REG-Everest Global Plc: Final Results
27/02/2024 14:30
27 February
2024
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 2023.
The last financial year has been very rewarding albeit not without its
challenges. With that said we consider it successful in terms of achieving
what we set out to achieve.
In October 2022, the Company name was changed to Everest Global Plc and a new
board was constituted. The new board has integrated well and is working
particularly well together. Much was achieved in the past 12 months.
In late 2022 our existing auditors resigned as they exited the Public Interest
Entity ('PIE') audit space which left the business without an auditor. It took
some time to appoint a PIE registered auditor, with a false start announced in
December 2022. Eventually in April 2023 a PIE registered auditor, RPG Crouch
Chapman LLP ('RPGCC') was appointed. The Annual Financial Statements for
October 2022 were produced and lodged late on 27 July 2023. Both Companies
House and the Financial Conduct Authority ('FCA') were informed of the
Company's situation. During this period the shares were suspended by the FCA.
On 4 August 2023 the suspension was lifted.
New shareholders invested in the Company on 23 January 2023. 12,726,000 new
Ordinary Shares were issued at a subscription price of 5.5 pence per share
raising a total of £699,930. The subscription price represented a premium of
119 per cent to the closing price of 2.51 pence on 19 January 2023. Allied to
this on 25 January 2023 Golden Nice International Group Limited, the major
shareholder, converted £300,000 convertible loan notes ('CLNs') to 6,000,000
new Ordinary Shares. The conversion price being 5 pence per share. This
represented a premium of 85 per cent to the closing price of 2.70 pence on 23
January 2023. On 29 September 2023, Golden Nice International Group Limited,
being the holder of the outstanding CLNs in the Company, agreed to extend the
redemption date by 18 months from 30 September 2023 to 31 March 2025, at a
conversion price of 5 pence per share.
On 31 October 2023 the Company issued a prospectus. This allowed the shares
issued since 3 October 2022 to be listed. The shares were as follows:
Number of Ordinary Shares immediately prior to prospectus 25,789,714
Number of Ordinary Shares issued pursuant to the previously announced subscriptions 25,726,000
Number of Ordinary Shares issued pursuant to the previously announced conversions 13,373,141
Total number of Ordinary Shares in issue and listed on 31 October 2023 64,888,855
On 4 July 2023 the Company advanced £200,000 to PL as part of its strategic
pivot. The Company was of the opinion that PL operated in a complementary
sector and would therefore assist the Company in expanding its activities into
the wider food and beverage sector. Post year-end, on 10 January 2024, the
Company completed the acquisition of PL which was announced on 18 December
2023. The acquisition price for 100% of PL, was £500,000, to be settled by
the issue of 12,500,000 new Ordinary Shares at a value of 4 pence per Ordinary
Share, being a premium of 23.08 per cent, compared to the closing middle
market price of 3.25 pence per Ordinary Share on 15 December 2023. PL is a
wine retailer consisting of 2 retail liquor outlets in the Southeast of
England. The Company would like to assist in expanding the footprint and
product range of PL.
Following the acquisition of PL, the Company and K2 Spice Limited ('K2')
exercised the put and call option agreement which was detailed in the previous
Annual Financial Statements for the year ended October 2022. This resulted in
the Company selling its remaining 51% holding in Dynamic Intertrade (PTY) Ltd
('DI') in January 2024. I would like to thank the team at DI. The Company
currently has only one subsidiary, although the results for DI have been fully
consolidated for the year ended October 2023.
The focus for 2024 will be the growth in the food and beverage business via
acquisition and joint ventures. The Company will be looking for additional
capital during the next financial year in order to build up a war chest to
allow it to acquire operating assets. The additional funding available to PL
following the acquisition is expected to lead to growth due to development of
new sites and extending the product range.
We are looking forward to a busy year ahead. The financial information set out
below does not constitute the Company's statutory accounts for the years ended
31 October 2022 or 2023 within the meaning of Section 434 of the Companies Act
2006, but is derived from those accounts. Statutory accounts for 2022 have
been delivered to the Registrar of Companies and those for 2023 will be
delivered in due course. The auditor’s report on the statutory accounts for
the year 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, as well as a material uncertainty in relation to
going concern.
The auditor’s report on the statutory accounts for the year ended 31 October
2023 contained a material uncertainty relating to going concern due to
uncertainty inherent in the Company meeting its forecasts and obtaining
additional fund raising. However, the Directors are of the opinion that the
Group will be able to undertake its planned activities for the period to 28
February 2025 from current cash and debtor positions and have prepared the
consolidated financial statements on the going concern basis.
The announcement has been prepared on the basis of the accounting policies as
stated in the financial statements for the year ended 31 October 2023. 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 2023 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 2023 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.
Further the Company would like to update the market in relation to the
consideration shares to be paid in respect of the acquisition of Precious Link
(UK) Limited (“Precious Link”). On 10 January 2024. the Company announced
that it had completed its acquisition of Precious Link and had issued
12,500,000 new Ordinary Shares as consideration for the acquisition. These
shares have not yet been issued. The total number of shares currently in issue
therefore is 64,888,855 ,as mentioned above, and this represents the total
number of voting rights in the Company. The Company will make a further
announcement updating the market as soon as it issues the new Ordinary Shares
in respect of the Precious Link acquisition. Once issued the total voting
rights will be 77,388,855.
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 +44 (0) 776 775 1787
Executive Officer
Rob Scott, Non-Executive Director +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.
Overview
The objective of the management report of Everest Global Plc ('the Company')
is to provide sufficient detailed information to both shareholders and
stakeholders to make an informed decision as to how they 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 they consider, in good faith, would be most likely to promote the success
of the Company for the benefit of its members, and in so doing have regard,
amongst other matters, to:
1. the likely consequences of any decision in the long term;
2. the interests of the Company's employees;
3. the need to foster the Company's business relationships with suppliers,
customers and others;
4. the impact of the Company's operations on the community and the
environment;
5. the desirability of the Company maintaining a reputation for high standards
of business conduct; and
6. the need to act fairly as between members of the Company.
As a Board we consider the wider environment within which we operate and as
such ensure that we have considered the impact of our decisions on key
stakeholders. We also ensure 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 considered its strategic stakeholders in the
year as follows:
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 principal risks section below. The
Directors’ assessment of the risks faced by the Group are set out in the
specific subsidiary risks and uncertainties and can be found below in the
financial statements.
Responsibility statement
The Directors, whose names and functions are set out below of this annual
report and accounts under the sub-heading ‘Board of Directors’ with
registered office located at 1st Floor, 48 Chancery Lane, London WC2A 1JF,
accept responsibility for the information contained in this annual report and
accounts for the year ended 31 October 2023.
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 Global
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 Global
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 Global 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 2023.
Strategy
As set out in the Company’s prospectus dated 31 October 2023, the Company
recently extended its acquisition strategy to cover the wider food and
beverage industry with a focus on the beverage distribution and production
sector in the UK and the rest of Europe. The Directors of the Company believe
that the recently announced acquisition of Precious Link (UK) Limited ('PL')
will provide an entry into the beverage industry and allow it to access
industry know-how and expertise. This follows the £200,000 loan advance made
to PL during the financial year. The Company believes PL operates in a
complementary sector and the acquisition will pave the way in expanding its
activities into the wider food and beverage sector.
