%) (111,080) (111,080) (74,015) (74,015)
Tax effect of expenses not deductible for tax 10,569 1,934 - -
Overseas tax rate differences from the UK rate (26%) 85,096 16,296 - -
Tax effect of utilisation of tax losses 15,415 92,850 74,015 74,015
The Company has excess management expenses of £1,043,509 (2021: £1,043,509)
available for carry forward against future trading profits. The deferred tax
asset in these tax losses at 19.0% of £193,369 (2021: 19.0% of £193,369) has
not been recognised due to the uncertainty of recovery.
1. Loss Per Share
Loss per share data is based on the Group result for the year and the weighted
average number of shares in issue.
Basic loss per share is calculated by dividing the loss attributable to equity
shareholders by the weighted average number of ordinary shares in issue during
the year:
Year ended Year ended
31 October 31 October
2022 2021
£ £
Loss after tax (4,570,562) (584,633)
Weighted average number of ordinary shares in issue 25,690,228 21,966,087
Basic and diluted loss per share (pence) (17.79p) (2.66p)
Basic and diluted loss per share are the same, since where a loss is incurred
the effect of outstanding share options and warrants is considered
anti-dilutive and is ignored for the purpose of the loss per share
calculation. As at 31 October 2022 there were 46,162,855 (2021: 21,966,087)
shares in issue, 38,363,171 (2021: 14,988,511) outstanding share warrants and
38,363,171 (2021: 897,809) outstanding options, both are potentially dilutive.
1. Investments
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Investment in subsidiary
- Cost of investment - - 297,915 297,915
- Impairment of investment - - (297,915) (297,915)
Carrying value - - - -
15.1. Investment in Associate
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Investment in Dynamic Intertrade Agri (Pty) Ltd (held for sale) 6,154 6,154 90,046 90,046
Equity accounted profit for the period - - - -
Impairment of investment - - - -
Carrying value 6,154 6,154 90,046 90,046
Management have committed to selling its investment in the associate, Dynamic
Intertrade Agri (Pty) Ltd. The asset is available for immediate sale to a
willing buyer. A buyer for the asset has been identified and a preliminary
price of £6,154 has been discussed. It was anticipated that the sale will be
concluded within the last financial year ending 31 October 2021, however
COVID-19 delayed the process. The investment is still being held for sale to
the existing buyer. Accordingly, for the current year the investment is
reflected under current assets as held for sale. As part of the process of
selling the group’s investment in the associate a fair value exercise was
undertaken. Management considered the financial performance of the Company,
the price that a willing buyer was prepared to pay for the investment as well
as the prevailing market conditions. Based on the above, the directors are of
the opinion that the fair value of the Company is £6,154.
As at 31 October 2022, the Company directly and indirectly held the following
subsidiary and associate:
Name of Company Principal activities Country of incorporation and place of business Proportion (%) of equity interest 2022 Proportion (%) of equity interest 2021
Dynamic Intertrade (Pty) Limited Trading in Agricultural Products South Africa 51% 100%
Dynamic Intertrade Agri (Pty) Limited Agricultural commodity trading and distribution South Africa 46.8%Designated as Held for Sale 46.8%Designated as Held for Sale
15.2. Investment in Subsidiary
Information about the Group’s shareholding in Dynamic Intertrade (Pty) Ltd
at the end of the reporting period is as follows:
2022 2021
Dynamic Intertrade (Pty) Ltd
Percentage Held
As at 1 November 100% 100%
Percentage disposed of on subsidiary issuing shares
on 3 October 2022 49% 0%
Percentage held at 31 October 51% 100%
The Group acquired 100% of Dynamic Intertrade (Pty) Ltd in 2012 from Corestar
Holdings Ltd. On 3 October 2022, Dynamic Intertrade issued shares to a VSA NEX
Investments Limited such that Everest Global retains 51% interest in Dynamic
Intertrade and VSA NEX Investments Limited now holds 49% of Dynamic
Intertrade.
2022 2021
Dynamic Intertrade (Pty) Ltd
Proportion of ownership interests and voting rights held by non-controlling interests at 31 October 51% 100%
2022 2021
£ £
Profit / (Loss) allocated to non-controlling interests for the year 522 -
Non-controlling Interests (2,305,383) -
The reconciliation of non-controlling interests in note 25 includes an
analysis of the profit or loss allocated to non-controlling interests of each
subsidiary where the non-controlling interest is material. There are no
significant restrictions on the ability of the Group to access or use assets
and settle liabilities.
During the year, the Group disposed of a 49 per cent of its interest in
Dynamic Intertrade (Pty) Ltd. There were no proceeds on disposal as described
above. An amount of £2.903 million (being the proportion share of the
carrying amount of net assets in Dynamic Intertrade (Pty) Ltd has been
transferred to non-controlling interests (see note 51). There was no gain or
loss on disposal of Dynamic Intertrade (Pty) Ltd.
1. Long Term InterCompany Loans
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Loan to Dynamic Intertrade (Pty) Ltd
- Amount receivable - - - 1,002,918
- Impairment of loan - - - (1,002,918)
Carrying value - - - -
The loan is unsecured and bears interest at rates linked to LIBOR +2% p.a. As
indicated in Note 10, both the capital and the interest elements of the above
loan have been fully impaired during the year ended 31 October 2020. The
additional loan provided to the subsidiary was impaired during the current
year. During the year, the Company assigned certain debts to VSA NEX. VSA NEX
has signed a subordination agreement in relation to the loans due by Dynamic
to VSA NEX with an expiry date of 31 October 2023.Refer to Note 31 for more
information.
1. Property, Plant and Equipment
Group Leasehold Improve-ments Furniture, fixtures and equipment Plant and machinery Total
£ £ £ £
Cost
As at 31 October 2020 19,571 4,317 268,512 292,400
Additions - - 8,767 8,767
Disposals - - (298) (298)
Exchange difference 175 39 2,401 2,615
As at 31 October 2021 19,746 4,356 279,382 303,484
Additions - - 5,541 5,541
Disposals - - - -
Exchange difference (194) (56) (29,986) (30,236)
As at 31 October 2022 19,552 4,300 254,937 278,789
Accumulated depreciation
As at 31 October 2020 19,085 3,674 254,343 277,102
Charge for the year 477 363 9,750 10,590
Released on disposal - - (159) (159)
Exchange difference 158 23 2,001 2,182
As at 31 October 2021 19,720 4,060 265,935 289,715
Charge for the year 24 173 5,222 5,419
Released on disposal - - - -
Exchange difference (194) (40) (29,995) (30,229)
As at 31 October 2022 19,550 4,193 241,162 264,905
Net book value
As at 31 October 2021 26 296 13,447 13,769
As at 31 October 2022 2 107 13,775 13,884
The holding Company held no tangible fixed assets at 31 October 2022 and 2021.
