EVEREST GLOBAL PLC
ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
Company Registration No. 07913053 (England and Wales)
Contents
Directors and advisors
1
Chief Executive Officer’s statement
2
Strategic report
4
Directors’ report
10
Directors’ remuneration report
16
Corporate governance statement
18
Corporate governance report
23
Independent Auditor’s report
25
Statement of Comprehensive Income
30
Statement of Changes in Equity
31
Statement of Financial Position
32
Statement of Cash Flows
33
Notes to Group annual financial statements
35 - 88
Page | 1
Directors and Advisers
Directors
Robert Scott
Xin (Andy) Sui (appointed 3 October 2022)
Simon Grant-Rennick (appointed 3 October 2022)
Andrew Monk (resigned 3 October 2022)
Matthew Bonner (resigned 3 October 2022)
Secretary
Stephen Clow
Company Number
07913053
Registered Address
United Kingdom
Financial Adviser
Cairn Financial Advisers LLP
80 Cheapside,
London,
EC2V 6EE
Auditors
RPG Crouch Chapman LLP
5th Floor,
14-16 Dowgate Hill,
London,
EC4R 2SU
Registrars
Neville Registrars Limited
Neville House,
18 Laurel Lane,
Halesowen,
West Midlands,
B63 3DA
Chief Executive Officer’s Statement
For the Year Ended 31 October 2022
Page | 2
Overview
Following from 2021 and the withdrawal by Comarco from the marine and port transaction, on 3 October 2022 the
Company (Anglo African Agriculture Plc) entered into a transaction which saw the purchase of 65% of the
outstanding convertible loan notes by Golden Nice International Limited. The remainder of the convertible loan
notes (35%) were converted by the note holders to shares in the Company. In addition, Golden Nice International
Limited invested £650,000 in the Company to recapitalise it by the subscription of 13 million new ordinary shares.
The company then changed its name to Everest Global Plc at this time. In addition, both Andrew Monk and Matt
Bonner resigned from the Board and Simon Grant-Rennick and I were appointed to the Board. Robert Scott remains
on the Board. I would like to thank both Andrew Monk and Matt Bonner for their services to the company.
As mentioned in the previous Annual Financial Statements the Company’s subsidiary, Dynamic Intertrade (Pty)
Limited (“Dynamic”), on its own could not sustain a London Stock Exchange listing. During the period under review
the Company and VSA NEX Investments Limited (“VSA NEX”) entered into certain related party arrangements in
relation to Dynamic. At the time the arrangements were entered into VSA NEX was a 100% subsidiary of VSA Capital.
Also at the time the arrangements were entered into Andrew Monk was a director of the Company, VSA Capital and
VSA NEX and is deemed to have significant influence over VSA Capital and VSA NEX. Pursuant to the arrangements,
VSA NEX subscribed for such number of new shares in the capital of Dynamic resulting in VSA NEX holding 49% of
the enlarged issued share capital of Dynamic for a consideration of ZAR10,982; the Company agreed to assign certain
debts owing by Dynamic, amounting to £4.2 million which had been fully impaired in prior years, to the Company
and certain other parties to VSA NEX in consideration for VSA NEX paying to the Company £100,001 and agreeing to
fund Dynamic so as to enable Dynamic to carry on its business in the ordinary course until such time as the Company
ceases to hold any further shares in Dynamic. This assignment agreement resulted in VSA NEX having a non-
controlling interest in Dynamic and as such its share of the current year profits amounted to £522, its share of
accumulated losses prior to acquisition amounted to £2,305,905. Additionally, the assignment of the loans resulted
in the Group incurring a finance charge on consolidation of £3.1 million. VSA NEX has signed a subordination
agreement in relation to the loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA
NEX choose to request the repayment of the loans due by Dynamic this will severely impact the Company's ability
to continue as a going concern. Upon consolidation of the VSA NEX loans, the borrowings have increased by
£4.1 million. Under a put and call option agreement the Company granted to VSA NEX the option to acquire 11,430
shares in Dynamic Intertrade, being the remaining 51% of Dynamic held by the Company, subject to the satisfaction
of certain conditions and subject to certain time restrictions for £1. At 31 October 2022 Dynamic was still controlled
by Everest Global and has been consolidated in the group financial statements
The Company’s present primary operations and source of revenue remains it 51% holding in Dynamic, our Cape
Town based spice blender and trader. The Company was still loss making for the year under review but has since
improved its performance during the six-months ended April 2023. Group turnover increased by 20.98% (2021: a
reduction of 20.8%). Group operating losses amounted to £1,152,170 (2021: £515,660) for the current year. The
total Group comprehensive loss for the year amounted to £4,570,562 (2021: £584,633), including the finance charge
on consolidation referred to above, amounting to £3,131,890.
The Company will now be actively looking at new opportunities to bolster its current operating assets and will no
doubt in the near future seeks to raise more funds and acquire more assets. As announced on the 4
th
July 2023, the
Company announced that it had invested £200,000 by way of a loan into Precious Link (UK) Limited, a wine retailer,
located within the Southeast of England. The Board believe that Precious Link operates in a complementary sector
and that the loan could assist the Company in expanding its activities into the wider food and beverage sector.
Chief Executive Officer’s Statement
For the Year Ended 31 October 2022
Page | 3
Post year end our previous auditor resigned as they were no longer in a position to audit Public Interest Entity (“PIE”)
companies and due to capacity constraints with many other auditors there was a delay in appointing a PIE registered
auditor. As a result, the Company could not complete their statutory audit, publication of results or statutory filing
at Companies House on time. As such, trading in the Company’s ordinary shares and its listing on the Official List of
the Financial Conduct Authority was suspended pending the publication of these audited results. The Company was
granted an extension of its filing obligations by Companies House.
On the 24
th
of January 2023, the Company announced a subscription for 12,726,000 new Ordinary Shares. The
Company raised net proceeds totalling £699,930 at a subscription price of 5.5 pence per share.
COVID-19 which had a devastating effect on the world economy and social fabric, has now been declared by the
head of the UN World Health Organization (WHO) as no longer a public health emergency, however stressing that it
does not mean the disease is no longer a global threat. As a result the Company will not report on initiatives or
effects of COVID-19 in these Annual Financial Statements.
Xin ‘Andy’ Sui
Chief Executive Officer
26th July 2023
Strategic Report
For the Year Ended 31 October 2022
Page | 4
Overview
The primary objective of the strategic report is to provide information for the shareholders to help them to assess
how the Directors have performed their duty, under section 172 of the Act, to promote the success of the Company
and to provide context for the related financial statements as well as assist them in their decision making.
The duty of a director, as set out in section 172 of the Act, is to act in the way he considers, in good faith, would be
most likely to promote the success of the Company for the benefit of its members, and in doing so have regard
(amongst other matters) to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company's employees;
(c) the need to foster the Company's business relationships with suppliers, customers and others;
(d) the impact of the Company's operations on the community and the environment;
(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly as between members of the Company.
As a Board, we must always seek and be open to feedback from anyone affected by our activities. This enables the
Board to understand the impact of its decisions on key stakeholders, but also ensures that we are aware of any
significant changes in the market or the external environment, including the identification of emerging risks, which
can be fed into our strategy discussions and our risk management process. The Board considers our strategic
stakeholders as follows:
Customers
We listened to our customers and endeavoured to supply them with relevant product. This entailed continuous
discussions with our existing and potential customers as well as product development.
Suppliers
We have worked with a number of our suppliers for many years, and any loss of our sales or product mix impacts
their business. We communicated to them where possible to reduce the impact on their businesses.
Shareholders and Lenders
We have a clear responsibility to engage with shareholders and lenders of our business and their views are an
important driver of our strategy. We keep our shareholders regularly informed while lenders receive regular updates
on the performance of the organisation.
Staff
During the year under review the Group had 17 (2021-24) staff and Directors. The Company had 3 male Directors.
Noting that there was a total of 5 with 3 at any one stage. The subsidiary had 1 female and 3 male directors of which
1 male director was a director of both the Company and Dynamic. The subsidiary had 5 female and 9 male staff
excluding managers and directors.
Social, community and human rights issues
The Company and its subsidiary comply with all national and international laws and regulations pertaining to human
rights and social interaction. Additionally, the South African subsidiary is ensuring, where possible, with Broad Based
Black Economic Empowerment legislation (“BBBEE”) to address the social, community and economic issues within
the South African context.
Strategic Report (continued)
For the Year Ended 31 October 2022
Page | 5
Review of the Group’s Business
Dynamic Intertrade (Pty) Ltd (“Dynamic”) is based in Cape Town, South Africa and is involved in the importation,
milling, blending and packaging of products that include herbs, spices, seasonings and confectionary for the domestic
market. On 3 October 2023 a new shareholder, the Company and VSA NEX Investments Limited (“VSA NEX”) entered
into certain related party arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA NEX was a 100%
subsidiary of VSA Capital. At the time the arrangements were entered into Andrew Monk was a director of the
Company, VSA Capital and VSA NEX and is deemed to have significant influence over VSA Capital and VSA NEX.
Pursuant to the arrangements, VSA NEX subscribed for such number of new shares in the capital of Dynamic resulting
in VSA NEX holding 49% of the enlarged issued share capital of Dynamic for a consideration of ZAR10,982; the
Company agreed to assign certain debts owing by Dynamic, amounting to £4.2 million which had been fully impaired
in prior years, to the Company and certain other parties to VSA NEX in consideration for VSA NEX paying to the
Company £100,001 and agreeing to fund Dynamic so as to enable Dynamic to carry on its business in the ordinary
course until such time as the Company ceases to hold any further shares in Dynamic. This assignment agreement
resulted in VSA NEX having a non-controlling interest in Dynamic and as such its share of the current year profits
amounted to £522, its share of accumulated losses prior to acquisition amounted to £2,305,905. Additionally, the
assignment of the loans resulted in the Group incurring a finance charge on consolidation of £3.1 million. VSA NEX
has signed a subordination agreement in relation to the loans due by Dynamic to VSA NEX with an expiry date of 31
October 2023. Should VSA NEX choose to request the repayment of the loans due by Dynamic this will severely
impact the Company's ability to continue as a going concern. Under a put and call option agreement the Company
granted to VSA NEX the option to acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of Dynamic
held by the Company, subject to the satisfaction of certain conditions and subject to certain time restrictions for £1.
At 31 October 2022, the total amount due by Dynamic to VSA NEX amounted to £4,174,538.
During the year to 31 October 2022, Dynamic recorded an increase of 20.98% in turnover to £1.698 million (2021:
decrease of 20.8). In the subsidiary’s functional currency of South African Rand, it recorded turnover of R34.8 million,
an increase of R6.4 million from the prior year. The required product mix changed and lower margin commodities
saw general price increases which could not be passed on to customers for our core spice lines of commodity paprika
and chilli-based products as well as our value-added blended products.
Gross profits for the Group increased by 10.68% to £420,358 (2021: decreased by 10.3% to £379,804) and represents
a 24.74% (2021: 27.05%) gross margin.
Group operating losses for the year increased £1,152,170 (2021: £515,660). Total Group comprehensive loss
amounted to £4,570,562 (2021: £584,633) after incurring a finance charge consolidation, resulting from the
assignment of the loans to VSA NEX, of £3.1 million.
Basic and diluted loss per share from continuing operations for the year was 17.79p (2021:2.66p).
As at 31 October 2022 the Group held £925,814 (2021: £1,109,774) in cash and cash equivalents.
The Company will now be actively looking at new opportunities to bolster its current operating assets and will no
doubt in the near future seek to raise more funds and acquire more assets. As announced on 4 July 2023, the
Company invested £200,000 by way of a loan into Precious Link (UK) Limited, a wine retailer, located within the
Southeast of England. The Board believes that Precious Link operates in a complementary sector and that the loan
could assist the Company in expanding its activities into the wider food and beverage sector.
Strategic Report (continued)
For the Year Ended 31 October 2022
Page | 6
Financing And Capital Structure
During the year under review, the Company issued 3,823,627 new ordinary shares to VSA Capital Limited in
settlement of the outstanding fees of £152,945.08.
In addition, the Company issued 13,000,000 new ordinary shares in order to raise £650,000. As part of this
transaction the Company also converted £581,951.52 owing to the convertible note holders into 7,373,141 new
ordinary shares.
As detailed above, the Company assigned certain debts, amounting to £4,174,538, due by Dynamic to VSA NEX. In
prior years these loan were eliminated upon consolidation, however with the loans now being due to VSA NEX, the
consolidated values include these loans and represent an increase in borrowings of £4,174,538.
Acquisition Strategy
The Company will be actively looking for new acquisitions to bolster its operations and will as a result in all likelihood
seek to raise more capital by way of both debt and equity.
Key Performance Indicators
31 October
31 October
2022
2021
£
£
Turnover
1,698,839
1,404,234
Gross profit
420,368
379,804
Cash on hand and in bank
925,814
1,109,774
Underlying operating loss
(1,152,170)
(515,660)
Principal Risks and Uncertainties
The Directors consider the following risk factors to be of relevance to the Group’s activities. It should be noted that
the list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.
The risk factors are summarised below:
i. Development Risk
The Group’s development will be, in part, dependent on the ability of the Directors to continue to improve the
current business, to identify suitable investment opportunities and to implement the Group’s strategy. There is no
assurance that the Group will be successful in acquiring suitable investments.
ii. Sector Risk
The agriculture and agri-processing sectors are highly competitive markets and many of the competitors will have
greater financial and other resources than the Company and as a result may be in a better position to compete for
opportunities.
The development of these enterprises involves significant uncertainties and risks including unusual climatic
conditions such as drought, improper use of pesticides, availability of labour and seasonality of produce, any one of
which could result in security of supply, damage to, or destruction of crops, environmental damage or pollution.
Strategic Report (continued)
For the Year Ended 31 October 2022
Page | 7
Each of these could have a material adverse impact on the business, operations and financial performance of the
Group.
The market price of agricultural products and crops is volatile and affected by numerous factors which are beyond
the Group’s control. These include international supply and demand, the level of consumer product demand,
international economic trends, currency exchange rate fluctuations, the level of interest rates, the rate of inflation,
global or regional political events, as well as a range of other market forces. Sustained downward movements in
agricultural prices could render less economic, or un-economic, any development or investing activities to be
undertaken by the Group. Certain agricultural projects involve high capital costs and associated risks. Unless such
projects enjoy long term returns, their profitability will be uncertain resulting in potentially high investment risk.
iii. Political and Regulatory Risk
African countries experience varying degrees of political instability. There can be no assurance that political stability
will persist in those countries where the Group may have operations going forward. In the event of political instability
or changes in government policies in those countries where the Group may operate, the operations and financial
condition of the Group could be adversely affected.
iv. Environmental Risks and Hazards
All phases of the Group’s operations are subject to environmental regulation in the areas in which it operates.
Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased
fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a
heightened degree of responsibility for companies and their officers, Directors and employees.
There is no assurance that existing or future environmental regulation will not materially adversely affect the
Group’s business, financial condition and results of operations. Environmental hazards may exist on the properties
on which the Group holds interests that are unknown to the Group at present. The Board manages this risk by
working with environmental consultants and by engaging with the relevant governmental departments and other
concerned stakeholders.
v. Internal Control and Financial Risk Management
The Board has overall responsibility for the Group’s systems of internal control and for reviewing their effectiveness.
The Group maintains systems which are designed to provide reasonable but not absolute assurance against material
loss and to manage rather than eliminate risk.
The key features of the Group’s systems of internal control are as follows:
o Management structure with clearly identified responsibilities;
o Production of timely and comprehensive historical management information presented to the Board;
o Detailed budgeting and forecasting;
o Day to day hands on involvement of the Executive Director and Senior Management; and
o Regular Board meetings and discussions with the Non-Executive Directors.
The Group’s activities expose it to several financial risks including cash flow risk, liquidity risk and foreign currency
risk.
vi. Environmental Policy
The Group is aware of the potential impact that its subsidiary and associate companies may have on the
environment. The Group ensures that it complies with all local regulatory requirements and seeks to implement a
best practice approach to managing environmental aspects.
Strategic Report (continued)
For the Year Ended 31 October 2022
Page | 8
The subsidiary, Dynamic Intertrade operates a Food Safety System Certification (“FSSC”) compliant facility in Cape
Town. The FSSC provides a framework for effectively managing the organisation's food safety responsibilities and is
fully recognized by the Global Food Safety Initiative and is based on existing ISO Standards.
vii. Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective,
the Group provides ongoing training and support to employees and sets demanding standards for workplace safety.
viii. Financing Risk
The development of the Group’s business may depend upon the Group’s ability to obtain financing primarily through
the raising of new equity capital or debt. The Group’s ability to raise further funds may be affected by the success of
existing and acquired investments. The Group may not be successful in procuring the requisite funds on terms which
are acceptable to it (or at all) and, if such funding is unavailable, the Group may be required to reduce the scope of
its investments or the anticipated expansion. Further, Shareholders’ holdings of Ordinary Shares may be materially
diluted if debt financing is not available.
ix. Credit Risk
The Directors have reviewed the forecasts prepared by both the Company and Dynamic and believe that Dynamic
has adequate resources available to meet its obligations to the Company and its lenders.
x. Liquidity Risk
The Directors have reviewed the working capital requirements of the Company and Dynamic and believe that,
following stress tests and variance analysis on the forecasts, there is sufficient working capital to fund the business
while expanding turnover. The Directors further highlight the inherent uncertainties involved in making the
assessment that the entity is a going concern.
xi. Capital Risk
The Group manages its capital resources to ensure that entities in the Group will be able to continue as a going
concern, while maximising shareholder return.
The capital structure of the Group consists of equity attributable to shareholders, comprising issued share capital
and reserves. The availability of new capital will depend on many factors including a positive operating environment,
positive stock market conditions, the Group’s track record, and the experience of management. There are no
externally imposed capital requirements. The Directors are confident that adequate cash resources exist or will be
made available to finance operations and controls over expenditure are carefully managed.
To manage the above risks, management are in regular contact with our customers and are actively exploring new
markets and customers in order to diversify these risks.
Shareholders should refer to Note 2 and Note 29 of the accounts for a summary of the Group’s use of financial
instruments and its exposure to market risk, credit risk, liquidity risk and cash flow risk.
Going Concern
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. Further details are given in Note 2 to the financial
statements. For this reason, the Directors continue to adopt the going concern basis in preparing the financial
statements.
Strategic Report (continued)
For the Year Ended 31 October 2022
Page | 9
During the year, the Group raised additional equity funding of £650,000 (2021: £Nil) in gross funding through share
subscriptions to fund working capital. In addition, the Company converted £581,951.52 of convertible loan notes
into new ordinary shares.