The Company is focusing on additional acquisitions of businesses in the
beverage distribution and production sector in the UK and the rest of Europe.
The Company’s primary objective is that of securing the best possible value
for Shareholders, consistent with achieving, over time, both capital growth
and income for Shareholders through developing profitability coupled with
dividend payments on a sustainable basis.
Our purpose & values
The Company's purpose and values are the fundamental beliefs and principles
that guide our decision making and actions. These shape our culture and
promotes teamwork. They assist differentiation although the values are
generic. These core principles assist us to stay true to our vision.
The Company's purpose and values is:
Chief Executive Officer's statement
The last financial year has been very rewarding albeit not without its
challenges. With that said we consider it successful in terms of achieving
what we set out to achieve.
In October 2022, the Company name was changed to Everest Global Plc and a new
board was constituted. The new board has integrated well and is working
particularly well together. Much was achieved in the past 12 months.
In late 2022 our existing auditors resigned as they exited the Public Interest
Entity ('PIE') audit space which left the business without an auditor. It took
some time to appoint a PIE registered auditor, with a false start announced in
December 2022. Eventually in April 2023 a PIE registered auditor, RPG Crouch
Chapman LLP ('RPGCC') was appointed. The Annual Financial Statements for
October 2022 were produced and lodged late on 27 July 2023. Both Companies
House and the Financial Conduct Authority ('FCA') were informed of the
Company's situation. During this period the shares were suspended by the FCA.
On 4 August 2023 the suspension was lifted.
New shareholders invested in the Company on 23 January 2023. 12,726,000 new
Ordinary Shares were issued at a subscription price of 5.5 pence per share
raising a total of £699,930. The subscription price represented a premium of
119 per cent to the closing price of 2.51 pence on 19 January 2023. Allied to
this on 25 January 2023 Golden Nice International Group Limited, the major
shareholder, converted £300,000 convertible loan notes ('CLNs') to 6,000,000
new Ordinary Shares. The conversion price being 5 pence per share. This
represented a premium of 85 per cent to the closing price of 2.70 pence on 23
January 2023. On 29 September 2023, Golden Nice International Group Limited,
being the holder of the outstanding CLNs in the Company, agreed to extend the
redemption date by 18 months from 30 September 2023 to 31 March 2025, at a
conversion price of 5 pence per share.
On 31 October 2023 the Company issued a prospectus. This allowed the shares
issued since 3 October 2022 to be listed. The shares were as follows:
Number of Ordinary Shares immediately prior to prospectus 25,789,714
Number of Ordinary Shares issued pursuant to the previously announced subscriptions 25,726,000
Number of Ordinary Shares issued pursuant to the previously announced conversions 13,373,141
Total number of Ordinary Shares in issue and listed on 31 October 2023 64,888,855
On 4 July 2023 the Company advanced £200,000 to PL as part of its strategic
pivot. The Company was of the opinion that PL operated in a complementary
sector and would therefore assist the Company in expanding its activities into
the wider food and beverage sector. Post year-end, on 10 January 2024, the
Company completed the acquisition of PL which was announced on 18 December
2023. The acquisition price for 100% of PL, was £500,000, to be settled by
the issue of 12,500,000 new Ordinary Shares at a value of 4 pence per Ordinary
Share, being a premium of 23.08 per cent, compared to the closing middle
market price of 3.25 pence per Ordinary Share on 15 December 2023. PL is a
wine retailer consisting of 2 retail liquor outlets in the Southeast of
England. The Company would like to assist in expanding the footprint and
product range of PL.
Following the acquisition of PL, the Company and K2 Spice Limited ('K2')
exercised the put and call option agreement which was detailed in the previous
Annual Financial Statements for the year ended October 2022. This resulted in
the Company selling its remaining 51% holding in Dynamic Intertrade (PTY) Ltd
('DI') in January 2024. I would like to thank the team at DI. The Company
currently has only one subsidiary, although the results for DI have been fully
consolidated for the year ended October 2023.
The focus for 2024 will be the growth in the food and beverage business via
acquisition and joint ventures. The Company will be looking for additional
capital during the next financial year in order to build up a war chest to
allow it to acquire operating assets. The additional funding available to PL
following the acquisition is expected to lead to growth due to development of
new sites and extending the product range.
We are looking forward to a busy year ahead.
.............................
Xin (Andy) Sui
Chief Executive Officer
Date: 26 February 2024
Financial review
As stated above, DI was fully disposed of in January 2024. DI is involved in
the importation, milling, blending, and packaging of products that include
herbs, spices, seasonings and confectionery for the domestic market.
DI achieved an increase in revenue during the year under review of 64.33%
(2022: 20.98%) to £2.792 million (2022: £1.699 million). In DI's local
currency of South African Rand turnover increased from R34.8 million to R60.8
million – a 74.71% increase. This was as a result of across the board
increases in sales to existing customers and a handful of new customers.
Product mix was similar to previous years and gross margins improved from
22.8% in 2022 to 24.6% during the year under review. Gross profits for the
Group increased by 63.58% to £687,635 (2022: £420,358).
Group operating losses for the year decreased to £721,902 (2022:
£1,152,170). Total Group comprehensive loss amounted to £887,038 (2022:
£4,570,562). The 2022 loss was after incurring a finance charge on
consolidation, resulting from the assignment of the loans to K2, of £3.1
million.
Basic and diluted loss per share from continuing operations for the year was
1.71p (2022:17.79p).
As at 31 October 2023 the Group held £858,024 (2022: £925,814) in cash and
cash equivalents.
Financing and capital structure
During the year under review, the Company issued 12,726,000 new Ordinary
Shares at a subscription price of 5.5 pence per share raising a total of
£699,930. Golden Nice International Group Limited, the major shareholder,
converted £300,000 CLNs to 6,000,000 new Ordinary Shares at a conversion
price of 5 pence per share. In the year ended 31 October 2022, the Company
assigned certain debts, which amounted to £4,174,538, that were due by DI to
K2.
The Group uses warrants and CLNs to provide cash liquidity that allows the
Directors to pursue investment opportunities. More details of the Company's
financial instruments are at note 29 of our financial statements.
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 ('KPI')
Year ended 31 October Year ended 31 October
2023 £ 2022 £
Turnover 2,791,695 1,698,839
Gross profit 687,635 420,368
Cash on hand and in bank 858,024 925,814
Underlying operating loss (721,902) (1,152,170)
The Board use these indicators as a high level indication of how the Group is
performing and therefore how to actively improve the performance.
The KPIs used are reflective of the business as at 31 October 2023 and
therefore includes DI's financial information. As a result of the acquisition
and subsequent disposal, the KPIs in future years will reflect this change in
the group.
Turnover is the income for the Group and therefore is vital to enable the
Group to continue with its current business model. Turnover in 2023 has
increased by 64%, which shows the business is growing and recovering from the
pandemic.
