REG - Ross Group PLC - Annual Financial Report
20/09/2022 16:45
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220920:nRST0375Aa&default-theme=true
RNS Number : 0375A Ross Group PLC 20 September 2022
Ross Group Plc & Subsidiaries
Annual Report and Financial Statements For the year ended 31 December 2021
For a more printer friendly version please click here
http://www.rns-pdf.londonstockexchange.com/rns/0375A_1-2022-9-20.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0375A_1-2022-9-20.pdf)
LEI: 213800PIS2QRIKPZB546 ROSS GROUP PLC
Page
Company
Information
1
Summary and
Highlights
2
Chairman's
Statement
4
Group Strategic
Report
6
Report of the
Directors
12
Corporate Governance
Statement
15
Directors' Remuneration
Report
18
Corporate Social
Responsibility
19
Report of the Independent
Auditors
20
Consolidated Income
Statement
28
Company Income
Statement
29
Consolidated Statement of Comprehensive
Income
30
Company Statement of Comprehensive
Income
31
Consolidated Statement of Financial
Position
32
Company Statement of Financial
Position
33
Consolidated Statement of Changes in
Equity
34
Company Statement of Changes in
Equity
35
Consolidated Statement of Cash
Flows
36
Company Statement of Cash
Flows
37
Notes to the Statement of Cash
Flows
38
Notes to the Consolidated Financial
Statements
39
Directors: B R Pettitt
S C Mehta BSc (Hons) R E Tamraz
P M Fisher
M J L D'Hombres
Secretary: S C Mehta BSc
(Hons)
Registered Office: 71-75 Shelton Street
Covent Garden London
WC2H 9JQ
Registered Number: 00131902 (England and Wales)
Auditors: CBW Audit
Limited Chartered Accountants & Statutory Auditors 66 Prescot Street
London
E1 8NN
As we have previously reported in our interim accounts, during the first half
of 2021, Ross Group Plc ("RGP") has been having to go through the process of
restructuring its acquisition of the four start-up businesses that were
completed in 2019 and which are wholly-owned subsidiaries within Archipelago
Aquaculture Group (AAG) and had amongst other things been primarily subjected
to the Worldwide consequential effects of the COVID Pandemic.
This is therefore the first full year RGP Annual Report that includes and
consolidates the AAG's results, particularly given the above COVID
circumstances.
As a result, there is a fundamental difference in the 2021 results in
comparison to its previous year.
RGP has, for many years now, been operating based on a specialist professional
supply chain management model and continues to do so to date. However, the AAG
acquisition subsequently caused that model to have to be modified; in order to
include and integrate other more specialist supply chain services and
functions, particularly with regard to the requisite research and development
("R&D") in order to try to provide proof of pioneering production concepts
and then thereafter transition at a considered viable point in the future into
mass production and sales of product and/or global turn-key projects of
hopefully high quality pharmaceutical grade Chitin.
For our fiscal year 2021, no services or sales of Chitin were able to be
recorded - as all of the R&D and implementation of pioneering production
processes were more than hampered by both restricted and/or reduced funding
from the seller of the AAG businesses, in combination with the commercial
effects of COVID causing the operations to have to be indefinitely suspended
whilst a review and remedial restructuring took place; resulting in the
renewed and continued Chitin focus through a new venture, namely, RGP-525.
Production and administration costs have been subsequently subjected to
specific strategic reorganisation, which has resulted in the further
impairment and/or reduction of certain contingent, capitalized and
considerable pre-existing liabilities that the AAG companies were incurring
both in advance of any production and with all the logistical labour
constraints of COVID. The relocation and centralization of the venture allows
for a much more manageable and efficient operation and overhead structure once
a post-Covid norm can be established.
Your Board of Directors had initially always anticipated and estimated that it
would take a considerable amount of time and funding in order to get this new
technology into mass production and had initially provisioned for it
accordingly. However, the commercial confluence of COVID and the consequential
cashflow constraints, caused by the lack of the pre-agreed financing from the
seller of the AAG business were both exceptionally unique and unpredictable.
Our new venture, RGP-525, with the founder of 525 Solutions, Professor Robin
Rogers, who had previously sub-licensed their proprietary ionic liquid
extraction technology, has provided us with a more viable, cost-effective,
supply chain solution that enables making the best out of a bad set of
circumstances. The Group will also continue in its endeavours to strategically
search for suitable synergistic partners and opportunities.
Throughout this post-acquisition and COVID pandemic period, there have been
considerable costs incurred during development and/or downsizing of all of the
start-up AAG businesses and management has been extremely diligent in ensuring
that such initial and consequential costings are to now be commensurate with
real-time performance criteria and actual achievements, especially given the
ensuing effects and constraints of COVID and limited financing calling for a
more conservative approach.
Therefore, wherever possible and/or necessary, the Group's specialist supply
chain management experience has been highly re-focused upon implementing newer
strategic disciplines, procedures and protocols in order to try to provide the
best possible performance in its endeavours over time; hence the consideration
and approval by the Board to the RGP-525 new venture as an investment holding,
thus enabling the Group to seek out other opportunities, preferably
potentially start-up and pre-financed in a more strategically secured
structure.
The resulting loss for the year was £2.576m (2020: £1.245m) which duly
reflects the respective restructuring, working capital costs and expenses to
date.
2021 2020 2019
£ 000's £ 000's £ 000's
Restated Restated
Revenues - 43 -
Other income 6 136 14,502
Total costs (2,582) (1,424) (17,441)
──── ──── ────
(Loss) for the year (2,576) (1,245) (2,939)
════ ════ ════
It is once again my pleasure to report to you on both the business activities
and the financial results of the Ross Group Plc for the financial year ended
31st December 2021.
Having endured the unprecedented occurrence of COVID and a number of
consequential as well as also some unrelated challenges, we are pleased and
proud to announce that your Board has been able to respond as best as possible
through taking diligent and prudent measures accordingly.
In addition, the Group is still actively deploying our specialist supply chain
management services on a project-by-project basis and we are also,
particularly at present, evaluating several strategic start-up opportunities
that given a post-COVID pandemic period are believed to be worthy to explore.
Since becoming Chairman, over 10 years ago, I have always been mindful - even
while our Board of Directors were constantly busy with such exploratory work -
that our operating businesses and Premium Listing Company status should always
be capable of generating sufficient profit and/or cashflow in order to
primarily cover running costs of the business on a potentially worst-case
scenario. Therefore, through these exceptionally unusual COVID years we have
had to rightfully reorganize and incur such significant restructuring expenses
- which are considered to be reasonable given our previous many years of
careful and conservative costings.
In this respect, our 2021 result of a £2.576m loss (2020: £1.245m loss) is
considered by the Board to be both understandable and justifiable under such
circumstances.
There was no revenue in the year. Costs have increased over 2020 and relate
predominantly to various restructuring, operational, accounting and legal
costs.
The Board and myself remain satisfied with the ongoing progress that we have
made over this last year's cumulative challenges by identifying, initiating,
and implementing our respective emergency and/or restructuring strategic
plans.
We will continue to be prudent and focused in our specialist supply chain
service management and also our Board remains conservatively confident that we
will be able to progressively focus in on identifying and being able to put
forward an appropriate refined start-up strategy of opportunities for the
Board to consider and to hopefully be able to then present to our Shareholders
at some stage in the foreseeable future.
Regarding the continuing subject of Brexit, given our domiciled departure from
the EU, the timing, terms and impact of the United Kingdom's exit are still
considered difficult to predict; especially with the combined confluence
post-COVID and also the recent predictive effects of the Ukrainian-Russian
conflict. Regardless of the anticipated time scale, terms and conditions of
the United Kingdom's exit from the European Union, the result with regard to
these political and economic events provides an outlook where it is
anticipated that there may be some volatility on the exchange rate between the
Pound Sterling ("£") and the Euro ("€") and more generally, between the
£/Pound and other international currencies such as the US Dollar ("US$").
Because some subsidiaries are presently based both in the United States and/or
also outside of Europe, they are therefore predominately in a US$ currency
environment and while this could lead to adverse consequences in terms of
US$/£ exchange rates, our respective subsidiaries and/or joint ventures are
not yet fully trading or selling products, and therefore we do not anticipate
any material negative impact and do not intend to take specific measures to
cover fluctuations of the currency market at this stage.
Ross Group Plc & Subsidiaries Chairman's Statement
For the year ended 31 December 2021
As always, I would like to particularly personally thank our Board of
Directors, our specialist contractors, consultants and advisors, for all their
excellent support, commitment and hard work in helping the Group wherever
possible towards achieving its aims.
Again and again, I would also like to personally thank our extraordinary loyal
shareholders for their continued patience, understanding and support during
this extraordinary period in time.
Sincerely
Barry Richard Pettitt
Chairman & Group Managing Director Ross Group Plc
Date: 2022
The Directors are pleased to present their strategic report of the Group and
the Company for the year ended 31 December 2021.
Background and History
The existing management team that took over control of the Ross Group Plc
approximately thirteen years ago has been consistent in their prime objective
to search for suitable supply chain start-up opportunities in order to try to
build a balance of businesses that would be commensurate with the respective
existing and potential value of the Group's Premium Listed Main Board status
and, as a result, would also enable the Group to be able to potentially enter
into more mergers and acquisitions in the foreseeable future, whenever deemed
appropriate, that in turn could create a sizeable, stable and potentially
prosperous long term enlarged Group going forward.
Business Strategy: 2022 Model & Principal Activity
During 2020, Ross Group Plc's Archipelago Aquaculture Group ("AAG") entered
into a new venture with 525 Solutions ("525"), a company that was founded in
2015 by Professor Robin Rogers, who created, co-patented and licensed the
Ionic Liquid extraction process that was initially exclusively sub- licensed
by AAG and who together in 2018 they had respectively collaborated together to
be able to win the USA environmentally prestigious EPA Green Chemical Award.
Given the constraints of COVID together with an unexpected reduction of
pre-agreed R&D financing, a more refined restructuring strategy was
required, It was therefore the considered opinion of both Ross Group Plc and
525 that as this Ionic Liquid extraction process has never yet been mass
produced to such a high grade quality and quantity, there could be significant
synergies in collaborating together in a collaborative strategic new venture,
in order to try to successfully attain such a World class, ground-breaking
achievement. Therefore, in 2021, RGP-525 - albeit under unique and challenging
COVID circumstances - was duly created and has endeavoured to continue to
further its research and development as a separate business unit, in which the
Group has a 19.9% investment holding, thus enabling Ross Group Plc to maintain
its prime objective to re-focus to search for other suitable supply chain
management opportunities in order to try to build a balance of businesses that
would be commensurate with its respective existing and/or potential value as a
Premium Listed Company on the Main Board of the London Stock Exchange.
Business Review 2021
The Group as at 31 December 2021 consisted of Ross Group Plc and three wholly
owned subsidiaries; Ross Diversified Trading Limited ("RDT"), Ross Group Plc
Inc. and Archipelago Aquaculture Group LLC ("AAG").
AAG continues to contain the start-up businesses of Mari Signum Limited, Mari
Signum Dragon Drying- MS LLC, Mari Signum Mid-Atlantic LLC and Prometheus
Progenitor Genetics Technologies Limited LLC - all having been initially
involved and integrated within the main Chitin-based business of AAG.
These subsidiaries have strategically been operationally restructured in
favour of combining certain Chitin corporate assets and equipment with those
of 525 Solutions (a company founded by Professor Robin Rogers, who is the
collaborative creator of the ionic liquid extraction process for Chitin) and,
in doing so, forming a new venture, RGP525 Solutions LLC, in which AAG has an
investment holding of 19.9%.
Whereas the main focus of the Board, throughout the last decade and to date is
to consistently continue to explore various promising start-up or existing
business opportunities around the World, it is envisioned that through our
restructuring efforts in 2021 the ability for us to re-focus on these new
endeavours in 2022 should help enable us to be able to provide further
opportunities for consideration in the near future.
Regarding the Group's revenue performance in 2021, while undergoing the
continued restructuring of the Group during the constraints of COVID and
restricted cashflow, all operations were either suspended and/or wound-down
respectively in favour of the RGP-525 new Venture with 525 Solutions, along
with a further restructuring of AAG in order to accommodate a more enhanced,
efficient and effective separate business unit strategy.