The Directors have prepared cash flow forecasts. These forecasts consider operating cash flows and capital
expenditure requirements for the Company and Dynamic, available working capital and forecast expenditure,
including overheads and other costs. The Directors are of the opinion that the Group has sufficient working capital
and that no additional funding is required. As part of the assignment of certain debts to VSA NEX, VSA NEX have
agreed to fund Dynamic so as to enable Dynamic to carry on its business in the ordinary course until such time as
the Company ceases to hold any further shares in Dynamic. . VSA NEX has signed a subordination agreement in
relation to the loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA NEX choose to
request the repayment of the loans due by Dynamic this will severely impact the Company's ability to continue as a
going concern. However, post year end the Group did raise £699,930 in additional equity capital. Based upon the
Company’s forecast, it has sufficient cash for the foreseeable future.
After careful consideration of the matters set out above, the Directors are of the opinion that the Group will be able
to undertake its planned activities for the period to 31 July 2024 from production and from additional funds raising
and have prepared the consolidated financial statements on the going concern basis. Nevertheless, due to the
uncertainties inherent in meeting its revenue predictions and obtaining additional fund raising there can be no
certainty in these respects. The financial statements do not include any adjustments that would result if the Group
was unable to continue as a going concern. For this reason, the Directors believe that there is a material uncertainty
relating to the Group’s going concern.
It the intention of the Directors to look for acquisitions to make the Company more sustainable.
On behalf of the Board
Xin ‘Andy’ Sui
26
th
July 2023
Directors’ Report
For the Year Ended 31 October 2022
Page | 10
The Directors present their Report and Financial Statements for the year ended 31 October 2022.
Principal Activities
Emissions
The Group is not an intensive user of fossil fuels or electricity. During the year Dynamic Intertrade consumed an
average of 18,828kwh (2021: 8,418 kwh) per month based on using actual charges levied by the Cape Town City
Council. As per the University of Cape Town’s assessment of the South African average of 1.015kg/kwh, the Group
contributed 229,325kg (2012: 102,539kg) of carbon emissions during the financial year. Due to the nature of the
business, there is limited scope to reduce emissions materially as all power is sourced from the Cape Town City
Council. There were no operations in the UK and as such no emissions in the UK.
Investing Policy
The Company was established to invest in or acquire companies engaged in the agriculture and ancillary sectors in
Africa. The Directors intend to use their collective experience to identify appropriate investment opportunities in
the production, transportation and trading of food and beverage products and ancillary industries.
Directors
The following Directors have held office in the year:
Robert Scott - Non-Executive Director
Xin ‘Andy’ Sui (Appointed 3 October 2022) – Chief Executive Officer
Simon Grant-Rennick (Appointed 3 October 2022) – Non-Executive Director
Andrew Monk (Resigned 3 October 2022)
Matthew Bonner (Resigned 3 October 2022)
Xin ‘Andy’ Sui Chief Executive Officer
Andy Sui has over 11 years of investment banking experience. Andy started his career at Barclays Capital under the
trading desk. He eventually became Chief Risk Officer (CRO) at Union Bank of India (UK) managing a balance sheet
of over $1 billion asset. Andy is also a Co-Founder of London Capital Homes Ltd managing over 120 residential
properties and focusing on UK northern cities property development projects. Andy has a Masters Degree from the
London School of Economics (LSE) in Finance and a number of financial market qualifications.
Robert Scott, Executive Director
Robert has principal responsibility as being the director responsible for the overview of the management of Dynamic,
the Group’s spice manufacturing business. He has over 30 years’ financial and investment management experience
with the last twenty years specifically focussed on, executive management, finance, corporate governance,
acquisitions and investor management. Rob is a Chartered Accountant (CA(SA)) by profession. He served as Country
Manager for Lonrho and has served as the General Manager of Uramin’s South African operations. He held executive
and senior positions with a number of companies across a number of countries in Southern Africa. He has been
involved in such broad industries as mining, food manufacturing, hotels, agriculture, shipping, consumer products
and construction amongst many other industries. Robert has been a Director of Dynamic for 12 years and is
responsible for setting the strategy for Dynamic with management and ensuring implementation. He has an intimate
understanding of its day-to-day operations. He has served on a number of other public and private Company boards.
Robert began his career and qualified with Deloitte South Africa after obtaining his Certificate of Theory of
Accounting (CTA) from the University of Cape Town. Rob’s broad understanding of finance, markets, acquisitions
and corporate governance will greatly assist the Group in its growth plans.
Directors’ Report (continued)
For the Year Ended 31 October 2022
Page | 11
Simon Grant-Rennick, Non-Executive Director
Simon graduated from Camborne School of Mines (BSc Hons Mining Engineering, ACSM) and has been actively
involved in the mining and metal trading industry for over 40 years . He has also been active in the agriculture
space in Southern Africa, from the growing of Macadamia nuts to Chillies and Paprika, amongst other crops and
game farming with his own game farm Simon has served as Chairman and executive director of various private and
public companies in Australia, America and UK (LSE, ASX) over various global industries in agriculture, mining,
property and technology.
Directors’ remuneration, shareholding and options
The Directors’ remuneration for the year ended 31 October 2022 is set out in note 8 of the accounts. None of the
Directors receive share options, long term incentives, bonus or the like as part of their remuneration packages.
Remuneration for all Directors, both executive and non-executive, is £1,000 per month. There are contracts for the
new company directors.
Shareholding
As at 31 October 2022, the Directors of the Company held the following shares:
2022
2022
2021
2021
Director
Shareholding
Percentage of
the Company’s
Ordinary Share
Capital
Shareholding
Percentage of
the Company’s
Ordinary Share
Capital
David Lenigas
(resigned)
-
0.00%
1,119,403
2.42%
Andrew Monk
(resigned)
-
0.00%
1,106,338
5.04%
Robert Scott
552,599
1.20%
213,231
0.97%
Matthew Bonner
(resigned)
-
0.00%
165,891
0.76%
Simon Grant-Rennick and Xin (Andy) Sui do not have any shares in the Company.
Share options and warrants
As at 31 October 2022 the Directors share options and warrants were:
2022
Warrants @ 5p
Director
(expiring
23 March 2023)
Andrew Monk
(resigned)
4,240,000
Robert Scott
820,000
Matthew Bonner
(resigned)
840,000
5,900,000
Directors’ Report (continued)
For the Year Ended 31 October 2022
Page | 12
2021
Warrants @ 5p
Director
(expiring
23 March 2023)
Andrew Monk
(resigned)
4,240,000
Robert Scott
820,000
Matthew Bonner
(resigned)
840,000
5,900,000
2021
2021
2021
2021
Options at 20p
Options @ 11p
Warrants @ 20p
Warrants @ 5p
Director
(expiring
5 September
2022)
(expiring
5 September
2022)
(expiring
5 September
2022)
(expiring
24 July 2022)
Andrew Monk
(resigned)
91,952
100,000
69,033
622,233
Robert Scott
50,000
-
128,578
Matthew Bonner
(resigned)
180,000
-
-
128,578
321,952
100,000
69,033
879,389
The total warrants outstanding for the directors at 31 October 2022 were 5,900,00 (2021: 7,779,844). There are no
outstanding options for the directors as at 31 October 2022 (2021: 421,952). Refer to note 24 for more detail.
Dividends
No dividends will be distributed for the current year (2021 - nil).
Supplier Payment Policy
It is the Group’s payment policy to pay its suppliers in conformance with industry norms. Trade payables are paid in
a timely manner within contractual terms, which is generally 30 to 45 days from the date an invoice is received.
Substantial Interests
The Group has been informed of the following shareholdings that represent 3% or more of the 46,162,855 issued
Ordinary Shares of the Company as at 31 October 2022:
Directors’ Report (continued)
For the Year Ended 31 October 2022
Page | 13
Substantial Interests @ 31 October 2022
2022
2022
2021
2021
Shareholder
Shareholding
Percentage of
the Company’s
Ordinary Share
Capital
Shareholding
Percentage of
the Company’s
Ordinary Share
Capital
Golden Nice
International Limited
13,000,000
28.16%
-
0.00%
HSBC Global Custody
Nominee (UK)
Limited
5,315,474
11.51%
1,591,847
7.25%
Interactive Investor
Services Nominees
Limited
3,311,851
7.17%
2,943,459
13.40%
JIM Nominees
Limited
1,597,718
3.46%
1,625,041
7.40%
Lynchwood
Nominees Limited
8,773,542
19.01%
5,150,000
23.45%
Pershing Nominees
Limited
1,526,172
3.31%
1,026,172
4.67%
Vidacos Nominees
Limited
1,950,918
4.23%
1,701,856
7.75%
Vsa Capital Limited
1,754,779
3.80%
Barclays Direct
Investing Nominees
Limited
-
0.00%
726,113
3.31%
CGWL Nominees
Limited
-
0.00%
1,256,338
5.72%
Hargreaves
Lansdown
(Nominees) Limited
-
0.00%
1,121,892
5.11%
The Group has been informed of the following shareholdings that represent 3% or more of the issued Ordinary
Shares of the Company as at 30
th
of June 2023:
Substantial Interests as at 30 June 2023
Shareholder
Shareholding
Percentage of
the Company’s
Ordinary Share
Capital
Golden Nice International Limited
19,000,000
29.28%
Lynchwood Nominees Limited
8,773,542
13.52%
Mr Xiangyu An
6,363,000
9.81%
Ms Fangling Chen
6,363,000
9.81%
HSBC Global Custody Nominee (Uk) Limited
5,315,474
8.20%
Interactive Investor Services Nominees
Limited
3,204,468
4.94%
Vidacos Nominees Limited
1,958,918
3.02%
Directors’ Report (continued)
For the Year Ended 31 October 2022
Page | 14
Auditors
RPG Crouch Chapman LLP (“RPG”), act as auditor to the Company. The appointment of RPG follows the resignation
of Jeffreys Henry LLP as auditors to the Company. Section 519 of the Companies Act 2006 (the "Act") requires Jeffreys
Henry LLP to send a statement of the reasons for ceasing to hold office. They have stated that in accordance with
Section 519 of the Act, they are ceasing to hold office on the grounds that the firm has taken the decision not to
register as an auditor eligible to undertake Public Interest Entity (PIE) audits.
There are no circumstances connected with Jeffreys Henry LLP ceasing to hold office as auditor which it considers
should be brought to the attention of the Company’s members or creditors. RPG has expressed its willingness to
continue in office and a resolution to reappoint them will be proposed at the next Annual General Meeting.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with
applicable law and regulations. Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom. Under Company law
the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view
of the Company and the Group and of the profit or loss of the Company and the Group for that year. In preparing
these financial statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and accounting estimates that are reasonable and prudent;
● state whether the Group and Parent Company financial statements have been prepared in accordance with
IFRS as adopted by the United Kingdom, subject to any material departures disclosed and explained in the
Financial Statements; and
● prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are enough to show and explain the
Group and Parent Company's transactions, disclose with reasonable accuracy at any time the financial position of
the Company and the Group and enable them to ensure that the financial statements comply with the Companies
Act 2006.
The Directors are responsible for safeguarding the assets of the Group and Parent Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Group’s website.
Responsibility Statement
The Directors, whose names and functions are set out in this Directors’ Report under the sub-heading ‘Directors’
with registered office located at 48 Chancery Lane, London WC2A 1JF, accept responsibility for the information
contained in this annual report and accounts for the period ended 31 October 2022.
Directors’ Report (continued)
For the Year Ended 31 October 2022
Page | 15
To the best of the knowledge of the Directors:
• the financial statements are prepared in accordance with the applicable set of accounting standards, give a
true and fair view of the assets, liabilities, financial position and profit or loss of Everest Group Plc and the
undertakings included in the consolidation taken as a whole; and
• the management report includes a fair review of the development and performance of the business and the
position of Everest Group Plc and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
Everest Group Plc acknowledges that it is responsible for all information drawn up and made public in this report
and accounts for the period ended 31 October 2022.
Statement of Disclosure to Auditors
Each person who is a Director at the date of approval of this Annual Report confirms that:
● so far as the Directors are aware, there is no relevant audit information of which the Group and Parent
Company’s auditors are unaware;
● each Director has taken all the steps he ought as Director, in order to make himself aware of any relevant
audit information and to establish that the Group and Parent Company’s auditors are aware of that
information, and
● each Director is aware of and concurs with the information included in the Strategic Report.
Branches Outside the UK
The Group head office is in London and Dynamic Intertrade (Pty) Limited’s office is located in South Africa.
Events after the Reporting Period
Further information on events after the reporting date is set out in note 33.
Strategic Report
In accordance with Section 414C (11) of the Companies Act 2006, the Group chooses to report the review of the
business, the outlook and the risk and uncertainties faced by the Company in the Strategic Report on pages 5 to
10. The Directors’ assessment of the risks faced by the Group are set out in the Strategic Report and in Note 30 to
the financial statements.
On Behalf of the Board
Xin ‘Andy’ Sui, CEO
26
th
July 2023
Directors’ Remuneration Report
For the Year Ended 31 October 2022
Page | 16
Introduction
The information included in this report is not subject to audit other than where specifically indicated.
Remuneration Committee
The remuneration committee consists of all the Board members. This committee's primary function is to review the
performance of Executive Directors and senior employees and set their remuneration and other terms of
employment. Simon Grant- Rennick is the Chairman of the committee.
The committee is also responsible for administering any share option schemes and for granting warrants to the
existing directors. The table indicates share options held by the current directors, Directors of the subsidiary and
former Directors of the Company.
2022
2022
2021
2021
Director
Warrants
Options
Warrants
Options
Andrew Monk **
4,240,000
-
4,931,266
191,952
Robert Scott
820,000
-
820,000
50,000
Matthew Bonner
**
840,000
-
968,578
180,000
Totals
5,900,000
-
7,779,844
421,952
** Director resigned 3 October 2022.
The warrants outstanding as at 31 October 2022 may be exercised by the directors on or before 23 March 2023 at
5p per share.
The Company has one Executive Director. Robert Scott became a Non-Executive Director when Xin ‘Andy’ Sui was
appointed as Chief Executive Officer.
The remuneration policy
It is the aim of the committee to remunerate Executive Directors competitively and to reward performance. The
remuneration committee determines the Company's policy for the remuneration of executive directors, having
regard to the UK Corporate Governance Code 2018.
Service agreements and terms of appointment
The two new Directors have service contracts with the Company.
Directors' interests
The Directors' interests in the share capital of the Company are set out in the Directors’ report.
Directors’ Remuneration Report (continued)
For the Year Ended 31 OCTOBER 2022
Page | 17
Directors' emoluments
Salaries and
Fees
Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£
David Lenigas
**
-
9,000
-
9,000
Robert Scott
12,000
12,000
12,000
12,000
Andrew Monk
**
12,923
13,966
12,923
13,966
Matt Bonner **
11,000
12,000
11,000
12,000
35,923
46,966
35,923
46,966
* Included in Andrew Monk’s remuneration is £1,923 (2021: £1,966) for National Insurance.
** Director has resigned.
No pension contributions were made by the Company on behalf of its Directors other than for Andrew Monk.
Andrew Monk’s pension contribution for 2022 was £330 (2021: £360).
At the year-end a total of £33,587 (2021: £62,126) was outstanding in respect of Directors’ emoluments.
Approval by shareholders
At the next annual general meeting of the Company a resolution approving this report is to be proposed as an
ordinary resolution.
This report was approved by the Board on 26
th
July 2023.
On Behalf of the Board
Simon Grant- Rennick - Committee Chairman
26
th
July 2023
Corporate Governance Statement
For The Year Ended 31 October 2022
Page | 18
The Directors recognise the importance of sound corporate governance while taking into account the Group’s size
and stage of development. We recognise that we require the Company to:
• provide details of a recognised corporate governance code that the Board of Directors has decided to apply
• explain how the Company complies with that code, and where it departs from its chosen corporate governance
code provide an explanation of the reasons for doing so.
The corporate governance disclosures need to be reviewed annually, and the Company is also required to state the
date on which these disclosures were last reviewed. This Corporate Governance Statement sets out how Everest
Global Plc seeks to comply with these requirements. The Directors acknowledge that they have overall responsibility
for the Company’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage
rather than eliminate the risk of failure to achieve business objectives and even the most effective system can
provide only reasonable, and not absolute, assurance with respect to the preparation of financial information and
the safeguarding of assets. The close involvement of the Directors in all decisions and actions undertaken by the
Company is intended to ensure that the risks to the Company are minimised.
This Corporate Governance Statement forms part of the Directors’ report for the purposes of the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority.
Overview
As Chief Executive Office it is my responsibility to ensure that the Company has both sound corporate governance
and an effective Board. The Company is admitted to the Official List of the FCA and to trading on the main market
of the London Stock Exchange and its principal activity is as a holding company for its subsidiary, Dynamic
Intertrade (Pty) Limited, which in involved in the importation, milling, blending and packaging of products that
include herbs, spices, seasonings and confectionary for the domestic market, being South Africa where Dynamic is
located.
The Company’s Board has adopted the principles of the Quoted Companies Alliance Corporate Governance Code
2018 Edition (QCA Code). A copy of the QCA Code is publicly available at https://www.theqca.com/. The QCA Code
identifies ten principles to be followed in order for companies to deliver growth in long term shareholder value,
encompassing an efficient, effective and dynamic management framework accompanied by communication to
promote confidence and trust. This report follows the structure of these guidelines and explains how we have
applied the guidance as well as disclosing any areas of non-compliance. We will provide annual updates on our
compliance with the QCA Code. The Board considers that the Group complies with the QCA Code so far as it is
practicable having regard to the size, nature and current stage of development of the Company, and will disclose
any areas of non-compliance in the text below.
The sections below set out the ways in which the Group applies the ten principles of the QCA Code in support of
the Group’s medium to long-term success and provides reasons for any departures from the QCA Code.
QCA Principles
1. Establish a strategy and business model which promotes long-term value for shareholders
Everest Global Plc is a holding Company with an operating business on the African continent. The Company currently
has a subsidiary in the food sector in South Africa. The Company is actively seeking allied investments is similar
sectors that will enhance long term shareholder value.