Gross profit is an indication that the underlying business is profitable. This
is because gross profit is turnover less any direct costs. As with any
business, growing turnover by more than 64% is a good sign but it needs to be
making profit to allow the business to grow and reinvest in itself or pay out
to its shareholders. It is also important to see the gross profit margin
remain the same. In 2022 it was 24.7% and it has marginally decreased to
24.6%. This reiterates the point that the underlying business remains
profitable and with good margins.
As a Company that invests in companies, having cash in hand is invaluable to
both pay for ongoing costs but also to be able to invest in new businesses.
Investment opportunities can arise from anywhere and by having adequate cash,
this allows the Group to actively scour the market for these opportunities.
Finally, operating loss takes into consideration overheads of the Group. This
can include impairment charges and also foreign exchange difference as a
result of currency moving between South African Rand and British Pound. Given
the Group lost £722k is not a direct indication of poor performance as we
pivot the business from a South African focus to a European focus with retail
footprint rather than manufacturing.
We would hope to see improvements in these KPIs as we move forward. This isn't
going to occur in the short term as we purchase businesses, however in the
medium to long term we envisage a profitable group that is growing its
turnover and producing cash.
Principal risks
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. Failure to identify or anticipate future risks Although the Directors believe that the Group’s risk management procedures are adequate, the methods used to manage risk may not identify or anticipate current or future risks or the extent of future exposures, which could be significantly greater than historical measures indicate.
ii. The Company may The Company intends to make acquisitions in the food and beverage industry with
be unable to raise a focus on the beverage distribution and production sector in the UK and the rest of
funds to complete Europe. Although the Company has not formally identified any prospective
an acquisition or targets, save for what is mentioned in Events Subsequent to Year End, it cannot
fund the operations currently predict the amount of additional capital that may be required.
of the target
business if it does
not obtain
additional funding
iii. Food safety and regulation Ensuring the safety and quality of food products is crucial for the Group. Contamination, improper handling, storage or processing can lead to foodborne illnesses, product recalls, legal issues and damage to the brand’s reputation. Any non-compliance with food safety regulations may adversely affect the Group’s operations and / or result in penalties, fines, product recalls and potential closure of the business.
iv. Ownership and Reverse Takeover risks The Company’s next acquisition following our recent purchase of PL may be a Reverse Takeover. If an acquisition is made, its business risk will be concentrated in a
single target until the Company completes an additional acquisition, if it chooses to do so. In the event that the Company acquires less than a 100 per cent interest in a
particular entity, the remaining ownership interest will be held by third parties and the subsequent management and control of such an entity may entail risks associated
with multiple owners and decision-makers. In circumstances where the Company were to undertake a Reverse Takeover (or analogous transaction) requiring the eligibility of
the Company to be re-assessed, the Company would be required to meet the minimum market capitalisation requirement of £30,000,000 to maintain its listing. In the event
that the Company is unable to satisfy the minimum market capitalisation requirement, the Company would be unable to meet the eligibility requirements to maintain its
listing and would be required to de-list, meaning the shareholders of the Company would hold shares in a non-trading public company (assuming it would be unable to secure
a listing or quotation on another exchange).
v. Reliance on key customers and key suppliers DI, although disposed of, generated approximately 90 per cent of its revenues in the year ended October 2023 from its top ten customers. This dominance of a select few customers in any business has the potential to force erosion of prices and, by extension, profit margins. Additionally, there is the risk that loss of a key customer and inability to locate an alternative buyer for that proportion of product could result in a significant decrease in revenue.
Specific subsidiary risks & uncertainties
i. 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.
ii. 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.
iii. 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.
Managing risks & internal controls
The Company continually identifies the risks that could affect its goals and
operations. It assesses the likelihood and impact of each risk, and
prioritises them accordingly.
Internal controls are designed and implemented to mitigate or reduce the
risks, or transfer or avoid them if possible. The Directors monitor and
evaluate the effectiveness and efficiency of the internal controls, and
identify any gaps or weaknesses as well as review and update the internal
controls periodically, or when there are significant changes in the business
environment or objectives.
The key features of the Group’s systems and internal controls have been
detailed in risk four of the specific subsidiary risks and uncertainties
below.
Going concern & viability statement
The Directors have reviewed the Group‘s forecast financial position for the
12 months following the Board approval of these financial statements. The
Group‘s business activities, financial standing, and factors likely to
influence its future development, performance, and position were reviewed by
the Board. Following a full analysis of the Company, the Directors have a
reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. 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 £699,930
(2022: £650,000) in gross funding through share subscriptions to fund working
capital. In addition, the Company converted £300,000 (2022: £581,951.52) of
CLNs into new ordinary shares.
The Directors have prepared cash flow forecasts. These forecasts consider
operating cash flows and capital expenditure requirements for the Company as
well as its subsidiaries, 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 other than that what has been raised. Based upon the Company’s
forecast, it has sufficient cash for the foreseeable future.
Based on the results of this analysis, the Directors have a reasonable
expectation that the Group will be able to continue in operation and meet its
obligations as they fall due over the period to 2025.
.............................
Xin (Andy) Sui
On behalf of the board
Date: 26 February 2024
Board of Directors
The following Directors have held office in the year:
Xin (Andy) Sui - Chief Executive Director
Andy Sui has over 11 years of investment banking experience. Andy started his
career at Barclays Capital on 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 property development
projects in the North of England. Andy has a Masters Degree from the London
School of Economics (LSE) in Finance and a number of financial market
qualifications.
Robert Scott - Non-Executive Director
Robert has principal responsibility as being the director responsible for the
overview of the management of DI, the Group’s spice manufacturing business
that was disposed of post year end, in January 2024. 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 was 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 others. Robert has been a Director of DI for 12 years and
is responsible for setting the strategy for DI 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 Director
Simon 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.
Key activities of the board during the year
Meetings attended:
Xin (Andy) Sui Robert Scott Simon Grant- Rennick
Board meetings 31/31 31/31 31/31
Audit Committee meetings 2/2 2/2 2/2
Remuneration Committee meetings 1/1 1/1 1/1
Directors duties
The duties and responsibilities of the Board are:
• To promote the success of the Company;
• To exercise independent judgement;
• To exercise reasonable care, skill and diligence;
• To avoid conflicts of interest;
• Not to accept benefits from third parties; and
• To declare interests in transactions or arrangements.
Corporate governance
As a company with a Standard Listing, the Company is not required to comply
with the provisions of the UK Corporate Governance Code published by the
Financial Reporting Council. Nevertheless, the Directors are committed to
maintaining high standards of corporate governance and, so far as is
practicable given the Group’s size and nature, adopts and complies with the
ǪCA Corporate Governance Code 2023 ('ǪCA Code') on a comply or explain
basis. A copy of the ǪCA Code is publicly available at
https://www.theqca.com.
The Company does depart from the ǪCA Code. This isn't the intention of the
Board but is circumstantial for the Company.
The complexity of the Board's needs remain limited and therefore the size of
the board has matched the needs of the Company. It is hoped that as the
Company progresses through its current cycle of investments, it will grow in
both revenue and market capitalisation. With a bigger and more complex Company
the Board will need to grow. This will provide greater governance with the
addition of a chairperson, more independent Non- Executive Directors, the
formation of a stand alone nomination committee and well as other committees
being formed of individuals rather than the entire Board.