The Directors are confident that, given its reasonably resolute structure and
strategies, the underlying value of the Group should be able to remain strong
and that the Group will hopefully find success in securing the strategic
business that it is currently seeking.
Regarding the financial position at year-end 2021, the Board can report that
the Group's statement of financial position shows that through such
restructuring efforts total assets are £394k compared to
£1,449k in 2020.
It is also worth noting that, in prior years, one of the largest items in the
Group's balance sheet was the long-term "Interest-bearing loans and
borrowings" of £6.072m that has since been restructured into Convertible Loan
Debentures, which were approved by the Board and Shareholders accordingly in
2020 and have been subsequently restructured in 2021 and extended for up to a
further one to three years (at the Board's discretion) potentially until 2025.
Thus the Group has managed to maintain a relatively healthy cashflow position
through the diminishment of this liability and also by the issuance of new
shares.
Business Outlook
The Board is reasonably confident, notwithstanding the COVID Pandemic and its
subsequent ongoing economic effects, that there will still be various unique
and exciting opportunities ahead - particularly in the short-term - for its
business to be sustained and/or transformed for potential growth to be
considered in the future.
As at the reporting date, the Group held £209k in cash, total assets of
£394k and current liabilities of
£3,875k, including amounts owed to associated undertakings of £2,335k.
Contemplation of cancelling all deferred shares, resulting in a one-off
exceptional gain, is currently under consideration by the Board in order to
provide a platform for future investment opportunities.
The budgets and cashflows set for 2022 & 2023 given ensuing partial COVID
Pandemic provisions, indicate that there are sufficient working capital
reserves, especially given prudent provisions.
Economic Considerations
In the light of the ongoing COVID pandemic and the uncertainties this brings,
the Directors have also prepared cashflow forecasts to December 2023. These
cashflows have been sensitized to assess the adequacy of cash available should
further COVID restrictions, global fuel prices, recession and/or inflation
impinge the activities of the Group. Based on the sensitivity testing and
additional resources available the directors are satisfied the group can
continue as a going concern for the foreseeable future.
Due to the emergency measures implemented by the respective Governments, which
are still ongoing in certain respects, and also given the subsequent strategic
RGP-525 new venture regarding the development cycle of Chitin, the Group has
already taken prudent steps to minimise the cost exposure of its activities
accordingly.
The Group is regularly reviewing its initial projections and also aiming to
minimise any potential deficits over the next financial year by trying to
reduce all non-essential expenditure.
Section 172(1) Statement
Within the strategic report for this financial year is the mandated Section
172(1) Statement which hereby describes how the Board of Directors have acted
in regard to the matters set out in Section 172(1)(a) to (f) when performing
their duties under this Section.
These duties have included, but are also not necessarily limited to, their
responsibility to earnestly promote the success of the Group and its
companies, to act in the way that he or she considers to be in good faith and
would be most likely to promote the success of the Group and its companies for
the benefits of its shareholders as a whole, and other stakeholders.
The Directors welcome the opportunity to also engage with our shareholders and
other stakeholders, wherever possible, in promoting and discussions regarding
reasonable, non-price sensitive information on subjects that are only
available within the Public Domain.
In both the Chairman's Statement and in this Strategic Report, the Chairman
and directors have detailed the matters affecting the Group during the year
particularly the subsequent restructuring of AAG.
The acquisition of AAG during 2018/2019 together with the effects of COVID, a
reduction of pre-agreed financing from the seller of AAG and ongoing
restructuring implementation have had significant impacts on the Group and
have subsequently resulted in a consecutive loss for the year.
The details given in these reports, particularly on pages 6 & 7, outline
the Directors strategy for the business both in the short and the longer term.
The main factor facing the Directors is the ongoing financing of the group
and/or any impact that the COVID-19 pandemic may have on the business. These
matters have had due consideration by the directors and are detailed in the
Strategic Review, in the Business Review 2021, Business Outlook and Corona
Virus pandemic considerations on pages 6 & 7 and Principal Risks and
Uncertainties on page 9.
At the end of last year it was reported that there was only one employee
(excluding the directors) remaining at the year-end (none UK) and that
employee is now on a part-time employment. During the current year more
employees had joined the group as the previously dormant subsidiary, Ross
Diversified Trading Limited had now become more active, however, it has since
been decided to restructure their employment, respective roles and
responsibilities while also considering other opportunities that may perhaps
be presented by them and/or other parties in the foreseeable future.
The main stakeholders are the shareholders and the directors are committed to
acting in their best interest and communicate to them at the AGM and through
regular correspondence and/or webinars, whenever deemed relevant, as well as
through timely filing of informative interim and year-end financial
statements, stock exchange announcements and as detailed in the Governance
Report on page 12.
As detailed in the Strategic Report on pages 6 to 11 the directors are proud
of the Group's Premium Listing on the Main Board of the London Stock Exchange
and therefore always have the desirability of the Group and its companies
maintaining a reputation for high standards of business conduct as also
detailed in the Governance Report on page 15.
As the Group is continuing to be focused on research and development through
its relationship in the RGP-525 new venture with 525 Solutions and the key
relationship with Professor Robin Rogers, it can confirm that there is little
or no impact that the Group has on its community or environment as detailed on
page 10 of the Strategic Report.
Whilst the Group has sufficient cash and reserves to meet its current needs as
detailed in the Strategic Report on page 7, the directors are always striving
to increase revenue and raise funds for strategic opportunities they view are
beneficial to the Group shareholders.
Principal Risks and Uncertainties
Notwithstanding the Coronavirus Pandemic, the main risk to the existing
operations of the Group is the possibility of depleting necessary working
capital. The Board is both fully aware of these risks and, as a result, has
always endeavoured to managed its cash and cashflow as conservatively and
prudently as possible; ensuring that its exposure to any RGP-525 liabilities
in this instance are primarily limited to its initial investment.
Due to time constraints the company has not been able to publish the 2021
accounts before the deadline of 30 June 2022. As a result of this the trading
of the company's shares has been suspended on the London Stock Exchange. It is
understood that this suspension will be removed when the financial statements
are published.
In addition, the Board is equally endeavouring to ensure that funds are being
made available to the Group, through the issuance of new shares and/or other
financial instruments, whilst also exploring other opportunities for future
growth.
Your Directors are therefore reasonably confident that the Group currently has
both the financial resources and capability to fund existing expenses for
future growth.
Viability Statement
The Group's business activities, together with the factors likely to affect
the future performance and position are set out in the Group Strategic Report
and Going Concern Statement on pages 6 to 11
Having endured a protracted period of the COVID Pandemic over the last 2
years, the Group has now begun to take a longer term view of various
post-COVID Pandemic potential factors, ranging from Global and/or Continental
inflation and recession, through to perhaps other opportunities arising in
such markets, for example, in Crypto exchanges and/or Supply Chain Management
(SCM) services.
Given the current listing of the Group on the Main Board of the London Stock
Exchange and also it's present Premium Listing status, both of which
individually and/or collectively are of considerable value, the Group believes
that it is in a viable position to be able to enter into either possible
start-ups, joint ventures, mergers and/or acquisitions; any of which would
probably involve an injection of new management and business(es) that could
transform the Group significantly.
In addition, the Group's existing business potential is presently beginning to
take shape in its commodity-based trading and supply chain management
services; with initial contracts being forecasted and/or envisioned
accordingly.
As recently demonstrated, new share issuances have been successfully placed to
date and there seems to be a continued interest for possible or potential
further new share issuances in the foreseeable future.
Breakdown by sex of directors
At 31 December 2021 there are five directors: five men and no women.
Environmental matters
1 - UK Companies
In the year under review, the activities of all of the RGP UK companies (Ross
Group, the parent) and Ross Diversified Trading (a subsidiary) involved no
direct manufacturing, mining or materials processing. The UK based Directors
mostly worked from home, made frequent use of telecoms/remote conferencing to
discuss company business and occasionally met at hired premises.
The Board considers that in such circumstances, the carbon emissions arising
from those Directors' activities (excluding the Chairman) are minimal.
The Chairman, Mr Barry Richard Pettitt who in the past has previously
travelled extensively around the world, accompanied occasionally by other
directors, had in fact not travelled internationally at all during 2020
however he has started to travel more extensively in 2021 in pursuit of new
opportunities. Therefore, the total number of business miles the Ross
directors travelled in 2021 is calculated at 44,443 which, per the conversion
factor taken from the Carbonify.com, website amounts to 23.2 kg CO2.
2 - US Companies
The acquisition of AAG in January 2019 meant that the Group now had for the
first time in many years research and development facilities with industrial
processing/manufacturing premises. Given aforesaid circumstances, these were
restructured accordingly, as discussed elsewhere in this report, so that the
commercial production of Chitin - a powerful, natural polymer containing
characteristics with the potential to alter industries and improve the
environment - now forms an integral part of a new venture, namely, RGP-525
which intends to use its best endeavours to produce market-ready, premium
quality Chitin in an environmentally conscious manner at some time in the
future. This investment is being monitored and managed through Ross Group PLC
Inc., which is also responsible for the Group's other USA investments and
activities. All US Companies have managed to maintain a minimal number of
employees and/or sub-contractors.
The Board of Directors are very proud to be partly responsible for such an
environmentally friendly new venture operation and subsidiaries that are also,
wherever possible, committed to similar standards, ethics and governance.
The Board of Directors, who are responsible for the day-to-day management of
the Group, have considered the requirements of the FCA new Listing Rule to
enhance climate- related financial disclosures for periods beginning on or
after I January 2021 and the associated recommendations of the Task Force on
Climate Related Financial Disclosures (TCFD).
The TCFG recommend disclosures are made specifically in the areas of
governance and risk management with regard to climate related risks and
opportunities and where material the strategy and metrics and targets used to
assess such risks and opportunities.
The Board at their regular meetings consider all risks and opportunities
facing the Group. The current limited operations of the Group, in the
judgement of the Board, do not give rise to significant risks and
opportunities related to climate - related matters and the Board have
therefore not fully made all disclosures consistent with the some or all of
the TCFD's recommendations and / or recommended disclosures on the grounds of
materiality.
The Board at regular meetings, from a governance perspective, has continued
oversight of operations, they consider any climate -related matters that may
arise from changing activities and any risks or opportunities that may arise.
These matters are considered for the short, medium and long-term impact they
may have and the Board continues to strive to support a low carbon economy.
From a risk management perspective any opportunities being considered by the
Board must also highlight as part of that due diligence any risks associated
with the opportunity. The impact any climate- related matters may have
resulting from its location, changing climate conditions we are seeing develop
that may impact the future of such an opportunity be it from rising
temperatures resulting in flood, fire, rising sea levels or such other climate
- related matters, climate related policy or emerging technologies. The risks
are not only considered from the Group's perspective but from that of our
supply chain and customers also. The Board consider the impact any such risks
may also have on our ability to raise future capital or restructure debt
should that be required.
There are no such climate -related risks identified at this time and the
possible opportunities being considered by the Board be it through the
investment in RGP-525 or other opportunities under consideration do not give
any additional climate - related risks.
On behalf of the Board
…………………………………… Barry Richard Pettitt - Chairman
Date: 2022
The directors present their report with the financial statements of the
company and the group for the year ended 31 December 2021.
Dividends
No dividends will be distributed for the year ended 31 December 2021.
Events since the end of the year
Information relating to events since the end of the year is given in the notes
to the financial statements.
Directors
B R Pettitt (Chief Executive Officer)
Barry Richard Pettitt, aged 62, was appointed to the board on 22 December 2008
as the CEO of the group and elected as its Chairman and CEO on 28 April 2009.
He has more than 30 years' experience within the consumer electronics and
supply chain management industries, during which time he successfully started
a specialist supply chain management services company. ISO International
(Holdings) Ltd, which was subsequently purchased by a Hong Kong Public Company
for HK$ 155,000,000 in 2003. In addition, he has managed a number of Public
Company divisions (in the capacities of President and Managing Director) and
successfully relisted a Hong Kong Public Company, Vision Tech Ltd, as its CEO
in 2007. Prior to that, he was the joint Managing Director of Ross Consumer
International Ltd and a main board director of the Ross Group (formerly Ross
Consumer Electronic Plc) in 1987 after which he has continued to be a
shareholder in Ross Group for the last 34 years.