The Company may exploit a wide range of investment opportunities within the target sectors as they arise and, to
this end, the Company has complete flexibility in selecting the specific investment and trading strategies that it sees
fit in order to achieve its investment objective. In this regard, the Company may seek to gain Board representation
and/or managerial control in its underlying investments if it deems to be the best way of generating value for
Shareholders. Opportunities will be chosen through a careful selection process which will appraise both the
fundamental factors specific to the opportunity as well as wider economic considerations. Typical factors that will
be considered are the strength of management, the quality of the asset base, the investment’s scale and growth
Chairman’s Corporate Governance Statement (continued)
For the Year Ended 31 October 2022
Page | 19
potential, the commodity price outlook, any geopolitical concerns, the underlying financial position, future working
capital requirements as well as potential exit routes. Investments may be in the form of buy-outs, controlling
positions (whether initially or as a result of additional or follow-on investments) or strategic minority investments.
There is no fixed limit on the number of projects or companies into which the Company may invest, nor the
proportion of the Company’s gross assets that any investment may represent at any time. No material change will
be made to the Company’s investing policy without the approval of Shareholders.
Challenges to delivering strategy, long-term goals and capital appreciation are uncertain in relation to organisational,
operational, financial and strategic risks, all of which are outlined in the Strategic Report on pages 7 - 9, as well as
steps the Board takes to protect the Company by mitigating these risks and secure a long-term future for the
Company.
2. Seek to understand and meet shareholder needs and expectations
The Board recognises the importance of communication with its stakeholders and is committed to establishing
constructive relationships with investors and potential investors in order to assist it in developing an understanding
of the views of its shareholders. The Company also maintains a dialogue with shareholders through formal meetings
such as the AGM, which provides an opportunity to meet, listen and present to shareholders, and shareholders are
encouraged to attend in order to express their views on the Company’s business activities and performance.
Members who have queries regarding the Company’s AGM can contact the Company’s Registrars, Neville Registrars
or the Company Secretary. The Board welcomes feedback from key stakeholders and the Chief Executive Officer is
the shareholder liaison, who meets shareholders regularly, and informs other Directors of their views and
suggestions. Analysts provide the Board with updates on the Company’s business and how strategy is being
implemented, as well as to hear views and expectations from shareholders. The views of the shareholders expressed
during these meetings are reported to the Board, ensuring that all members of the Board are fully aware of the
thoughts and opinions of shareholders. The Company maintains effective contact with its principal shareholders and
welcomes communications from its private investors. Information on the Investor Relations section of the
Company’s website is kept updated and contains details of relevant developments, Annual and Interim Results,
Regulatory News Service announcements, presentations and other key information.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board recognises that the long-term success of the Company is reliant upon the efforts of employees, regulators
and many other stakeholders. The Board has put in place a range of processes and systems to ensure that there is
close oversight and contact with its key resources and relationships. The Company prepares and updates its strategic
plan regularly together with a detailed rolling budget and financial projections which consider a wide range of key
resources including staffing, consultants and utility providers. The Board is kept updated on questions / issues raised
by stakeholders and incorporates information and feedback into future decision making. The Group fully abides by
the provisions of the 2015 Modern Slavery Act. In accordance with its Code of Business Conduct and Ethics, the
Company opposes the crime of slavery in all of its forms, including child labour, servitude, forced or compulsory
labour and human trafficking.
All employees within the Group are valued members of the team, and the Board seeks to implement provisions to
retain and incentivise all its employees. The Group offers equal opportunities regardless of race, gender, gender
identity or reassignment, age, disability, religion or sexual orientation. The Directors are in constant contact with
employees and seek to provide continual opportunities in which issues can be raised allowing for the provision of
feedback. This feedback process helps to ensure that new issues and opportunities that arise may be used to further
the success of the Company. The Company complies fully with all employment legislation where it has operations.
4. Embedded effective risk management, considering both opportunities and threats, throughout the
organisation
The Board recognises the need for an effective and well-defined risk management process and it oversees and
regularly reviews the current risk management and internal control mechanisms. The Board regularly reviews the
risks facing the Company as detailed in the Strategic Report and seeks to exploit, avoid or mitigate those risks as
appropriate. The Board is responsible for the monitoring of financial performance against budget and forecast and
the formulation of the Company’s risk appetite including the identification, assessment and monitoring of the
Company’s principal risks. Additionally, the Board reviews the mechanisms of internal control and risk management
it has implemented on an annual basis and assesses both for effectiveness. On the wider aspects of internal control,
Chairman’s Corporate Governance Statement (continued)
For the Year Ended 31 October 2022
Page | 20
relating to operational and compliance controls and risk management, the Board, in setting the control environment,
identifies, reviews, and regularly reports on the key areas of business risk facing the Group.
The Group Board and subsidiary Boards maintain close day to day involvement in all of the Group’s activities which
enables control to be achieved and maintained. This includes the comprehensive review of both management and
technical reports, the monitoring of interest rates, environmental considerations, government and fiscal policy
issues, employment and information technology requirements and cash control procedures. In this way, the key risk
areas can be monitored effectively, and specialist expertise applied in a timely and productive manner.
The effectiveness of the Group’s system of internal financial controls, for the year to 31 October 2022 and for the
period to the date of approval of the financial statements, has been reviewed by the Directors. Whilst they are aware
that although no system can provide for absolute assurance against material misstatement or loss, they are satisfied
that effective controls are in place. The Group’s internal controls are primarily detailed oversight by the Directors of
the transactions of both the Company and the Subsidiary in addition there are monthly management reports
detailing actual versus budget which are reviewed by the Directors.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board recognises the QCA code recommendation for a balance between Executive and Non-Executive Directors
and the recommendation that there be at least two Independent Non-Executives. The Board currently comprises of
one Executive Director, two Non-Executive Directors, of which, Simon Grant-Rennick, is deemed independent. The
Board will take this into account when considering future appointments. It is the Company’s intention to appoint a
Chairman when its size warrants it. However, all Directors are encouraged to use their judgement and to challenge
matters, whether strategic or operational, enabling the Board to discharge its duties and responsibilities effectively.
The Board maintains that the Board’s composition will be frequently reviewed as the Company develops. The
Company is small and as a result has only two committees, an audit and risk committee and a remuneration and
nominations committee, all of which comprise the entire Board as its members. The Company does not have a
separate nominations committee at this time. The Board does not deem it appropriate to have more committees.
The Group is controlled and led by the Board of Directors with an established schedule of matters reserved for their
specific approval. The Board meets regularly throughout the year and is responsible for the overall Group strategy,
acquisition and divestment policy, approval of major capital expenditure and consideration of significant financial
matters. It reviews the strategic direction of the Company and its individual subsidiaries, their annual budgets, their
progress towards achievement of these budgets and their capital expenditure programmes. The role of the CEO
(Chairman once appointed) is to supervise the Board and to ensure its effective control of the business, and that of
the Executive Director is to manage the Group on the Board’s behalf. All Board members have access, at all times,
to sufficient information about the business, to enable them to fully discharge their duties. Also, procedures exist
covering the circumstances under which the Directors may need to obtain independent professional advice. The
Board meets regularly and is responsible for formulating, reviewing and approving the Group’s strategy, budgets,
performance, major capital expenditure and corporate actions. Detailed biographies of the Board members can be
found on the website and summaries can be found on page 11.
Throughout the year, there have been seventeen Board meetings, with all meetings being quorate. The Directors of
the Company are committed to sound governance of the business and each devotes enough time to ensure this
happens.
Directors’ conflict of interest
The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and
interests are reported to and, where appropriate, agreed with the rest of the Board.
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Company believes that the current balance of skills in the Board as a whole reflects a very broad range of
personal, commercial and professional skills, and notes the range of financial and managerial skills. The Non-
Executive Directors maintain ongoing communications with the Executive between formal Board meetings.
Biographical details of the Directors can be found on the Company’s website and in the Directors’ Report of this
report.
Stephen Clow is the Company Secretary and helps the Company comply with all applicable rules, regulations and
obligations governing its operation. The Company can also draw on the advice of its solicitors and corporate and
Chairman’s Corporate Governance Statement (continued)
For the Year Ended 31 October 2022
Page | 21
financial advisors Cairn Financial Advisers LLP (who were appointed post period end). The Directors have access to
all advisers, Company Secretary, lawyers and auditors as and when required and are able to obtain advice from other
external bodies when necessary. If required, the Directors are entitled to take independent legal advice and if the
Board is informed in advance, the cost of the advice will be reimbursed by the Company. Board composition is always
a factor for consideration in relation to succession planning. The Board will seek to consider any Board imbalances
for future nominations, with areas considered including Board independence and gender balance. The Group
considers however that at this stage of its development and given the current size of its Board, it is not necessary to
establish a formal Nominations Committee. Instead, the appointments to the Board are made by the Board as a
whole and this position is reviewed on a regular basis by the Board.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Directors consider that the Company and Board are not yet of a sufficient size for a full Board evaluation to make
commercial and practical sense. In the frequent Board meetings/calls, the Directors can discuss any areas where
they feel a change would benefit the Company, and the Company Secretary remains on hand to provide impartial
advice. As the Company grows, it expects to expand the Board and with the Board expansion, re-consider the need
for Board evaluation. The Board continues to conduct internal and external Board evaluations which consider the
balance of skills, experience, independence and knowledge of the Company. The evaluation process, the Board
refreshment, use of third-party search companies and succession planning elements are discussed. The Board
evaluation of the Executives’ performance is carried out on a regular basis. Given the level of activity and size of the
Company, no other evaluation is seen as appropriate. In view of the size of the Board, the responsibility for proposing
and considering candidates for appointment to the Board as well as succession planning is retained by the Board. All
Directors submit themselves for re-election at the AGM at regular intervals.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company
as a whole and that this will impact the performance of the Company. The Board is aware that the tone and culture
set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The
corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders, and that shareholders have the opportunity to express their views and
expectations for the Company in a manner that encourages open dialogue with the Board. Therefore, the
importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its
corporate objectives. The Board places great importance on their responsibility for producing accurate financial
statements. The Board also places great importance on accuracy and honesty and seeks to ensure that this aspect
of corporate life flows through all that the Company does. A large part of the Company’s activities is centred upon
an open and respectful dialogue with employees, clients and other stakeholders. Therefore, the importance of sound
ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives.
The Directors consider that the Company has an open culture facilitating comprehensive dialogue and feedback and
enabling positive and constructive challenge. Whilst the Company has a small number of employees, the Board
maintains that as the Company grows it intends to maintain and develop strong processes which promote ethical
values and behaviours across all hierarchies.
The Board has adopted an anti-corruption and bribery policy (Bribery Policy). The Bribery Policy applies to all
Directors and employees of the Group, and sets out their responsibilities in observing and upholding a zero-tolerance
position on bribery and corruption, as well as providing guidance to those working for the Company on how to
recognise and deal with bribery and corruption issues and the potential consequences.
The Board complies with Rules relating to dealings in the Company’s securities by the Directors and other such
persons discharging managerial responsibility. To this end, the Company has adopted a code for Directors’ dealings
appropriate for a Company whose shares are admitted to trading on the London Stock Exchange and takes all
reasonable steps to ensure compliance by the Directors and any relevant employees.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by
the Board
The Board is committed to, and ultimately responsible for, high standards of corporate governance. The Board
reviews the Company’s corporate governance arrangements regularly and expect to evolve this over time, in line
with the Company’s growth.
Chairman’s Corporate Governance Statement (continued)
For the Year Ended 31 October 2022
Page | 22
The Board would delegate responsibilities to committees and individuals as it sees fit. However due to the size of
the Board and Company the Board considers it appropriate that all committees, namely the audit and remuneration
committee are populated by the full Board with invitees as and when. The auditors as an example are invited to the
audit committee.
The Boards’ principal responsibility is to ensure that the Company and its Board are acting in the best interests of
shareholders.
The Executive Director is responsible for the general day-to-day running of the business and developing corporate
strategy.
The Executive Director has, through powers delegated by the Board, the responsibility for leadership of the
management team in the execution of the Group’s strategies and policies and for the day-to-day management of
the business. He is responsible for the general day-to-day running of the business and developing corporate strategy
while the Non-Executive Directors are tasked with constructively challenging the decisions of executive management
and satisfying themselves that the systems of business risk management and internal financial controls are robust.
All Directors participate in the key areas of decision-making, including the following matters:
- Strategy
- Budgets
- Performance
- Major Capital Expenditure
- Corporate Actions
The Board would normally delegate authority to a number of specific Committees to assist in meeting its business
objectives, and the Committees, comprising of at least two independent Non-Executive Directors, would meet
independently of Board meetings.
However, the current Board structure does not permit this, and the Directors will seek to take this into account when
considering future appointments. As a result, matters that would normally be referred to the Nominations
Committee are dealt with by the combined Remuneration and Nominations Committee.
The CEO and the Board continue to monitor and evolve the Company’s corporate governance structures and
processes, and maintain that these will evolve over time, in line with the Company’s growth and development.
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
The Board is committed to maintaining effective communication and having constructive dialogue with its
stakeholders. The Company intends to have ongoing relationships with both its private and institutional
shareholders (through meetings and presentations), and for them to have the opportunity to discuss issues and
provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the
Company’s Annual General Meeting. The Board already discloses the result of General Meetings by way of
announcement and discloses the proxy voting numbers to those attending the meetings. In order to improve
transparency, the Board has committed to publishing proxy voting results on its website in the future.
The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year
results announcements and the Annual General Meeting (AGM). Information on the Investor Relations section of
the Group’s website is kept updated and contains details of relevant developments, regulatory announcements,
financial reports and shareholder circulars. A range of corporate information (including all Company announcements
and presentations) is also available to shareholders, investors and the public on the Company’s corporate website.
Shareholders with a specific enquiry can contact us on the website contact page. The Company uses electronic
communications with shareholders in order to maximise efficiency.
On behalf of the Board
Xin (Andy) Sui
26
th
July 2023
Corporate Governance Report
For the Year Ended 31 October 2022
Page | 23
Introduction
The Board continues to recognise that an effective governance framework is fundamental in ensuring that the
Group’s ability to deliver long term shareholder value. The Group continues to comply with the principles of the QCA
Code .
Board composition
It is critical that the Board has the right composition, so it can provide the best possible leadership for the Group and
discharge its duties to shareholders. This includes the right balance of skills and experience, ensuring that all
Directors have a good working knowledge of the Group’s business and that the Board retains its independence and
objectivity.
The Board currently comprises of two Non-Executive Directors, of which one, being Simon Grant-Rennick, is
considered to be independent, and one executive director. Xin (Andy) Sui was appointed CEO on 3 October 2022. At
that time it was decided that due to the size of the Board and the business a Chairman would not be appointed.
The articles of association require a third, but not greater than a third, of the Directors to retire by rotation each
year.
There are regular Board meetings each year and other meetings are held as required to direct the overall Company
strategy and operations. Board meetings follow a formal agenda covering matters specifically reserved for decision
by the Board. These cover key areas of the Company's affairs including overall strategy, acquisition policy, approval
of budgets, major capital expenditure and significant transactions and financing issues.
The Board has delegated certain responsibilities, within defined terms of reference, to the audit committee and the
remuneration committee as described below. The appointment of new Directors is made by the Board as a whole.
During the year ended 31 October 2022, there were seventeen Board meetings, two audit committee meeting and
no remuneration committee meetings. All meetings were fully attended and quorate.
The Board undertakes an annual evaluation of its own performance and that of its committees and individual
Directors, through discussions and one-to-one reviews.
Board effectiveness
The Board is unanimous in its view that the Board appointments have a range of experience, skills and strength of
leadership. The Company’s procedures for new Directors include undergoing a full induction process, and will
continue with ongoing training, tailored to their knowledge and previous experience. A short biography of all
Directors can be found in the Directors’ Report herein.
Shareholder engagement
As CEO, I am responsible for the effective communication between shareholders and the Company and for ensuring
the Board understands the views of major shareholders.
I look forward to listening to the views of our shareholders at the Company’s next AGM. Directors regularly meet
with a cross section of the Company shareholders to ensure an ongoing dialogue is maintained and report to the
Board on feedback received from shareholders. I also make myself available to meet any of our shareholders who
wish to discuss matters regarding the Company.
Corporate Governance Report (continued)
For the Year Ended 31 October 2021
Page | 24
Audit committee
The audit committee is currently headed by Robert Scott, the Chairman of the committee, and comprises Xin (Andy)
Sui and Simon Grant-Rennick. The committee's terms of reference are in accordance with the UK Corporate
Governance Code. The committee reviews the Company's financial and accounting policies, interim and final results
and annual report prior to their submission to the Board, together with management reports on accounting matters
and internal control and risk management systems. It reviews the auditor’s management letter and considers any
financial or other matters raised by both the auditors and employees.
During the year under review the Company announced the appointment of RPG Crouch Chapman (“RPG”) Jones, as
auditor to the Company. The appointment of RPG will be subject to approval by shareholders at the next Annual
General Meeting of the Company. The appointment of RPG follows the resignation of Jeffreys Henry LLP as auditors
to the Company. Section 519 of the Companies Act 2006 (the "Act") requires Jeffreys Henry LLP to send a statement
of the reasons for ceasing to hold office. They have stated that in accordance with Section 519 of the Act, they are
ceasing to hold office on the grounds that the firm has taken the decision not to register as an auditor eligible to
undertake Public Interest Entity audits.
There are no circumstances connected with Jeffreys Henry LLP ceasing to hold office as auditor which it considers
should be brought to the attention of the Company’s members or creditors.
While searching for a PIE registered auditor the committee approached many auditors to perform the audit however
by and large each one had capacity constraints and could not accept the appointment. The Company further notes
that it announced on 15 December 2022 that Jones Hunt & Keelings ("JH&K") had been appointed as auditor of the
Company however their registration as a Public Interest Entity auditor has not come through and as such, they were
not in a position to accept the audit.
Due to delays in appointing a PIE registered auditor, the Company could not complete its statutory audit or
publication of results or statutory filing at Companies House on time. As such, trading in the Company’s ordinary
shares and its listing on the Official List of the Financial Conduct Authority was suspended pending the publication
of these audited results. The Company was granted an extension of its filing obligations by Companies House.
The committee considers the independence of the external auditors and ensures that, before any non-audit services
are provided by the external auditors, they will not impair the auditor’s objectivity and independence. During the
year, non-audit services totalled £Nil (2021: £Nil).
There is currently no internal audit function within the Group. The Directors consider that this is appropriate of a
Group of this size.
The committee has primary responsibility for making recommendations to the Board in respect of the appointment,
re-appointment and removal of the external auditors.
On Behalf of the Board
Robert Scott
26
th
July 2023
Page | 25
Independent Auditor’s Report
To the Members of Everest Global Plc
Qualified Opinion
We have audited the financial statements of Everest Global Plc (the ‘Company’) and its subsidiaries (the
‘Group’) for the year ended 31 October 2022 which comprise the Group and Company statements of
comprehensive income, statements of changes in equity, statements of financial position, statements of
cash flows and notes to the financial statements, and notes to the financial statements, including a summary
of significant accounting policies. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards as adopted in the United
Kingdom (IFRS).
