TIDMRGP
RNS Number : 0375A
Ross Group PLC
20 September 2022
Ross Group Plc & Subsidiaries
Annual Report and Financial Statements For the year ended 31
December 2021
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LEI: 213800PIS2QRIKPZB546 ROSS GROUP PLC
Page
Company Information 1
Summary and Highlights 2
Chairman's Statement 4
Group Strategic Report 6
Report of the Directors 12
Corporate Governance Statement 15
Directors' Remuneration Report 18
Corporate Social Responsibility 19
Report of the Independent Auditors 20
Consolidated Income Statement 28
Company Income Statement 29
Consolidated Statement of Comprehensive Income 30
Company Statement of Comprehensive Income 31
Consolidated Statement of Financial Position 32
Company Statement of Financial Position 33
Consolidated Statement of Changes in Equity 34
Company Statement of Changes in Equity 35
Consolidated Statement of Cash Flows 36
Company Statement of Cash Flows 37
Notes to the Statement of Cash Flows 38
Notes to the Consolidated Financial Statements 39
Directors: B R Pettitt
S C Mehta BSc (Hons) R E Tamraz
P M Fisher
M J L D'Hombres
Secretary: S C Mehta BSc (Hons)
Registered Office: 71-75 Shelton Street
Covent Garden London
WC2H 9JQ
Registered Number: 00131902 (England and Wales)
Auditors: CBW Audit Limited Chartered Accountants &
Statutory Auditors 66 Prescot Street London
E1 8NN
As we have previously reported in our interim accounts, during
the first half of 2021, Ross Group Plc ("RGP") has been having to
go through the process of restructuring its acquisition of the four
start-up businesses that were completed in 2019 and which are
wholly-owned subsidiaries within Archipelago Aquaculture Group
(AAG) and had amongst other things been primarily subjected to the
Worldwide consequential effects of the COVID Pandemic.
This is therefore the first full year RGP Annual Report that
includes and consolidates the AAG's results, particularly given the
above COVID circumstances.
As a result, there is a fundamental difference in the 2021
results in comparison to its previous year.
RGP has, for many years now, been operating based on a
specialist professional supply chain management model and continues
to do so to date. However, the AAG acquisition subsequently caused
that model to have to be modified; in order to include and
integrate other more specialist supply chain services and
functions, particularly with regard to the requisite research and
development ("R&D") in order to try to provide proof of
pioneering production concepts and then thereafter transition at a
considered viable point in the future into mass production and
sales of product and/or global turn-key projects of hopefully high
quality pharmaceutical grade Chitin.
For our fiscal year 2021, no services or sales of Chitin were
able to be recorded - as all of the R&D and implementation of
pioneering production processes were more than hampered by both
restricted and/or reduced funding from the seller of the AAG
businesses, in combination with the commercial effects of COVID
causing the operations to have to be indefinitely suspended whilst
a review and remedial restructuring took place; resulting in the
renewed and continued Chitin focus through a new venture, namely,
RGP-525.
Production and administration costs have been subsequently
subjected to specific strategic reorganisation, which has resulted
in the further impairment and/or reduction of certain contingent,
capitalized and considerable pre-existing liabilities that the AAG
companies were incurring both in advance of any production and with
all the logistical labour constraints of COVID. The relocation and
centralization of the venture allows for a much more manageable and
efficient operation and overhead structure once a post-Covid norm
can be established.
Your Board of Directors had initially always anticipated and
estimated that it would take a considerable amount of time and
funding in order to get this new technology into mass production
and had initially provisioned for it accordingly. However, the
commercial confluence of COVID and the consequential cashflow
constraints, caused by the lack of the pre-agreed financing from
the seller of the AAG business were both exceptionally unique and
unpredictable.
Our new venture, RGP-525, with the founder of 525 Solutions,
Professor Robin Rogers, who had previously sub-licensed their
proprietary ionic liquid extraction technology, has provided us
with a more viable, cost-effective, supply chain solution that
enables making the best out of a bad set of circumstances. The
Group will also continue in its endeavours to strategically search
for suitable synergistic partners and opportunities.
Throughout this post-acquisition and COVID pandemic period,
there have been considerable costs incurred during development
and/or downsizing of all of the start-up AAG businesses and
management has been extremely diligent in ensuring that such
initial and consequential costings are to now be commensurate with
real-time performance criteria and actual achievements, especially
given the ensuing effects and constraints of COVID and limited
financing calling for a more conservative approach.
Therefore, wherever possible and/or necessary, the Group's
specialist supply chain management experience has been highly
re-focused upon implementing newer strategic disciplines,
procedures and protocols in order to try to provide the best
possible performance in its endeavours over time; hence the
consideration and approval by the Board to the RGP-525 new venture
as an investment holding, thus enabling the Group to seek out other
opportunities, preferably potentially start-up and pre-financed in
a more strategically secured structure.