S C Mehta (Executive Director)
Shashi Mehta, aged 64, was appointed on the board on 22 December 2009. He
holds a BSc (Hons) in Manufacturing and has had a distinguished career in a
variety of industrial and manufacturing trouble- shooting roles. He brings a
wealth of experience and expertise to the Group. He spent many years working
for the Ford Motor Company, and was Operations Manager in Ross Consumer
Electronics during the 1980's.
R E Tamraz (Non- Executive Director)
Roger Tamraz aged 81, was appointed to the Board in December 2020 as a
Non-Executive Director. He is an international banker and venture capital
investor who has had an active business career in banking, oil and gas
spanning from Middle East to USA. Fluent in English, French and Arabic, he was
Chairman of Kidder, Peabody & Co. Middle East. Also has owned and
controlled banks in the Middle East and in the United States; Also, having led
the takeover and then re- built the largest bank in Lebanon, Intra Bank.
P M Fisher
Philip Fisher aged 68, was appointed to the board in February 2021. He was the
joint Managing Director of Ross Consumer International Ltd., a subsidiary of
Ross Group (formerly Ross Consumer Electronic Plc) in 1988/89 and has since
maintained an excellent working relationship with its senior management for
many years. He will oversee new business divisions and/or developments within
the UK.
Newly Elected Directors
M J L d'Hombres (Non- Executive Director)
Marc d'Hombres aged 75, was appointed to the board in December 2021 as a
Non-Executive Director. He is a loan and economics graduate from Paris
university and has in-depth experience managing boutique investment banks and
private equity funds. He is well versed in the African markets and an expert
in trade and project financing.
Financial Instruments
Details of the financial instruments used by the group can be found in note 22
of the accounts.
Employee Involvement
During the year there was an average of 3 employees, and 5 Main Board
directors.
Directors Interests Directors
Mr Barry Pettitt has from time to time entered into contracts with Ross Group
concerning the provision of professional services to third parties and/or
subsidiaries. Apart from this, no director had any interests in contracts of
significance with the company.
In accordance with the Articles of Association members will be asked to
confirm the appointment of all directors.
The total number of shares controlled by Barry Pettitt, directly and
indirectly through Lynchwood Nominees Limited (previously Prime Growth
Enterprises Limited) at the date of this report was 27,305,609 (11.72%). Mr
Pettitt has sought and obtain Board approval to specifically negotiate and
possibly increase his shareholding interests as well as to further his loan
position with Group on existing financial instruments
Substantial shareholdings
As at 31 December 2021 the following were registered as being materially
interested in 4% or more of the company's issued share capital, or being a
related shareholder.
No of Ordinary Shares % of Issued Share Capital
Keniworth Capital Limited 40,000,000 17.17%
Vidacos Nominees Limited 37,033,448 15.89%
Lynchwood Nominees Limited Des: 2006442 27,078,369 11.62%
Escalating Investments Limited 22,200,720 9.53%
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual 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 as adopted by the UK and the Republic of Ireland. 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 state of affairs of the
company and the group and of the profit or loss of the group for that period.
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 applicable UK Accounting Standards have bene
followed, subject to any material departures disclosed and explained in the
financial statements;
- 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
sufficient to show and explain the company's and the group's transactions and
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. They are also responsible for safeguarding
the assets of the company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
1. The financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the UK and the Republic of
Ireland, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the company and the undertakings included in
the consideration taken as a whole; and
2. The management's report, which is incorporated into the Directors'
Report together with the information provided in the Chairman's Statement, the
Strategic Report, includes a fair review of the development and performance of
the business and the position of the company and the undertakings included in
the consolidation as a whole, together with a description of the principal
risks and uncertainties that they face.
Statement as to disclose of information as Auditors
So far as the directors are aware, there is no relevant audit information (as
defined by Section 418 of the Companies Act 2006) of which the group's
auditors are unaware, and each director has taken all the steps that he ought
to have taken as a director in order to make himself aware of any relevant
audit information and to establish that the group's auditors are aware of that
information.
Auditors
In accordance with section 485 of the Companies Act 2006, a resolution
proposing that CBW Audit Limited be re-appointed will be put at the
forthcoming Annual General Meeting in 2022.
On behalf of the Board
………………………….. M J L d'Hombres Director
Date: 2022
Application of The Principles of the UK Corporate Governance Cod
The group is pleased to present its report on Corporate Governance and the UK
Corporate Governance Code. The board strives to comply with the high standards
set by the UK Corporate Governance Code as incorporated in the UK Listing
Rules of the Financial Conduct Authority. The Code requires the company to
make a two-part disclosure statement, firstly on how the principles of the
code are applied and secondly confirmation of compliance or explanation of any
reason for deviation from the Code. Throughout the year the company has
complied with the main principles of the Code.
The Board
There is an effective and appropriately constituted board which in the year
under review consisted of five directors. The Chief Executive, Mr Pettitt who
is normally based overseas, also serves as Chairman. The board is fully aware
that this is contrary to Code provision A.2.1, which states that the roles of
chairman and chief executive should not be exercised by one individual. The
board is of the opinion that, given the current size of the business, and also
Mr Pettitt's undoubted and considerable knowledge, experience and contacts in
the Group's field of operations that the shareholders' interests are best
served by this arrangement. The board is active in its management of the group
and meets and confers regularly on business matters arising. These frequent
and robust discussions serve to ensure that no one individual has unfettered
powers of decision.
During 2021 Mr Pettitt was supported by four other directors: Mr P.M. Fisher
being appointed in January 2021 and Mr M J Simon, who was appointed in April
2009 and retired in December 2021, Mr S C Mehta who was appointed in December
2009, and Mr R Tamraz being appointed in December 2020.
Mr Simon who acted as company secretary since April 2009, resigned on 14
September 2022. Mr S C Mehta was appointed as the company secretary on 14
September 2022.
One director resigned from the board in December 2021 Mr M J Simon. One new
director was appointed December 2021 Mr M J L D'Hombres.
The two non-executive directors, Mr D'Hombres and Mr Tamraz, are considered to
be independent as there are no circumstances or relationships as described by
Code provision B.1.1 which apply to their appointments. The group's definition
of a non-executive director is one who considers the interest of all the
shareholders and this is demonstrated during the board meetings. As part of
their role, the non- executive directors constructively challenge decisions
and help develop strategies and plans for the benefit of the board.
Board procedure
The board is responsible for decisions concerning strategic and financial
planning and matters involving the overall direction of the company.
Management will seek board approval of the annual budget and rolling business
plan. Reforecasts are presented as updates to the budget throughout the year
to account for variances and provide forward vision. The operational business
decisions are taken by local management with reference to the board where
necessary.
The board has established several separate committees for the following:
Appointments (Chaired by Mr Pettitt);
Audit & Remuneration (Chaired by Mr D'Hombres); Governance &
Compliance (Chaired by Mr Mehta)
All of the directors are subject to periodic re-election and also the full
board considers all appointments. A director will require re-election within a
maximum period of three years.
Biographies of the board are included in the financial statements. These
indicate a wealth of experience, which is essential in effectively managing
the activities of the group. In addition to this the board members, wherever
deemed appropriate and/or possible, endeavour to attend relevant seminars and
courses of their respective professional organisations.
Attendance
Board meetings are held regularly throughout the year. Due to the location of
the directors, the meetings are often held electronically. The board is
supplied with all the information relevant to the meeting in a timely manner
and in a form and quantity appropriate to enable it to discharge its duties
during the meetings.
The board has now established procedures in respect of access to the company
secretary and the directors have access to consult the company secretary when
required.
All shareholders have the opportunity to put forward questions to the board
during the company's Annual General Meeting and the board communicates with
the shareholders via the notices and other papers relating to the Annual
General Meeting. The company also welcomes and responds wherever possible to
communication, preferably in a written form, from its Shareholders regarding
reasonable, non-price sensitive information requests on subjects that are only
available within the Public Domain.
The company website allows shareholders to contact the directors by email.
The board has carried out a formal and rigorous annual evaluation of its
performance and of its committees and individual directors. This evaluation
covers contribution, commitment and the manner in which board related duties
have been completed. The chairman has discussed the review with individual
directors where necessary to ensure the board operates as an effective unit.
The performance review was conducted using recognised evaluation processes.
The independent non- executive director has conducted a performance review on
the chairman which included the consideration of the views expressed by the
executive directors.
Internal audit and control
The respective responsibilities of the directors and the auditors in
connection with the financial statements are set out in the audit report. The
directors have overall responsibility of the effectiveness of the group's
whole system of internal control, including financial and other controls,
which are designed to provide reasonable but not absolute assurance against
material misstatement or loss. The key procedures that the directors have
established to provide effective internal financial control are as follows:
Financial Reporting
There is a comprehensive system for reporting performance. During the course
of the year, a one year rolling budget is prepared for each company within the
group and a consolidated budget is prepared for the whole group. The board
then formally approves the budgets. The results are then reported regularly to
the board for their consideration and forecasts are revised accordingly.
Quality and Integrity of Personnel
The integrity of the group is maintained through the appointment of
experienced and professional staff and the application of appropriate policies
and procedures.
Capital Investment
The group has set procedures for capital expenditure. These include annual
budgets, appraisals and review of the required expenditure, approvals at the
right levels of authority and the commissioning of independent professional
advice where appropriate.
Professional Advice
Professional advice is usually sought on contentious and disclosure issues,
this being as a result of discussions during the Board Meetings. During the
year the Chairman can seek independent professional advice in relation to
matters affecting the group.
The group has an ongoing system for identifying, evaluating and managing the
significant risks faced by the group which has been in place for the whole of
the year under review up to the date of approval of the annual report and
accounts and which is regularly reviewed by the board to ensure it continues
to accord with the UK Corporate Governance Code. The directors have reviewed
the effectiveness of the system of internal financial control during the year
from information provided by the management and the group's external auditors.
It must be recognised that such a system can only provide reasonable and not
absolute assurance, and in that context, the review revealed nothing which, in
the opinion of the directors, indicates that the system was inappropriate or
unsatisfactory.
The group has no formal internal audit function and the board has determined
that there is no need for one. The board considers that internal audit is
dealt with in other ways and the situation is regularly reviewed.
Going Concern
The directors confirm that after making the appropriate enquiries, they are of
the opinion that the group as a whole has adequate resources to continue in
operational existence for the foreseeable future and therefore have prepared
the financial statements on a going concern basis.
External Audit and Audit Committee
The Audit Committee during 2021 comprised of the non-executive directors, Mr
Simon and Mr D'Hombres, as well as Executive Directors Mr Mehta and Mr Fisher.
The committee was chaired by Mr Simon until 31 December 2021 when this role
was passed to Mr D'Hombres. It met periodically to review the adequacy of the
group's internal control systems, accounting policies, corporate governance
policies and compliance with applicable accounting standards and to consider
the appointment of the external auditors and to review their fees. CBW Audit
Limited is invited to attend these meetings. The Audit Committee is authorised
by the board to investigate any activity within its terms of reference and
obtain external professional advice as is necessary.
By order of the Board
……………………………….. Barry Richard Pettitt
Chairman & Group Chief Executive Officer
Date: 2022
The board is pleased to present its remuneration report in accordance with
section 12.43A(c) of The Listing Rules.
The board has in place a remuneration committee, comprising Mr Michael Simon,
non-executive director to 31 December 2021, and Mr B Pettitt, Chief Executive,
to determine the remuneration of the board. Post year end Mr Tamraz joined the
committee following Mr Simon's resignation.
The company policy during the restructuring period throughout 2021 was to
continue to pay directors only a nominal £1 salary (which has been in place
since 2008). This policy will be reconsidered as occasion arises and as the
new business opportunities open to the group are realised. The directors feel
it would be inappropriate to take any reward until that has been achieved.
Total Total
Gross salary Notice Pay Remuneration 2021 Remuneration 2020
Name Position Benefits
B R Pettitt Chairman/ Group Chief Executive £1 Nil Nil £1 £1
M J Simon Non- executive Director £1 Nil Nil £1 £1
S C Mehta Executive Director £1 Nil Nil £1 £1
R E Tamraz Executive Director £1 Nil Nil £1 £1
P M Fisher Executive Director £1 Nil Nil £1 £1
M J L D'Hombres Non- executive Director Nil Nil Nil Nil Nil
.