Principle 1. The Company is a holding company. Its subsidiary, which makes up the group with the Company (‘the Group’), is a businesses involved in the production of food, agriculture and agricultural related products and more recently the wider food and beverage industry. The Company's strategy is to acquire profitable businesses within the sector and leverage existing management and the Company’s ability to
access capital and new talent.
Establish a purpose, strategy and business model which promotes long- term value for shareholders. The Company’s strategy for growth is to: • Acquire profitable businesses within the sectors we operate; • Leverage the internal skills that is has and where necessary bring in the appropriate skills; • Ensure the underlying business has access to sufficient growth capital while being aware of the actual cost of capital and the returns that are required to be generated; and
• Create a company that engages all our people with a common set of values and goals.
Our can-do culture feeds into our strategy, which is being pursued both organically and, as opportunities arise, by relevant acquisitions.
Board diversity
The Company is dedicated to promoting equal opportunities for all employees
and job applicants. We aim to create an environment that is free from
discrimination and harassment, where cultural diversity and individual
differences are positively valued and decisions are based on merit. We do not
discriminate against employees on the basis of age, disability, gender
reassignment, gender identity, marital or civil partner status, pregnancy or
maternity, race, colour, nationality, ethnic or national origin, religion or
belief, sex or sexual orientation.
As at 31 October 2023, being the reporting date, the Company had only three
Board members of which all were men and only one has an ethnic origin other
than white British. As such the Company has not met the targets specified
under the Listing Rules of having women make up 40 per cent of the Board or
having a woman in at least one of the following senior positions on its Board:
(A) the chair; (B) the Chief Executive; (C) the senior independent director;
and (D) the chief financial officer. However the Company does have one Board
member from an Asian background meaning that it does meet the target of having
at least one Board member from a minority ethnic background.
The Company has not met the diversity expectation of a standard listed company
on the London Stock Exchange. This is because Board doesn't comprise of any
women, however, our subsidiary company, DI, does have a female board member.
The Board currently views its size as adequate for the needs of the Company.
As the Company's needs grow the Board will also grow which will provide the
ability to create a diverse team of Directors.
As part of our starting form for staff there are a number of questions that
perform dual purposes for both commercial needs as well as financial reporting
needs. Of these questions we have been able to use: what sex do you identify
as; and what ethnic background do you come from. Both of these questions are
deemed to be self reporting as each member of staff undertakes the questions
by themselves.
Gender identity or sex
Task Force on Climate-related Financial Disclosures (TCFD)
The Company operates in an environment that renders our exposure to
climate-related risks minimal, therefore, the Company has not included in this
annual report and financial statement the climate related financial
disclosures consistent with the TCFD Recommendations and Recommended
Disclosures. However, our commitment is unwavering towards comprehending our
environmental footprint and crafting sustainability strategies over the future
relative to our operational size. While limited in its environmental impact,
our operational ethos is underscored by a proactive approach to environmental
stewardship. We detail the eleven TCFD recommendation below.
The Company intends to comply with the TCFD recommendations within the next
12-24 months. As part of this we will review our new investments and see how
they can provide accurate information to the Company to enable this reporting.
Governance
Strategy
Risk management
Metrics & targets
The Company is deeply committed to a sustainable future and will continuously
assess its environmental impact and adopt strategies to minimise its carbon
emissions.
Remuneration Committee report
Remuneration Committee terms of reference
The Remuneration Committee has responsibility, subject to any necessary
Shareholder approval, for the determination of the terms and conditions of
employment, remuneration and benefits of the Executive Directors and certain
other senior executives, including pension rights and any compensation
payments. It also recommends and monitors the level and structure of
remuneration for senior management and the implementation of share option or
other performance-related schemes. 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 ǪCA Corporate Governance Code 2023.
The Remuneration Committee meets at least twice a year. However, due to the
structure of the business currently the meeting was combined into a board
meeting as all the members are the same as the Board. The responsibilities of
the committee covered in its terms of reference include determining and
monitoring policy on and setting levels of remuneration, termination,
performance-related pay, pension arrangements, reporting and disclosure, share
incentive plans and the appointment of remuneration consultants. The terms of
reference also set out the reporting responsibilities and the authority of the
committee to carry out its responsibilities.
Directors’ remuneration, shareholding and options
Remuneration
The Directors’ remuneration for the year ended 31 October 2023 is set out in
the table below. None of the Directors receive share options, long term
incentives, bonus schemes or the like as part of their remuneration packages.
Some Directors receive monthly fees as invoiced for consultancy work as agreed
between the Directors and the Remuneration Committee. There are contracts for
the Directors.
No pension contributions were made by the Company on behalf of its Directors
other than for Andrew Monk. Andrew Monk’s pension contribution for 2023 Nil
(2022: £330).
At the year-end a total of £2,810 (2022: £33,587) was outstanding in respect
of Directors’ emoluments.
Shareholding
As at 31 October 2023, the Directors of the Company held the following shares:
number of Ordinary Shares in issue on 31 October 2023 - 64,888,855
** Total number of Ordinary Shares in issue on 31 October 2022 - 46,162,855
*** Shares are held Vidacos Nominees Ltd as nominee
Xin (Andy) Sui and Simon Grant-Rennick do not have any shares in the Company.
Options
There is no Option Scheme in place at the Company and no options have been
issued to any of the Directors. All options issued previously have expired.
Warrants
As at 31 October 2023 the warrants held by Directors were:
Warrant holder 5p warrants 5p warrants
2023 2022
Robert Scott - 820,000
Andrew Monk * - 4,240,000
Matt Bonner * - 840,000
Total - 5,900,000
* These directors resigned during the year ended 31 October 2022
The warrants that were held by the Directors as at 31 October 2022 expired on
23 March 2023. Due to the warrants lapsing the Directors no longer hold any
warrants within the company.
Audit Committee report
Audit Committee terms of reference
The Audit Committee comprises of all three members of the Board, with only one
of those members being an independent Non-Executive Director. The committee
encompasses the monitoring of risks posed to the Group on an ongoing basis,
has responsibility for, among other things, the monitoring of the financial
integrity of the Group’s financial statements and the involvement of its
auditors in that process. It focuses in particular on compliance with
accounting policies and ensuring that an effective system of internal
financial controls is maintained. The ultimate responsibility for reviewing
and approving the annual report and accounts and the half-yearly reports
remains with the Board.
The Audit Committee meets no less than twice a year at the appropriate times
in the reporting and audit cycle. It also meets on an ‘as necessary’
basis. The responsibilities of the committee covered in its terms of reference
include external audit, internal audit, financial reporting and internal
controls.
Audit Committee report
I am pleased to present the 2023 audit report. As part of the process of
preparing a prospectus the Board conducted a review of the Company’s risk
management. As the Company pivoted its business model to a broader food and
beverage business we believed it was vital for us to conduct a new and
thorough understanding of how uncertainty affects our business objectives.