The resulting loss for the year was GBP2.576m (2020: GBP1.245m)
which duly reflects the respective restructuring, working capital
costs and expenses to date.
2021 2020 2019
GBP 000's GBP 000's GBP 000's
Restated Restated
Revenues - 43 -
Other income 6 136 14,502
Total costs (2,582) (1,424) (17,441)
-------- -------- --------
(Loss) for the year (2,576) (1,245) (2,939)
It is once again my pleasure to report to you on both the
business activities and the financial results of the Ross Group Plc
for the financial year ended 31st December 2021.
Having endured the unprecedented occurrence of COVID and a
number of consequential as well as also some unrelated challenges,
we are pleased and proud to announce that your Board has been able
to respond as best as possible through taking diligent and prudent
measures accordingly.
In addition, the Group is still actively deploying our
specialist supply chain management services on a project-by-project
basis and we are also, particularly at present, evaluating several
strategic start-up opportunities that given a post-COVID pandemic
period are believed to be worthy to explore.
Since becoming Chairman, over 10 years ago, I have always been
mindful - even while our Board of Directors were constantly busy
with such exploratory work - that our operating businesses and
Premium Listing Company status should always be capable of
generating sufficient profit and/or cashflow in order to primarily
cover running costs of the business on a potentially worst-case
scenario. Therefore, through these exceptionally unusual COVID
years we have had to rightfully reorganize and incur such
significant restructuring expenses - which are considered to be
reasonable given our previous many years of careful and
conservative costings.
In this respect, our 2021 result of a GBP2.576m loss (2020:
GBP1.245m loss) is considered by the Board to be both
understandable and justifiable under such circumstances.
There was no revenue in the year. Costs have increased over 2020
and relate predominantly to various restructuring, operational,
accounting and legal costs.
The Board and myself remain satisfied with the ongoing progress
that we have made over this last year's cumulative challenges by
identifying, initiating, and implementing our respective emergency
and/or restructuring strategic plans.
We will continue to be prudent and focused in our specialist
supply chain service management and also our Board remains
conservatively confident that we will be able to progressively
focus in on identifying and being able to put forward an
appropriate refined start-up strategy of opportunities for the
Board to consider and to hopefully be able to then present to our
Shareholders at some stage in the foreseeable future.
Regarding the continuing subject of Brexit, given our domiciled
departure from the EU, the timing, terms and impact of the United
Kingdom's exit are still considered difficult to predict;
especially with the combined confluence post-COVID and also the
recent predictive effects of the Ukrainian-Russian conflict.
Regardless of the anticipated time scale, terms and conditions of
the United Kingdom's exit from the European Union, the result with
regard to these political and economic events provides an outlook
where it is anticipated that there may be some volatility on the
exchange rate between the Pound Sterling ("GBP") and the Euro
("EUR") and more generally, between the GBP/Pound and other
international currencies such as the US Dollar ("US$").
Because some subsidiaries are presently based both in the United
States and/or also outside of Europe, they are therefore
predominately in a US$ currency environment and while this could
lead to adverse consequences in terms of US$/GBP exchange rates,
our respective subsidiaries and/or joint ventures are not yet fully
trading or selling products, and therefore we do not anticipate any
material negative impact and do not intend to take specific
measures to cover fluctuations of the currency market at this
stage.
Ross Group Plc & Subsidiaries Chairman's Statement
For the year ended 31 December 2021
As always, I would like to particularly personally thank our
Board of Directors, our specialist contractors, consultants and
advisors, for all their excellent support, commitment and hard work
in helping the Group wherever possible towards achieving its
aims.
Again and again, I would also like to personally thank our
extraordinary loyal shareholders for their continued patience,
understanding and support during this extraordinary period in
time.
Sincerely
Barry Richard Pettitt
Chairman & Group Managing Director Ross Group Plc
Date: 2022
The Directors are pleased to present their strategic report of
the Group and the Company for the year ended 31 December 2021.
Background and History
The existing management team that took over control of the Ross
Group Plc approximately thirteen years ago has been consistent in
their prime objective to search for suitable supply chain start-up
opportunities in order to try to build a balance of businesses that
would be commensurate with the respective existing and potential
value of the Group's Premium Listed Main Board status and, as a
result, would also enable the Group to be able to potentially enter
into more mergers and acquisitions in the foreseeable future,
whenever deemed appropriate, that in turn could create a sizeable,
stable and potentially prosperous long term enlarged Group going
forward.