No director currently has a service contract with a notice period in excess of
12 months. All executive directors have contracts that require a notice period
of one month. The contracts of the non-executive directors would normally be
renewed for a period of one year. All directors are presented for re-election
by the members at the Annual General Meeting on a maximum cycle of three year.
The group does not currently operate a director's share option scheme or a
long-term incentive system. The group also does not currently have an
employees' share scheme or other long-term incentive.
The board has instructed local management to ensure the companies address
those corporate social responsibilities which are recognised as being of prime
importance. The responsibility for CSR rests with the Chief Executive Officer,
Barry Pettitt, who will bring to the board's attention any major issues which
require their approval and regularly updates the board on CSR matters. The
views of shareholders and interested external parties are considered when
developing the ongoing policy to CSR.
Figures are available for the board to review to enable them to assess the
trend towards improvement in CSR matters and to direct the policy towards
those areas that require further attention.
For the year ended 31 December 2021
Employees
For several years the only employees of the company were its directors. This
changed with the acquisition of AAG in January 2019. When this happened, the
Group inherited 25 employees, this has now reduced on the reorganisation of
AAG.
The group has always taken the view that employees constitute a group's most
valuable asset and therefore it has always been committed to ensuring they
should enjoy the best environment in which to perform their duties, one of
equal opportunity and free from discrimination and harassment.
For reasons discussed elsewhere, it was not possible to continue operations
with the four businesses of AAG constituted as they were, and those facilities
during and by the year ended 2019 were suspended. Consequently, at the
year-end 2019 there was only one employee left on the payroll of the AAG
companies. During 2021 this has increased to three and they have been joined
by three new employees in Ross Diversified Trading Limited as this, previously
dormant subsidiary commenced trading in the year 2020. In 2021 trading results
proved difficult and numbers have been reduced again.
The group strongly believes in the future of the AAG technology, and we have
developed a corporate structure to facilitate that development through the
RGP-525 new venture. We will aim to promote a culture which suits the
recruitment and retention of the highest calibre of staff and to ensure that
all staff will be trained to the appropriate standard required to fully meet
their job specifications.
The health and safety of the employees is paramount to the group. Staff are
issued with data sheets on the handling of any substances which might be toxic
and will be trained in the correct procedures to follow. Any potential issues
can be raised with Mr Pettitt.
Environment
The board is fully aware of its responsibilities and fully supports the drive
for ongoing improvement in this area. The impact the group's activities on the
environment are regularly assessed to enable action to be directed at areas
where any harmful impact could be reduced. As noted above the travel and
energy use in the group have been limited over the past two years.
The group has worked with its suppliers during the year to ensure the products
used in manufacturing and any waste arising from the use of those products
have a minimal impact on the environment. The use of energy is closely
monitored, and the available controls are used to good effect to reduce
consumption where possible.
Customers
Customer satisfaction is one of the main targets for the group and this is
aided by a rigorous quality policy. The Quality procedures adopted by the
group require the recording of customer feedback and measures our performance
against customer expectation. The group strives to meet the demands of its
customers, but also ensures that solutions to their requirements are designed
with efficiency.
Local Community
The group seeks to inter act with the local community and develop close
relationships within its area of operation. It has established links with the
local schools and colleges.
Commitment
The group will continue to enhance its approach to CSR to ensure that it
supports the principles as it expands its range of activities and welcomes any
suggestions on how it can improve in this area.
Opinion
We have audited the financial statements of Ross Group Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 31 December
2021 which comprise the group and parent company's Income Statements,
Statements of Comprehensive Income, Statements of Financial Position,
Statements of Changes in Equity, Statements of Cash Flows and notes to the
consolidated 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 (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
- give a true and fair view of the state of the group's and of the
parent company's affairs as at 31 December 2021 and of the group's and the
parent company's loss for the year then ended;
- have been properly prepared in accordance with IFRSs as adopted
by the United Kingdom; and
- have been prepared in accordance with the requirements of the
Companies Act 2006 and, as regards the group financial statements, Article 4
of the IAS regulation.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 2 to the group financial statements, the group in
addition to complying with its legal obligation to apply IFRSs as adopted by
the United Kingdom, has also applied IFRSs as issued by the International
Accounting Standards Board (IASB).
In our opinion the group financial statements give a true and fair view of the
consolidated financial position of the group as at 31 December 2021 and of its
consolidated financial performance and its consolidated cash flows for the
year then ended in accordance with IFRSs as issued by the IASB.
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 public interest 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 opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
there are events or conditions identified that may cast significant doubt on
the entity's ability to continue as a going concern. The Company's listing
with the London Stock Exchange is currently suspended, which creates
uncertainty in respect of the timing of its re-listing. This unknown time
frame has an effect on future trading and cash flows. In addition to this, the
Company and Group have presented a loss for the year ended 31 December 2021,
and, at the balance sheet date, both have net current liabilities. As stated
in note 2, these events or conditions, along with the other matters as set
forth in note 2, 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
- Obtaining management's assessment of going concern of the Group
and challenged the appropriateness of the assumptions used by utilising our
knowledge of the Group gained throughout the audit and obtaining further
corroborative audit evidence.
- Analysing forecasts prepared by management covering a period to
31 December 2023, which have been flexed using different variables for events
over the corresponding period.
- Reviewing minutes of meetings of the Board for any factors that
may affect going concern.
- Assessing the wider macro-economic environment over the period,
in particular with respect of COVID-19 and Brexit.
- Considered publicly available information to identify if there
is anything to contradict the assessment made by management, or if there are
any indicators of potential risk to the group of industry.
- Assessing the appropriateness of going concern disclosure.
In relation to the entity's reporting on how they have applied the UK
Corporate Governance Code, we have nothing material to add or draw attention
to in relation to the directors' statement in the financial statements about
whether the director's considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our approach to the audit
Tailoring of the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the group and the company, the accounting processes
and controls, and the industry in which they operate
The group consists of the parent company and a subsidiary incorporated in the
UK, for which a full scope audits were conducted, and an American based group
(AAG), which consists of five companies and Ross Group Plc Inc. All
subsidiaries were considered to be significant components, therefore audit
work was completed on material balances. These group companies are listed in
note 12 of the financial statements. There were no acquisitions during the
reporting period, therefore the scope has not changed significantly compared
to the prior period.
Procedures have been conducted on a group level to ensure the amounts brought
into the consolidation are not materially misstated.
Materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Key Audit Matter How our scope addressed this matter
Revenue recognition
Revenue is recognised in accordance with the accounting policy set out in the Performed substantive testing. We tested a sample of transactions from the
notes to the consolidated financial statements (set out in note 2). The point of origin, which were the original contracts, and traced these to the
accounting policy contains a number of judgements with regards to revenue financial statements. Revenue of Ross Diversified Trading (RDT) tested
earned from contracts. This is considered to be a significant risk due to it substantively per the above. However, it was found that there was no further
often being contingent on external variables. trading income to be recognised in the year, which is consistent with
understanding of the business. Assessed whether income transactions were
recorded in compliance with IFRS 15 and constitute an agent or principal
relationship. Assessed the
appropriateness of the related disclosures in the financial statements and
consider them to be reasonable.
The key observations with regards to these risks were that we concurred that
revenue had been recognised in accordance with IFRS 15 Revenue from contracts
with customersand is materially appropriate or accurate.
Non-compliance with laws and regulations Ross Group Plc has a premium listing
on the London Stock Exchange, and therefore needs to comply with a high level
of regulation. Non- compliance with these laws and regulation could result in Performed testing to ensure that the parent company is up to date with
the parent company being de- listed from the London Stock Exchange, which relevant fees due to regulators. Performed testing to ensure that all returns
would threaten the group are submitted in accordance with requirements and within the specified
and parent company's ability timescales. Performed a detailed analysis of the relevant laws and regulations
to continue. This is considered to and discussed with management to outline the control processes to ensure
be a significant risk. compliance with these rules.
They key observation with regards to this risk was that the parent company is
generally compliant with the requirements of the London Stock Exchange. It is
noted that the Company is not currently compliant with the London Stock
Exchange rules with regards to the filing of the financial statements, and the
shares are currently suspended.
Key Audit Matter How our scope addressed this matter
Going concern
The group is considered by the board to be a going concern, and the accounts In order to address this risk, a detailed review of going concern was
have been prepared as appropriate on this basis, and therefore this judgement conducted, which involved reviewing management's forecasts for the period up
should be assessed. As the majority of the group companies do not trade or to December 2023, and challenging the assumptions made in preparation of this.
generate revenues, and the group is in a net liabilities position, there is a Sensitivity analysis was conducted, and a 'worse' case scenario was assessed
risk of material uncertainty relating to going concern, compounded with the to consider the impact of this. Detailed discussions have been had with
current economic climate as a result of COVID-19. management on future plans, review of board meeting minutes, and review of the
appropriateness of the going concern disclosure in note 2. The application of
materiality is not as applicable in this area since this relates to the
overall appropriateness of applying the going concern principle.
The key observations with regards to this risk are that due to the suspension
of the shares with the London Stock Exchange, and the lack of financial
support for the Company, there is a material uncertainty relating to going
concern.
Accounting estimates
We will assess the impairments made by management to ensure that investments We obtained an understanding of the impairment process and evaluated the
and fixed assets are not materially misstated in the financial statements. impairment methodology and, tested the accuracy and completeness of the
impairment review assessments. We gathered evidence from third parties, where
possible, to corroborate cost assumptions included in calculations for future
activity of operations for the forecasts. For those assets or investments
impaired previously, we evaluated the actual results and the assumptions made
and considered if reversals were required. We checked the recoverability of
the receivables in AAG's accounts to gain direct written confirmations on the
existence of these assets from third parties. And obtained evidence from third
parties of financial stability and ability to repay to test recoverability. We
enquired management regarding the intention of the group balances, and whether
these should be netted off.
Our application of materiality
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows: group and parent company
materiality for the financial statements as a whole at
£29,100 and £26,300 respectively, which is based on 2% of loss before tax
after the removal of exceptional items at the planning stage. Materiality has
been set using this measure as this is considered to represent the most
appropriate measure of underlying performance, which is the most sensitive
measure being a listed group. The group and parent company performance
materiality adopted is 50% of this figure, which was calculated as £14,500
and £13,100 respectively. This is deemed by the audit team to be an
appropriate level to identify material errors, which is used for a high-risk
audit. The materiality at completion has been assessed and it was noted that
the loss before tax had increased as a result of an audit adjustment, however
it was concluded that materiality should not be amended. Materiality has
influenced our workings not only for the key audit matters but also for the
rest of the work performed during the audit. Anything below £1,450 and
£1,300 was considered trivial from a group and parent company perspective
respectively.
We agreed with the audit committee that we would report to them misstatements
identified during our audit above £1,450 or £1,300 as appropriate as well as
misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors' remuneration report to be audited
has been properly prepared in accordance with 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 those reports have been
prepared in accordance with applicable legal requirements;
- the information about internal control and risk management systems
in relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Rules and Transparency Rules sourcebook made by the Financial Conduct
Authority (the FCA Rules), is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements; and
- information about the company's corporate governance code and
practices and about its administrative, management and supervisory bodies and
their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
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; or
- the information about internal control and risk management systems
in relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
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 and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
- certain disclosures of directors' remuneration specified by law
are not made; or
- we have not received all the information and explanations we
require for our audit; or
- a corporate governance statement has not been prepared by the
parent company.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to
going concern, longer- term viability and that part of the Corporate
Governance Statement relating to the group's compliance with the provisions of
the UK Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
- Directors' statement with regards the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified (set out on page 10);
- Directors' explanation as to its assessment of the entity's
prospects, the period this assessment covers and why they period is
appropriate (set out on page 13).
- Directors' statement is fair, balanced and understandable (set out
on page 14);
- Board's confirmation that it has carried out a robust assessment
of the e-merging and principal risks (set out on page 14);
- The section of the annual report that describes the review of
effectiveness of risk management and internal control systems (set out on page
13); and;
- The section describing the work of the audit committee (set out on
page 14).
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 11, 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 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 company or to cease operations, or
have no realistic alternative but to do so.