1. Inventories
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Raw materials 175,875 40,116 - -
Finished goods - 2,566 - -
Carrying value 175,875 42,682 - -
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a
funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko pay the
suppliers directly and this is then repaid by Dynamic to purchase stock from
suppliers where deposits are required. This funding is secured by a lien over
the inventory and a cession of the debtors
1. Trade and other receivables
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Financial instruments
Trade receivables 256,824 257,332 - -
Deposits 14,360 2,028 - -
Other receivables 11,219 28,737 11,219 28,737
Non-financial instruments
Prepayments 126 9,703 - -
Carrying value 282,529 297,800 11,219 28,737
Current 282,529 297,800 11,219 28,737
Non-Current - - - -
282,529 297,800 11,219 28,737
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a
funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko pay the
suppliers directly and this is then repaid by Dynamic to purchase stock from
suppliers where deposits are required. This funding is secured by a lien over
the inventory and a cession of the debtors
The receivables are considered to be held within a held-to-collect business
model consistent with the Group’s continuing recognition of the receivables.
As at 31 October 2022 the Group does not have any contract assets nor any
contract liabilities arising out of contracts with customers relating to the
Group’s right to receive consideration for agricultural products sold but
not billed. Group Trade receivables represent amounts receivable on the sale
of agricultural products and are included after provisions for doubtful debts.
Credit and market risks, and impairment losses
The Group did not impair any of its trade receivables as at 31 October 2022,
as all trade receivables generated during the financial year, and outstanding
at 31 October 2022 are considered to be recoverable during the ordinary course
of business.
Information about the Group’s exposure to credit and market risks and
impairment losses for trade receivables is included in Note 30.
The Directors consider that the carrying amount of trade receivables and other
receivables approximates their fair value.
1. Cash and Cash Equivalents
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Cash on hand 925,814 1,109,774 922,613 1,108,476
925,814 1,109,774 922,613 1,108,476
1. Trade and Other Payables
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Trade payables 582,180 1,274,105 160,585 981,000
Other payables - 153,515 - 132,694
Related party payables 42,202 40,879 - -
624,382 1,468,499 160,585 1,113,694
Trade payables represent amounts due for the purchase of agriculture materials
and administrative expenses. The Directors consider that the carrying amount
of trade payables approximates to their fair value.
Included in Other payables is a loan from G Roach: The loan bears interest at
the South African prime overdraft rate. The interest will be calculated and
paid when the loan is repaid. The loan is repayable as decided upon from time
to time.
The related party financial liabilities comprise:
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
M Bonner 25,357 24,562 - -
R Scott 16,845 16,317 - -
42,202 40,879 - -
Terms:
M Bonner: The loan bears interest at the South African prime overdraft rate.
The interest is calculated and paid quarterly. The loan is repayable as
decided upon from time to time.
R Scott: The loan bears interest at the South African prime overdraft rate.
The interest is calculated and paid quarterly. The loan is repayable as
decided upon from time to time.
1. Share Capital and Share Premium
Allotted, called up and fully paid share capital and share premium Number of shares Nominal value Share premium Total
£ £ £
Balance at 31 October 2020 21,966,087 439,322 2,571,247 3,010,569
Share issue - - - -
Balance at 31 October 2021 21,966,087 439,322 2,571,247 3,010,569
Share issue on settlement of debt 29 April 2022 3,823,627 76,473 76,473 152,946
Share issue on conversion of convertible loan notes 3 October 2022 7,373,140 147,463 221,194 368,657
Share issue 3 October 2022 13,000,000 260,000 390,000 650,000
Warrants issued during the year - - -218,799 -218,799
Balance at 31 October 2022 46,162,854 923,258 3,040,115 3,963,373
Share capital is the amount subscribed for shares at nominal value.
During the 2019 financial year the Company consolidated all existing and
issued shares and share options on the basis of 20 existing shares/options for
1 new share/option.
Retained losses represent the cumulative loss of the Group attributable to
equity shareholders.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
During the prior year the Company placed these shares and as the number of
placing shares comprised more than 20% of the Company’s issued share
capital, and although the placing shares has been allotted, admission of the
placing shares required publication of a Prospectus within a twelve-month
period.
1. Share Based Payments Reserve
The Company does not have a share-ownership compensation scheme for senior
executives of the Company. However senior executives may be granted options to
purchase Ordinary Shares in the Company.
Warrants
During the 2019 financial year the Company consolidated all existing and
issued shares and share options on the basis of 20 existing shares/options for
1 new share/option.
There are 38,363,171 warrants to subscribe for ordinary shares at 31 October
2022 (2021: 14,988,511).
Expired /
As at 1 exercised / As at 31
Date of Grant November vested / October Exercise Exercise/vesting date
2021 issued 2022 price From To
Warrants
09/05/2012 138,066 (138,066) - 20p 09/05/2012 05/09/2022
27/11/2018 8,050,000 8,050,000 20p 27/11/2018 30/09/2024
24/07/2020 4,233,556 (4,233,556) - 5p 24/07/2020 27/07/2022
23/03/2021 2,566,889 2,566,889 5p 23/03/2021 23/03/2024
03/10/2022 - 13,000,000 13,000,000 5p 03/10/2022 31/12/2024
03/10/2022 - 7,373,141 7,373,141 5p 03/10/2022 31/12/2024
03/10/2022 - 7,373,141 7,373,141 10p 03/10/2022 31/12/2024
14,988,511 23,374,660 38,363,171
Warrants were attached to the convertible loan notes issued on 23 March 2021,
with an exercise price of 5.0p per ordinary share and expire 12 months from
allotment of the Subscription Shares. These warrants will only be issued once
the convertible loan notes are converted into shares.
Warrants were attached to the subscription shares on 24 July 2020 a 1-for-1
basis, with an exercise price of 5.0p per ordinary share and expire 12 months
from allotment of the subscription shares. Further warrants were attached to
any new ordinary shares that are issued as a result of conversion of any loan
notes, on a 1-for-1 basis on the same terms as the subscription warrants.