In our opinion, except for the matter described in the “Basis for qualified opinion” section of our report, the
financial statements:
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December
2022 and of the Group’s loss for the year then ended;
• have been properly prepared in accordance with IFRS; and;
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
The Group recorded closing inventory of £175,875. We were appointed after the balance sheet date and
were unable to arrange attendance at the year-end counting of inventory. We were therefore unable to
verify the closing value of inventory and the associated impact on cost of sales.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Material uncertainty related to going concern
We draw attention to note 2a in the financial statements, which indicates events or conditions identified that
may cast significant doubt over the Company’s ability to continue as a going concern. As stated in note 2a,
these events or conditions, along with other matters set forth in note 2a, indicate that a material uncertainty
exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis
of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern
basis of accounting included:
• Review budgets and cash flows projections up to 31 December 2024;
• Comparison of budget to past performance;
• Sensitise cash flows for variations in trading performance and working capital requirements;
• Consider if there is any other information brought to light during the audit that would impact on the going
concern assessment;
• Review of working capital facilities and assess headroom available in the projections; and
• Review of adequacy and completeness of disclosures in the financial statements in respect of the going
concern assumption.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Independent Auditors’ Report to the members of Everest Global PLC (continued)
Page | 26
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for
example in respect of significant accounting estimates. As in all of our audits, we also addressed the risk
of management override of internal controls, including evaluating whether there was evidence of bias by
the directors that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to issue an opinion
on the financial statements as a whole, taking into account the structure of the group and the parent
company, the accounting processes and controls, and the industry in which they operate.
We performed the audit of the Company and reviewed the work performed by the component auditor in
addition to performing our own tests on the Company’s subsidiary.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement we identified (whether or not due to fraud), including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. The matter identified was addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. The use of the Going Concern basis of accounting was assessed as a key audit matter and
has already been covered in the previous section of this report. The other key audit matters identified are
listed below.
Key audit matter
How our work addressed this matter
Revenue recognition
Revenue recognition is a
presumed risk of fraud under
International Auditing
Standards.
Given the subjectivity of
estimates involved, we consider
the carrying value of property to
be a key audit matter.
Our work included:
• Reviewing accounting policies adopted and ensuring these are in
accordance with IFRS;
• Confirming revenue has been recognised in accordance with the
accounting policies;
• Reconciling expected income for a sample of contracts to
amounts reported in the accounts.
• Reviewing settlement of contract values after the period end; and
• Where no post year end settlement has occurred, for amounts
agreed in the period consider the accuracy of past estimates.
Independent Auditors’ Report to the members of Everest Global PLC (continued)
Page | 27
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements. We consider materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also
take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
We consider gross assets to be the most significant determinant of the Group’s financial performance used
by the users of the financial statements. We have based materiality on 1.5% of gross assets for each of the
operating components. Overall materiality for the Group was therefore set at £28,000. For each component,
the materiality set was lower than the overall group materiality.
We agreed with the Audit Committee that we would report on all differences in excess of 5% of materiality
relating to the Group financial statements. We also report to the Audit Committee on financial statement
disclosure matters identified when assessing the overall consistency and presentation of the consolidated
financial statements.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection
with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns;
or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Independent Auditors’ Report to the members of Everest Global PLC (continued)
Page | 28
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 14 the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or
the parent company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below:
• We obtained an understanding of the legal and regulatory frameworks within which the Group operates
focusing on those laws and regulations that have a direct effect on the determination of material
amounts and disclosures in the financial statements.
• We identified the greatest risk of material impact on the financial statements from irregularities,
including fraud, to be the override of controls by management. Our audit procedures to respond to
these risks included enquiries of management about their own identification and assessment of the
risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for
biases.
Independent Auditors’ Report to the members of Everest Global PLC (continued)
Page | 29
Independent Auditors’ Report to the members of Everest Global PLC (continued)
Auditor’s responsibilities for the audit of the financial statements (continued)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as
fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor's Report.
Other matters that we are required to address
We were appointed on 12 April 2023 and this is the first year of our engagement as auditors for the Group.
We confirm that we are independent of the Group and have not provided any prohibited non-audit services,
as defined by the Ethical Standard issued by the Financial Reporting Council.
Our audit report is consistent with our additional report to the Audit Committee explaining the results of our
audit.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members, as a body, for our audit work, for this report, or for the opinions we
have formed.
Paul Randall FCA (Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered Accountants
Registered Auditor
5
th
Floor, 14-16 Dowgate Hill
London
EC4R 2SU
26 July 2023
Statement of Comprehensive Income
For the Year Ended 31 October 2022
Page | 30
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
Notes
2022
2021
2022
2021
£
£
£
£
Revenue from contracts with customers
5
-
-
Cost of sales
(1,278,471 )
(1,024,430 )
-
-
Gross profit
-
-
Other income
6
-
-
Administrative expenses
9
(1,573,802 )
(895,464 )
21,587
(345,735)
Impairments
10
(227,939)
(161,091)
Operating loss
(1,152,170 )
(515,660 )
(206,352)
(506,826)
Finance costs
11
(3,418,549 )
(224,631 )
(135,775)
(99,785)
Finance income
12
20,439
158,568
Loss for the year from continuing
operations
(4,570,562 )
(584,633 )
(321,688)
(448,043)
Tax on loss on ordinary activities
13
Loss for the year from continuing
operations
(4,570,562 )
(584,633 )
(321,688)
(448,043)
Other comprehensive income
-
-
Total comprehensive loss for the year
from continuing operations
(4,570,562 )
(584,633 )
(321,688)
(448,043)
Loss attributable to ordinary shareholders
(4,571,084 )
(584,633 )
(321,688)
(448,043)
Loss attributable to non-controlling
interest
-
-
Total comprehensive loss attributable
to ordinary shareholders
(4,570,562 )
(584,633 )
(321,688)
(448,043)
Total comprehensive loss attributable
to non-controlling interest
-
-
Basic and diluted earnings per share
14
(17.79
(2.66
All amounts relate to continuing operations.
Group Statement of Changes in Equity
For the Year Ended 31 October 2022
Page | 31
Group
Share
capital
Share
premium
Share based
payments
reserve
Equity
portion of
convertible
loan notes
Retained
earnings
Total
equity
Non-
controlling
interest
Total
equity
£
£
£
£
£
£
£
£
Balance at 31 October 2020
(3,831,894 )
(737,948 )
(737,948 )
Equity portion of Convertible
Loan Notes issued during the
year
Loss for the year
(584,633 )
(584,633 )
(584,633 )
Balance at 31 October 2021
(4,416,527 )
(1,247,646 )
(1,247,646 )
Shares issued
Shares issued on conversion
of Convertible Loan Notes
Settlement of debt by the
issue of shares
Extension of date of
conversion of the Convertible
Loan Notes
(32,396 )
(32,396 )
(32,396 )
Warrants issued during the
year
(218,799 )
Loss attributable to non-
controlling interest on
disposal of 49% of subsidiary
(2,305,905 )
Loss for the year
(4,571,084 )
(4,571,084 )
(4,570,562 )
Balance at 31 October 2022
(6,681,706 )
(2,373,618 )
(2,305,383 )
(4,679,001 )
Share capital is the amount subscribed for shares at nominal value.
The share premium has arisen on the issue of shares at a premium to their nominal value.
Share-based payments reserve relate to the charge for share-based payments in accordance with IFRS 2.
Retained earnings represent the cumulative loss of the Group attributable to equity shareholders.
Company Statement of Changes in Equity
For the Year Ended 31 OCTOBER 2021
Page | 32
Company
Share
capital
Share
premium
Share based
payments
reserve
Equity
portion of
convertible
loan notes
Retained
earnings
Total
equity
Non-
controlling
interest
Total
equity
£
£
£
£
£
£
£
£
Balance at 31 October 2020
439,322
2,571,247
83,377
-
(3,469,230)
(375,284)
-
(375,284)
Equity portion of Convertible
Loan Notes issued during the
year
-
-
-
74,935
-
74,935
-
74,935
Loss for the year
-
-
-
-
(448,043)
(448,043)
-
(448,043)
Balance at 31 October 2021
439,322
2,571,247
83,377
74,935
(3,917,273)
(748,392)
-
(748,392)
Shares issued
260,000
390,000
-
-
-
650,000
-
650,000
Shares issued on conversion
of Convertible Loan Notes
147,463
221,194
-
-
-
368,657
-
368,657
Settlement of debt by the
issue of shares
76,473
76,473
-
-
-
152,946
-
152,946
Extension of date of
conversion of the Convertible
Loan Notes
-
-
-
(32,396)
-
(32,396)
-
(32,396)
Warrants issued during the
year
-
(218,799)
218,799
-
-
-
-
-
Loss for the year
-
-
-
-
(321,688)
(321,688)
-
(321,688)
Balance at 31 October 2022
923,258
3,040,115
302,176
42,539
(4,238,961)
69,127
-
69,127
Statement of the Financial Position
As at 31 October 2022
Page | 33
Group
Group
Company
Company
Notes
2022
2021
2022
2021
£
£
£
£
Assets
Non-current assets
Investment in subsidiaries
15
-
-
Long term intercompany loans
16
-
-
Property, plant and equipment
17
-
-
Right of use asset
28
-
-
Total non-current assets
-
-
Current assets
Investment in associate
(held for sale)
15
6,154
6,154
Inventories
18
-
-
Trade and other receivables
19
11,219
28,737
Cash and cash equivalents
20
922,613
1,108,476
Total current assets
939,986
1,143,367
Total assets
939,986
1,143,367
Equity and liabilities
Share capital
22
923,258
439,322
Share premium
22
3,040,115
2,571,247
Share-based payments reserve
23
302,176
83,377
Equity portion of convertible loan
notes
25
42,539
74,935
Retained earnings
(6,681,706 )
(4,416,527 )
(4,238,961)
(3,917,273)
Total owners' equity
(2,373,618 )
(1,247,646 )
69,127
(748,392)
Non-controlling interest
24
(2,305,383 )
-
-
Total equity
(4,679,001 )
(1,247,646 )
69,127
(748,392)
Non-current liabilities
Non-current lease liabilities
28
-
-
Borrowings
27
-
-
Convertible loan notes
26
710,274
778,065
Total non-current liabilities
710,274
778,065
Current liabilities
Current lease liabilities
28
-
-
Trade and other payables
21
160,585
1,113,694
Total current liabilities
160,585
1,113,694
Total equity and liabilities
939,986
1,143,367
The notes on pages 35 to 88 form part of these financial statements
Approved by the Board and authorised for issue on 26 July 2023.
Xin (Andy) Sui
Company Registration No. 07913053
Statement of Cash Flow
For the year ended 31 October 2022
Page | 34
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
Notes
2022
2021
2022
2021
£
£
£
£
Cash flows from operating activities
Operating loss
(1,152,170 )
(515,660 )
(206,352)
(506,826)
Adjustments for:
Add: Depreciation
17,28
-
-
Add: Impairment of investment
10
227,939
161,091
Add: (Profit)/loss on disposal of
property, plant and equipment
17
-
-
Add: unrealised foreign exchange loss
(41,293 )
(65,301 )
-
-
Finance costs paid
11
(124,889 )
(93,378 )
-
-
Interest received
12
-
149,359
Profit on disposal of loans
receivable
1
-
Changes in working capital
(Increase)/Decrease in inventories
(133,193 )
-
-
Decrease/(Increase) in receivables
(8,363 )
17,518
(16,574)
(Decrease) / Increase in payables
(538,038 )
(647,030)
212,409
Net cash flow from operating
activities
(1,889,194 )
(48,830 )
(607,924)
(541)
Investing activities
Acquisition of property, plant and
equipment
17
(5,541 )
(8,767 )
-
-
Foreign exchange movements
17
(7 )
-
-
Increase in Intercompany Loans
Receivable
(227,939)
(80,611)
Loans Receivable repaid
18
-
944,004
Net cash flow from investing
activities
(5,548 )
(227,939)
863,393
Cash flows from financing activities:
Net proceeds from issue of shares
23
650,000
-
Convertible loan notes issued
26
-
220,000
Increase / (decrease) in borrowings
29
-
-
Foreign exchange movements
29
(8,043 )
-
-
Capital repayments of lease liability
(73,233 )
(67,071 )
-
-
Net cash flow from financing
activities
650,000
220,000
Net cash flow for the period
29
(183,960 )
(185,863)
1,082,852
Opening cash and cash equivalents
1,108,476
25,624
Foreign exchange movements
29
(176 )
-
-
Closing cash and cash equivalents
21/29
922,613
1,108,476
Notes to Group Annual Financial Statements
For the Year Ended 31 October 2022
Page | 35
1. General Information
advisers to the Company are presented on the Directors and Advisers page at the beginning of this report. The
Company is admitted to the Official List (by way of a Standard Listing under Chapter 14 of the Listing Rules) and to
trading on the London Stock Exchange’s Main Market for listed securities. The information within these financial
statements and accompanying notes has been prepared for the year ended 31 October 2022 with comparatives for
the year ended 31 October 2021.
2. Basis of Preparation and Significant Accounting Policies
The consolidated financial statements of Everest Global Plc have been prepared in accordance with International
Financial Reporting Standards as adopted by the United Kingdom (IFRS as adopted by the UK), IFRS Interpretations
Committee and the Companies Act 2006 applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared under the historical cost convention in the Group’s
reporting currency of Pound Sterling.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are disclosed in Note 3. The preparation of financial
statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Although
these estimates are based on management’s experience and knowledge of current events and actions, actual results
may ultimately differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised if the revision affects only that year or in the year of the
revision and future year if the revision affects both current and future year.
a. Going Concern
These consolidated financial statements are prepared on the going concern basis. The going concern basis assumes
that the Group will continue in operation for the foreseeable future and will be able to realise its assets and discharge
its liabilities and commitments in the normal course of business. The Group has incurred significant operating losses
and negative cash flows from operations as the Group continued to expand its operations during the year under
review.
There remains an active and liquid market for the Group’s shares.
As at 31 October 2022 the Group held £925,814 (2021: £1,109,774) in cash and cash equivalents.
During the year, the Group raised additional equity funding of £650,000 (2021: £Nil) in gross funding through share
subscriptions to fund working capital. In addition, the Company converted £581,951.52 of convertible loan notes
into new ordinary shares. As part of the assignment of certain debts to VSA NEX, VSA NEX have agreed to fund
Dynamic so as to enable Dynamic to carry on its business in the ordinary course until such time as the Company
ceases to hold any further shares in Dynamic. VSA NEX has signed a subordination agreement in relation to the loans
due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA NEX choose to request the
repayment of the loans due by Dynamic this will severely impact the Company's ability to continue as a going
concern.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 36
VSA NEX have agreed to subordinate the loans due to themselves. The subordination agreement expires on 31
October 2023. In the event that VSA NEX do not extend their subordination agreement and ask for repayment of
their loans, this would cast significant doubt on the Group’s ability to continue as a going concern.
The Directors have prepared cash flow forecasts. These forecasts consider operating cash flows and capital
expenditure requirements for the Company and Dynamic, available working capital and forecast expenditure,
including overheads and other costs. The Directors are of the opinion that the Group has sufficient working capital
and that no additional funding is required. However, post year end the Group did raise £700,000 in additional capital.
Based upon the Company’s forecast, it has sufficient cash for the foreseeable future.
After careful consideration of the matters set out above, the Directors are of the opinion that the Group will be able
to undertake its planned activities for the period to 31 July 2024 from production and from additional fund raising
and have prepared the consolidated financial statements on the going concern basis. Nevertheless, due to the
uncertainties inherent in meeting its revenue predictions and obtaining additional fund raising there can be no
certainty in these respects. The financial statements do not include any adjustments that would result if the Group
was unable to continue as a going concern. For this reason, the Directors believe that there is a material uncertainty
relating to the Group’s going concern.
b. New and Amended Standards Adopted by the Company
The Group has implemented IFRS as adopted by the UK. At the point of transition from IFRS as adopted by the EU
the underlying requirements were identical. The following standards, amendments and interpretations are new and
effective for the year ended 31 October 2022 and have been adopted. None of the IFRS standards below had a
material impact on the financial statements.
The following new standards, amendments to standards and interpretations have been issued, but are not effective
for the financial year beginning 1 November 2022 and have not been early adopted:
Reference
Title
Summary
Application date of
standard (Periods
commencing on or
after)
IFRS 16
Leases
COVID-19 related rent concessions Extension of the
practical expedient
1 April 2021
IFRS 4,
IAS 7 and
IFRS 16
Interest rate benchmark reform – Phase 2.
The Phase 2 amendments address issues that arise from
the implementation of the reforms, including the
replacement of one benchmark with an alternative one.
The Phase 2 amendments provide additional temporary
reliefs from applying specific IAS 39 and IFRS 9 hedge
accounting requirements to hedging relationships
directly affected by IBOR reform.
1 January 2021
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 37
Reference
Title
Summary
Application date of
standard (Periods
commencing on or
after)
IFRS 3
Business
Combinations
Updating a reference in IFRS 3 to the Conceptual
Framework for Financial Reporting without changing
the accounting requirements for business
combinations.
1 January 2022
IAS 16
Property, Plant
and Equipment
Prohibits a Company from deducting from the cost of
property, plant and equipment amounts received from
selling items produced while the Company is preparing
the asset for its intended use. Instead, a Company will
recognise such sales proceeds and related cost in profit
or loss.
1 January 2022
IAS 37
Provisions,
contingent
liabilities and
contingent assets
Specifies which costs a Company includes when
assessing whether a contract will be loss-making.
1 January 2022
IAS 1
Presentation of
Financial
Statements
Clarifies that liabilities are classified as either current or
noncurrent, depending on the rights that exist at the
end of the reporting period. Classification is unaffected
by the expectations of the entity or events after the
reporting date (for example, the receipt of a waiver or a
breach of covenant). The amendment also clarifies what
IAS 1 means when it refers to the ‘settlement’ of a
liability.
1 January 2023
IAS 1 and
IAS 8
‘Presentation of
Financial
Statements’ and
‘Accounting
policies, changes
in accounting
estimates and
errors’
Amendments to improve accounting policy disclosures
and to help users of the financial statements to
distinguish between changes in accounting estimates
and changes in accounting policies.