Auditor's Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
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 ensured that the engagement team collectively had the appropriate
competence, capabilities and skills to identify or recognise non-compliance
with applicable laws and regulations. The laws and regulations applicable to
the company were identified through discussions with directors and other
management, and from our commercial knowledge and experience of a premium
listed group undertaking various global activities. Of these laws and
regulations, we focused on those that we considered may have a direct material
effect on the financial statements or the operations of the company, including
the Listing Rules of the Financial Conduct Authority (FCA), Companies Act
2006, taxation legislation, data protection, anti-bribery,
anti-money-laundering, employment, environmental and health and safety
legislation. The extent of compliance with these laws and regulations
identified above was assessed through making enquiries of management and
inspecting legal correspondence. The identified laws and regulations were
communicated within the audit team regularly and the team remained alert to
instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to
material misstatement, including obtaining an understanding of how fraud might
occur, by:
- making enquiries of management as to where they considered there
was susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud;
- considering the internal controls in place to mitigate risks of
fraud and non-compliance with laws and regulations; and
- understanding the design of the company's remuneration policies.
To address the risk of fraud through management bias and override of controls,
we:
- performed analytical procedures to identify any unusual or
unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining
the accounting estimates set out in note 2 were indicative of potential bias;
and
- investigated the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting
documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and
claims; and
- reviewing correspondence with HMRC, relevant regulators including
the FCA and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The
more removed that laws and regulations are from financial transactions, the
less likely it is that we would become aware of non- compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any. Material
misstatements that arise due to fraud can be harder to detect than those that
arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: https://www.fr
(http://www.frc.org.uk/auditorsresponsibilities) c.org.uk
(http://www.frc.org.uk/auditorsresponsibilities) /auditorsresponsibilities.
(http://www.frc.org.uk/auditorsresponsibilities) This description forms part
of our auditor's report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the
board of directors on 20 May 2021 to audit the financial statements for the
year ending 31 December 2021 and subsequent financial periods. The period of
total uninterrupted engagement is 3 years, covering the years ending 31
December 2019 to 31 December 2021.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the parent 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 parent company's members
those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the parent company and the parent
company's members as a body, for our audit work, for this report, or for the
opinions we have formed.
Daniel Howarth FCA (Senior Statutory Auditor) for and on behalf of CBW Audit
Limited Chartered Accountants
Statutory Auditors 66 Prescot Street London
E1 8NN
Date:
2021 2020
Notes £'000 £'000
Restated
Revenue
- 43
Production expenses - (39)
──── ────
Gross profit / (loss) - 4
Other operating income 5 5 135
Administrative expenses (1,878) (894)
──── (1,873) ──── (755)
Operating (loss)
Finance income 8 1 1
Finance expense 8 (704) (491)
──── (2,576) ──── (1,245)
(Loss) before income tax 7
Income tax 9 - -
──── (2,576) ──── (1,245)
(Loss) for the year ════ ════
(Loss) attributable to: Owners of the parent
(2,576) (1,245)
════ ════
Earnings per share expressed in pence per share: Basic 10
(1.11) (0.57)
Diluted (0.85) (0.44)
════ ════
Earnings per share from continuing operations Basic
(1.11) (0.57)
Diluted (0.85) (0.44)
════ ════
The notes form part of these financial statements.
2021 2020
Notes £'000 £'000
Continuing operations Restated
Revenue - -
Other operating income 5 22 30
Administrative expenses (2,782) (220)
──── (2,760) ──── (190)
Operating (loss)
Finance costs 8 (612) (366)
──── (3,372) ──── (556)
(Loss) before income tax 7
Income tax 9 - -
──── (3,372) ──── (556)
(Loss) for the year ════ ════
2021 2020
£'000 £'000
Restated
(Loss) for the year (2,576) (1,245)
Exchange losses arising on translation of foreign operations (13) (89)
──── (2,589) ──── (1,334)
Total comprehensive income for the year ════ ════
Total comprehensive income attributable to: Owners of the parent
(2,589) (1,334)
════ ════
2021 2020
£'000 £'000
Restated
(Loss) for the year (3,372) (556)
Exchange losses arising on translation of foreign operations - -
──── (3,372) ──── (556)
Total comprehensive income for the year ════ ════
2021 2020
Notes £'000 £'000
Assets Restated
Current assets
Trade and other receivables 16 117 310
Cash and cash equivalents 17 209 91
───── ─────
326 401
Non-Current assets ───── ─────
Investments 12 - 424
Property, plant and equipment 13 27 313
Right-of-use assets 14 41 311
Intangible assets 15 - -
───── ───── 1,048
Total assets Equity 68 ───── 1,449
───── ═════
394
═════
Shareholders' equity
Called up share capital 18 11,232 11,218
Share premium 19 3,540 3,146
Other reserves 19 15,384 15,384
Convertible debenture 19 4,692 5,145
Translation reserve 19 (212) (199)
Retained earnings 19 (41,943) (39,820)
Total equity Liabilities ───── (7,307) ───── (5,126)
───── ─────
Non-current liabilities
Lease liabilities 14 10 183
Financial liabilities 21 3,003 2,551
Provisions 26 813 -
───── 3,826 ───── 2,734
───── ─────
Current liabilities
Trade and other payables 20 3,315 3,408
Lease liabilities 14 37 208
Financial liabilities 21 523 225
───── 3,875 ───── 3,841
───── 7,701 ───── 6,575
Total liabilities ───── ─────
Total equity and liabilities 394 1,449
═════ ═════
The financial statements were approved by the Board of Directors
on 2022 and were signed on
its behalf by:
……………………………………….
……………………………………….
B Pettitt -
Director
M J L d'Hombres - Director
2021 2020
Notes £'000 £'000
Assets Restated
Current assets
Trade and other receivables 16 78 763
Cash and cash equivalents 17 193 44
───── ─────
271 807
Non-Current assets ───── ─────
Investments 12 - 627
Property, plant and equipment 13 16 20
───── ─────
16 647
───── ─────
Total assets 287 1,454
───── ─────
Equity
Shareholders' equity
Called up share capital 18 11,232 11,218
Share premium 19 3,540 3,146
Other reserves 19 30,938 30,938
Convertible debenture 19 4,692 5,145
Retained earnings 19 (55,239) (52,320)
───── ───── (1,873)
Total equity (4,837) ─────
─────
Liabilities
Non-current liabilities
Financial liabilities 21 3,003 2,551
Provisions 26 813 -
───── 3,816 ───── 2,551
───── ─────
Current liabilities
Trade and other payables 20 914 551
Financial liabilities 21 394 225
───── 1,308 ─────
───── 776
─────
Total liabilities 5,124 3,327
───── ─────
Total equity and liabilities 287 1,454
═════ ═════
The financial statements were approved by the Board of Directors
on 2022 and were signed on its behalf by:
………………………………
………………………………
B Pettitt -
Director
M J L d'Hombres - Director
Called up Retained Share
Share capital earnings premium
£'000 £'000 £000
Restated
Balance at 1 January 2020 11,218 (38,784) 3,146
Changes in equity
Issue of share capital - - -
Total comprehensive income - (1,245) -
Derecognition of conversion rights on loans - - -
Value of conversion rights on convertible loans - 209 -
───── 11,218 ───── (39,820) ───── 3,146
Balance at 31 December 2020 ───── ───── ─────
Changes in equity
Issue of share capital 14 - 394
Total comprehensive income - (2,576) -
Derecognition of conversion rights on loans - - -
Value of conversion rights on convertible loans - 453 -
───── ───── ─────
Balance at 31 December 2021 11,232 (41,943) 3,540
───── ───── ─────
Translation Other Convertible Total
reserves reserves debenture equity
£'000 £'000 £'000 £'000
Restated Restated Restated
Balance at 1 January 2020 (110) 15,384 5,354 (3,792)
Changes in equity
Issue of share - - -
capital
-
Total comprehensive income (89) - - (1,334)
Derecognition of conversion rights
on - (5,354) (5,354)
loans
-
Value of conversion rights on
convertible - 5,145 5,354
loans
-
───── ───── ───── ─────
Balance at 31 December 2020 (199) 15,384 5,145 (5,126)
───── ───── ───── ─────
Changes in equity
Issue of share - - 408
capital
-
Total comprehensive income (13) - - (2,589)
Derecognition of conversion rights
on - (5,145) (5,145)
loans
-
Value of conversion rights on
convertible - 4,692 5,145
loans
-
───── ───── ───── ─────
Balance at 31 December 2021 (212) 15,384 4,692 (7,307)
═════ ═════ ═════ ═════
Called up Retained Share
Share capital earnings premium
£'000 £'000 £000
Restated
Balance at 1 January 2020 11,218 (51,973) 3,146
Changes in equity
Issue of share capital - - -
Total comprehensive income - (556) -
Derecognition of conversion rights on loans - - -
Value of conversion rights on convertible loans - 209 -
───── 11,218 ───── (52,320) ───── 3,146
Balance at 31 December 2020 ───── ───── ─────
Changes in equity
Issue of share capital 14 - 394
Total comprehensive income - (3,372) -
Derecognition of conversion rights on loans - - -
Value of conversion rights on convertible loans - 453 -
───── ───── ─────
Balance at 31 December 2021 11,232 (55,239) 3,540
───── ───── ─────
Other reserves Convertible debenture Total equity
£'000 £'000 £'000
Restated Restated
Balance at 1 January 2020 30,938 5,354 (1,317)
Changes in equity
Issue of share capital - - -
Total comprehensive income - - (556)
Derecognition of conversion rights on loans - (5,354) (5,354)
Value of conversion rights on convertible loans - 5,145 5,354
───── 30,938 ───── 5,145 ───── (1,873)
Balance at 31 December 2020 ───── ───── ─────
Changes in equity
Issue of share capital - - 408
Total comprehensive income - - (3,372)
Derecognition of conversion rights on loans - (5,145) (5,145)
Value of conversion rights on convertible loans - 4,692 5,145
───── 30,938 ───── 4,692 ───── (4,837)
Balance at 31 December 2021 ═════ ═════ ═════
2021 2020
Notes £'000 £'000
Restated
Cash flows from operating activities
(Loss) before income tax (2,576) (1,125)
Investment impairment provision 486 -
Depreciation of property, plant and equipment 6 4
Loss of sale of property, plant and equipment 2,711 121
Reverse impairment of property, plant and equipment (3,048) (167)
Impairment of property, plant and equipment - 207
Amortisation of right-of-use assets 33 202
Impairment of intangible assets - -
Foreign exchange adjustments (4) 9
Finance expense 704 282
Finance income (1) (1)
──── (1,689) ──── (468)
Decrease / (Increase) in trade and other receivables 212 (187)
Decrease in inventories - 39
(Decrease) / increase in trade and other payables Net cash from operating 592 453
activities
──── ──── (163)
(885) ────
────
Cash flows from investing activities
Purchase of fixed asset investments (62) (424)
Purchase of property, plant and equipment (13) (65)
Proceeds from sale of property, plant and equipment 867 470
Interest received on loans 1 1
──── ────
Net cash from investing activities 793 (18)
──── ────
Cash flows from financing activities
Issue of ordinary shares 408 -
Proceeds from new loans issued 401 162
Repayment of loans and borrowings (3) -
Interest paid on loans and borrowings (247) (250)
Principal paid on lease liabilities (345) (219)
Interest paid on lease liabilities (4) (32)
Amount withdrawn by directors Net cash from financing activities - (38)
──── ──── (377)
210 ────
────
(Decrease) / increase in cash and cash equivalents 118 (558)
Cash and cash equivalents at beginning of year 1 91 649
Cash and cash equivalents at end of year 1 ──── ────
209 91
════ ════
2021 2020
Notes £'000 £'000
Restated
Cash flows from operating activities
(Loss) before income tax (3,372) (347)
Impairment provision 689 -
Foreign exchange adjustment 11 -
Finance cost 612 157
Depreciation 4 -
──── (2,056) ──── (190)
Decrease / (Increase) in trade and other receivables 703 (236)
Increase in trade and other payables Net cash from operating activities 1,157 331
──── (196) ────
──── (95)
────
Cash flows from investing activities
Purchase of fixed asset investments (62) (424)
Purchase of property, plant and equipment Net cash from investing activities - (20)
──── ──── (444)
(62) ────
────
Cash flows from financing activities
Issue of ordinary shares 408 -
Proceeds from new loans issued 160 138
Repayment of loans and borrowings (3) -
Interest paid on loans and borrowings (159) (158)
Amount withdrawn by directors - (33)
Amount introduced by directors Net cash from financing activities 1 -
──── ────
407 (53)
──── ────
Increase / (decrease) in cash and cash equivalents 149 (592)
Cash and cash equivalents at beginning of year 1 44 636
Cash and cash equivalents at end of year 1 ──── ────
193 44
════ ════
1. Cash and cash equivalents
The amounts disclosed on the Cash Flow Statements in respect of cash and cash
equivalents are in respect of these Balance Sheet amounts:
Group Company
Year ended 31 December 2021
31/12/21 01/01/21 31/12/21 01/01/21
£'000 £'000 £'000 £'000
Cash and cash equivalents 209 91 193 44
════ ════ ════ ════
Year ended 31 December 2020
31/12/20 01/01/20 31/12/20 01/01/20
£'000 £'000 £'000 £'000
Cash and cash equivalents 91 649 44 636
════ ════ ════ ════
For the year ended 31 December 2021
1. Statutory Information
Ross Group Plc is a public company, limited by shares, registered in England
and Wales. The company's registered number and registered office address can
be found on the General Information page. The subsidiary, Ross Diversified
Trading Limited, is a private company limited by shares and registered in
England and Wales. The subsidiary, Ross Group Plc Inc, is a close corporation,
limited by shares and registered in USA. The subsidiary, Archipelago
Aquaculture Group LLC, is a limited liability company registered in USA.