Warrants were attached to the Subscription Shares on 14 September 2018 a
1-for-1 basis, with an exercise price of 20.0p per ordinary share and expire
12 months from allotment of the subscription shares. Further warrants were
attached to any new ordinary shares that are issued as a result of conversion
of any loan notes, on a 1-for-1 basis on the same terms as the subscription
warrants. A maximum of 20,450,222 new ordinary shares could potentially be
issued in the event that all subscription warrants and loan note warrants are
exercised.
An Investor has subscribed for 13,000,000 new ordinary shares in the Company
at a price of 5p per share, representing a capital injection of £650,000
(gross and net) into the Company. The new ordinary shares will be accompanied
by 1 for 1 warrants at 5p in the Company’s ordinary shares, equating to
13,000,000 warrants exercisable at any time before 31 December 2024.
The Company has agreed with 35% of the convertible loan note holders to
accelerate the conversion of 5,971,000 CLNs and accrued but unpaid interest
into 7,373,141 New Ordinary Shares in the Company at a conversion price of 5p.
As such, the conversion of 5,971,000 CLNs plus accrued but unpaid interest
resulted in the issue of 7,373,141 5p Warrants and 7,373,141 10p Warrants, all
of which will expire on 31 December 2024.
The estimated fair value of the options in issue was calculated by applying
the Black-Scholes option pricing model.
The assumptions used in the calculation were as follows:
Share price at date of grant £0.0040
Exercise price £0.05 to £0.10
Expected volatility 49%
Expected dividend 0%
Contractual life 2.25 years
Risk free rate (based on 2 year UK Bond market) 4.00%
Estimated fair value of each option £0.002845 – £0.009710
Options
At 31 October 2022 there were nil share options issued to the directors and
past directors of the Company. During the current year nil share options were
granted (2021: 897,809).
The movement on the share-based payment charge for the year was £nil (2021 -
£nil) in respect of the issued options. The details of warrants and options
are as follows:
As at 1 Exercised / As at 31
Date of Grant November vested / October Exercise Exercise/vesting date
2021 (forfeited) 2022 Price From To
Options
09/05/2012 897,809 (897,809) - 20p 09/05/2012 05/09/2022
897,809 (897,809) -
The remuneration committee’s aim is to remunerate executive directors
competitively and to reward performance. The remuneration committee determines
the Company's policy for the remuneration of executive directors, having
regard to the UK Corporate Governance Code and its provisions on directors'
remuneration.
The number of options outstanding to the Directors that served in the year, as
at 31 October 2022 were as follows:
2022 2021
Director Options Options
Andrew Monk - 191,952
Robert Scott - 50,000
Matthew Bonner - 180,000
Total - 421,952
The estimated fair value of the options in issue was calculated by applying
the Black-Scholes option pricing model.
The assumptions used in the calculation were as follows:
Share price at date of grant £0.0050
Exercise price £0.0075 to £0.01
Expected volatility 65%
Expected dividend 0%
Contractual life 1.1 years
Risk free rate 1.63%
Estimated fair value of each option £0.003764 – £0.0378
The share options outstanding at the year-end had a weighted average remaining
contractual life of nil years (2021: 0.5 years).
1. Non-controlling interests
Summarised financial information in respect of each of the Group’s
subsidiaries that has material non-controlling interests is set out below. The
summarised financial information below represents amounts before intragroup
eliminations.
2022 2021
Dynamic Intertrade (Pty) Ltd £ £
Current assets 450,386 313,043
Non-current assets 264,330 355,674
Current liabilities (522,082) (391,816)
Non-current liabilities (4,898,562) (4,066,056)
(4,705,928) (3,789,155)
Equity attributable to the owners of the company (4,705,928) (3,789,155)
Non-controlling interests - -
(4,705,928) (3,789,155)
2022 2021
Dynamic Intertrade (Pty) Ltd £ £
Revenue 1,698,839 1,404,234
Expenses 2,615,612 1,585,303
Loss for the year (916,773) (181,069)
Loss attributable to owners of the Company (916,773) (181,069)
Loss attributable to the non-controlling interests - -
Loss for the year (916,773) (181,069)
Other comprehensive income attributable to owners of the Company - -
Other comprehensive income attributable to the non-controlling interests - -
Other comprehensive income for the year - -
Total comprehensive income attributable to owners of the Company (916,773) (181,069)
Total comprehensive income attributable to the non-controlling interests - -
Total comprehensive income for the year (916,773) (181,069)
Net cash outflows from operating activities (786,055) (98,062)
Net cash outflows from investing activities (4,415) (8,876)
Net cash inflows from financing activites 792,436 87,906
Net cash inflow / (outflow) 1,966 (19,032)
Further information about non-controlling interests is given in note 15.
2022 2021
£ £
Non-controlling interest
Balance at 1 November - -
Equity attributable to non-controlling interest (2,305,905)
on disposal of 49% of Dynamic
Share of profits for the year 522 -
Balance at 31 October (2,305,383) -
During the period under review the Company and VSA NEX Investments Limited
(“VSA NEX”) entered into certain related party arrangements in relation to
Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA NEX was a 100% subsidiary of
VSA Capital. At the time the arrangements were entered into Andrew Monk was a
director of the Company, VSA Capital and VSA NEX and is deemed to have
significant influence over VSA Capital and VSA NEX. Pursuant to the
arrangements, VSA NEX subscribed for such number of new shares in the capital
of Dynamic resulting in VSA NEX holding 49% of the enlarged issued share
capital of Dynamic for a consideration of ZAR10,982; the Company agreed to
assign certain debts owing by Dynamic, amounting to £4.2 million which had
been fully impaired in prior years, to the Company and certain other parties
to VSA NEX in consideration for VSA NEX paying to the Company £100,001 and
agreeing to fund Dynamic so as to enable Dynamic to carry on its business in
the ordinary course until such time as the Company ceases to hold any further
shares in Dynamic. This assignment agreement resulted in VSA NEX having a
non-controlling interest in Dynamic and as such its share of the current year
profits amounted to £522, its share of accumulated losses prior to
acquisition amounted to £2,305,905. Additionally, the assignment of the loans
resulted in the Group incurring a finance charge on consolidation of £3.1
million. VSA NEX has signed a subordination agreement in relation to the loans
due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA
NEX choose to request the repayment of the loans due by Dynamic this will
severely impact the Company's ability to continue as a going concern. Under a
put and call option agreement the Company granted to VSA NEX the option to
acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of
Dynamic held by the Company, subject to the satisfaction of certain conditions
and subject to certain time restrictions for £1.