1 January 2023
IAS 12
Deferred
Taxation
These amendments require companies to recognise
deferred tax on transactions that, on initial recognition
give rise to equal amounts of taxable and deductible
temporary differences.
1 January 2023
IFRS17
Insurance
contracts
This standard replaces IFRS 4, which currently permits a
wide variety of practices in accounting for insurance
contracts. IFRS 17 will fundamentally change the
accounting by all entities that issue insurance contracts
and investment contracts with discretionary
participation features.
1 January 2023
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 38
The Directors anticipate that the adoption of these standards and the interpretations in future periods will not have
a material impact on the financial statements of the Group.
c. Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) made up to 31 October each year. Control is achieved where the Company has the
power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
into line with those used by other members of the Group. All intra-Group transactions, balances, income and
expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those interests
of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share
of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests’
proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement is made
on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value.
Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests’ share of subsequent changes in equity.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company
and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of
the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-
controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling
interests. Where certain assets of the subsidiary are measured at revalued amounts or fair values and the related
cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts
previously recognised in other comprehensive income and accumulated in equity are accounted for as if the
Company had directly disposed of the related assets (i.e. reclassified to profit or loss or transferred directly to
retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is
lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 “Financial Instruments:
Recognition and Measurement” or, when applicable, the cost on initial recognition of an investment in an associate
or a jointly controlled entity.
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of
the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised
in profit or loss as incurred.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 39
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair value
at the acquisition date, except that:
● deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
● liabilities or equity instruments related to share-based payment transactions of the acquiree or the
replacement of an acquiree’s share-based payment transactions with share-based payment transactions of the
Group are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and
● assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that standard.
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
assessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately
in profit or loss as a bargain purchase gain.
Joint Ventures and Associates
A joint venture is a contractual agreement under which two or more parties conduct an economic activity and
unanimous approval is required for the financial and operating policies. Associates are all entities over which the
Group has significant influence but not control, generally accompanying a shareholding between 20% and 50% of
the voting rights. Joint ventures and associates are accounted for using the equity method, which involves
recognition in the consolidated income statement of EG’s share of the net result of the joint ventures and associates
for the year. Accounting policies of joint ventures and associates have been changed where necessary to ensure
consistency with the policies adopted by the Group. EG’s interest in a joint venture or associate is carried in the
statement of financial position at its share in the net assets of the joint venture or associate together with goodwill
paid on acquisition, less any impairment loss. When the share in the losses exceeds the carrying amount of an equity-
accounted Company (including any other receivables forming part of the net investment in the Company), the
carrying amount is written down to nil and recognition of further losses is discontinued, unless we have incurred
legal or constructive obligations relating to the Company in question.
d. Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less subsequent accumulated depreciation and
accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit
or loss during the financial year in which they are incurred. Depreciation on property, plant and equipment is
calculated using the straight-line method to write off their cost over their estimated useful lives at the following
annual rates:
Leasehold improvements
33.3%
Furniture, fixtures and equipment
17%
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 40
Plant and machinery
20% and 33.3%
Useful lives and depreciation method are reviewed and adjusted if appropriate, at the end of each reporting year.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the relevant asset and is recognised in profit or loss in the year in which the asset is derecognised.
e. Leased assets
The Group leases various offices and equipment. Rental contracts are typically made for fixed periods of 3 years but
may have extension options for an additional 2 years. Lease terms are negotiated on an individual basis and contain
a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
The right-of use asset is depreciated over the shorter of the asset's useful life and the lease term as per the table
below:
1
st
year of the lease
15%
2
nd
year of the lease
17%
3
rd
year of the lease
20%
4
th
year of the lease
22%
5
th
year of the lease
26%
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and
conditions.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received any initial
direct costs, and
• restoration costs.
Payments associated with short term leases and leases of low-value assets are recognised on a straight-line basis as
an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets
comprise moving equipment rented on a day to day basis.
f. Investments in Subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 41
g. Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined using specific identification
and in the case of work in progress and finished goods, comprises the cost of purchase, cost of conversion and other
costs incurred in bringing the inventories to their present location and condition. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated cost of completion and applicable selling
expenses.
When the inventories are sold, the carrying amount of those inventories is recognised as an expense in the year in
which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and
all losses of inventories are recognised as an expense in the year in which the write-down or loss occurs. The amount
of any reversal of any write-down of inventories is recognised as an expense in the year in which the reversal occurs.
h. Impairment
Non-derivative financial assets
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at
Fair Value through Other Comprehensive Income (“FVOCI”) are credit-impaired. A financial asset is “credit-impaired”
when one or more events that have a detrimental impact on the estimated future cash flows of the financial assets
have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
• significant financial difficulty of the borrower or issuer;
• a breach of contract such as a default or being more than 90 days past due;
• the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
• it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
• the disappearance of an active market for a security because of financial difficulties.
A 12 month approach is followed in determining the Expected Credit Loss (“ECL”).
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the
assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in Other Comprehensive
Income (“OCI”).
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually
makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable
expectation of recovery from the amount written off. However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the Group’s procedures of recovery of the amounts due.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 42
i. Financial Instruments
The Group classifies non-derivative financial assets into the following categories: loans and receivables and Fair
Value through Profit and Loss (“FVTPL”) and Fair Value through OCI (“FVTOCI”) financial assets.
The Group classifies non-derivative financial liabilities into the following category: other financial liabilities.
i. Non-derivative financial assets and financial liabilities – Recognition and derecognition
The Group initially recognises loans and receivables on the date when they are originated. All other financial assets
and financial liabilities are initially recognised on the trade date when the entity becomes a party to the contractual
provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the
risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such
derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Gains or losses on derecognition of financial liabilities are recognised in profit or loss as a finance charge.
Financial assets and financial liabilities are offset, and the net amount presented in the statement of financial
position when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends
either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
ii. Loans and receivables- Measurement
These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, they are measured at amortised cost using the effective interest method.
iii. Assets at FVOCI - Measurement
These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised in
OCI and accumulated in the revaluation reserve.
When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
iv. Non-derivative financial liabilities – Measurement
Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest
method.
v. Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting purposes is governed by IAS 32 and IFRS 9. These
standards require the loan notes to be separated into two components:
• a derivative liability; and
• a debt host liability.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 43
This is because the loan notes are convertible into an unknown number of shares, therefore failing the ‘fixed-for-
fixed’ criterion under IAS 32. This requires the ‘underlying option component’ of the loan note to be valued first (as
an embedded derivative), with the residual of the face value being allocated to the debt host liability (refer financial
liabilities policy above).
Compound financial instruments issued by the Group comprise convertible notes denominated in British pounds
that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed
and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognised at the fair value of a similar liability
that does not have an equity conversion option. The equity component is initially recognised at the difference
between the fair value of the compound financial instrument as a whole and the fair value of the liability component.
Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their
initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial instrument is
not remeasured.
Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability
is reclassified to equity and no gain or loss is recognised.
The Group’s financial liabilities include amounts due to a director, trade payables and accrued liabilities. These
financial liabilities are classified as FVTPL are stated at fair value with any gains or losses arising on re-measurement
recognised in profit or loss. Other financial liabilities, including borrowings are initially measured at fair value, net of
transaction costs.
j. Borrowings
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for
at least 12 months after the reporting period, in which case they are presented as non-current liabilities.
Borrowings are initially recorded at fair value, net of transaction costs and subsequently carried for at amortised
costs using the effective interest method. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the year of the borrowings using the effective interest method.
Borrowings which are due to be settled within twelve months after the reporting period are included in current
borrowings in the statement of financial position even though the original term was for a period longer than twelve
months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the
reporting period and before the financial statements are authorised for issue.
k. Revenue Recognition
Performance obligations and service recognition policies
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises
revenue when it transfers control over of goods or services to a customer.
The following table provides information about the nature and timing of the satisfaction of performance obligations
in contracts with customers, including significant payment terms, and the related revenue recognition policies.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 44
Type of product/ service
Nature and timing of satisfaction of
performance obligations, including
significant payment terms
Revenue recognition under IFRS 15
Sale of goods
Customers obtain control of the goods
when the goods have been delivered to
them and have been accepted at their
premises or the agreed point of delivery.
Invoices are generated at that point in time
net of rebates and discounts. Invoices are
generally payable within 30 days. No
settlement discounts are provided for.
The sale of the goods are not subject to a
return policy.
Revenue is recognised when the goods
are delivered and have been accepted
by the customers at their premises or
the agreed point of delivery.
Interest revenue
Interest income is recognised in the income
statement for all interest-bearing
instruments (whether classified as held-to-
maturity, FVTOCI, FVTPL, derivatives or
other assets) on an accrual basis using the
effective interest method based on the
actual purchase price including direct
transaction costs.
Once a financial asset has been written
down to its estimated recoverable
amount, interest income is thereafter
recognised based on the effective
interest rate that was used to discount
the future cash flows for the purpose of
measuring the recoverable amount.
l. Cost of Sales
Cost of sales consists of all costs of purchase and other directly incurred costs.
Cost of purchase comprises the purchase price, import duties and other taxes (other than those subsequently
recoverable by the Group from the taxing authorities), if any, and transport, handling and other costs directly
attributable to the acquisition of goods. Trade discounts, rebates and other similar items are deducted in
determining the costs of purchase. Cost of conversion primarily consists of hiring charges of subcontractors incurred
during conversion.
m. Finance Income and Finance Costs
The Group’s finance income and finance costs include:
• interest income;
• interest expense; and
• dividend income.
Interest income and expense is recognised using the effective interest method. Dividend income is recognised in
profit or loss on the date on which the Group’s right to receive payment is established.
The “effective interest rate” is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument to:
• the gross carrying amount of the financial asset; or
• the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets
that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 45
effective interest rate to the amortised cost of the financial asset, if the asset is no-longer credit-impaired, then the
calculation of interest income reverts to the gross basis.
n. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in
the statement of comprehensive income because it excludes items of income and expense that are taxable or
deductible in other years, and it further excludes items that are never taxable or deductible. The Group’s liability for
current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting
year.
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries,
except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments are only recognised to the extent that it is probable that
there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year in which the
liability is settled or the asset realised. The measurement of deferred tax assets and liabilities reflects the tax
consequences that would follow from the manner in which the Group expects, at the end of the reporting year, to
recover or settle the carrying amount of its assets and liabilities.
Current or deferred tax for the year is recognised in profit or loss, except when it relates to items that are recognised
in other comprehensive income or directly in equity, in which case the current and deferred tax is also recognised in
other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the
initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
o. Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial
institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value, having been within three months of maturity at
acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 46
management are also included as a component of cash and cash equivalents for the purpose of the consolidated
statement of cash flows.
p. Provisions and Contingencies
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that
the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the
expenditure required to settle the obligation at the statement of financial position date and are discounted to
present value where the effect is material. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
When the effect of discounting is material, the amount recognised for a provision is the present value at the
reporting date of the future expenditures expected to be required to settle the obligation. The increase in the
discounted present value amount arising from the passage of time is included in finance costs in the statement of
comprehensive income.
Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an
outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial
statements but disclosed when an inflow of economic benefits is probable.
q. Share Capital
Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital and
share premium.
r. Foreign Currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the
functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the
currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on
the dates of the transactions. At the end of the reporting year, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated
in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-
monetary items that are measured in terms of historical costs in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on translation of monetary items, are
recognised in profit or loss in the year in which they arise. Exchange differences arising on the retranslation of non-
monetary items carried at fair value are included in profit or loss for the year except for differences arising on the
retranslation of non-monetary items in respect of which gains, and losses are recognised directly in other
comprehensive income, in which cases, the exchange differences are also recognised directly in other
comprehensive income.
For the purposes of presenting the consolidated financial statements, assets and liabilities of the Group’s foreign
operations are translated from South African Rand into the presentation currency of the Group of Pound Sterling at
the rate of exchange prevailing at the end of the reporting year, and their income and expenses are translated at
the average exchange rates for the year, unless exchange rates fluctuate significantly during that year, in which case,
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 47
the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in equity.
The principal exchange rates during the year are set out in the table below:
Rate compared to £
Year End Rate 2022
Year End Rate 2021
South African Rand
21.04
20.83
US Dollar
1.15
1.37
s. Employee Benefits
Salaries, annual bonuses, paid annual leave and the cost to the Group of non-monetary benefits are accrued in the
year in which employees of the Group render the associated services. Where payment or settlement is deferred and
the effect would be material, these amounts are stated at their present values.
t. Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive Director who makes strategic decisions.
3. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
In the application of the Group’s accounting policies, which are described above, management is required to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and assumptions that had a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities are discussed below.
a. Inventory Valuation
Inventory is valued at the lower of cost and net realisable value. Net realisable value of inventories is the estimated
selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These
estimates are based on the current market conditions and the historical experience of selling products of a similar
nature. It could change significantly as a result of competitors’ actions in response to severe industry cycles. The
Group reviews its inventories in order to identify slow-moving merchandise and uses markdowns to clear
merchandise. Inventory value is reduced when the decision to markdown below cost is made.
b. Impairment of long term Inter-Company Receivables
The Group’s management reviews long-term inter-Company receivables on a regular basis to determine if any
provision for impairment is necessary. The policy for the impairment of long-term inter-Company receivables of the
Group is based on, where appropriate, the evaluation of collectability, the trading performance of the relevant
subsidiary and on management’s judgement. A considerable amount of judgement is required in assessing the
ultimate realisation of these outstanding amounts, including the current and estimated future trading performance
of the relevant subsidiary. If the financial conditions of inter-Company debtors of the Group were to deteriorate,
resulting in an impairment of their ability to make payments, a provision for impairment may be required.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 48
c. Impairment of Receivables
The Group’s management reviews receivables on a regular basis to determine if any provision for impairment is
necessary. The policy for the impairment of receivables of the Group is based on, where appropriate, the evaluation
of collectability and ageing analysis of the receivables and on management’s judgement. A considerable amount of
judgement is required in assessing the ultimate realisation of these outstanding amounts, including the current
creditworthiness and the past collection history of each debtor. If the financial conditions of debtors of the Group
were to deteriorate, resulting in an impairment of their ability to make payments, provision for impairment may be
required.
d Incremental borrowing cost of Right of Use Assets and Lease Liabilities
In assessing the Group’s right of use assets and lease liabilities, the Group has to assess its incremental borrowing
costs. As an approximation of the Group’s incremental long term borrowing costs, the Group estimated the
borrowing costs associated with similar long term, asset based financing arrangements. The Group based the implied
incremental borrowing costs on the South African prime lending rate applicable at the date of commencement of
the agreement and added an appropriate lending premium that would be typically applied by lenders. At the year
end the estimated incremental borrowing costs used amounted to 8.5% (2021: 8.5%).
e. Income Taxes
The Group is subject to income taxes in South Africa and the UK. The South African income taxes are administered
by South African accountants. Significant judgement is required in determining the provision for income taxes and
the timing of payment of the related tax. There are certain transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated
tax based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax provision in the
year in which such determination is made.
f. Share Based Payments
The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes
model, which considers conditions attached to the vesting and exercise of the equity instruments. The expected life
used in the model is adjusted; based on management’s best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is
based on management’s best estimate of future share price behaviour based on past experience, future
expectations and benchmarked against peer companies in the industry.
g. Equity portion of Convertible Loan Notes
The Group provides for the equity portion of convertible loan notes by applying an estimated interest rate in
determining the present values of the convertible loan notes and the interest payable thereon over the life of the
convertible loan notes.
h. Depreciation and Amortisation
The Group depreciates property, plant and equipment and amortises the leasehold buildings and land use rights on
a straight-line method over the estimated useful lives. The estimated useful lives reflect the Directors’ estimate of
the years that the Group intends to derive future economic benefits from the use of the Group’s property, plant and
equipment.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 49
4. Segmental Reporting
In the opinion of the Directors, the Group has one class of business, being the trading of agricultural materials. The
Group’s primary reporting format is determined by the geographical segment according to the location of its
establishments. There is currently only one geographic reporting segment, which is South Africa. All revenues and
costs are derived from the single segment.
5. Revenue
Group
Group
Company
Company
For the year
For the year
For the year
For the year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Major product/service lines
Sale of agricultural materials
1,698,839
1,404,234
-
-
Primary geographic markets
South Africa
1,698,839
1,404,234
-
-
Timing of revenue recognition
Products transferred at a point in
time
1,698,839
1,404,234
-
-
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 50
6. Other Income
Group
Group
Company
Company
For the year
For the year
For the year
For the year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Settlement discounts received
(1)
-
(1)
-
Profit on disposal of loan to subsidiary
1
1
Profit on disposal of property
plant and equipment
1,264
-
-
-
1,264
-
-
-
7. Personnel Expenses and Staff Numbers (Including Directors)
Group
Group
Company
Company
For the
year
For the
year
For the
year
For the
year
ending
ending
ending
ending
Number
31 October
31 October
31 October
31 October
2022
2021
2022
2021
The average number of employees in the year were:
Directors
3
4
3
4
Management
3
2
-
-
Accounts and administration
2
2
-
-
Sales
1
3
-
-
Manufacturing/warehouse
8
13
-
-
Total
17
24
3
4
£
£
£
£
The aggregate payroll costs for these
persons were:
232,273
278,499
59,032
68,681
Average ratio of executive pay
verses average employee pay
0.85
1.01
Average Directors
11,974
11,742
Average of all employees
13,663
11,604
Average of non-director employees
14,025
11,577
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 51
8. Directors’ Remuneration
Group
Group
Company
Company
For the
year
For the
year
For the
year
For the
year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
Salaries and Fees
2022
2021
2022
2021
£
£
£
£
David Lenigas (resigned)
-
9,000
-
9,000
Robert Scott
12,000
12,000
12,000
12,000
Andrew Monk (resigned)*
12,923
13,966
12,923
13,966
Matt Bonner (resigned)
11,000
12,000
11,000
12,000
35,923
46,966
35,923
46,966
* Included in Andrew Monk’s remuneration is £1,923 for National Insurance.
No pension contributions were made by the Company on behalf of its directors other than for Andrew Monk.
Included in Andrew Monk’s remuneration are pension contributions amounting to £330 (2021: £360).