The following companies are all subsidiaries of Archipelago Aquaculture Group
LLC.
The subsidiary, Mari Signum Limited, is a company limited by shares and
registered in USA. The subsidiary Mari Signum Mid-Atlantic LLC, is a limited
liability company registered in USA. The subsidiary Mari Signum Dragon Drying
- MS LLC, is a limited liability company registered in USA. The subsidiary
Prometheus Progeniture Genetics Technologies Limited LLC, is a limited
liability company registered in USA.
2. Accounting Policies Basis of preparation
The consolidated financial statements of Ross Group Plc have been prepared in
accordance with International Financial Reporting Statements (IFRS) and
interpretations issued by the IFRS Interpretations Committee (IFRS IC) as
adopted by the UK and the Republic of Ireland and with the Companies Act 2006
as applicable to companies reporting under IFRS. The financial statements have
been prepared on a historical cost basis and on a going concern basis.
Items included in the financial statements of each of the group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in British Pounds (GBP), which is Ross Group Plc's
functional and presentation currency. Amounts are rounded to the nearest
thousand.
In preparing the financial statements for the current period, the group has
adopted the following new IFRS's, amendments to IFRS's and IFRS
Interpretations Committee (IFRIC) Interpretations. These standards do not have
a significant impact on the results or net assets of the group.
IFRS 7 (amended) Financial Instruments:
Disclosures IFRS 9
(amended) Financial
Instruments
IFRS 16 (amended) Leases
New standards, amendments and interpretations that are not effective for the year ended 31 December 2021
On the date of approval of these financial statements, the following
accounting standards have been issued by the International Accounting
Standards Board but were not yet effective:
2. Accounting policies - continued
New standards and amendments which are not effective for the current year and
have been endorsed by the UK and the Republic of Ireland.
· Amendments to IAS 1 Presentation of Financial Statements
(Effective for annual reporting periods beginning on or after 1 January 2023)
· Amendment to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors (Effective for annual reporting periods beginning on or
after 1 January 2023)
· Amendment to IAS 12 Income Taxes (Effective for annual reporting
periods beginning on or after 1 January 2023)
· Amendment to IAS 16 Property, Plant and Equipment (Effective for
annual reporting period beginning on or after 1 January 2022)
· Amendment to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets (Effective for annual reporting periods beginning on or
after 1 January 2022)
· Amendment to IFRS 3 Business Combinations (Effective for annual
reporting period beginning on or after 1 January 2022)
· IFRS 17 Insurance Contracts (Effective for annual reporting
periods beginning on or after 1 January 2023)
The Group is in the process of assessing the impact of new and revised
standards but does not expect that the application of the new standards will
have a significant impact on the Group's financial statements.
Going concern
The Group's business activities, together with the factors likely to affect
the future performance and position are set out in the Strategic Report on
pages 6 to 11.
As described in the Business Review on pages 6 to 7 the Group has restructured
its Chitin operations in favour of entering into an agreement with 525
Solutions who have undertaken a controlling shareholding in RGP 525 - with the
Group holding a balance 19.9% shareholding in RGP525 - in order to continue to
explore opportunities to mass produce Chitin in a way never before undertaken
and, given this, there is undoubtably an uncertainty as to how long it will
take to achieve these aims and generate income. Although this uncertainty
exists, the Group are working with such experts in this field who are also
integrally involved in this process and are therefore confident in the
possibility of its long term success. The Directors have instituted measures
to preserve cash by also restructuring the Group's finances and through the
RGP525 venture have ensured the limiting of any further cost exposure,
although if the proof of mass production is proven to be successful, the Group
will look to secure additional finance, if so required. In this respect, our
strategic approach and implementation has ceased to create any cash flow
issues flows from this particular sector of the Group's business.
The Directors have now decided to re-focus their efforts on pursuing other
opportunities during these exceptional post COVID times and have commenced
trading within the wholly owned subsidiary company, Ross Diversified Trading
Limited, regarding supply chain management contracts in the commodities
sector. A number of other such opportunities are also currently being explored
in other sectors and it is anticipated that a number of transactions in these
areas will conclude during the 2022 and/or 2023 financial years with a view to
increasing both revenue and profitability in the group.
The Board is reasonably confident, notwithstanding the COVID Pandemic and its
subsequent ongoing economic effects, that there will still be various unique
and exciting opportunities ahead- both in the short term and longer term - in
order for its overall business to be sustained and for potential growth to be
considered in the future.
.
2. Accounting policies - continued
The Group continues to negotiate the sale of certain assets and the settlement
of the current and contingent liabilities, following the restructure of the
AAG group and would hope to bring these to conclusion in the next twelve to
eighteen months. The Board have prepared cash flow forecasts to December 2023
- including sensitivity testing on these forecasts - and are reasonably
satisfied that once the temporary suspension of the shares is released on
filing of the financial statements the Group has sufficient cash available to
it from various sources and letters of interest to invest in new share
offerings in order to meet its liabilities as they fall due for a period of at
least twelve months from the signing of the financial statements.
Based on the above, the Board believe that it remains appropriate to prepare
the financial statements on a going concern basis. However, these
circumstances represent a material uncertainty that may cast doubt on the
Company's and Group's ability to continue as a going concern and therefore to
continue realising its assets and discharging its liabilities in the normal
course of business. The financial statements do not include any adjustments
that would result from this basis of preparation being inappropriate.
Basis of consolidation
The group financial statements consolidate those of the company and of its
subsidiary undertakings drawn up to 31 December 2021. Profits or losses on
intra-group transactions and intra-group balances are eliminated in full. On
acquisition of a subsidiary, all of the subsidiary's assets and liabilities
which exist at the date of acquisition are recorded at their fair values
reflecting their condition at that date.
The AAG group has not generated any revenue, the decision has been made to
restructure this group of companies, post new venture in 2020 and continued in
2021.
Revenue recognition
Revenue is the total amount receivable by the group for goods supplied and
services provided to third parties, excluding VAT.
Revenue from the sale of goods is recognised when the significant risks and
rewards of ownership of the goods has transferred to the buyer. This is
usually when the goods have been delivered to customers such that the risks
and removal of ownership have been transferred to them.
Revenue from contracts for the provision of professional services is
recognised by reference to the stage of completion, when the stage of
completion, costs incurred and costs to complete can be estimated reliably.
The stage of completion is calculated by comparing costs incurred, mainly in
relation to contractual hourly staff rates and materials, as a proportion of
total costs. Where the outcome cannot be estimated reliably, revenue is
recognised only to the extent of the expenses recognised that are recoverable.
A level of judgement is exercised by management in this regard.
Goodwill
Goodwill represents the excess of the cost of a business combination over the
group's interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the consolidated statement of comprehensive income.
Where the fair value of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the excess is
credited in full to the consolidated statement of comprehensive income on the
acquisition date.
2. Accounting policies - continued Property, plant and equipment
Property plant and equipment are carried at cost or deemed cost (fair value on
acquisition through business combination) less accumulated depreciation and
impairment provisions.
Acquisition cost includes the purchase price plus other costs related to
acquisition, such as freight, postage, duties, commissions, interest on
investment loans recorded before the tangible assets are capitalised or before
they are put into use.
The costs of expansion, modernisation, or improvements leading to increased
productivity, capacity or efficiency are capitalised. Maintenance and repair
expenses are expensed as incurred.
Where the carrying amount of an asset is greater than the amount that it is
estimated to be recoverable, it is written down to its recoverable amount.
The Group depreciates its property, plant and equipment on a straight line
basis in order to write off the cost of each asset less the estimated residual
value over its estimated useful life as follows:
Building
39 years straight line basis
Leasehold improvements Over the term
of the lease Plant, machinery and
equipment 7 years straight line basis
Right of use
assets
Over the term of the lease
Financial instruments
Financial assets and liabilities are recognised on the statement of financial
position when the entity becomes party to the contractual provisions of the
instrument.
The Group's financial instruments consist primarily of cash and cash
equivalents, accounts receivable and accounts payable.
Financial liabilities
The group recognises financial debt when the group becomes a party to the
contractual provisions of the instruments.
Financial liabilities, including borrowings, trade payables and other
short-term monetary liabilities, are initially measured at fair value net of
transactions costs directly attributable to the issuance of the financial
liability. They are subsequently measured at amortised cost using the
effective interest method. For the purposes of each financial liability,
interest expense includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the liability is
outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the group's
obligations are discharged, cancelled, or they expire.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand and deposits held at call with financial
institutions.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective method, less loss allowance.
2. Accounting policies - continued
Prepayments from clients
Payments received in advance on sale contracts for which no revenue has been
recognised yet are recorded as prepayments from clients as the reporting date
and carried under liabilities.
Investments and other financial assets
The group classifies its debt instruments in the category those to be measured
at amortised cost, which are assets held for collection of contractual cash
flows, where those cash flows represent solely payments of principal and
interest. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the
group has transferred substantially all the risks and rewards of ownership.
Any gain or loss arising on derecognition is recognised directly in profit or
loss and presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as a separate line item in
the income statement. The group subsequently measures all equity investments
at cost.
The group assesses, on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
group prior to the end of the financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective
interest method.
Deferred taxation
A deferred tax asset is provided for if material, using the tax rates
estimated to arise when the timing differences reverse and is accounted for to
the extent that it is probable that an asset will crystallise.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the statement of financial position date.
Foreign currencies
Transactions denominated in foreign currencies are translated at the exchange
rate ruling at the date of the transaction. Monetary assets and liabilities in
foreign currencies are translated at the rates of exchange ruling at the year
end date. These transaction differences are dealt with in the income
statement. The financial statements of foreign subsidiaries are translated at
the rate of exchange ruling at the year end date. The exchange differences
arising from the retranslation of the opening net investment in subsidiaries
are taken directly to reserves.
3. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are discussed below.
Estimates and assumptions
- The determination of lease term for some lease contracts in which the
Group is a lessee, including whether the Group is reasonably certain to
exercise lessee options (see note 16)
- The determination of the incremental borrowing rate used to measure the
lease liabilities (see note 14)
- Depreciation of property, plant and equipment - Estimate of the useful
economic life (see note 13)
- The determination of the discount rate used to measure the convertible
loan debenture (see note 21)
- Impairment of property, plant and equipment - Estimate of the net
realisable value of property, plant and equipment held at the year end (see
note 13).
- Provision for legal expenses - Estimate of the expenses payable (see note
26).
- Impairment of investments - Estimate of the profitability of the companies
(see note 12).
- Related party debtors - Estimate of the recoverability of the debts (see
note 16).
4. Segmental reporting
The directors feel that due to no revenue earned this year and little trading
during the previous year it is not possible to identify any segments and as a
result cannot follow IFRS 8. The entire turnover in the previous year was
generated within the UK but delivered overseas through the rendering of
services related to the principal activity of the Group.