1. Equity portion of convertible loan notes
During the 2021 financial year, on the 23(rd) of March 2021, the Company
converted £383,000 owed to the directors and a Company owned by a director
for 7,660,000 convertible loan notes and, simultaneously, issued 4,400,000
convertible loan notes to the value of £220,000 for cash. During the current
financial year the Company extended the conversion date of the CLNs to 31
December 2024. The equity portion of the convertible loan notes is presented
below.
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Equity portion of convertible loan notes
issued during the year (per note 26) 42,539 74,935 42,539 74,935
Carrying value 42,539 74,935 42,539 74,935
1. Convertible loan notes
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Convertible loan notes 710,274 778,065 710,274 778,065
Carrying value 710,274 778,065 710,274 778,065
The loan notes holder will be paid an annual interest rate of 12 per cent in
cash, semi-annually, with a term of 24 months. The loan notes will not be
admitted to trading on any exchange.
During the 2021 financial year, on the 23(rd) of March 2021, the Company
converted £383,000 owed to the directors and a Company owned by a director
for 7,660,000 convertible loan notes and, simultaneously, issued 4,400,000
convertible loan notes to the value of £220,000 for cash.
During the 2020 financial year, as part of the subscription dated 24 July
2020, 3,333,333 additional share warrants were allocated to the capital
portion of the convertible loan notes and 750,000 additional share warrants
were allocated to the outstanding interest portion of the convertible loan
notes, which at the subscription date was £37,500.
The new ordinary shares issued as a result of conversion of all Loan Notes
would represent 17,060,000 ordinary shares, or 43.71 per cent of the issued
share capital of the Company, as enlarged by the 2018 Fundraising. On 14
September 2018 issued £250,000 of convertible loan notes for 50,000,000 loan
notes of 0.50p (the “Loan Notes”) with a conversion price of 0.75p (the
“Conversion Price”). The Subscription Price was at the last closing price
of 0.50p per ordinary share as at 13 September 2018. Further, the Conversion
Price represents a premium of 50.0 per cent to this same closing price. The
Subscription included the issue of 50,000,000 Convertible Loan Notes of 0.50p
with a conversion price of 0.75p which after the 20:1 share consolidation of
2018 resulted in there being 2,500,000 Convertible Loan Notes of 10.0p with a
conversion price of 15.0p.
If the Convertible Loan Notes were converted, up to 17,810,000 new Ordinary
Shares will be issued (“Loan Conversion Shares”). Further, Warrants will
be attached to any Loan Conversion Shares that are issued on a 1-for-1 basis
on the same terms as the Warrants attached to the New Ordinary Shares (“Loan
Conversion Warrants”). A maximum of 32,510,222 New Ordinary Shares could
potentially be issued in the event that all New Ordinary Shares Warrants and
Loan Conversion Warrants are exercised.
The fair value of the liability component, included in non-current
liabilities, is calculated using a market interest rate for an equivalent
non-convertible loan note at the date of issue. The residual amount,
representing the value of the equity conversion component, is included in
shareholder’s equity in Equity portion of convertible loan notes (Note 25).
The carrying amount of the liability component of the convertible loan notes
at the balance sheet date are derived as follows:
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Liability component at the beginning
of the financial year 910,759 282,909 910,759 282,909
Face value of the convertible loan notes
issued on 23 March 2021 - 603,000 - 603,000
Conversion of convertible loan notes to
shares on 3 October 2022 (368,656) - (368,656) -
Equity portion on extension of conversion 32,396 - 32,396 -
date
Equity conversion component - (74,935) - (74,935)
Accumulated amortisation of interest
expense 135,775 99,785 135,775 99,785
Accumulated payments of interest - - - -
Liability component at the end of the
financial year 710,274 910,759 710,274 910,759
Current portion included in current
liabilities - 132,694 - 132,694
Long term portion included in long term
liabilities 710,274 778,065 710,274 778,065
Liability component at the end of the
financial year 710,274 910,759 710,274 910,759
As part of the of 3 October 2022 investment agreement, the Company has agreed
with the CLN holders to accelerate the conversion of 5,971,000 CLNs and
accrued but unpaid interest into 7,373,141 New Ordinary Shares in the Company
at a conversion price of 5p.
1. Borrowings
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Euro 2 Afrisko Ltd
- Inventory financing 417,891 401,696 - -
Onga Wari CRS (PTY) LTD
- Inventory financing - 16,560 - -
Working Capital Partners
- Accounts receivable financing 140,063 47,808 - -
Loan from VSA NEX Investments Ltd 4,174,538 -
Carrying value 4,732,492 466,064 - -
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a
funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko pay the
suppliers directly and this is then repaid by Dynamic to purchase stock from
suppliers where deposits are required. This funding is secured by a lien over
the inventory and a cession of the debtors.
The borrowings are secured by a security agreement from the Company. The loans
bear interest at 14% per annum.
During the period under review the Company and VSA NEX Investments Limited
(“VSA NEX”) entered into certain related party arrangements in relation to
Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA NEX was a 100% subsidiary of
VSA Capital. At the time the arrangements were entered into Andrew Monk was a
director of the Company, VSA Capital and VSA NEX and is deemed to have
significant influence over VSA Capital and VSA NEX. Pursuant to the
arrangements, VSA NEX subscribed for such number of new shares in the capital
of Dynamic resulting in VSA NEX holding 49% of the enlarged issued share
capital of Dynamic for a consideration of ZAR10,982; the Company agreed to
assign certain debts owing by Dynamic, amounting to £4.2 million which had
been fully impaired in prior years, to the Company and certain other parties
to VSA NEX in consideration for VSA NEX paying to the Company £100,001 and
agreeing to fund Dynamic so as to enable Dynamic to carry on its business in
the ordinary course until such time as the Company ceases to hold any further
shares in Dynamic. This assignment agreement resulted in VSA NEX having a
non-controlling interest in Dynamic and as such its share of the current year
profits amounted to £522, its share of accumulated losses prior to
acquisition amounted to £2,305,905. Additionally, the assignment of the loans
resulted in the Group incurring a finance charge on consolidation of £3.1
million. VSA NEX has signed a subordination agreement in relation to the loans
due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA
NEX choose to request the repayment of the loans due by Dynamic this will
severely impact the Company's ability to continue as a going concern. Under a
put and call option agreement the Company granted to VSA NEX the option to
acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of
Dynamic held by the Company, subject to the satisfaction of certain conditions
and subject to certain time restrictions for £1.