While we had a good understanding of these effects before, we now have a
significantly improved focus and comprehension of the risks and this
understanding enhances the Board's strategic thinking and decision-making
process. The new auditors settled in very well and we have built up a level of
trust with them. I believe their continued input will be very helpful to the
Company in reducing risk and enhancing internal controls. Next year, we are
looking to continue our work on risk management, particularly focusing on
identifying, assessing, and mitigating potential risks that could impact our
strategic objectives. I am proud of the progress we have made over the past
year and we as a Company remain committed to maintaining the highest standards
of corporate governance.
.............................
Simon Grant-Rennick
Chair of the Audit Committee
Date: 26 February 2024
Directors' report
The Directors have the pleasure of submitting their report and the audited
financial statements for the year ended 31 October 2023.
To make our annual report and financial statements more accessible, a number
of the sections traditionally found in this report can be found in other
sections of this annual report, where it is deemed that the information is
presented in a more connected and accurate way.
Principal Group activities, business review and results
The principal activity of the Group in the reporting year was investing and
trading in the agriculture and ancillary sectors in Africa. The business
review and results can be found above in the annual report.
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;
• the Directors have taken all the steps they ought
to have taken as Directors, in order to make themselves 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 management report.
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 ben 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.
Annual general meeting ('AGM')
Information about the AGM can be found below.
Auditors
RPGCC, has expressed its willingness to continue in office and a resolution to
reappoint following the 2023 annual report being signed will be proposed at
the next annual general meeting.
Branches outside the UK
Details of all branches outside the UK can be found below.
Corporate governance code (the 'Code')
Information on how the Company applied the Principles and complied with the
provisions of the Code may be found above.
Dividends
No dividends will be distributed for the current year (2022 - nil).
Diversity
The Group's diversity statistics are available above.
Events after the reporting period
Further information on events after the reporting date are set out in note 32.
Employees
The average number of employees and their remuneration are detailed in note 7.
Internal control and risk management
The Group's has detailed out its internal controls and risk management above.
Additionally its principle risks are above.
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.
Indemnity and insurance
Details of Directors’ indemnity and insurance is located below.
Political donations
The Group made no political donations during the current year and previous
financial period. Nor has it made any contributions to any non-UK political
party during the current year or previous financial period.
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 shareholders
The Group has been informed of the shareholdings that represent 3% or more
issued Ordinary Shares of the Company as at 31 October 2023. A full list of
these positions can be found below.
Stakeholder engagement
Details regarding the engagement with suppliers, customers and others in
business relationships with the Company may be found above.
Non-financial reporting
Non-financial measures are an important part of our business and we have
consistently recognised the importance of non-financial information in our
annual report. The Board is committed to acting responsibility and working
with our stakeholders to manage the social and ethical impact of our
activities. We aim to treat all our stakeholders fairly and with integrity, as
we explain in our climate related financial disclosures.
.............................
Xin (Andy) Sui
On behalf of the board
Date: 26 February 2024
Independent auditor's report
To the members of Everest Global Plc
Opinion
We have audited the financial statements of Everest Global Plc (the
‘Company’) and its subsidiaries (the ‘Group’) for the year ended 31
October 2023 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, 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, 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 October 2023 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 opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We 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 relating 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
October 2025;
• 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 matters identified were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. 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 matter
identified is described below.
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 2% of gross assets for each of the operating
components. Overall materiality for the Group was therefore set at £33,000.
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;
• 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
on above, 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 IASs (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 second 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.
Statement of comprehensive income
Statement of financial position As at 31 October 2023
The notes form part of these financial statements The financial statements
were approved and authorised for issue on 26
February 2024 by the board of directors and were signed on its behalf by:
Company Registration No. 07913053
.............................
Xin (Andy) Sui
Director
Group statement of changes in equity For the year ended 31 October 2023
Company statement of changes in equity For the year ended 31 October 2023
Statement of cash flows
For the year ended 31 October 2023
Notes to the group annual financial statements For the year ended 31 October
2023
1. 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 professional advisers page at the back of this 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 2023 with comparatives for the year ended 31 October 2022.
2. 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 years if the revision affects both current and future
years.
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 pivoted to new opportunities during
the year under review.
There remains an active and liquid market for the Group's shares.
As at 31 October 2023 the Group held £858,024 (2022: £925,814) in cash and
cash equivalents.
As disclosed in note 32, the Group has acquired PL and disposed of DI since
the year-end. Furthermore, the Group continues to seek further investment
opportunities to develop its European-focused food and beverage operations. It
will be necessary to raise further funding to achieve these objectives. At the
time of approving this report, negotiations are in progress to raise further
capital in the form of CLNs.
The Directors have prepared cash flow forecasts. These forecasts consider
operating cash flows and capital expenditure requirements for the Company and
PL, 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, funding is being raised to provide adequate cash flow to cover the
business for unforeseen costs that might occur.
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 28 February 2025 from current cash and debtor positions and
have prepared the consolidated financial statements on the going concern
basis. Nevertheless, due to the uncertainties inherent in meeting its
forecasts 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 2023 and have been adopted. None of
the IFRS standards below had a material impact on the financial statements.
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:
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.
Associates
The Company's interest in an associate is carried in the statement of
financial position at its share in the net assets of the 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, the
carrying amount is written down to nil and recognition of further losses is
discontinued.
d. Property, plant & 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 of their cost over their estimated
useful lives at the following annual rates:
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:
First year of the lease 15.00%
Second year of the lease 17.00%
Third year of the lease 20.00%
Fourth year of the lease 22.00%
Fifth year of the lease 26.00%
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 ('FVTOCI') 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
• 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 FVTOCI, 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.
1. 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 it's 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.
1. 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.
1. Assets at FVTOCI - 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.
1. 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.
1. 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.
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 & 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 £ (GBP)
Foreign currency For the year ending 31 October 2023 For the year ending 31 October 2022
South African Rand 22.6757 21.0410
US Dollar 1.2154 1.1469
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.
3. 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 managements'
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% (2022: 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 Groups' property, plant and equipment.
4. Segmental reporting
In the opinion of the Directors, the Group, during the reporting period 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.
5. Revenue
6. Other income
7. Personnel expenses and staff numbers
8. Directors' remuneration
Group Company
For the year For the year For the year For the year
ending 31 ending 31 ending 31 ending 31
October October October October
2023 2022 2023 2022
Salaries and fees £ £ £ £
Xin (Andy) Sui 39,000 - 39,000 -
Robert Scott 34,000 12,000 34,000 12,000
Simon Grant-Rennick 50,260 - 50,260 -
Andrew Monk * # - 12,923 - 12,923
Matthew Bonner * - 11,000 - 11,000
Total 123,260 35,923 123,260 35,923
* These directors resigned during the year ended 31 October 2022
# included in Andrew Monk's remuneration is £1,923 for National Insurance
contributions
No pension contributions were made by the Company on behalf of its directors
in the current year. Included in Andrew Monk's 2022 remuneration are pension
contributions amounting to £330.
At the year-end a total of £2,810 (2022: £33,587) was outstanding in respect
of directors' emoluments.
G. Expenses - analysis by nature
Admission costs included £100,000 payable to RPGCC with respect to their
engagement as reporting accountant.
10. Impairments
In previous financial years, 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. They are held at nil value in the financial
statements.
11. Finance costs
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 K2.