The loss for the year was incurred mainly by the parent company itself, Ross
Group Plc, based in the United Kingdom arising from administration costs
incurred in pursuit of new opportunities. Whilst Ross Diversified Trading
Limited had a small amount of trade in 2020 this has reduced in 2021 but is
anticipated to increase again.
The main contributor to the loss incurred during the previous year was the
subsidiary group AAG LLC based in the USA. This group was acquired in January
2019 and due to unforeseen circumstances ceased to operate throughout 2020
being included in the prior year financial statements as a discontinued
operation. Expenses are still being incurred for this group as operations are
wound up and/or transferred to its venture RGP-525.
The directors will review this assessment next year.
5. Other operating income
Group 2021 2020
£'000 £'000
Restated
Government grants receivable 1 135
Compensation receivable 4 -
──── ────
5 135
════ ════
Company 2021 2020
£'000 £'000
Restated
Other miscellaneous income 22 30
════ ════
6. Employees and directors
Employee benefit expenses (including directors) comprise:
2021 2020
£ £
Wages and salaries - 129,923
Directors' remuneration 5 5
Social security contributions and similar taxes - 4,957
───── ───── 134,885
5 ═════
═════
The average number of employees during the year was as follows:
2021 2020
Number Number
Management 8 8
Production - -
Administrative - 3
──── ────
8 11
════ ════
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements For the year ended 31 December
2021
7. Loss before income tax
The loss before income tax is stated after charging:
2021 2020
£'000 £'000
Restated
Auditor's remuneration 110 74
Impairment of investment 486 -
Amortisation of right-of-use assets 33 202
Depreciation of property, plant and equipment 6 4
Impairment of property, plant and equipment - 207
Reverse of impairment of property, plant and equipment (3,048) (167)
Loss on disposal of property, plant and equipment 2,471 151
Loss on disposal of right-of-use assets 240 -
Associated undertaking loan write back (30) (25)
════ ════
8. Finance income and expense
Group
2021 2020
£'000 £'000
Restated
Finance income
Interest income on financial assets 1 1
════ ════
2021 2020
£'000 £'000
Restated
Finance expense
Interest expense on financial liabilities 166 185
Interest expense on lease liabilities 4 32
Interest expense on convertible debenture 81 65
Reserves adjustment of convertible debenture 453 209
──── ────
704 491
════ ════
Company
2021 2020
£'000 £'000
Restated
Finance expense
Interest expense on financial liabilities 78 92
Interest expense on convertible debenture 81 65
Reserves adjustment of convertible debenture 453 209
──── ────
612 366
════ ════
9. Income tax
No liability for UK corporation tax arose on ordinary activities for the year
ended 31 December 2021 or for the year ended 31 December 2020. The Group made
a loss during the year.
Subject to the agreement with HM Revenue and Customs, the Group has allowable
trading losses at 31 December 2021 for set-off against future trading profits
of £13.78m (2020: £13.25m).
A deferred tax asset of £3.45m (2020: £2.46m) arises due to the large losses
described above. As the timing of when the Group will be able to make use of
these losses the asset has not been recognised in the financial statements.
10. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
2021
Weighted average number
Pre-share
Earnings of shares amount pence
£'000
Basic EPS
Earnings attributable to ordinary shareholders (2,576) 233,000,000 (1.11)
Effect of dilutive securities - 68,851,000 -
───── ──────── ─────
Diluted EPS
Adjusted earnings (2,576) 301,851,000 (0.85)
═════ ════════ ═════
2020
Weighted
average number Pre-share
Earnings of shares amount pence
£'000
Basic EPS Restated
Earnings attributable to ordinary shareholders (1,245) 218,767,475 (0.57)
Effect of dilutive securities - 64,645,789 -
───── ──────── ─────
Diluted EPS
Adjusted earnings (1,245) 283,413,264 (0.44)
═════ ════════ ═════
11. Subsidiaries
At 31 December 2021 the company held 100% of the allotted equity share capital
of the following:-
Country of
Name of subsidiary registration and Class of share
undertaking incorporation capital held Nature of business
Ross Diversified Trading Limited England and Wales
Ordinary Supply chain management (formerly Sansui
Electronics (UK)
Limited)
The costs of this fixed asset investment have been written off over the
previous periods.
Archipelago Aquaculture Group LLC Mari Signum Limited USA USA USA Ordinary Ordinary Ordinary Intermediate holding company Aquaculture support
Mari Signum Dragon Drying-MS LLC USA Ordinary Drying Shrimp hulls
Mari Signum Mid-Atlantic II LLC Aquaculture support
Prometheus Progeniture Genetics Technologies Limited LLC
USA Ordinary Genetic enhancement of
colossal shrimp for higher quality chitin.
Ross Group Plc Inc USA Ordinary Supply chain management
12. Investments
Unlisted
Group
investments
£'000
Cost
At 1 January
2021
424
Additions
62
Disposals
-
────
At 31 December (#_TOC_250002) 2021 (#_TOC_250002)
(#_TOC_250002) 486 (#_TOC_250002)
────
Provisions (#_TOC_250001)
At 1 January
2021
-
Impairments
486
Disposals
-
────
At 31 December (#_TOC_250000) 2021 (#_TOC_250000)
(#_TOC_250000) 486 (#_TOC_250000)
════
Net book value
At 31 December 2021 -
════
At 31 December
2020
424
════
Unlisted
Company
investments
£'000
Cost
At 1 January
2021
643
Additions
62
Disposals
-
────
At 31 December
2021
705
────
Provisions
At 1 January
2021
16
Impairments
689
Disposals
-
────
At 31 December
2021
705
════
Net book value
At 31 December 2021 -
════
At 31 December
2020
627
════
13. Property, plant and equipment
Group Land and Plant and
buildings machinery Totals
£'000 £'000 £'000
Cost
At 1 January 2021 293 20 313
Additions - 13 13
Disposals (293) (3,048) (3,341)
Impairment reversal - 3,048 3,048
──── ───── ─────
At 31 December 2021 - 33 33
════ ═════ ═════
Depreciation
At 1 January 2021 - - -
Charge for the year - 6 6
Disposals - - -
Impairment - - -
──── ───── ─────
At 31 December 2021 - 6 6
════ ═════ ═════
Net book value
At 31 December 2021 - 27 27
═════ ═════ ═════
At 31 December 2020 293 20 313
═════ ═════ ═════
In December 2019 the group ceased trading in its US subsidiaries, Archipelago
Aquaculture Group LLC, at the time the plant and machinery operated by the
group were impaired to nil as the assets were no longer in use. During 2021
some of the equipment was sold to third parties resulting in the impairment
been reversed.
Plant and
Company machinery Totals
£'000 £'000
Cost
At 1 January 2021 20 20
Additions - -
Disposals - -
───── ─────
At 31 December 2021 20 20
═════ ═════
Depreciation
At 1 January 2021 - -
Charge for the year 4 4
Disposals - -
───── ─────
At 31 December 2021 4 4
═════ ═════
Net book value
At 31 December 2021 16 16
═════ ═════
At 31 December 2020 20 20
═════ ═════
14. Leases
Right-of-use Assets
Land and
buildings Total
£'000 £'000
At 1 January 2021 311 311
Disposals (240) (240)
Amortisation (33) (33)
Foreign exchange movements 3 3
───── ─────
At 31 December 2021 41 41
═════ ═════
Lease liabilities
Land and
buildings Total
£'000 £'000
At 1 January 2021 391 391
Interest expense 4 4
Lease payments (345) (345)
Foreign exchange movements (3) (3)
───── ─────
At 31 December 2021 47 47
═════ ═════
Current liabilities 37 37
═════ ═════
Non Current liabilities 10 10
═════ ═════
15. Intangible assets
Group Goodwill Total
£'000 £'000
Cost
At 1 January 2021 1,684 1,684
Additions - -
Foreign exchange - -
──── ─────
At 31 December 2021 1,684 1,684
════ ═════
Amortisation
At 1 January 2021 1,684 1,684
Charge for the year - -
Impairment - -
Foreign exchange - -
──── ─────
At 31 December 2021 1,684 1,684
════ ═════
Net Book Value
At 31 December 2021 - -
════ ═════
At 31 December 2020 - -
════ ═════
16. Trade and other receivables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current: Restated Restated
Trade receivables - 83 - -
Amounts owed by group undertakings - - 1,374 1,310
Provision for impairment - - (1,374) (609)
Amounts owed by associated undertakings - 14 - -
Directors' current accounts 63 63 57 58
Taxation 19 - 19 -
VAT 2 - 2 -
Prepayments and accrued income 9 109 - 4
Other debtors 24 41 - -
──── ──── ──── ────
117 310 78 763
════ ════ ════ ════
17. Cash and cash equivalents
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Bank accounts 209 91 193 44
════ ════ ════ ════
18. Called up share capital
Group and company 2021 2020
£'000 £'000
Authorised share capital:
195,000,000 Deferred shares of 4.8p each 9,360 9,360
67,052,306 Deferred shares of 4p each 2,682 2,682
300,000,000 Ordinary shares of 0.1p each 300 300
2,700,000,000 Deferred shares of 0.1p each 2,700 2,700
───── ───── 15,042
15,042 ═════
Allotted, called up and fully paid: ═════
147,745,300 Deferred shares of 4.8p each 7,092 7,092
67,052,306 Deferred shares of 4p each 2,682 2,682
233,000,000 Ordinary shares of 0.1p each 233 218
1,225,628,316 Deferred shares of 0.1p each 1,225 1,226
───── ───── 11,218
11,232 ═════
═════
The ordinary shares have both voting rights and the right to dividends. The
deferred shares have no rights to dividends and no voting rights.
On a winding up the holders of the deferred shares of 4.8p each shall be
entitled to receive 1p per share after the repayment of all amounts payable to
the holders of any other class of share and the payment of £5,000 on each
ordinary share for the time being in issue. On a winding up the holders of
deferred shares of 0.1p each shall be entitled to receive 0.1p per share after
the payment of £5,000 on each ordinary share for the time being in issue but
shall not confer the right to participate in any surplus.
The deferred shares of 4.8p each are redeemable at the company's option any
time at a price of 1p for each of the deferred shares held by any member. The
deferred shares of 0.1p each are transferable at the company's option at any
time to any person at a total price of 1p for all of the shares held by the
shareholder. The deferred shares of 0.1p each are redeemable or cancellable at
the company's option at any time at a total price of 1p for all of the shares
held by a shareholder.
As the deferred shares rank behind the ordinary shares, they are recognised as
equity.
Managing capital
The Group considers only the allotted share capital set out above to be the
capital of the group. There are no financial liabilities considered to be part
of the capital, and no components of equity excluded from it.
The Group's objectives when managing capital are:
- To safeguard the entity's ability to continue as a going concern, so
that it can continue to provide returns for shareholders and benefits for
other stakeholders.
- To provide an adequate return to shareholders by pricing products and
services at an appropriate level taking into account the level of risk.
The Group sets an amount of capital in proportion to risk. The Group manages
the capital structure and makes adjustments to it in the light of changes in
economic conditions and risk characteristics of the underlying assets.
The entity is not subject to any externally imposed capital requirements.
Share Issue
On 15 September 2021 the company issued 13,126,051 ordinary shares for a total
consideration amounting to £377,883.
On 15 October 2021 the company issued 1,106,474 ordinary shares for a total
consideration amounting to £30,981.
19. Reserves
Group Retained Share Other Translation Convertible Totals
earnings premium reserves reserve debenture
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 (39,820) 3,146 15,384 (199) 5,145 (16,344)
Total comprehensive
income for the year (2,576) - - (13) - (2,589)
Premium on issue of share capital
- 394 - - - 394
Debenture derecognition - - - - (5,145) (5,145)
Debenture re- 453 - - - 4,692 5,145
recognition
───── ──── ───── ───── ──── ─────
At 31 December 2021 (41,943) 3,540 15,384 (212) 4,692 (18,539)
═════ ════ ═════ ═════ ════ ═════
Company Retained earnings Share premium Other reserves Convertible debenture Totals
£'000 £'000 £'000 £'000 £'000
At 1 January 2021 (52,320) 3,146 30,938 5,145 (13,091)
Loss for the year (3,372) - - - (3,372)
Premium on issue of share capital
- 394 - - 394
Debenture derecognition
- - - (5,145) (5,145)
Debenture re-
recognition 453 - - 4,692 5,145
───── ──── ───── ──── ─────
At 31 December 2021 (55,239) 3,540 30,938 4,692 (16,069)
═════ ════ ═════ ════ ═════
Other reserves of the Group consist of a capital redemption reserve of £1.92m
(2020: £1.92m), a non-distributable capital reserve of £3.33m (2020:
£3.33m) and a special reserve of £10.13m (2020: £10.13m).