At the year-end a total of £33,587 (2021: £62,126) was outstanding in respect of directors’ emoluments.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 52
9. Expenses - Analysis by Nature
Group
Group
Company
Company
For the
year
For the
year
For the
year
For the
year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Auditor's remuneration for audit services:
Parent
45,000
27,256
45,000
27,256
Auditor's remuneration for audit
related services
-
1,500
-
1,500
Under-provision of prior year audit fee
11,530
-
11,530
-
Auditor's remuneration for audit services:
Subsidiary
17,308
3,536
-
-
Brokership fees
15,000
39,724
15,000
39,724
Legal and professional fees
(269,522)
36,089
(269,522)
34,261
Registrar fees
3,034
5,138
3,034
5,138
Depreciation on property, plant and
equipment (Note 17)
5,419
10,590
-
-
Depreciation on IFRS 16 Right of Use
Asset (Note 28)
79,541
67,519
-
-
(Gain) /loss on exchange
1,061,452
145,055
305
50,725
Personnel expenses (Note 7)
232,273
278,499
59,032
68,681
Other administrative expenses
372,767
280,558
114,034
118,450
Subtotal
1,573,802
895,464
(21,587)
345,735
Admission and regulatory expenses
-
-
-
-
Total administrative expenses
1,573,802
895,464
(21,587)
345,735
10. Impairments
During the financial year, the recoverability of the investment was evaluated and in management’s estimation, it
was considered necessary to impair the goodwill on consolidation, the investment in the subsidiary and the
intercompany loans receivable.
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Impairment of goodwill
-
-
-
-
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 53
Impairment of investment in subsidiary
-
-
-
-
Impairment of inter-company loans
receivable
-
-
227,939
161,091
-
-
227,939
161,091
11. Finance Costs
Group
Group
Company
Company
For the year
For the year
For the year
For the year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Interest paid on borrowings
124,889
93,378
-
-
Interest accrued on convertible loan notes
135,775
99,785
135,775
99,785
Lease liability
25,995
31,468
-
-
Finance charges associated with
disposal of intercompany loan to VSA
NEX Investments Limited (note 1)
3,131,890
-
-
3,418,549
224,631
135,775
99,785
Finance costs represent interest and charges in respect of the discounting of invoices, the interest accrual for the
Convertible Loan Notes issued and the interest charged on capitalised right-of use lease liability.
Note 1: These finance charges relate to the disposal of an inter-company loan to VSA NEX. Refer to Note 30 for more
information.
12. Finance Income
Group
Group
Company
Company
For the
year
For the
year
For the
year
For the
year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Interest earned on loan receivable
-
149,359
-
149,359
Interest earned on intercompany
loan receivable
-
-
20,439
9,209
Interest earned on favourable bank
balances
157
6,299
-
-
157
155,658
20,439
158,568
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 54
13. Taxation
The charge for the year can be reconciled to the profit before taxation per the consolidated statement of
comprehensive income as follows:
Taxation
Group
Group
Company
Company
For the
year
For the
year
For the
year
For the
year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Tax Charge
-
-
-
-
Factors affecting the tax charge
Loss on ordinary activities before taxation
(584,633)
(584,633)
(389,553)
(389,553)
Loss on ordinary activities before taxation
multiplied by standard rate of UK corporation
tax of 19,00% (2019: 19,00%)
(111,080)
(111,080)
(74,015)
(74,015)
Tax effect of expenses not deductible for tax
10,569
1,934
-
-
Overseas tax rate differences from
the UK rate (26%)
85,096
16,296
-
-
Tax effect of utilisation of tax losses
15,415
92,850
74,015
74,015
The Company has excess management expenses of £1,043,509 (2021: £1,043,509) available for carry forward against
future trading profits. The deferred tax asset in these tax losses at 19.0% of £193,369 (2021: 19.0% of £193,369) has
not been recognised due to the uncertainty of recovery.
14. Loss Per Share
Loss per share data is based on the Group result for the year and the weighted average number of shares in issue.
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average
number of ordinary shares in issue during the year:
Year ended
Year ended
31 October
31 October
2022
2021
£
£
Loss after tax
(4,570,562)
(584,633)
Weighted average number of ordinary shares in issue
25,690,228
21,966,087
Basic and diluted loss per share (pence)
(17.79p)
(2.66p)
Basic and diluted loss per share are the same, since where a loss is incurred the effect of outstanding share options
and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. As at 31
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 55
October 2022 there were 46,162,855 (2021: 21,966,087) shares in issue, 38,363,171 (2021: 14,988,511) outstanding
share warrants and 38,363,171 (2021: 897,809) outstanding options, both are potentially dilutive.
15. Investments
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Investment in subsidiary
- Cost of investment
-
-
297,915
297,915
- Impairment of investment
-
-
(297,915)
(297,915)
Carrying value
-
-
-
-
15.1. Investment in Associate
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Investment in Dynamic Intertrade
Agri (Pty) Ltd (held for sale)
6,154
6,154
90,046
90,046
Equity accounted profit for the
period
-
-
-
-
Impairment of investment
-
-
-
-
Carrying value
6,154
6,154
90,046
90,046
Management have committed to selling its investment in the associate, Dynamic Intertrade Agri (Pty) Ltd. The asset
is available for immediate sale to a willing buyer. A buyer for the asset has been identified and a preliminary price of
£6,154 has been discussed. It was anticipated that the sale will be concluded within the last financial year ending 31
October 2021, however COVID-19 delayed the process. The investment is still being held for sale to the existing
buyer. Accordingly, for the current year the investment is reflected under current assets as held for sale. As part of
the process of selling the group’s investment in the associate a fair value exercise was undertaken. Management
considered the financial performance of the Company, the price that a willing buyer was prepared to pay for the
investment as well as the prevailing market conditions. Based on the above, the directors are of the opinion that the
fair value of the Company is £6,154.
As at 31 October 2022, the Company directly and indirectly held the following subsidiary and associate:
Name of Company
Principal activities
Country of
incorporation and
place of business
Proportion (%) of
equity interest
2022
Proportion (%) of
equity interest
2021
Dynamic Intertrade
(Pty) Limited
Trading in Agricultural
Products
South Africa
51%
100%
Dynamic Intertrade
Agri (Pty) Limited
Agricultural commodity
trading and distribution
South Africa
46.8%
Designated as
Held for Sale
46.8%
Designated as
Held for Sale
15.2. Investment in Subsidiary
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 56
Information about the Group’s shareholding in Dynamic Intertrade (Pty) Ltd at the end of the reporting period is as
follows:
2022
2021
Dynamic Intertrade (Pty) Ltd
Percentage Held
As at 1 November
100%
100%
Percentage disposed of on subsidiary issuing shares
on 3 October 2022
49%
0%
Percentage held at 31 October
51%
100%
The Group acquired 100% of Dynamic Intertrade (Pty) Ltd in 2012 from Corestar Holdings Ltd. On 3 October 2022,
Dynamic Intertrade issued shares to a VSA NEX Investments Limited such that Everest Global retains 51% interest in
Dynamic Intertrade and VSA NEX Investments Limited now holds 49% of Dynamic Intertrade.
2022
2021
Dynamic Intertrade (Pty) Ltd
Proportion of ownership interests and voting rights
held by non-controlling interests at 31 October
51%
100%
2022
2021
£
£
Profit / (Loss) allocated to non-controlling interests
for the year
522
-
Non-controlling Interests
(2,305,383)
-
The reconciliation of non-controlling interests in note 25 includes an analysis of the profit or loss allocated to non-
controlling interests of each subsidiary where the non-controlling interest is material. There are no significant
restrictions on the ability of the Group to access or use assets and settle liabilities.
During the year, the Group disposed of a 49 per cent of its interest in Dynamic Intertrade (Pty) Ltd. There were no
proceeds on disposal as described above. An amount of £2.903 million (being the proportion share of the carrying
amount of net assets in Dynamic Intertrade (Pty) Ltd has been transferred to non-controlling interests (see note 51).
There was no gain or loss on disposal of Dynamic Intertrade (Pty) Ltd.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 57
16. Long Term InterCompany Loans
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Loan to Dynamic Intertrade (Pty) Ltd
- Amount receivable
-
-
-
1,002,918
- Impairment of loan
-
-
-
(1,002,918)
Carrying value
-
-
-
-
The loan is unsecured and bears interest at rates linked to LIBOR +2% p.a. As indicated in Note 10, both the capital
and the interest elements of the above loan have been fully impaired during the year ended 31 October 2020. The
additional loan provided to the subsidiary was impaired during the current year. During the year, the Company
assigned certain debts to VSA NEX. VSA NEX has signed a subordination agreement in relation to the loans due by
Dynamic to VSA NEX with an expiry date of 31 October 2023.Refer to Note 31 for more information.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 58
17. Property, Plant and Equipment
Group
Leasehold
Improve-
ments
Furniture,
fixtures and
equipment
Plant and
machinery
Total
£
£
£
£
Cost
As at 31 October 2020
19,571
4,317
268,512
292,400
Additions
-
-
8,767
8,767
Disposals
-
-
(298)
(298)
Exchange difference
175
39
2,401
2,615
As at 31 October 2021
19,746
4,356
279,382
303,484
Additions
-
-
5,541
5,541
Disposals
-
-
-
-
Exchange difference
(194)
(56)
(29,986)
(30,236)
As at 31 October 2022
19,552
4,300
254,937
278,789
Accumulated depreciation
As at 31 October 2020
19,085
3,674
254,343
277,102
Charge for the year
477
363
9,750
10,590
Released on disposal
-
-
(159)
(159)
Exchange difference
158
23
2,001
2,182
As at 31 October 2021
19,720
4,060
265,935
289,715
Charge for the year
24
173
5,222
5,419
Released on disposal
-
-
-
-
Exchange difference
(194)
(40)
(29,995)
(30,229)
As at 31 October 2022
19,550
4,193
241,162
264,905
Net book value
As at 31 October 2021
26
296
13,447
13,769
As at 31 October 2022
2
107
13,775
13,884
The holding Company held no tangible fixed assets at 31 October 2022 and 2021.
18. Inventories
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Raw materials
175,875
40,116
-
-
Finished goods
-
2,566
-
-
Carrying value
175,875
42,682
-
-
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a funding agreement with Euro 2 Afrisko Ltd
whereby Euro 2 Afrisko pay the suppliers directly and this is then repaid by Dynamic to purchase stock from suppliers
where deposits are required. This funding is secured by a lien over the inventory and a cession of the debtors
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 59
19. Trade and other receivables
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Financial instruments
Trade receivables
256,824
257,332
-
-
Deposits
14,360
2,028
-
-
Other receivables
11,219
28,737
11,219
28,737
Non-financial instruments
Prepayments
126
9,703
-
-
Carrying value
282,529
297,800
11,219
28,737
Current
282,529
297,800
11,219
28,737
Non-Current
-
-
-
-
282,529
297,800
11,219
28,737
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a funding agreement with Euro 2 Afrisko Ltd
whereby Euro 2 Afrisko pay the suppliers directly and this is then repaid by Dynamic to purchase stock from
suppliers where deposits are required. This funding is secured by a lien over the inventory and a cession of the
debtors
The receivables are considered to be held within a held-to-collect business model consistent with the Group’s
continuing recognition of the receivables.
As at 31 October 2022 the Group does not have any contract assets nor any contract liabilities arising out of contracts
with customers relating to the Group’s right to receive consideration for agricultural products sold but not billed.
Group Trade receivables represent amounts receivable on the sale of agricultural products and are included after
provisions for doubtful debts.
Credit and market risks, and impairment losses
The Group did not impair any of its trade receivables as at 31 October 2022, as all trade receivables generated during
the financial year, and outstanding at 31 October 2022 are considered to be recoverable during the ordinary course
of business.
Information about the Group’s exposure to credit and market risks and impairment losses for trade receivables is
included in Note 30.
The Directors consider that the carrying amount of trade receivables and other receivables approximates their fair
value.
20. Cash and Cash Equivalents
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 60
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Cash on hand
925,814
1,109,774
922,613
1,108,476
925,814
1,109,774
922,613
1,108,476
21. Trade and Other Payables
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Trade payables
582,180
1,274,105
160,585
981,000
Other payables
-
153,515
-
132,694
Related party payables
42,202
40,879
-
-
624,382
1,468,499
160,585
1,113,694
Trade payables represent amounts due for the purchase of agriculture materials and administrative expenses. The
Directors consider that the carrying amount of trade payables approximates to their fair value.
Included in Other payables is a loan from G Roach: The loan bears interest at the South African prime overdraft
rate. The interest will be calculated and paid when the loan is repaid. The loan is repayable as decided upon from
time to time.
The related party financial liabilities comprise:
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
M Bonner
25,357
24,562
-
-
R Scott
16,845
16,317
-
-
42,202
40,879
-
-
Terms:
M Bonner: The loan bears interest at the South African prime overdraft rate. The interest is calculated and paid
quarterly. The loan is repayable as decided upon from time to time.
R Scott: The loan bears interest at the South African prime overdraft rate. The interest is calculated and paid
quarterly. The loan is repayable as decided upon from time to time.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 61
22. Share Capital and Share Premium
Allotted, called up and fully paid
share capital and share premium
Number of
shares
Nominal
value
Share
premium
Total
£
£
£
Balance at 31 October 2020
21,966,087
439,322
2,571,247
3,010,569
Share issue
-
-
-
-
Balance at 31 October 2021
21,966,087
439,322
2,571,247
3,010,569
Share issue on settlement of debt 29
April 2022
3,823,627
76,473
76,473
152,946
Share issue on conversion of
convertible loan notes 3 October
2022
7,373,140
147,463
221,194
368,657
Share issue 3 October 2022
13,000,000
260,000
390,000
650,000
Warrants issued during the year
-
-
-218,799
-218,799
Balance at 31 October 2022
46,162,854
923,258
3,040,115
3,963,373
Share capital is the amount subscribed for shares at nominal value.
During the 2019 financial year the Company consolidated all existing and issued shares and share options on the
basis of 20 existing shares/options for 1 new share/option.
Retained losses represent the cumulative loss of the Group attributable to equity shareholders.
Share-based payments reserve relate to the charge for share-based payments in accordance with IFRS 2.
During the prior year the Company placed these shares and as the number of placing shares comprised more than
20% of the Company’s issued share capital, and although the placing shares has been allotted, admission of the
placing shares required publication of a Prospectus within a twelve-month period.
23. Share Based Payments Reserve
The Company does not have a share-ownership compensation scheme for senior executives of the Company.
However senior executives may be granted options to purchase Ordinary Shares in the Company.
Warrants
During the 2019 financial year the Company consolidated all existing and issued shares and share options on the
basis of 20 existing shares/options for 1 new share/option.
There are 38,363,171 warrants to subscribe for ordinary shares at 31 October 2022 (2021: 14,988,511).
Expired /
As at 1
exercised /
As at 31
Date of Grant
November
vested /
October
Exercise
Exercise/vesting date
2021
issued
2022
price
From
To
Warrants
09/05/2012
138,066
(138,066)
-
20p
09/05/2012
05/09/2022
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 62
27/11/2018
8,050,000
8,050,000
20p
27/11/2018
30/09/2024
24/07/2020
4,233,556
(4,233,556)
-
5p
24/07/2020
27/07/2022
23/03/2021
2,566,889
2,566,889
5p
23/03/2021
23/03/2024
03/10/2022
-
13,000,000
13,000,000
5p
03/10/2022
31/12/2024
03/10/2022
-
7,373,141
7,373,141
5p
03/10/2022
31/12/2024
03/10/2022
-
7,373,141
7,373,141
10p
03/10/2022
31/12/2024
14,988,511
23,374,660
38,363,171
Warrants were attached to the convertible loan notes issued on 23 March 2021, with an exercise price of 5.0p per
ordinary share and expire 12 months from allotment of the Subscription Shares. These warrants will only be issued
once the convertible loan notes are converted into shares.
Warrants were attached to the subscription shares on 24 July 2020 a 1-for-1 basis, with an exercise price of 5.0p per
ordinary share and expire 12 months from allotment of the subscription shares. Further warrants were attached to
any new ordinary shares that are issued as a result of conversion of any loan notes, on a 1-for-1 basis on the same
terms as the subscription warrants.
Warrants were attached to the Subscription Shares on 14 September 2018 a 1-for-1 basis, with an exercise price of
20.0p per ordinary share and expire 12 months from allotment of the subscription shares. Further warrants were
attached to any new ordinary shares that are issued as a result of conversion of any loan notes, on a 1-for-1 basis on
the same terms as the subscription warrants. A maximum of 20,450,222 new ordinary shares could potentially be
issued in the event that all subscription warrants and loan note warrants are exercised.
An Investor has subscribed for 13,000,000 new ordinary shares in the Company at a price of 5p per share,
representing a capital injection of £650,000 (gross and net) into the Company. The new ordinary shares will be
accompanied by 1 for 1 warrants at 5p in the Company’s ordinary shares, equating to 13,000,000 warrants
exercisable at any time before 31 December 2024.
The Company has agreed with 35% of the convertible loan note holders to accelerate the conversion of 5,971,000
CLNs and accrued but unpaid interest into 7,373,141 New Ordinary Shares in the Company at a conversion price of
5p. As such, the conversion of 5,971,000 CLNs plus accrued but unpaid interest resulted in the issue of 7,373,141 5p
Warrants and 7,373,141 10p Warrants, all of which will expire on 31 December 2024.
The estimated fair value of the options in issue was calculated by applying the Black-Scholes option pricing model.
The assumptions used in the calculation were as follows:
Share price at date of grant
£0.0040
Exercise price
£0.05 to £0.10
Expected volatility
49%
Expected dividend
0%
Contractual life
2.25 years
Risk free rate (based on 2 year UK Bond market)
4.00%
Estimated fair value of each option
£0.002845 – £0.009710
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 63
Options
At 31 October 2022 there were nil share options issued to the directors and past directors of the Company. During
the current year nil share options were granted (2021: 897,809).
The movement on the share-based payment charge for the year was £nil (2021 - £nil) in respect of the issued options.
The details of warrants and options are as follows:
As at 1
Exercised /
As at 31
Date of Grant
November
vested /
October
Exercise
Exercise/vesting date
2021
(forfeited)
2022
Price
From
To
Options
09/05/2012
897,809
(897,809)
-
20p
09/05/2012
05/09/2022
897,809
(897,809)
-
The remuneration committee’s aim is to remunerate executive directors competitively and to reward performance.
The remuneration committee determines the Company's policy for the remuneration of executive directors, having
regard to the UK Corporate Governance Code and its provisions on directors' remuneration.
The number of options outstanding to the Directors that served in the year, as at 31 October 2022 were as follows:
2022
2021
Director
Options
Options
Andrew Monk
-
191,952
Robert Scott
-
50,000
Matthew Bonner
-
180,000
Total
-
421,952
The estimated fair value of the options in issue was calculated by applying the Black-Scholes option pricing model.