1. Leases
Right of use assets and lease liability
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Operating lease commitments
disclosed as at 31 October 347,102 410,502 - -
Discounted using the incremental
borrowing rate at date of initial application - - - -
Additions to leases during the year - - - -
Lease payments (73,233) (67,072) - -
Exchange difference (7,313) 3,672
Lease liability recognised in the
statement of financial position 266,556 347,102 - -
Of which:
Current lease liabilities 100,485 77,887 - -
Non-current lease liabilities 166,070 269,215 - -
266,555 347,102 - -
Right-of use assets were measured at the amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments relating to
that lease recognised in the statement of financial position as at 31 October
2019. There were no onerous lease contracts that would have required an
adjustment to the right-of-use assets at the date of initial application. The
recognised right of-use assets relate to the following types of assets:
Group Group Company Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Properties 250,446 341,905 - -
On the 3(rd) of March 2020 a new lease was signed for the Group’s main
trading address, 104 Bofors Circle, Epping Industrial 2, Cape Town, South
Africa with commencement date of 1 July 2020. On the commencement date, the
Group recognised a lease liability and right-of-use asset of £430,973.
Impact on earnings per share
Depreciation on the right-of-use asset amounting to £73,233 (2021: £67,072)
and interest on the right-of-use lease liability of £25,995 (2021: £31,468)
were charged to the statement of profit and loss for the current year. As a
result, the earnings per share decreased by 0.005p.
1. Notes to the Statement of Cash Flows
Group Group Company Company
For the year For the year For the year For the year
ending ending ending ending
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Cash and cash equivalents 925,814 1,109,774 922,613 1,108,476
Borrowings (4,732,492) (466,064) - -
Convertible loan notes (710,274) (910,759) (710,274) (910,759)
Right of use lease liability (266,555) (347,102) - -
Net debt (4,783,507) (614,151) 212,339 197,717
Cash and liquid investments 925,814 1,109,774 922,613 1,108,476
Fixed rate instruments (5,709,321) (1,723,925) (710,274) (910,759)
Net debt (4,783,507) (614,151) 212,339 395,434
Net Debt Reconciliation for the Group
Cash and Right of use
cash Convertible lease Total
equivalents Borrowings loan notes liability debt Net debt
£ £ £ £ £ £
Net debt as at 31 October 2020 45,251 (428,719) (250,000) (410,502) (1,089,221) (1,043,970)
Cash flows 1,064,699 (32,973) (220,000) 67,071 (185,902) 878,797
Non-cash transactions - - (515,694) - (515,694) (515,694)
Equity portion of convertible loan notes - - 74,935 - 74,935 74,935
Foreign exchange adjustments (176) (4,372) - (3,671) (8,043) (8,219)
Net debt as at 31 October 2021 1,109,774 (466,064) (910,759) (347,102) (1,723,925) (614,151)
Cash flows (183,960) (1,134,015) - 73,233 (1,060,782) (1,244,742)
Non-cash transactions - (3,131,890) 200,485 - (2,931,405) (2,931,405)
Foreign exchange adjustments - - - 7,313 7,313 7,313
Net debt as at 31 October 2022 925,814 (4,731,969) (710,274) (266,556) (5,708,799) (4,782,985)
The non-cash transactions of £3,131,890 relates to the finance charges
incurred by the Group on assignment of certain debts owed by Dynamic to VSA
NEX.
Net Debt Reconciliation for the Company
Cash and Right of use
cash Convertible lease Total
equivalents Borrowings loan notes liability debt Net debt
£ £ £ £ £ £
Net debt as at 31 October 2020 25,624 - (250,000) - (250,000) (224,376)
Cash flows 1,082,852 - (703,298) - (703,298) 379,554
Non-cash transactions - (383,000) (383,000) (383,000)
Equity portion of convertible loan notes 42,539 - 42,539 42,539
Foreign exchange adjustments - - - - - -
Net debt as at 31 October 2021 1,108,476 - (910,759) - (910,759) 197,717
Cash flows (185,863) - - - - (185,863)
Non-cash transactions - 200,485 200,485 200,485
Foreign exchange adjustments - - - - - -
Net debt as at 31 October 2022 922,613 - (710,274) - (710,274) 212,339
1. Financial Instruments – Fair values and risk management
The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and
financial liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
Trade and other receivables and trade and other payables classified as
held-for-sale are not included in the table below. As at 31 October 2021 the
Group did not have any trade and other receivables nor any trade and other
payables that were classified as held-for-sale.
The Group has not disclosed the fair values of financial instruments such as
short-term trade receivables and payables, because their carrying amounts are
a reasonable approximation of their fair value.