12. Finance income
13. Taxation
The charge for the year can be reconciled to the profit before taxation per
the consolidated statement of comprehensive income as follows:
The Company has excess management expenses of £1,585,329 (2022: £1,432,899
)available for carry forward against future trading profits. The deferred tax
asset in these tax losses at 19.0% has not ben recognised due to the
uncertainty of recovery.
The UK government changed the corporate tax with effect from 1 April 2023.
This change meant there was a sliding scale between 19% and 25%, depending on
your profits. Given the Company isn't profitable we have applied the rate of
19%, which is applicable for business with profits less than £50,000.
14. 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:
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 2023 there were 50,488,839 (2022: 46,162,855)
shares in issue, 63,089,171 (2022: 38,363,171) outstanding share warrants and
nil (2022: nil) outstanding options, both are potentially dilutive.
During the year, DIA, was sold to the proposed purchaser as disclosed last
year. It had been anticipated that the sale be concluded within the last two
financial year, however COVID-19 delayed the process. The Company received
£15,385 for its investment within DIA. This was greater than the Directors
had estimated while preparing the financial statements to 31 October 2022.
As at 31 October 2023, the Company directly and indirectly held the following
investments:
The reconciliation of non-controlling interests in note 23 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.
Subsequent to the year end the Company has disposed of its remaining holding
of 51% of DI to K2.
1. Property, plant & equipment
17. Inventories
Group Year ended Year ended Company Year ended Year ended
31 October 31 October 31 October 31 October
2023 £ 2022 £ 2023 £ 2022 £
Raw materials 329,408 175,875 - -
Carrying value 329,408 175,875 - -
The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko
Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then
repaid by DI to purchase stock from suppliers where deposits are required.
This funding was secured by a lien over the inventory and a cession of the
debtors balances.
18. Trade and other receivables
Group Year ended Year ended Company Year ended Year ended
31 October 31 October 31 October 31 October
2023 £ 2022 £ 2023 £ 2022 £
Financial instruments Trade receivables 282,671 256,824 - -
Deposits - 14,360 - -
Loans receivable 210,773 - 200,000 -
Other receivables 42,726 11,219 42,726 11,219
Non-financial instruments Accrued income 6,959 - 6,959 -
Prepayments 30,257 126 8,634 -
Carrying value 573,386 282,529 258,319 11,219
Current 573,386 282,529 258,319 11,219
Non- current - - - -
573,386 282,529 258,319 11,219
The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko
Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then
repaid by DI to purchase stock from suppliers where deposits are required.
This funding was secured by a lien over the inventory and a cession of the
debtors balances.
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 2023 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 loses
The Group did not impair any of its trade receivables as at 31 October 2023,
as all trade receivables generated during the financial year, and outstanding
at 31 October 2023 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 29.
The Directors consider that the carrying amount of trade receivables and other
receivables approximates their fair value.
19. Cash and cash equivalents
Group Year ended Year ended Company Year ended Year ended
31 October 31 October 31 October 31 October
2023 £ 2022 £ 2023 £ 2022 £
Cash on hand 858,024 925,814 765,814 922,613
858,024 925,814 765,814 922,613
20. Trade and other payables
Group Year ended Year ended Company Year ended Year ended
31 October 31 October 31 October 31 October
2023 £ 2022 £ 2023 £ 2022 £
Trade payables 478,862 582,180 92,135 160,585
Other payables 643,166 - 256,595 -
Related party payables - 42,202 - -
1,122,028 624,382 348,730 160,585
Trade payables represent amounts due for the purchase of agricultural
materials and administrative expenses. The Directors consider that the
carrying amount of trade payables approximates to their fair value.
The related party financial liabilities comprise:
Terms:
Matthew Bonner & Robert 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. The loans were repaid in the
year
21. Share capital and share premium
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.
22. 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 63,089,171 warrants to subscribe for Ordinary Shares at 31 October
2023 (2022: 38,363,171).
Warrants were attached to the CLNs issued on 23 March 2021, with an exercise
price of 5.0p per Ordinary Share. The redemption date for these CLNs is 31
March 2025.. These warrants will only be issued once the CLNs are converted
into shares.
Warrants were attached to the subscription shares issued 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 issued 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.
On 3 October 2022 an investor 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 were
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.
On 3 October 2022 the Company agreed with 35% of 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. 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.
On 19 January 2023 investors subscribed for 12,726,000 new ordinary shares in
the Company at a price of 5.5p per share, representing a capital injection of
£699,930 (gross and net) into the Company. The new ordinary shares were
accompanied by 1 for 1 warrants at 5.5p in the Company's ordinary shares,
equating to 12,726,000 warrants exercisable at any time before 31 December
2024.
The conversion of £300,000 of CLNs on 24 January 2023 has created 6,000,000
new shares in the Company. As per the terms of the CLNs on conversion each
share also gets both a 5p and a 10p warrant. Therefore on conversion 6,000,000
5p warrants and 6,000,000 10p warrants were issued and are exercisable up
until 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 0.03
Exercise price Being the exercise price as stated above
Expected volatility 69%
Expected dividend 0%
Contractual life (in years) 1.92
Risk free rate (based on 10 year UK Government Gilts) 3.28%
Estimated fair value of each option 0.004796 - 0.011232
Options
At 31 October 2023 there were nil share options issued to the Directors and
past directors of the Company. During the current year nil share options were
granted (2022: nil).
23. 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.
Dynamic Intertrade (Pty) Ltd 2023 £ 2022 £
Current assets 736,685 451,450
Non-current assets 181,900 264,330
Current liabilities (1,259,338) (522,082)
Non-current liabilities (4,414,514) (4,898,562)
(4,755,267) (4,704,864)
Equity attributable to the owners of the Company (2,425,186) (2,399,481)
Non-controlling interests (2,330,081) (2,305,383)
(4,755,267) (4,704,864)
Dynamic Intertrade (Pty) Ltd 2023 £ 2022 £
Revenue 2,791,695 1,698,839
Expenses (3,138,683) (2,615,612)
Loss for the year (346,988) (916,773)
Loss attributable to the owners of the Company (346,988) (916,773)
Loss attributable to the non-controlling interests - -
Loss for the year (346,988) (916,773)
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 (346,988) (916,773)
Total comprehensive income attributable to the non-controlling interests - -
Total comprehensive income for the year (346,988) (916,773)
Net cash outflows from operating activities (314,591) (786,055)
Net cash outflows from investing activities (22,290) (4,415)
Net cash outflows from financing activities 429,724 792,436
Net cash inflow / (outflow) 92,843 1,966
Non-controlling interest 2023 £ 2022 £
Balance at 1 November (2,305,383) -
Equity attributable to non-controlling interest on disposal of 49% interest - (2,305,905)
Share of profits for the year (24,698) 522
Balance at 31 October (2,330,081) (2,305,383)
On 16 January 2024 K2 exercised the put and call option agreement which was
detailed in the Annual Financial Statements for the year ending October 2022.
This resulted in the Company selling its remaining 51% of DI. Full details of
this transaction can be found in the subsequent events, at note 32.