The assumptions used in the calculation were as follows:
Share price at date of grant
£0.0050
Exercise price
£0.0075 to £0.01
Expected volatility
65%
Expected dividend
0%
Contractual life
1.1 years
Risk free rate
1.63%
Estimated fair value of each option
£0.003764 – £0.0378
The share options outstanding at the year-end had a weighted average remaining contractual life of nil years (2021:
0.5 years).
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 64
24. Non-controlling interests
Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling
interests is set out below. The summarised financial information below represents amounts before intragroup
eliminations.
2022
2021
Dynamic Intertrade (Pty) Ltd
£
£
Current assets
450,386
313,043
Non-current assets
264,330
355,674
Current liabilities
(522,082)
(391,816)
Non-current liabilities
(4,898,562)
(4,066,056)
(4,705,928)
(3,789,155)
Equity attributable to the owners of the company
(4,705,928)
(3,789,155)
Non-controlling interests
-
-
(4,705,928)
(3,789,155)
2022
2021
Dynamic Intertrade (Pty) Ltd
£
£
Revenue
1,698,839
1,404,234
Expenses
2,615,612
1,585,303
Loss for the year
(916,773)
(181,069)
Loss attributable to owners of the Company
(916,773)
(181,069)
Loss attributable to the non-controlling interests
-
-
Loss for the year
(916,773)
(181,069)
Other comprehensive income attributable to owners of the Company
-
-
Other comprehensive income attributable to the non-
controlling interests
-
-
Other comprehensive income for the year
-
-
Total comprehensive income attributable to owners of the Company
(916,773)
(181,069)
Total comprehensive income attributable to the non-controlling
interests
-
-
Total comprehensive income for the year
(916,773)
(181,069)
Net cash outflows from operating activities
(786,055)
(98,062)
Net cash outflows from investing activities
(4,415)
(8,876)
Net cash inflows from financing activites
792,436
87,906
Net cash inflow / (outflow)
1,966
(19,032)
Further information about non-controlling interests is given in note 15.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 65
2022
2021
£
£
Non-controlling interest
Balance at 1 November
-
-
Equity attributable to non-controlling interest
on disposal of 49% of Dynamic
(2,305,905)
Share of profits for the year
522
-
Balance at 31 October
(2,305,383)
-
During the period under review the Company and VSA NEX Investments Limited (“VSA NEX”) entered into certain
related party arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA NEX was a 100% subsidiary
of VSA Capital. At the time the arrangements were entered into Andrew Monk was a director of the Company, VSA
Capital and VSA NEX and is deemed to have significant influence over VSA Capital and VSA NEX. Pursuant to the
arrangements, VSA NEX subscribed for such number of new shares in the capital of Dynamic resulting in VSA NEX
holding 49% of the enlarged issued share capital of Dynamic for a consideration of ZAR10,982; the Company agreed
to assign certain debts owing by Dynamic, amounting to £4.2 million which had been fully impaired in prior years,
to the Company and certain other parties to VSA NEX in consideration for VSA NEX paying to the Company £100,001
and agreeing to fund Dynamic so as to enable Dynamic to carry on its business in the ordinary course until such time
as the Company ceases to hold any further shares in Dynamic. This assignment agreement resulted in VSA NEX having
a non-controlling interest in Dynamic and as such its share of the current year profits amounted to £522, its share
of accumulated losses prior to acquisition amounted to £2,305,905. Additionally, the assignment of the loans
resulted in the Group incurring a finance charge on consolidation of £3.1 million. VSA NEX has signed a subordination
agreement in relation to the loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA
NEX choose to request the repayment of the loans due by Dynamic this will severely impact the Company's ability
to continue as a going concern. Under a put and call option agreement the Company granted to VSA NEX the option
to acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of Dynamic held by the Company, subject
to the satisfaction of certain conditions and subject to certain time restrictions for £1.
25. Equity portion of convertible loan notes
During the 2021 financial year, on the 23
rd
of March 2021, the Company converted £383,000 owed to the directors
and a Company owned by a director for 7,660,000 convertible loan notes and, simultaneously, issued 4,400,000
convertible loan notes to the value of £220,000 for cash. During the current financial year the Company extended
the conversion date of the CLNs to 31 December 2024. The equity portion of the convertible loan notes is presented
below.
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Equity portion of convertible loan notes
issued during the year (per note
26)
42,539
74,935
42,539
74,935
Carrying value
42,539
74,935
42,539
74,935
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 66
26. Convertible loan notes
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Convertible loan notes
710,274
778,065
710,274
778,065
Carrying value
710,274
778,065
710,274
778,065
The loan notes holder will be paid an annual interest rate of 12 per cent in cash, semi-annually, with a term of 24
months. The loan notes will not be admitted to trading on any exchange.
During the 2021 financial year, on the 23
rd
of March 2021, the Company converted £383,000 owed to the directors
and a Company owned by a director for 7,660,000 convertible loan notes and, simultaneously, issued 4,400,000
convertible loan notes to the value of £220,000 for cash.
During the 2020 financial year, as part of the subscription dated 24 July 2020, 3,333,333 additional share warrants
were allocated to the capital portion of the convertible loan notes and 750,000 additional share warrants were
allocated to the outstanding interest portion of the convertible loan notes, which at the subscription date was
£37,500.
The new ordinary shares issued as a result of conversion of all Loan Notes would represent 17,060,000 ordinary
shares, or 43.71 per cent of the issued share capital of the Company, as enlarged by the 2018 Fundraising. On 14
September 2018 issued £250,000 of convertible loan notes for 50,000,000 loan notes of 0.50p (the “Loan Notes”)
with a conversion price of 0.75p (the “Conversion Price”). The Subscription Price was at the last closing price of 0.50p
per ordinary share as at 13 September 2018. Further, the Conversion Price represents a premium of 50.0 per cent
to this same closing price. The Subscription included the issue of 50,000,000 Convertible Loan Notes of 0.50p with a
conversion price of 0.75p which after the 20:1 share consolidation of 2018 resulted in there being 2,500,000
Convertible Loan Notes of 10.0p with a conversion price of 15.0p.
If the Convertible Loan Notes were converted, up to 17,810,000 new Ordinary Shares will be issued (“Loan
Conversion Shares”). Further, Warrants will be attached to any Loan Conversion Shares that are issued on a 1-for-1
basis on the same terms as the Warrants attached to the New Ordinary Shares (“Loan Conversion Warrants”). A
maximum of 32,510,222 New Ordinary Shares could potentially be issued in the event that all New Ordinary Shares
Warrants and Loan Conversion Warrants are exercised.
The fair value of the liability component, included in non-current liabilities, is calculated using a market interest rate
for an equivalent non-convertible loan note at the date of issue. The residual amount, representing the value of the
equity conversion component, is included in shareholder’s equity in Equity portion of convertible loan notes (Note
25).
The carrying amount of the liability component of the convertible loan notes at the balance sheet date are derived
as follows:
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 67
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Liability component at the beginning
of the financial year
910,759
282,909
910,759
282,909
Face value of the convertible loan notes
issued on 23 March 2021
-
603,000
-
603,000
Conversion of convertible loan notes to
shares on 3 October 2022
(368,656)
-
(368,656)
-
Equity portion on extension of conversion
date
32,396
-
32,396
-
Equity conversion component
-
(74,935)
-
(74,935)
Accumulated amortisation of interest
expense
135,775
99,785
135,775
99,785
Accumulated payments of interest
-
-
-
-
Liability component at the end of the
financial year
710,274
910,759
710,274
910,759
Current portion included in current
liabilities
-
132,694
-
132,694
Long term portion included in long term
liabilities
710,274
778,065
710,274
778,065
Liability component at the end of the
financial year
710,274
910,759
710,274
910,759
As part of the of 3 October 2022 investment agreement, the Company has agreed with the CLN holders to accelerate
the conversion of 5,971,000 CLNs and accrued but unpaid interest into 7,373,141 New Ordinary Shares in the
Company at a conversion price of 5p.
27. Borrowings
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Euro 2 Afrisko Ltd
- Inventory financing
417,891
401,696
-
-
Onga Wari CRS (PTY) LTD
- Inventory financing
-
16,560
-
-
Working Capital Partners
- Accounts receivable financing
140,063
47,808
-
-
Loan from VSA NEX Investments Ltd
4,174,538
-
Carrying value
4,732,492
466,064
-
-
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 68
The Group’s subsidiary Dynamic Intertrade (Pty) Ltd has entered into a funding agreement with Euro 2 Afrisko Ltd
whereby Euro 2 Afrisko pay the suppliers directly and this is then repaid by Dynamic to purchase stock from suppliers
where deposits are required. This funding is secured by a lien over the inventory and a cession of the debtors.
The borrowings are secured by a security agreement from the Company. The loans bear interest at 14% per annum.
During the period under review the Company and VSA NEX Investments Limited (“VSA NEX”) entered into certain
related party arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”). VSA NEX was a 100% subsidiary
of VSA Capital. At the time the arrangements were entered into Andrew Monk was a director of the Company, VSA
Capital and VSA NEX and is deemed to have significant influence over VSA Capital and VSA NEX. Pursuant to the
arrangements, VSA NEX subscribed for such number of new shares in the capital of Dynamic resulting in VSA NEX
holding 49% of the enlarged issued share capital of Dynamic for a consideration of ZAR10,982; the Company agreed
to assign certain debts owing by Dynamic, amounting to £4.2 million which had been fully impaired in prior years,
to the Company and certain other parties to VSA NEX in consideration for VSA NEX paying to the Company £100,001
and agreeing to fund Dynamic so as to enable Dynamic to carry on its business in the ordinary course until such time
as the Company ceases to hold any further shares in Dynamic. This assignment agreement resulted in VSA NEX having
a non-controlling interest in Dynamic and as such its share of the current year profits amounted to £522, its share
of accumulated losses prior to acquisition amounted to £2,305,905. Additionally, the assignment of the loans
resulted in the Group incurring a finance charge on consolidation of £3.1 million. VSA NEX has signed a subordination
agreement in relation to the loans due by Dynamic to VSA NEX with an expiry date of 31 October 2023. Should VSA
NEX choose to request the repayment of the loans due by Dynamic this will severely impact the Company's ability
to continue as a going concern. Under a put and call option agreement the Company granted to VSA NEX the option
to acquire 11,430 shares in Dynamic Intertrade, being the remaining 51% of Dynamic held by the Company, subject
to the satisfaction of certain conditions and subject to certain time restrictions for £1.
28. Leases
Right of use assets and lease liability
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 69
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Operating lease commitments
disclosed as at 31 October
347,102
410,502
-
-
Discounted using the incremental
borrowing rate at date of initial
application
-
-
-
-
Additions to leases during the year
-
-
-
-
Lease payments
(73,233)
(67,072)
-
-
Exchange difference
(7,313)
3,672
Lease liability recognised in the
statement of financial position
266,556
347,102
-
-
Of which:
Current lease liabilities
100,485
77,887
-
-
Non-current lease liabilities
166,070
269,215
-
-
266,555
347,102
-
-
Right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the statement of financial position as at 31 October
2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at
the date of initial application. The recognised right of-use assets relate to the following types of assets:
Group
Group
Company
Company
Year ended
Year ended
Year ended
Year ended
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Properties
250,446
341,905
-
-
On the 3
rd
of March 2020 a new lease was signed for the Group’s main trading address, 104 Bofors Circle, Epping
Industrial 2, Cape Town, South Africa with commencement date of 1 July 2020. On the commencement date, the
Group recognised a lease liability and right-of-use asset of £430,973.
Impact on earnings per share
Depreciation on the right-of-use asset amounting to £73,233 (2021: £67,072) and interest on the right-of-use lease
liability of £25,995 (2021: £31,468) were charged to the statement of profit and loss for the current year. As a result,
the earnings per share decreased by 0.005p.
29. Notes to the Statement of Cash Flows
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 70
Group
Group
Company
Company
For the year
For the year
For the year
For the year
ending
ending
ending
ending
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Cash and cash equivalents
925,814
1,109,774
922,613
1,108,476
Borrowings
(4,732,492)
(466,064)
-
-
Convertible loan notes
(710,274)
(910,759)
(710,274)
(910,759)
Right of use lease liability
(266,555)
(347,102)
-
-
Net debt
(4,783,507)
(614,151)
212,339
197,717
Cash and liquid investments
925,814
1,109,774
922,613
1,108,476
Fixed rate instruments
(5,709,321)
(1,723,925)
(710,274)
(910,759)
Net debt
(4,783,507)
(614,151)
212,339
395,434
Net Debt Reconciliation for the Group
Cash and
Right of
use
cash
Convertible
lease
Total
equivalents
Borrowings
loan notes
liability
debt
Net debt
£
£
£
£
£
£
Net debt as at 31
October 2020
45,251
(428,719)
(250,000)
(410,502)
(1,089,221)
(1,043,970)
Cash flows
1,064,699
(32,973)
(220,000)
67,071
(185,902)
878,797
Non-cash transactions
-
-
(515,694)
-
(515,694)
(515,694)
Equity portion of
convertible loan notes
-
-
74,935
-
74,935
74,935
Foreign exchange
adjustments
(176)
(4,372)
-
(3,671)
(8,043)
(8,219)
Net debt as at 31
October 2021
1,109,774
(466,064)
(910,759)
(347,102)
(1,723,925)
(614,151)
Cash flows
(183,960)
(1,134,015)
-
73,233
(1,060,782)
(1,244,742)
Non-cash transactions
-
(3,131,890)
200,485
-
(2,931,405)
(2,931,405)
Foreign exchange
adjustments
-
-
-
7,313
7,313
7,313
Net debt as at 31
October 2022
925,814
(4,731,969)
(710,274)
(266,556)
(5,708,799)
(4,782,985)
The non-cash transactions of £3,131,890 relates to the finance charges incurred by the Group on assignment of
certain debts owed by Dynamic to VSA NEX.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 71
Net Debt Reconciliation for the Company
Cash and
Right of
use
cash
Convertible
lease
Total
equivalents
Borrowings
loan notes
liability
debt
Net debt
£
£
£
£
£
£
Net debt as at 31
October 2020
25,624
-
(250,000)
-
(250,000)
(224,376)
Cash flows
1,082,852
-
(703,298)
-
(703,298)
379,554
Non-cash transactions
-
(383,000)
(383,000)
(383,000)
Equity portion of
convertible loan notes
42,539
-
42,539
42,539
Foreign exchange
adjustments
-
-
-
-
-
-
Net debt as at 31
October 2021
1,108,476
-
(910,759)
-
(910,759)
197,717
Cash flows
(185,863)
-
-
-
-
(185,863)
Non-cash transactions
-
200,485
200,485
200,485
Foreign exchange
adjustments
-
-
-
-
-
-
Net debt as at 31
October 2022
922,613
-
(710,274)
-
(710,274)
212,339
30. Financial Instruments – Fair values and risk management
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including
their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Trade and other receivables and trade and other payables classified as held-for-sale are not included in the table
below. As at 31 October 2021 the Group did not have any trade and other receivables nor any trade and other
payables that were classified as held-for-sale.
The Group has not disclosed the fair values of financial instruments such as short-term trade receivables and
payables, because their carrying amounts are a reasonable approximation of their fair value.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 72
Carrying
value
Fair value
Group as at 31 October 2022
Note
FVOCI -
equity
instruments
Financial
assets at
amortised
cost
Other
financial
liabilities
Total
Level 1
Level 2
Level 3
Total
£
£
£
£
£
£
£
£
Financial assets measured at fair value
Investment in associate
6,154
-
-
6,154
-
-
6,154
6,154
Loan receivable
-
-
-
-
-
-
-
-
6,154
-
-
6,154
Financial assets not measured at fair value
Trade and other receivables
-
271,184
-
271,184
Cash and cash equivalents
-
925,814
-
925,814
-
1,196,998
-
1,196,998
Financial liabilities measured at fair value
-
-
-
-
-
-
-
-
Financial liabilities not measured at fair
value
Lease Liability
-
-
(266,555)
(266,555)
Unsecured borrowings
-
-
(4,732,492)
(4,732,492)
Convertible loan notes
-
-
(710,274)
(710,274)
Trade and other payables
-
-
(624,382)
(624,382)
-
-
(6,333,703)
(6,333,703)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 73
Carrying
value
Fair value
Group as at 31 October 2021
Note
FVOCI -
equity
instruments
Financial
assets at
amortised
cost
Other
financial
liabilities
Total
Level 1
Level 2
Level 3
Total
£
£
£
£
£
£
£
£
Financial assets measured at fair value
Investment in associate
6,154
-
-
6,154
-
-
6,154
6,154
Loan receivable
-
-
-
-
-
-
-
-
6,154
-
-
6,154
Financial assets not measured at fair value
Trade and other receivables
-
259,360
-
259,360
Cash and cash equivalents
-
1,109,774
-
1,109,774
-
1,369,134
-
1,369,134
Financial liabilities measured at fair value
-
-
-
-
-
-
-
-
Financial liabilities not measured at fair
value
Lease Liability
-
-
(347,102)
(347,102)
Unsecured borrowings
-
-
(466,064)
(466,064)
Convertible loan notes
-
-
(778,065)
(778,065)
Trade and other payables
-
-
(1,468,499)
(1,468,499)
-
-
(3,059,730)
(3,059,730)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 74
Carrying
value
Fair value
Company as at 31 October 2022
Note
FVOCI -
equity
instruments
Financial
assets at
amortised
cost
Other
financial
liabilities
Total
Level 1
Level 2
Level 3
Total
£
£
£
£
£
£
£
£
Financial assets measured at fair value
Investment in associate
6,154
-
-
6,154
-
-
6,154
6,154
Loan receivable
-
-
-
-
-
-
-
-
6,154
-
-
6,154
Financial assets not measured at fair value
Intercompany loans receivable
-
-
-
-
Trade and other receivables
-
-
-
-
Cash and cash equivalents
-
922,613
-
922,613
-
922,613
-
922,613
Financial liabilities measured at fair value
Loans payable to VSA NEX
-
-
(4,174,538)
(4,174,538)
-
-
(4,174,538)
(4,174,538)
Financial liabilities not measured at fair
value
Lease Liability
-
-
-
-
Unsecured borrowings
-
-
(557,954)
(557,954)
Convertible loan notes
-
-
(710,274)
(710,274)
Trade and other payables
-
-
(160,585)
(160,585)
-
-
(1,428,813)
(1,428,813)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 75
Carrying
value
Fair value
Company as at 31 October 2021
Note
FVOCI -
equity
instruments
Financial
assets at
amortised
cost
Other
financial
liabilities
Total
Level 1
Level 2
Level 3
Total
£
£
£
£
£
£
£
£
Financial assets measured at fair value
Investment in associate
6,154
-
-
6,154
-
-
6,154
6,154
Loan receivable
-
-
-
-
-
-
-
-
6,154
-
-
6,154
Financial assets not measured at fair value
Intercompany loans receivable
-
-
-
-
Trade and other receivables
-
-
-
-
Cash and cash equivalents
-
1,108,476
-
1,108,476
-
1,108,476
-
1,108,476
Financial liabilities measured at fair value
Loans payable to VSA NEX
-
-
-
-
-
-
-
-
Financial liabilities not measured at fair
value
Lease Liability
-
-
-
-
Unsecured borrowings
-
-
(466,064)
(466,064)
Convertible loan notes
-
-
(778,065)
(778,065)
Trade and other payables
-
-
(1,113,694)
(1,113,694)
-
-
(2,357,823)
(2,357,823)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 76
Financial instruments – Fair values and risk management
B. Measurement of fair values
i. Valuation techniques and significant unobservable inputs
The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments
measured at fair value in the statement of financial position, as well as the significant unobservable inputs used.