Carrying value Fair value
Group as at 31 October 2022 Note FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
£ £ £ £ £ £ £ £
Financial assets measured at fair value
Investment in associate 6,154 - - 6,154 - - 6,154 6,154
Loan receivable - - - - - - - -
6,154 - - 6,154
Financial assets not measured at fair value
Trade and other receivables - 271,184 - 271,184
Cash and cash equivalents - 925,814 - 925,814
- 1,196,998 - 1,196,998
Financial liabilities measured at fair value
- - - -
- - - -
Financial liabilities not measured at fair value
Lease Liability - - (266,555) (266,555)
Unsecured borrowings - - (4,732,492) (4,732,492)
Convertible loan notes - - (710,274) (710,274)
Trade and other payables - - (624,382) (624,382)
- - (6,333,703) (6,333,703)
Carrying value Fair value
Group as at 31 October 2021 Note FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
£ £ £ £ £ £ £ £
Financial assets measured at fair value
Investment in associate 6,154 - - 6,154 - - 6,154 6,154
Loan receivable - - - - - - - -
6,154 - - 6,154
Financial assets not measured at fair value
Trade and other receivables - 259,360 - 259,360
Cash and cash equivalents - 1,109,774 - 1,109,774
- 1,369,134 - 1,369,134
Financial liabilities measured at fair value
- - - -
- - - -
Financial liabilities not measured at fair value
Lease Liability - - (347,102) (347,102)
Unsecured borrowings - - (466,064) (466,064)
Convertible loan notes - - (778,065) (778,065)
Trade and other payables - - (1,468,499) (1,468,499)
- - (3,059,730) (3,059,730)
Carrying value Fair value
Company as at 31 October 2022 Note FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
£ £ £ £ £ £ £ £
Financial assets measured at fair value
Investment in associate 6,154 - - 6,154 - - 6,154 6,154
Loan receivable - - - - - - - -
6,154 - - 6,154
Financial assets not measured at fair value
Intercompany loans receivable - - - -
Trade and other receivables - - - -
Cash and cash equivalents - 922,613 - 922,613
- 922,613 - 922,613
Financial liabilities measured at fair value
Loans payable to VSA NEX - - (4,174,538) (4,174,538)
- - (4,174,538) (4,174,538)
Financial liabilities not measured at fair value
Lease Liability - - - -
Unsecured borrowings - - (557,954) (557,954)
Convertible loan notes - - (710,274) (710,274)
Trade and other payables - - (160,585) (160,585)
- - (1,428,813) (1,428,813)
Carrying value Fair value
Company as at 31 October 2021 Note FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
£ £ £ £ £ £ £ £
Financial assets measured at fair value
Investment in associate 6,154 - - 6,154 - - 6,154 6,154
Loan receivable - - - - - - - -
6,154 - - 6,154
Financial assets not measured at fair value
Intercompany loans receivable - - - -
Trade and other receivables - - - -
Cash and cash equivalents - 1,108,476 - 1,108,476
- 1,108,476 - 1,108,476
Financial liabilities measured at fair value
Loans payable to VSA NEX - - - -
- - - -
Financial liabilities not measured at fair value
Lease Liability - - - -
Unsecured borrowings - - (466,064) (466,064)
Convertible loan notes - - (778,065) (778,065)
Trade and other payables - - (1,113,694) (1,113,694)
- - (2,357,823) (2,357,823)
Financial instruments – Fair values and risk management
B. Measurement of fair values
i. Valuation techniques and significant unobservable inputs
The following tables show the valuation techniques used in measuring Level 3
fair values for financial instruments measured at fair value in the statement
of financial position, as well as the significant unobservable inputs used.
Related valuation processes are described in Note 3.
Financial instruments measured at fair value
Type Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement
Investment in Associate The value of the investment is adjusted annually based upon the group’s share of the associates profit or loss. None None
ii. Transfers between Levels 1 and 2
There were no transfers between Levels 1 and 2 in either the current financial
year or in the prior financial year.
C. Financial Risk Management
The Group has exposure to the following risks arising from financial
instruments:
* credit risk;
* liquidity and cash flow risk; and
* market risk.
Risk management framework
The Company’s Board of Directors has overall responsibility for the
establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls and
to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the
Group’s activities.
The Group’s audit committee oversees how management monitors compliance with
the Group’s risk management policies and procedures and reviews the adequacy
of the risk management framework in relation to the risks faced by the Group.
The Group’s audit committee undertake ad hoc reviews of risk management
controls and procedures, the results of which are reported to the audit
committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from
customers and investments in debt securities.
The carrying amounts of financial assets represent the maximum credit
exposure. There was no impairment loss in the current year nor in the prior
year.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country in which its customers
operate. Details of concentration of revenue are included in Note 6.
The Group has established a credit policy under which each new customer is
analysed individually for creditworthiness before the Group’s standard
payment terms and conditions are offered. The Group’s review includes
external ratings, if they are available, financial statements, credit agency
information, industry information and in some cases bank references. Sales
limits are established for each customer and are reviewed regularly.
The Group limits its exposure to credit risk from trade receivables by
establishing a maximum payment period of one month.
The Group does not require collateral in respect of trade and other
receivables. The Group does not have trade receivables for which a no
allowance is recognised because of collateral.
Group Group Company Company
2022 2021 2022 2021
£ £ £ £
As at 31 October the exposure to credit
risk for trade receivables by geographic
region was follows:
South Africa 256,824 257,332 - -
Other - - - -
256,824 257,332 - -
As at 31 October the exposure to credit
risk for trade receivables by
counterparty was follows:
Other - - - -
- - - -
As at 31 October the exposure to credit
risk for trade receivables by credit
rating was follows:
External credit ratings - - - -
Other 256,824 257,332 - -
256,824 257,332 - -
Expected credit loss assessment for corporate customers as at 31 October 2022
and 31 October 2021
The Group allocates each exposure to a credit risk grade based on data that is
determined to be predictive of the risk of loss (including but not limited to
external ratings, audited financial statements, management accounts and cash
flow projections and available press information about customers) and applying
experienced credit judgement. Credit risk grades are defined using qualitative
and quantitative factors that are indicative of the risk of default.
The Company had no exposure to credit risk for the year ended 31 October 2021.
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables
during the year amounted to nil.
Cash and cash equivalents
As at 31 October 2022, the Group held £925,814 in cash and cash equivalents
(2021: £1,109,774) and had a bank overdraft of £nil. The cash and cash
equivalents are held with bank and financial institution counterparties which
are rated Baa3 to A1+ by Moody’s.
Impairment on cash and cash equivalents has been measured on a 12-month
expected loss basis and reflects the short maturities of the exposures. The
Group considers that its cash and cash equivalents have low credit risk based
on the external credit ratings of the counterparties. On the implementation of
IFRS 9 the Group did not impair any of its cash and cash equivalents.
Liquidity and cash flow risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
Exposure to liquidity and cash flow risk
The following tables present the remaining contractual maturities of financial
liabilities at the reporting date. The amounts are gross and undiscounted and
include contractual interest payments and exclude the impact of netting
agreements.
Contractual cash flows
Group as at Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
31 October 2022
£ £ £ £ £ £ £
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholders'
loans (VSA NEX) (4,174,538) (4,174,538) - - - - (4,174,538)
Convertible loan
notes (710,274) (710,274) - - (710,274) - -
Secured loans (557,954) (557,954) - (557,954) - - -
Right-of-use finance
lease (266,555) (307,998) (17,634) (89,933) (112,945) (87,486) -
Trade payables (582,180) (582,180) (582,180) - - - -
Other payables - - - - - - -
Related party
payables (42,202) (42,202) - (42,202) - - -
(6,333,703) (6,375,146) (599,814) (690,089) (823,219) (87,486) (4,174,538)
Derivative financial
liabilities - - - - - - -
- - - - - - -
As noted elsewhere the loan subordination agreement expires on 31 October 2023
but the loan does not have a fixed contract date. If Dynamic Intertrade stays
within the group, the directors expect the loans to be repayable greater than
5 years.