Convertible debenture of the group consists of the equity portion of
convertible loan debentures of £4.692m (2020: £5.145m).
Other reserves of the company consist of a capital redemption reserve of
£1.92m (2020: £1.92m) and a special reserve of £29.02m (2020: £29.02m).
Convertible debenture of the company consists of the equity portion of
convertible loan debentures of £4.692m (2020: £5.145m).
20. Trade and other payables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current: Restated Restated
Trade payables 293 461 58 100
Amounts owed to associated undertakings 2,335 2,226 - -
Amounts owed to group undertakings - - 561 268
Taxation 19 - 19 -
Other creditors 388 376 23 23
Accruals and deferred income 280 345 253 160
──── ──── 3,408 ──── ────
3,315 ════ 914 551
════ ════ ════
21. Financial liabilities - borrowings
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current: Restated Restated
Debentures 346 222 346 222
Bank loans 48 3 48 3
Other loans 129 - - -
──── ──── ──── ────
523 225 394 225
════ ════ ════ ════
Non-current: Debentures
1,256 846 1,256 846
Bank loans - 47 - 47
Other loans 1,747 1,658 1,747 1,658
──── ──── 2,551 ──── ────
3,003 ════ 3,003 2,551
════ ════ ════
Terms and debt repayment schedule:
1 year
Group or less 2-5 years Totals
£'000 £'000 £'000
Debentures 346 1,256 1,602
Bank loans 48 - 48
Other loans 129 1,747 1,876
──── ──── ────
523 3,003 3,526
════ 1 year or less ════ ════
Company £'000
2-5 years Totals
£'000 £'000
Debentures 346 1,256 1,602
Bank loans 48 - 48
Other loans - 1,747 1,747
──── ──── ────
394 3,003 3,397
════ ════ ════
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements For the year ended 31 December
2021
21. Financial liabilities - borrowings - continued Convertible loan
debenture
The parent entity issued two convertible loan debenture (CLD) on 27 September
2018 for £4,010k and £2,062k at a coupon rate of 5%.
The notes are convertible into Ordinary shares of the parent entity in three
years after the date of issue.
At the Annual General Meeting on 31 December 2020 it was agreed to extend the
conversion period to 26 September 2022.
At the Annual General Meeting on 31 December 2021 it was agreed to extend the
conversion period to 26 September 2025.
At each of the dates of modification the value of the conversion rights were
derecognised in the financial statements and a new valuation of the conversion
rights was recognised.
The convertible loan debenture will give right to a percentage of the issued
share capital of the parent company at the date of conversion. Each tranche of
£1 Million CLD owed by the long- term loan holders correspond to 4.925% of
the issued share capital at the date of conversion, resulting in a fixed
percentage of the issued share capital of the company to be allocated to the
loan holders regardless of the value/amount of the share capital of the
company.
2021 2020
£'000 £'000
Restated
Face value of notes issued 6,072 6,072
Value of conversion rights 4,692 5,145
──── ────
1,380 927
Interest expense * 222 141
Interest paid - -
──── ──── 1,068
Total liability element 1,602 ════
════
*Interest is calculated by applying the effective interest rate of 5% to the
total loan note amount.
The initial fair value of the liability portion of the debenture was
determined using a market interest rate for an equivalent non-convertible
debenture at the issue date. The liability is subsequently recognised on an
amortised cost basis until extinguished on conversion or maturity of the
bonds.
22. Financial instruments
The Group uses financial instruments, comprising borrowings, cash, liquid
resources and various items, such as trade debtors, trade creditors etc., that
arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the group's operations.
The Group did not enter into derivatives transactions such as interest rate
swaps, forward rate agreements and forward foreign currency contracts.
The Board of the Group considers that the interest rate risk, liquidity risk
and foreign currency risks arising from the Group financial instruments are
low. However, it reviews policies for managing each of these risks and they
are summarised below. These policies have remained unchanged from previous
periods.
It is and has been throughout the year under review, the group policy that no
trading in financial instruments shall be undertaken.
Short-term debtors and creditors
Short-term debtors and creditors have been excluded from all the following
disclosures, other than the currency risk disclosures.
Interest rate risk
The Group finances its operations through a mixture of borrowings. It relies
on loans from its shareholders to ensure sufficient liquidity is available to
meet foreseeable needs.
Maturity of financial liabilities
For the Group financial liabilities analysis at 31 December 2021 see note 21.
Currency risk
The Group does have foreign investments held in foreign currencies.
The Group's exposure to translation and transaction exchange risk is
considered to be low by the board.
There was no income in the current year. 100% of the Group's worldwide income
in the prior year was invoiced in US Dollars and has been settled in 2021. As
a result the board does not consider there is a need for Group policy to
manage the currency risk as it considers the risk to be low.
Fair values
The board considers that the fair values of the Group's borrowings are equal
to their book values.
23. Related party disclosures Group
The Group had the following balances with related parties at the year end.
31/12/21 31/12/20
£'000 £'000
Receivables
Barry
Pettitt
63 63
════ ════
Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc,
owns Lynchwood Nominees (previously Prime Growth Enterprises Limited).
Lynchwood Nominees owns 12% of the ordinary share capital in Ross Group Plc.
Company
At the year end Ross Group Plc had the following outstanding balances with its
related parties:
31/12/21 31/12/20
£'000 £'000
Receivables
Barry Pettitt 57 58
Mari Signum Dragon Drying - MS LLC - 14
Prometheus Progeniture Genetics Technologies Limited LLC - 164
Ross Group Plc Inc - 523
Ross Diversified - -
──── ────
57 759
════ ════
Payables
Mari Signum Mid-Atlantic II LLC 268 268
Mari Signum Dragon Drying - MS LLC 293 -
──── ────
561 268
════ ════
Ross Group Plc owns 100% of the capital of Ross Diversified Trading Limited,
Mari Signum Limited, Mari Signum Dragon Drying - MS LLC, Mari Signum
Mid-Atlantic II LLC, Prometheus Progeniture Genetics Technologies Limited LLC
and Ross Group Plc Inc.
Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc,
owns Lynchwood Nominees (previously Prime Growth Enterprises Limited).
Lynchwood Nominees owns 12% of the ordinary share capital in Ross Group plc.
24. Ultimate controlling party
The directors consider that there is no ultimate controlling party of Ross
Group Plc and subsidiaries for 2021: however, Barry Pettitt, by virtue of his
position as CEO within the Group and his 12% shareholding, exerts a
significant influence.
25. Reconciliation of movements in reserves
31/12/21 31/12/20
Group
£'000 £'000
Restated
(Loss) for the financial
year
(2,589) (1,334) Issue of share
capital
408 -
Derecognition of conversion
rights
(5,145) (5,354)
Value of conversion
rights
4,692 5,145
Reserves adjustment of convertible
debenture
453 209
──── ────
Net addition to
reserves
(2,181) (1,334)
Opening
reserves
(5,126) (3,792)
──── ────
Closing
reserves
(7,307) (5,126)
════ ════
31/12/21 31/12/20
Company
£'000 £'000
Restated
(Loss) for the financial
year
(3,372) (556) Issue of share
capital
408 -
Derecognition of conversion
rights
(5,145) (5,354)
Value of conversion
rights
4,692 5,145
Reserves adjustment of convertible
debenture
453 209
──── ────
Net addition to
reserves
(2,964) (556)
Opening
reserves
(1,873) (1,317)
──── ────
Closing
reserves
(4,837) (1,873)
════ ════
26. Provisions
31/12/21 31/12/20
£'000 £'000
Restated
Balance brought
forward
- -
Movement in the
year
813 -
──── ────
Balance carried
forward
813 -
════ ════
The group is involved as defendants in a multi-party lawsuit brought in the
United States of America, a provision has been included in the financial
statements to provide for any potential claim and legal expenses.
27. Prior Year Adjustment
Group 2020 Audited Correction of prior year 2020 Restated
Audited Impact Restated
£'000 £'000 £'000
Assets
Inventories - - -
Trade and other receivables 269 41 310
Cash and cash equivalents 91 - 91
Investments 424 - 424
Property, plant and equipment 355 (42) 313
Right of use assets 311 - 311
Intangible assets - - -
──── ──── ────
Total Assets 1,450 (1) 1,449
════ ════ ════
Liabilities and equity
Lease liabilities (non-current) 183 - 183
Financial liabilities (non-current) 1,705 (846) 2,551
Trade and other payables 3,408 - 3,408
Lease liabilities (current) 208 - 208
Financial liabilities (current) 957 732 225
──── ──── ────
Total Liabilities 6,461 (114) 6,575
════ ════ ════
Equity attributable to equity holders of parent
Shareholders' equity 11,218 - 11,218
Share premium 3,146 - 3,146
Others reserves 15,384 - 15,384
Convertible debentures 5,815 670 5,145
Translation reserve - (199) (199)
Retained earnings (40,574) 754 (39,820)
──── ──── ────
Total Equity (5,011) 115 (5,126)
════ ════ ════
Total Liabilities and Equity 1,450 1,449
════ ════
27. Prior Year Adjustment - continued
Company 2020 Audited Correction of prior year 2020 Restated
Audited Impact Restated
£'000 £'000 £'000
Assets
Trade and other receivables 763 - 763
Cash and cash equivalents 44 - 44
Investments 627 - 627
Property, plant and equipment 20 - 20
──── ──── ────
Total Assets 1,454 - 1,454
════ ════ ════
Liabilities and equity
Financial liabilities (non-current) 1,705 (846) 2,551
Trade and other payables 551 - 551
Financial liabilities (current) 957 732 225
──── ──── ────
Total Liabilities 3,213 (114) 3,327
════ ════ ════
Equity attributable to equity holders of parent
Shareholders' equity 11,218 - 11,218
Share premium 3,146 - 3,146
Others reserves 30,938 - 30,938
Convertible debentures 5,815 670 5,145
Retained earnings (52,876) (556) (52,320)
──── ──── ────
Total Equity (1,759) 114 (1,873)
════ ════ ════
Total Liabilities and Equity 1,454 1,454
════ ════
27. Prior Year Adjustment - continued
Consolidated Income Statement 2020 Correction of prior year 2020 Restated
Audited
Audited Impact Restated
£'000 £'000 £'000
Revenue 43 - 43
Production expenses (39) - (39)
Other operating income 127 8 135
Administrative expenses (1,056) 162 (894)
Finance income 1 - 1
Finance expense (539) 48 (491)
Income tax - - -
──── ──── ────
Loss for the year (1,463) 218 (1,245)
════ ════ ════
Total comprehensive income (1,399) 65 (1,334)
════ ════ ════
Earnings per share (basic) (0.67) 0.10 (0.57)
════ ════ ════
Earnings per share (diluted) (0.67) 0.23 (0.44)
════ ════ ════
Company Income Statement 2020 Audited Correction of prior year 2020 Restated
Audited Impact Restated
£'000 £'000 £'000
Revenue - - -
Other operating income 30 - 30
Administrative expenses (220) - (220)
Finance expense (421) 55 (366)
Income tax - - -
──── ──── ────
Loss for the year (611) 55 (556)
════ ════ ════
27. Prior Year Adjustment - continued
The Company and Group has restated the balance sheet, statement of other
comprehensive income, statement of financial position, and statement of
changes in equity. This is due errors in the accounting treatment for
convertible loan debentures, foreign exchange translation and recognition of a
Group asset which was not owned by the Group. This has been considered as a
prior year error and has been corrected in accordance with IAS 8 (Accounting
Policies, Changes in Accounting Estimates and Errors). The overall impact of
this restatement is disclosed in the note above.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR PPUBPBUPPGAURecent news on Ross
See all newsREG - Ross Group PLC - Temporary Suspension
AnnouncementREG - Official List - Suspension - ROSS GROUP PLC
AnnouncementREG - Ross Group PLC - Half-year Report
AnnouncementREG - Ross Group PLC - New Accounting Ref Date
AnnouncementREG - Ross Group PLC - Issue of Equity
Announcement