24. Equity portion of convertible loan notes
During the 2021 financial year, on 23 March 2021, the Company converted
£383,000 owed to the Directors and a Company owned by a director for
7,660,000 CLNs and, simultaneously, issued 4,400,000 CLNs 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
CLNs is presented below.
25. Convertible loan notes
The loan notes holder will be paid an interest rate of 12 per cent, accrued on
a monthly basis. The loan notes will not be admitted to trading on any
exchange.
On 31 March 2021, the Company issued 12,060,000 2021 Loan Notes in the sum of
£603,000 (by the conversion of existing sums due to creditors and by way of
subscription from private investors).
On 3 October 2022, Golden Nice acquired £162,000 of the 2018 Loan Notes and
£391,950 of the 2021 Loan Notes from various holders, being 65 per cent. of
the Convertible Loan Notes outstanding at that time, at a 15 per cent.
discount to their face value together with accrued but unpaid interest.
The Company also agreed with the remaining holders of Convertible Loan Notes
to accelerate the conversion of the balance of £87,500 2018 Loan Notes and
£211,050 2021 Loan Notes and accrued but unpaid interest into, in aggregate,
7,373,141 2022 Conversion Shares in the Company at a conversion price of 5p.
In accordance with their terms, the Company granted each holder one warrant to
subscribe for a new Ordinary Share at an exercise price of £0.05 per Ordinary
Share for every 2022 Conversion Share issued.
Additionally, the Company also agreed to grant each holder one warrant to
subscribe for a new Ordinary Share at an exercise price of £0.10 per Ordinary
Share for every 2022 Conversion Share issued. Accordingly, the conversion of
£87,500 2018 Loan Notes and £211,050 2021 Loan Notes plus accrued but unpaid
interest resulted in the granting of 7,373,141 5p 2022 CLN Warrants and
7,373,141 10p 2022 CLN Warrants.
On or around 24 January 2023, the Company received a conversion notice from
Golden Nice, pursuant to which Golden Nice notified the Company of the
conversion of the 2021 Loan Notes in the aggregate sum of
£300,000 into 6,000,000 Ordinary Shares at a price of 5 pence per share,
being a premium of 25 per cent to the closing price of 3.75 pence on 23
January 2023, being the business day prior to agreement of the conversion. As
part of the 2023 Conversion, Golden Nice received a 5p 2023 CLN Warrant and a
10p 2023 CLN Warrant for every Ordinary Share issued in connection with the
2023 Conversion.
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 amounts of the liability component of the CLNs at the balance
sheet date are derived as follows:
As part of the of 3 October 2022 investment agreement, the Company 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.
26. Borrowings
Group Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2023 2022 2023 2022
£ £ £ £
Euro 2 Afrisko Ltd - inventory financing 291,744 417,891 - -
Working Capital Partners Pty Ltd - accounts 71,267 140,063 - -
receivable financing
Loan from K2 Spice Ltd 4,355,369 4,174,538 - -
Carrying value 4,718,380 4,732,492 - -
The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko
Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then
repaid by DI to purchase stock from suppliers where deposits are required.
This funding was then repaid and secured by a lien over the inventory and
accession of the debtors.
The borrowings were secured by a security agreement from the Company. The
loans bear interest at 14% per annum.
27. Leases
Right of use asset and lease liability
Group Company
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2023 2022 2023 2022
£ £ £ £
Operating lease commitments disclosed as at 31 266,555 347,102 - -
October
Interest payments 17,935 - - -
Lease payments (89,704) (73,234) - -
Exchange difference (7,798) (7,313) - -
Lease liability recognised in the statement of 186,988 266,555 - -
financial position
Of which:
Current lease liabilities 108,266 100,485 - -
Non-current lease liabilities 78,722 166,070 - -
186,988 266,555 - -
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 Company
Year ended 31 October Year ended 31 October Year ended 31 October Year ended 31 October
2023 2022 2023 2022
£ £ £ £
Properties 156,129 250,446 - -
156,129 250,446 - -
On 3 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 £103,842 (2022: £73,234)
and interest on the right-of-use lease liability of £17,935 (2022: £25,995)
were charged to the statement of profit and loss for the current year. As a
result, the earnings per share decreased by 0.002p.
28. Notes to the statement of cash flows
29. 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.
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.
Group as at 31 October 2023
Company as at 31 October 2023
Company as at 31 October 2022
1. Measurement of fair values
1. 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 associate profit or loss. None None
1. Transfers between Levels 1 C 2
There were no transfers between levels 1 C 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 undertakes 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.
Expected credit loss assessment for corporate customers as at 31 October 2023
and 31 October 2022
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.
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 2023, the Group held £858,024 in cash and cash equivalents
(2022: £925,814) 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.
Company as at 31 October 2022
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:
Group foreign exchange risk
31 October 2023 31 October 2022
£ (GBP) R (ZAR) £ (GBP) R (ZAR)
Trade and other receivables 258,319 7,144,365 - 5,708,637
Cash and cash equivalents 765,814 2,090,921 922,613 67,345
Unsecured shareholders' loans - (98,761,043) - (87,836,461)
Secured loans - (8,231,521) - (11,739,909)
Convertible loan notes (491,071) - (710,274) -
Right of use finance lease - (3,905,322) - (5,608,577)
Trade payables (348,730) (17,535,102) (160,585) (9,758,757)
Net statement of financial exposure 184,332 (119,197,702) 51,754 (109,167,722)
Next 6 months actual sales - - 1,434,073 30,816,695
Next 6 months actual forecast - - (1,231,550) (26,464,641)
Net statement of financial exposure - - 202,523 4,352,054
Net exposure 184,332 (119,197,702) 254,277 (104,815,668)
Company foreign exchange risk
31 October 2023 31 October 2022
£ (GBP) R (ZAR) £ (GBP) R (ZAR)
Trade and other receivables 258,319 - - -
Cash and cash equivalents 765,814 - 922,613 -
Convertible loan notes (491,071) - (710,274) -
Trade payables (348,730) - (160,585) -
Net statement of financial exposure 184,332 - 51,754 -
Next 6 months sales forecast - - - -
Next 6 months purchases forecast - - (1,231,550) -
Net statement of financial exposure - - (1,231,550) -
Net exposure 184,332 - (1,179,796) -
As previously disclosed Dynamic was sold post year end in January 2024. It is
the opinion of the Directors that the only foreign exchange risk that the
Group faced were the outstanding debtor and creditor balances at the 31
October 2023 as documented on the statement of financial position. It is
believed that the trading in November and December, wouldn't have created
foreign exchange risk as cash wouldn't have been received nor paid prior to
the sale of the subsidiary.
The following significant exchange rates in relation to the reporting currency
are applicable:
Average for the year Year end spot rate
2023 2022 2023 2022
United States Dollar ($) 1.2477 1.2610 1.2154 1.1469
South African Rand (ZAR) 21.7957 20.5000 22.6757 21.0410
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 analysis
Financial 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
2023 2023 2022 2022
+10% - 10% +10% - 10%
United States Dollar ($) 0.1215 (0.1215) 0.1147 (0.1147)
South African Rand (ZAR) 2.2676 (2.2676) 2.1041 (2.1041)
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 management of the Group is as per the table below. as reported to the
Group Company
2023 2022 2023 2022
£ £ £ £
Financial assets - - - -
Financial liabilities (5,033,428) (5,709,321) (491,071) (710,274)
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 FVTOCI are held as a long- term investment.