Contractual cash flows
Group as at Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
31 October 2021
£ £ £ £ £ £ £
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholders'
loans (VSA NEX) - - - - - - -
Convertible loan
notes (778,065) (778,065) - - (778,065) - -
Secured loans (466,064) (466,064) - (466,064) - - -
Right-of-use finance
lease (347,102) (410,502) (10,446) (56,031) (77,196) (266,829) -
Trade payables (1,274,105) (1,274,105) (1,274,105) - - - -
Other payables (153,515) (153,515) - (153,515) - - -
Related party
payables (40,879) (40,879) - (40,879) - - -
(3,059,730) (3,123,130) (1,284,551) (716,489) (855,261) (266,829) -
Derivative financial
liabilities - - - - - - -
- - - - - - -
Contractual cash flows
Company as at Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
31 October 2022
£ £ £ £ £ £ £
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholders'
loans - - - - - - -
Convertible loan
notes (710,274) (710,274) - - (710,274) - -
Secured loans - - - - - - -
Right-of-use finance
lease - - - - - - -
Trade payables (160,585) (160,585) (160,585) - - - -
Other payables - - - - - - -
Related party
payables - - - - - - -
(870,859) (870,859) (160,585) - (710,274) - -
Derivative financial
liabilities - - - - - - -
- - - - - - -
Contractual cash flows
Company as at Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
31 October 2021
£ £ £ £ £ £ £
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholders'
loans - - - - - - -
Convertible loan
notes (778,065) (778,065) - - (778,065) - -
Secured loans - - - - - - -
Right-of-use finance
lease - - - - - - -
Trade payables (981,000) (981,000) (981,000) - - - -
Other payables (132,694) (132,694) - (132,694) - - -
Related party
payables - - - - - - -
(1,891,759) (1,891,759) (981,000) (132,694) (778,065) - -
Derivative financial
liabilities - - - - - - -
- - - - - - -
The interest payments on the financial liabilities represent the fixed
interest rates as per the respective contracts.
The Group aims to maintain the level of its cash and cash equivalents and
other highly marketable debt investments at an amount in excess of expected
cash outflows on financial liabilities other than trade payables. The Group
also monitors the level of expected cash inflows on trade and other
receivables together with expected cash outflows on trade and other payables.
Market risk
Market risk is the risk that changes in market prices – such as foreign
exchange rates, interest rates and equity prices – will affect the Group’s
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise.
The carrying amounts of the Group’s foreign currency denominated monetary
assets and monetary liabilities at the reporting date are as follows:
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as
reported to the management of the Group is as follows:
Group Foreign exchange 31 October 2022 31 October 2021
risk GBP ZAR GBP ZAR
Trade and other
receivables - 5,708,637 - 5,605,406
Cash and cash equivalents 922,613 67,345 1,108,476 27,042
Unsecured shareholders'
loans - (87,836,461) - -
Secured loans - (11,739,909) - (9,709,568)
Convertible loan notes (710,274) - (778,065) -
Right-of-use finance lease - (5,608,577) - (7,231,199)
Trade payables (160,587) (9,758,757) (1,113,694) (8,771,247)
Net statement of financial
position exposure 51,752 (109,167,723) (783,283) (20,079,566)
Next 6 months sales
forecast 1,434,073 30,816,695 - 14,750,700
Next 6 months purchases
forecast (1,231,550) (26,464,641) (131,337) (10,763,660)
Net forecast transaction
exposure 202,523 4,352,054 (85,642) 5,014,204
Net exposure 254,275 (104,815,669) (868,925) (15,065,362)
Company Foreign 31 October 2022 31 October 2021
exchange risk GBP ZAR GBP ZAR
Trade and other
receivables - - - -
Cash and cash equivalents 922,613 - 1,108,476 -
Unsecured shareholders'
loans - - - -
Secured loans - - - -
Convertible loan notes (710,274) - (778,065) -
Right-of-use finance lease - - - -
Trade payables (160,587) - (1,113,694) -
Net statement of financial
position exposure 51,752 - (783,283) -
Next 6 months sales
forecast - - - -
Next 6 months purchases
forecast (1,231,550) - (85,642) -
Net forecast transaction
exposure (1,231,550) - (85,642) -
Net exposure (1,179,798) - (868,925) -
The following significant exchange rates in relation to the reporting currency
are applicable:
Average for the year Year end spot rate
2022 2021 2022 2021
United States Dollar ($) 1.2610 1.3747 1.1469 1.3683
South African Rand (ZAR) 20.5000 20.2550 21.0410 20.8331
The presentation currency of the Group is British Pound Sterling.
The Group is exposed primarily to movements in USD and ZAR, the currency in
which the Group receives most of its funding, against other currencies in
which the Group incurs liabilities and expenditure.
Sensitivity analysisFinancial instruments affected by foreign currency risk
include cash and cash equivalents, trade other receivables and trade and other
payables. The following analysis, required by IFRS 7 Financial Instruments:
Disclosures, is intended to illustrate the sensitivity of the Group’s
financial instruments (at year end) to changes in market variables, being
exchange rates.
The following assumptions were made in calculating the sensitivity analysis:
* all income statement sensitivities also impact equity; and
* translation of foreign subsidiaries and operations into the Group’s
presentation currency have been excluded from this sensitivity as they have no
monetary effect on the results.
Income Statement / Equity
2022 2022 2021 2021
+10% -10% +10% -10%
Base currency of British Pound Sterling:
- United States Dollar ($) 0.1147 (0.1147) 0.1368 (0.1368)
- South African Rand (ZAR) 2.1041 (2.1041) 2.0833 (2.0833)
The above sensitivities are calculated with reference to a single moment in
time and will change due to a number of factors including:
* fluctuating other receivable and trade payable balances;
* fluctuating cash balances; and
* changes in currency mix.
Interest rate risk
The Group has entered into fixed rate agreements for its finance leases and
shareholders loans. The Group does not hedge its interest rate exposure by
entering into variable interest rate swaps.
Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial
instruments as reported to the management of the Group is as per the table
below.
Group Group Company Company
2022 2021 2022 2021
Fixed rate instruments
Financial assets - - - -
Financial liabilities (5,608,836) (1,513,344) (710,274) (778,065)
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets of financial
liabilities at FVTPL. Therefore, a change in interest rates at the reporting
date would not affect profit or loss.
Other market price risk
The Group is exposed to equity price risk, which arises from equity securities
at FVOCI are held as a long-term investment.