Related valuation processes are described in Note 3.
Financial instruments measured at fair value
Type
Valuation technique
Significant unobservable
inputs
Inter-relationship
between significant
unobservable inputs and
fair value measurement
Investment in
Associate
The value of the
investment is adjusted
annually based upon the
group’s share of the
associates profit or loss.
None
None
ii. Transfers between Levels 1 and 2
There were no transfers between Levels 1 and 2 in either the current financial year or in the prior financial year.
C. Financial Risk Management
The Group has exposure to the following risks arising from financial instruments:
• credit risk;
• liquidity and cash flow risk; and
• market risk.
Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group’s audit committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced
by the Group. The Group’s audit committee undertake ad hoc reviews of risk management controls and procedures,
the results of which are reported to the audit committee.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 77
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group’s receivables from customers and investments
in debt securities.
The carrying amounts of financial assets represent the maximum credit exposure. There was no impairment loss in
the current year nor in the prior year.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default
risk associated with the industry and country in which its customers operate. Details of concentration of revenue
are included in Note 6.
The Group has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment terms and conditions are offered. The Group’s review
includes external ratings, if they are available, financial statements, credit agency information, industry information
and in some cases bank references. Sales limits are established for each customer and are reviewed regularly.
The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of
one month.
The Group does not require collateral in respect of trade and other receivables. The Group does not have trade
receivables for which a no allowance is recognised because of collateral.
Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£
As at 31 October the exposure to credit
risk for trade receivables by geographic
region was follows:
South Africa
256,824
257,332
-
-
Other
-
-
-
-
256,824
257,332
-
-
As at 31 October the exposure to credit
risk for trade receivables by
counterparty was follows:
Other
-
-
-
-
-
-
-
-
As at 31 October the exposure to credit
risk for trade receivables by credit
rating was follows:
External credit ratings
-
-
-
-
Other
256,824
257,332
-
-
256,824
257,332
-
-
Expected credit loss assessment for corporate customers as at 31 October 2022 and 31 October 2021
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 78
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the
risk of loss (including but not limited to external ratings, audited financial statements, management accounts and
cash flow projections and available press information about customers) and applying experienced credit judgement.
Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.
The Company had no exposure to credit risk for the year ended 31 October 2021.
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables during the year amounted to nil.
Cash and cash equivalents
As at 31 October 2022, the Group held £925,814 in cash and cash equivalents (2021: £1,109,774) and had a bank
overdraft of £nil. The cash and cash equivalents are held with bank and financial institution counterparties which
are rated Baa3 to A1+ by Moody’s.
Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the
short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based
on the external credit ratings of the counterparties. On the implementation of IFRS 9 the Group did not impair any
of its cash and cash equivalents.
Liquidity and cash flow risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity
is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
Exposure to liquidity and cash flow risk
The following tables present the remaining contractual maturities of financial liabilities at the reporting date. The
amounts are gross and undiscounted and include contractual interest payments and exclude the impact of netting
agreements.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 79
Contractual cash flows
Group as at
31 October
2022
Carrying
value
Total
2 Months
or less
2 to 12
Months
1 to 2
Years
2 to 5
Years
More than
5 years
£
£
£
£
£
£
£
Non- derivative financial
liabilities
Bank
overdrafts
-
-
-
-
-
-
-
Unsecured shareholders'
loans (VSA
NEX)
(4,174,538)
(4,174,538)
-
-
-
-
(4,174,538)
Convertible loan
notes
(710,274)
(710,274)
-
-
(710,274)
-
-
Secured loans
(557,954)
(557,954)
-
(557,954)
-
-
-
Right-of-use finance
lease
(266,555)
(307,998)
(17,634)
(89,933)
(112,945)
(87,486)
-
Trade payables
(582,180)
(582,180)
(582,180)
-
-
-
-
Other payables
-
-
-
-
-
-
-
Related party
payables
(42,202)
(42,202)
-
(42,202)
-
-
-
(6,333,703)
(6,375,146)
(599,814)
(690,089)
(823,219)
(87,486)
(4,174,538)
Derivative financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
As noted elsewhere the loan subordination agreement expires on 31 October 2023 but the loan does not have a
fixed contract date. If Dynamic Intertrade stays within the group, the directors expect the loans to be repayable
greater than 5 years.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 80
Contractual cash flows
Group as at
31 October
2021
Carrying
value
Total
2 Months
or less
2 to 12
Months
1 to 2
Years
2 to 5
Years
More
than 5
years
£
£
£
£
£
£
£
Non- derivative financial
liabilities
Bank
overdrafts
-
-
-
-
-
-
-
Unsecured shareholders'
loans (VSA
NEX)
-
-
-
-
-
-
-
Convertible loan
notes
(778,065)
(778,065)
-
-
(778,065)
-
-
Secured loans
(466,064)
(466,064)
-
(466,064)
-
-
-
Right-of-use finance
lease
(347,102)
(410,502)
(10,446)
(56,031)
(77,196)
(266,829)
-
Trade payables
(1,274,105)
(1,274,105)
(1,274,105)
-
-
-
-
Other payables
(153,515)
(153,515)
-
(153,515)
-
-
-
Related party
payables
(40,879)
(40,879)
-
(40,879)
-
-
-
(3,059,730)
(3,123,130)
(1,284,551)
(716,489)
(855,261)
(266,829)
-
Derivative financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 81
Contractual cash flows
Company as at
31 October
2022
Carrying
value
Total
2 Months
or less
2 to 12
Months
1 to 2
Years
2 to 5
Years
More
than 5
years
£
£
£
£
£
£
£
Non- derivative financial
liabilities
Bank
overdrafts
-
-
-
-
-
-
-
Unsecured shareholders'
loans
-
-
-
-
-
-
-
Convertible loan
notes
(710,274)
(710,274)
-
-
(710,274)
-
-
Secured loans
-
-
-
-
-
-
-
Right-of-use finance
lease
-
-
-
-
-
-
-
Trade payables
(160,585)
(160,585)
(160,585)
-
-
-
-
Other payables
-
-
-
-
-
-
-
Related party
payables
-
-
-
-
-
-
-
(870,859)
(870,859)
(160,585)
-
(710,274)
-
-
Derivative financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 82
Contractual cash flows
Company as at
31 October
2021
Carrying
value
Total
2 Months
or less
2 to 12
Months
1 to 2
Years
2 to 5
Years
More
than 5
years
£
£
£
£
£
£
£
Non- derivative financial
liabilities
Bank
overdrafts
-
-
-
-
-
-
-
Unsecured shareholders'
loans
-
-
-
-
-
-
-
Convertible loan
notes
(778,065)
(778,065)
-
-
(778,065)
-
-
Secured loans
-
-
-
-
-
-
-
Right-of-use finance
lease
-
-
-
-
-
-
-
Trade payables
(981,000)
(981,000)
(981,000)
-
-
-
-
Other payables
(132,694)
(132,694)
-
(132,694)
-
-
-
Related party
payables
-
-
-
-
-
-
-
(1,891,759)
(1,891,759)
(981,000)
(132,694)
(778,065)
-
-
Derivative financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The interest payments on the financial liabilities represent the fixed interest rates as per the respective contracts.
The Group aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments
at an amount in excess of expected cash outflows on financial liabilities other than trade payables. The Group also
monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on
trade and other payables.
Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices
– will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 83
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the
Group is as follows:
Group Foreign exchange
31 October
2022
31 October
2021
risk
GBP
ZAR
GBP
ZAR
Trade and other
receivables
-
5,708,637
-
5,605,406
Cash and cash equivalents
922,613
67,345
1,108,476
27,042
Unsecured shareholders'
loans
-
(87,836,461)
-
-
Secured loans
-
(11,739,909)
-
(9,709,568)
Convertible loan notes
(710,274)
-
(778,065)
-
Right-of-use finance lease
-
(5,608,577)
-
(7,231,199)
Trade payables
(160,587)
(9,758,757)
(1,113,694)
(8,771,247)
Net statement of financial
position exposure
51,752
(109,167,723)
(783,283)
(20,079,566)
Next 6 months sales
forecast
1,434,073
30,816,695
-
14,750,700
Next 6 months purchases
forecast
(1,231,550)
(26,464,641)
(131,337)
(10,763,660)
Net forecast transaction
exposure
202,523
4,352,054
(85,642)
5,014,204
Net exposure
254,275
(104,815,669)
(868,925)
(15,065,362)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 84
Company Foreign
31 October
2022
31 October
2021
exchange risk
GBP
ZAR
GBP
ZAR
Trade and other
receivables
-
-
-
-
Cash and cash equivalents
922,613
-
1,108,476
-
Unsecured shareholders'
loans
-
-
-
-
Secured loans
-
-
-
-
Convertible loan notes
(710,274)
-
(778,065)
-
Right-of-use finance lease
-
-
-
-
Trade payables
(160,587)
-
(1,113,694)
-
Net statement of financial
position exposure
51,752
-
(783,283)
-
Next 6 months sales
forecast
-
-
-
-
Next 6 months purchases
forecast
(1,231,550)
-
(85,642)
-
Net forecast transaction
exposure
(1,231,550)
-
(85,642)
-
Net exposure
(1,179,798)
-
(868,925)
-
The following significant exchange rates in relation to the reporting currency are applicable:
Average for the year
Year end spot rate
2022
2021
2022
2021
United States Dollar ($)
1.2610
1.3747
1.1469
1.3683
South African Rand (ZAR)
20.5000
20.2550
21.0410
20.8331
The presentation currency of the Group is British Pound Sterling.
The Group is exposed primarily to movements in USD and ZAR, the currency in which the Group receives most of its
funding, against other currencies in which the Group incurs liabilities and expenditure.
Sensitivity analysis
Financial instruments affected by foreign currency risk include cash and cash equivalents, trade other receivables
and trade and other payables. The following analysis, required by IFRS 7 Financial Instruments: Disclosures, is
intended to illustrate the sensitivity of the Group’s financial instruments (at year end) to changes in market variables,
being exchange rates.
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 85
The following assumptions were made in calculating the sensitivity analysis:
• all income statement sensitivities also impact equity; and
• translation of foreign subsidiaries and operations into the Group’s presentation currency have been
excluded from this sensitivity as they have no monetary effect on the results.
Income Statement / Equity
2022
2022
2021
2021
+10%
-10%
+10%
-10%
Base currency of British Pound
Sterling:
- United States Dollar ($)
0.1147
(0.1147)
0.1368
(0.1368)
- South African Rand (ZAR)
2.1041
(2.1041)
2.0833
(2.0833)
The above sensitivities are calculated with reference to a single moment in time and will change due to a number of
factors including:
• fluctuating other receivable and trade payable balances;
• fluctuating cash balances; and
• changes in currency mix.
Interest rate risk
The Group has entered into fixed rate agreements for its finance leases and shareholders loans. The Group does not
hedge its interest rate exposure by entering into variable interest rate swaps.
Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the
Group is as per the table below.
Group
Group
Company
Company
2022
2021
2022
2021
Fixed rate instruments
Financial assets
-
-
-
-
Financial liabilities
(5,608,836)
(1,513,344)
(710,274)
(778,065)
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 86
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets of financial liabilities at FVTPL. Therefore, a change in
interest rates at the reporting date would not affect profit or loss.
Other market price risk
The Group is exposed to equity price risk, which arises from equity securities at FVOCI are held as a long-term
investment.
The Group’s investments in equity securities comprise small shareholdings in unlisted companies. The shares are not
readily tradable and any monetisation of the shares is dependent on finding a willing buyer.
Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair value of cash and receivables and liabilities approximates the carrying values disclosed in the financial
statements.
Capital management
The Group manages its capital resources to ensure that entities in the Group will be able to continue as a going
concern, while maximising shareholder return.
The capital structure of the Group consists of equity attributable to shareholders, comprising issued share capital
and reserves. The availability of new capital will depend on many factors including a positive operating environment,
positive stock market conditions, the Group’s track record, and the experience of management. There are no
externally imposed capital requirements. The Directors are confident that adequate cash resources exist or will be
made available to finance operations but controls over expenditure are carefully managed.
31. Related Party Transactions
Directors’ fees
Andrew Monk, a non-executive director of the Company, is a director of VSA Capital Limited and that Company
provided services amounting to £36,000 (2021: £57,384) to the Company during the year.
During the year ended 31 October 2022 £35,923 was paid to Directors of the Company (2021: £46,966). At the year-
end a total of £33,587 (2021: £62,126) was outstanding in respect of directors’ emoluments.
Other related party transactions
Included in trade and other payables are the following related party financial liabilities:
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 87
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
M Bonner
25,357
24,562
-
-
R Scott
16,845
16,317
-
-
42,202
40,879
-
-
Terms:
M Bonner and R Scott: The loan bears interest at the South African prime overdraft rate. The interest will be
calculated and paid when the loan is repaid. The loan is repayable as decided upon from time to time.
Outstanding director’s salaries and related party transactions
Included in trade and other payables are the following outstanding directors’ salaries and fees payable to related
parties for other services:
Group
Group
Company
Company
As at
As at
As at
As at
31 October
31 October
31 October
31 October
2022
2021
2022
2021
£
£
£
£
Company controlled by a former director:
VSA Capital
46,587
227,082
46,587
356,934
Included in the amount due to VSA Capital are director's salaries owed to A. Monk
Directors' salaries outstanding
- A. Monk (resigned)
10,587
37,126
10,587
31,266
- M. Bonner (resigned)
11,000
12,000
11,000
42,000
- D. Lenigas (resigned)
-
5,000
-
49,000
- R. Scott
12,000
8,000
12,000
37,000
33,587
62,126
33,587
159,266
Arrangements with VSA NEX Investments Limited
During the period under review the Company and VSA NEX Investments Limited (“VSA NEX”) entered into certain
related party arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”) as outlined below. VSA NEX is a
100% subsidiary of VSA Capital. At the time the arrangements were entered into Andrew Monk was a director of the
Company, VSA Capital and VSA NEX and is deemed to have significant influence over VSA Capital and VSA NEX.
Disposal of 49% equity interest in Dynamic to VSA NEX
VSA NEX subscribed for such number of new shares in the capital of Dynamic resulting in VSA NEX holding 49% of
the enlarged issued share capital of Dynamic for a consideration of ZAR10,982 and therefore became a significant
shareholder in Dynamic representing the non-controlling interest disclosed in the group financial statements;
Notes to the Group Annual Financial Statements (continued)
For the Year Ended 31 October 2022
Page | 88
Put and call option for VSA Nex to acquire remaining 51% of Dynamic
At the same time a put and call option agreement was entered into with the Company granting to VSA NEX the
option to acquire 11,430 shares in Dynamic Intertrade, which represents the remaining 51% equity interest currently
owned by the Company. This is subject to the satisfaction of certain conditions and a time restrictions of 31
December 2023 for a consideration of £1.
Disposal of group loans in Dynamic from the Company to VSA Nex and entry into a loan subordination agreement
Simultaneously with the above subscription and to allow the equity in Dynamic to be issued to VSA NEX, the
Company agreed to assign certain debts owing by Dynamic, amounting to £ 4.2 million which had been fully impaired
in prior years, to the Company and certain other parties to VSA NEX in consideration for VSA NEX paying to the
Company £100,001 and agreeing to fund Dynamic so as to enable Dynamic to carry on its business in the ordinary
course until such time as the Company ceases to hold any further shares in Dynamic. This assignment agreement
resulted in VSA NEX having a non-controlling interest in Dynamic and as such its share of the current year profits
amounted to £522, its share of accumulated losses prior to acquisition amounted to £2,305,905.
Additionally, the assignment of the loans resulted in the Group incurring a finance charge on consolidation of
£3.1 million. VSA NEX has signed a subordination agreement in relation to the loans due by Dynamic to VSA NEX
with an expiry date of 31 October 2023. Should VSA NEX choose to request the repayment of the loans due by
Dynamic this will severely impact the Company's ability to continue as a going concern.
32. Controlling Party Note
There is no single controlling party. Significant shareholders are listed in the Directors Report and Business Review.
33. Events Subsequent to 31 October 2022
Subsequent to year end the Company appointed a new auditor as disclosed previously in this report.
On 24 January 2023, the Company announced the subscription (the "Subscription") for 12,726,000 new Ordinary
Shares the Company raised net proceeds totalling £699,930 at 5.5 pence per share representing a premium of 119
per cent to the closing price of 2.51 pence on 20 January 2023, being the business day prior to agreement of the
subscription.
On 24 January 2023 the convertible loan note holder converted £300,000 of its debt to 6,000,000 new ordinary
shares. In addition, the Company issued an additional 12,726,000 new ordinary shares to two new shareholders for
an investment of £699,930 in February 2023.
On the 4
th
of July 2023, the Company entered into an agreement to provide a loan to Precious Link (UK) Limited
(“Precious Link”), a wine retailer, incorporated and registered in England and Wales, located within the Southeast of
England. The loan is for a sum of £200,000, is unsecured and attracts interest at 10 per cent. per annum payable
monthly in arrears. The loan is repayable on demand by the Company and is repayable on 5 business days’ notice
from Precious Link.
On the 20
th
of July 2023, the Company sold its 46.8% equity stake in Dynamic Intertrade Agriculture (Pty) Ltd (“DIA”).
As such, the investment has been held in the balance sheet of the Group as an asset held for sale since that decision
was made. The Company announced that it has now reached agreement with Athena Trading Worldwide Limited, a
private company, for the sale of its 46.8% stake in DIA, for a consideration of £15,384.62, payable in cash on
completion The contractual completion date is 31 July 2023.