The Groups' 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 purpose of measuring fair
value
The fair value of cash and receivables and liabilities approximates the
carrying values disclosed in the financial statements.
Capital management
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 but controls over expenditure
are carefully managed.
30. Related party transactions
Directors' fees
During the year ended 31 October 2023 £123,260 was paid to Directors of the
Company (2022: £35,923 ). At the year- end a total of £2,810 (2022:
£33,587) was outstanding in respect of Directors' emoluments.
Other related party transactions
Included in trade and other payables are the following related party financial
liabilities:
Terms:
Matthew Bonner and Robert 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:
The following information relates to the comparative period when Andrew Monk
was a director of both the Company and K2.
Arrangements with K2
During the period under review the Company and K2 entered into certain related
party arrangements in relation to DI as outlined below. K2 is a 10% subsidiary
of VSA Capital. At the time the arrangements were entered into Andrew Monk was
a director of the Company, VSA Capital and K2 and is deemed to have
significant influence over VSA Capital and K2.
Disposal of 4S% equity interest in DI to K2
K2 subscribed for such number of new shares in the capital of DI resulting in
K2 holding 49% of the enlarged issued share capital of DI for a consideration
of ZAR10,982 and therefore became a significant shareholder in DI representing
the non-controlling interest disclosed in the group financial statements.
Put and call option for K2 to acquire remaining 51% of DI
At the same time a put and call option agreement was entered into with the
Company granting to K2 the option to acquire 11,430 shares in DI, 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 DI from the Company to K2 and entry into a loan
subordination agreement
Simultaneously with the above subscription and to allow the equity in DI to be
issued to K2, the Company agreed to assign certain debts owing by DI,
amounting to £4.2 million which had been fully impaired in prior years, to
the Company and certain other parties to K2 in consideration for K2 paying to
the Company £100,001 and agreeing to fund DI so as to enable DI to carry on
its business in the ordinary course until such time as the Company ceases to
hold any further shares in DI. This assignment agreement resulted in K2 having
a non-controlling interest in DI, full details of K2's non-controlling
interest are at note 23.
Additionally, the assignment of the loans resulted in the Group incurring a
finance charge on consolidation of £3.1 million. K2 has signed a
subordination agreement in relation to the loans due by DI to K2 with an
expiry date of 31 October 2023. Should K2 choose to request the repayment of
the loans due by DI this will severely impact the Company's ability to
continue as a going concern.
31. Controlling Party Note
There is no single controlling party. Significant shareholders are listed
below.
32. Subsequent events
Subsequent to year end the following occurred:
1. The Company acquired from PI Distribution Investment Ltd the entire issued
share capital of Precious Link (UK) Limited ('PL'). PL is a wine retailer
incorporated and registered in England and Wales which consists of 2 retail
liquor outlets in the Southeast of England. For the year ended 30 September
2022, PL made a loss before tax of £35,057 on turnover of £692,985. For the
same period net liabilities amounted to £533,631. Under the terms of the SPA
the Company will issue 12,500,000 new ordinary shares of £0.02 each in the
issued share capital of the Company ('Ordinary Shares') at a value of 4 pence
per Ordinary Share, valuing the transaction at £500,000. At the date of
signing the accounts these shares had not yet been issued. This is due to
complexities with the vendors and the British Virgin Islands company that we
purchased PL from. The £200,000 loan between PL and the Company will remain
in force and the director of PL has assigned his loan of circa £0.5m, due to
him from PL, to the Company, as a condition of the SPA. Following the issue of
the 12,500,000 new Ordinary Shares to PI Distribution Investment Ltd, the
total number of Ordinary Shares in issue with voting rights in the Company
will be 77,388,855 ('Total Voting Rights').
On 10 January 2024 the Company announced that it had acquired PL and issued
12,500,000 new Ordinary Shares as consideration for the acquisition. In fact
these shares have not yet been issued due to complexities with the vendors and
the British Virgin Islands company from which PL was acquired. The total
number of shares currently in issue therefore is 64,888,855 and this
represents the total number of voting rights in the Company. The Company will
make a further announcement updating the market as soon as it issues the new
Ordinary Shares in respect of PL.
1. The Company and K2 exercised the put and call option agreement ('Option
Agreement'), that was detailed in the Annual Financial Statements for the year
ending October 2022 and announced on 27 July 2023 and the option was exercised
by K2 on 16 January 2024. In October 2022, K2 subscribed for such number of
new shares in the capital of DI resulting in K2 holding 49% of the enlarged
issued share capital of DI for a consideration of ZAR10,982, with the Company
retaining the remaining 51%. The Company also agreed to assign certain debts
owing by DI, amounting to £4.2 million which had been fully impaired in prior
years, to the Company and certain other parties to K2 in consideration for K2
paying to the Company £100,001 and agreeing to fund DI so as to enable DI to
carry on its business in the ordinary course until such time as the Company
ceased to hold any further shares in DI. This assignment agreement resulted in
K2 having a non-controlling interest in DI and DI was consolidated as such. At
the same time, the Company and K2 also entered into the Option Agreement which
was extended by mutual agreement and exercised on 16 January 2024. Under the
Option Agreement the Company granted to K2 the option to acquire 11,430 shares
in DI, being the remaining 51% of DI held by the Company, subject to the
satisfaction of certain conditions and subject to certain time restrictions,
for £1. At 31 October 2023 DI was still controlled by Everest Global and is
consolidated in the Group financial statements for this year.
General meeting
The Company will be holding a general meeting ('GM') at the offices of
Keystone Law, 1st Floor, 48 Chancery Lane, London, WC2A 1JF on 28 February
2024 at 11am.
The notice convening the GM was issued on 12 February 2024.
Annual general meeting
The Company has not yet scheduled an annual general meeting ('AGM') at the
time of signing the accounts. All details of the future AGM will be provided
to shareholders and notice convening the meeting will be released on the
London Stock Exchange as well as on the Company's website.
Auditor
The Board recommend that RPG Chapman Crouch LLP be reappointed as auditor, a
resolution will be tabled at the GM on 28 February 2024 for their
re-appointment following the 31 October 2022 audit being signed off.
Directors' and officers' insurance
The Group maintains insurance cover for all Directors and officers of Group
companies against liabilities which may be incurred by them while acting as
Directors and officers.
Everest Global Plc - 2023 full year accounts - signing (V18) (https://mb.cision.com/Main/22599/3936727/2632669.pdf)
Copyright (c) 2024 PR Newswire Association,LLC. All Rights ReservedRecent news on Everest Global
See all newsREG-Everest Global Plc: Result of AGM
AnnouncementREG-Everest Global Plc: Acquisition
AnnouncementREG-Everest Global Plc: Notice of AGM
AnnouncementREG-Everest Global Plc: Issue of Shares in relation to the Acquisition of Precious Link (UK) Limited
AnnouncementREG-Everest Global Plc: Result of General Meeting
Announcement