The Group’s investments in equity securities comprise small shareholdings in
unlisted companies. The shares are not readily tradable and any monetisation
of the shares is dependent on finding a willing buyer.
Valuation techniques and assumptions applied for the purposes of measuring
fair valueThe fair value of cash and receivables and liabilities approximates
the carrying values disclosed in the financial statements. Capital
managementThe Group manages its capital resources to ensure that entities in
the Group will be able to continue as a going concern, while maximising
shareholder return. The capital structure of the Group consists of equity
attributable to shareholders, comprising issued share capital and reserves.
The availability of new capital will depend on many factors including a
positive operating environment, positive stock market conditions, the
Group’s track record, and the experience of management. There are no
externally imposed capital requirements. The Directors are confident that
adequate cash resources exist or will be made available to finance operations
but controls over expenditure are carefully managed. 1. Related Party
Transactions
Directors’ fees
Andrew Monk, a non-executive director of the Company, is a director of VSA
Capital Limited and that Company provided services amounting to £36,000
(2021: £57,384) to the Company during the year.
During the year ended 31 October 2022 £35,923 was paid to Directors of the
Company (2021: £46,966). At the year-end a total of £33,587 (2021: £62,126)
was outstanding in respect of directors’ emoluments.
Other related party transactions
Included in trade and other payables are the following related party financial
liabilities:
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
M Bonner 25,357 24,562 - -
R Scott 16,845 16,317 - -
42,202 40,879 - -
Terms:
M Bonner and R Scott: The loan bears interest at the South African prime
overdraft rate. The interest will be calculated and paid when the loan is
repaid. The loan is repayable as decided upon from time to time.
Outstanding director’s salaries and related party transactions
Included in trade and other payables are the following outstanding
directors’ salaries and fees payable to related parties for other services:
Group Group Company Company
As at As at As at As at
31 October 31 October 31 October 31 October
2022 2021 2022 2021
£ £ £ £
Company controlled by a former director:
VSA Capital 46,587 227,082 46,587 356,934
Included in the amount due to VSA Capital are director's salaries owed to A. Monk
Directors' salaries outstanding
- A. Monk (resigned) 10,587 37,126 10,587 31,266
- M. Bonner (resigned) 11,000 12,000 11,000 42,000
- D. Lenigas (resigned) - 5,000 - 49,000
- R. Scott 12,000 8,000 12,000 37,000
33,587 62,126 33,587 159,266
Arrangements with VSA NEX Investments Limited
During the period under review the Company and VSA NEX Investments Limited
(“VSA NEX”) entered into certain related party arrangements in relation to
Dynamic Intertrade (Pty) Ltd (“Dynamic”) as outlined below. VSA NEX is a
100% subsidiary of VSA Capital. At the time the arrangements were entered into
Andrew Monk was a director of the Company, VSA Capital and VSA NEX and is
deemed to have significant influence over VSA Capital and VSA NEX.
Disposal of 49% equity interest in Dynamic to VSA NEX
VSA NEX subscribed for such number of new shares in the capital of Dynamic
resulting in VSA NEX holding 49% of the enlarged issued share capital of
Dynamic for a consideration of ZAR10,982 and therefore became a significant
shareholder in Dynamic representing the non-controlling interest disclosed in
the group financial statements;
Put and call option for VSA Nex to acquire remaining 51% of Dynamic
At the same time a put and call option agreement was entered into with the
Company granting to VSA NEX the option to acquire 11,430 shares in Dynamic
Intertrade, which represents the remaining 51% equity interest currently owned
by the Company. This is subject to the satisfaction of certain conditions and
a time restrictions of 31 December 2023 for a consideration of £1.
Disposal of group loans in Dynamic from the Company to VSA Nex and entry into
a loan subordination agreement
Simultaneously with the above subscription and to allow the equity in Dynamic
to be issued to VSA NEX, the Company agreed to assign certain debts owing by
Dynamic, amounting to £ 4.2 million which had been fully impaired in prior
years, to the Company and certain other parties to VSA NEX in consideration
for VSA NEX paying to the Company £100,001 and agreeing to fund Dynamic so as
to enable Dynamic to carry on its business in the ordinary course until such
time as the Company ceases to hold any further shares in Dynamic. This
assignment agreement resulted in VSA NEX having a non-controlling interest in
Dynamic and as such its share of the current year profits amounted to £522,
its share of accumulated losses prior to acquisition amounted to £2,305,905.
Additionally, the assignment of the loans resulted in the Group incurring a
finance charge on consolidation of
£3.1 million. VSA NEX has signed a subordination agreement in relation to the
loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should
VSA NEX choose to request the repayment of the loans due by Dynamic this will
severely impact the Company's ability to continue as a going concern.
1. Controlling Party Note
There is no single controlling party. Significant shareholders are listed in
the Directors Report and Business Review.
1. Events Subsequent to 31 October 2022
Subsequent to year end the Company appointed a new auditor as disclosed
previously in this report.
On 24 January 2023, the Company announced the subscription (the
"Subscription") for 12,726,000 new Ordinary Shares the Company raised net
proceeds totalling £699,930 at 5.5 pence per share representing a premium of
119 per cent to the closing price of 2.51 pence on 20 January 2023, being the
business day prior to agreement of the subscription.
On 24 January 2023 the convertible loan note holder converted £300,000 of its
debt to 6,000,000 new ordinary shares. In addition, the Company issued an
additional 12,726,000 new ordinary shares to two new shareholders for an
investment of £699,930 in February 2023.
On the 4(th) of July 2023, the Company entered into an agreement to provide a
loan to Precious Link (UK) Limited (“Precious Link”), a wine retailer,
incorporated and registered in England and Wales, located within the Southeast
of England. The loan is for a sum of £200,000, is unsecured and attracts
interest at 10 per cent. per annum payable monthly in arrears. The loan is
repayable on demand by the Company and is repayable on 5 business days’
notice from Precious Link.
On the 20(th) of July 2023, the Company sold its 46.8% equity stake in Dynamic
Intertrade Agriculture (Pty) Ltd (“DIA”). As such, the investment has been
held in the balance sheet of the Group as an asset held for sale since that
decision was made. The Company announced that it has now reached agreement
with Athena Trading Worldwide Limited, a private company, for the sale of its
46.8% stake in DIA, for a consideration of £15,384.62, payable in cash on
completion The contractual completion date is 31 July 2023.
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