Business Strategy: 2022 Model & Principal Activity
During 2020, Ross Group Plc's Archipelago Aquaculture Group
("AAG") entered into a new venture with 525 Solutions ("525"), a
company that was founded in 2015 by Professor Robin Rogers, who
created, co-patented and licensed the Ionic Liquid extraction
process that was initially exclusively sub- licensed by AAG and who
together in 2018 they had respectively collaborated together to be
able to win the USA environmentally prestigious EPA Green Chemical
Award. Given the constraints of COVID together with an unexpected
reduction of pre-agreed R&D financing, a more refined
restructuring strategy was required, It was therefore the
considered opinion of both Ross Group Plc and 525 that as this
Ionic Liquid extraction process has never yet been mass produced to
such a high grade quality and quantity, there could be significant
synergies in collaborating together in a collaborative strategic
new venture,
in order to try to successfully attain such a World class,
ground-breaking achievement. Therefore, in 2021, RGP-525 - albeit
under unique and challenging COVID circumstances - was duly created
and has endeavoured to continue to further its research and
development as a separate business unit, in which the Group has a
19.9% investment holding, thus enabling Ross Group Plc to maintain
its prime objective to re-focus to search for other suitable supply
chain management opportunities in order to try to build a balance
of businesses that would be commensurate with its respective
existing and/or potential value as a Premium Listed Company on the
Main Board of the London Stock Exchange.
Business Review 2021
The Group as at 31 December 2021 consisted of Ross Group Plc and
three wholly owned subsidiaries; Ross Diversified Trading Limited
("RDT"), Ross Group Plc Inc. and Archipelago Aquaculture Group LLC
("AAG").
AAG continues to contain the start-up businesses of Mari Signum
Limited, Mari Signum Dragon Drying- MS LLC, Mari Signum
Mid-Atlantic LLC and Prometheus Progenitor Genetics Technologies
Limited LLC - all having been initially involved and integrated
within the main Chitin-based business of AAG.
These subsidiaries have strategically been operationally
restructured in favour of combining certain Chitin corporate assets
and equipment with those of 525 Solutions (a company founded by
Professor Robin Rogers, who is the collaborative creator of the
ionic liquid extraction process for Chitin) and, in doing so,
forming a new venture, RGP525 Solutions LLC, in which AAG has an
investment holding of 19.9%.
Whereas the main focus of the Board, throughout the last decade
and to date is to consistently continue to explore various
promising start-up or existing business opportunities around the
World, it is envisioned that through our restructuring efforts in
2021 the ability for us to re-focus on these new endeavours in 2022
should help enable us to be able to provide further opportunities
for consideration in the near future.
Regarding the Group's revenue performance in 2021, while
undergoing the continued restructuring of the Group during the
constraints of COVID and restricted cashflow, all operations were
either suspended and/or wound-down respectively in favour of the
RGP-525 new Venture with 525 Solutions, along with a further
restructuring of AAG in order to accommodate a more enhanced,
efficient and effective separate business unit strategy.
The Directors are confident that, given its reasonably resolute
structure and strategies, the underlying value of the Group should
be able to remain strong and that the Group will hopefully find
success in securing the strategic business that it is currently
seeking.
Regarding the financial position at year-end 2021, the Board can
report that the Group's statement of financial position shows that
through such restructuring efforts total assets are GBP394k
compared to
GBP1,449k in 2020.
It is also worth noting that, in prior years, one of the largest
items in the Group's balance sheet was the long-term
"Interest-bearing loans and borrowings" of GBP6.072m that has since
been restructured into Convertible Loan Debentures, which were
approved by the Board and Shareholders accordingly in 2020 and have
been subsequently restructured in 2021 and extended for up to a
further one to three years (at the Board's discretion) potentially
until 2025. Thus the Group has managed to maintain a relatively
healthy cashflow position through the diminishment of this
liability and also by the issuance of new shares.
Business Outlook
The Board is reasonably confident, notwithstanding the COVID
Pandemic and its subsequent ongoing economic effects, that there
will still be various unique and exciting opportunities ahead -
particularly in the short-term - for its business to be sustained
and/or transformed for potential growth to be considered in the
future.
As at the reporting date, the Group held GBP209k in cash, total
assets of GBP394k and current liabilities of
GBP3,875k, including amounts owed to associated undertakings of
GBP2,335k.
Contemplation of cancelling all deferred shares, resulting in a
one-off exceptional gain, is currently under consideration by the
Board in order to provide a platform for future investment
opportunities.
The budgets and cashflows set for 2022 & 2023 given ensuing
partial COVID Pandemic provisions, indicate that there are
sufficient working capital reserves, especially given prudent
provisions.
Economic Considerations
In the light of the ongoing COVID pandemic and the uncertainties
this brings, the Directors have also prepared cashflow forecasts to
December 2023. These cashflows have been sensitized to assess the
adequacy of cash available should further COVID restrictions,
global fuel prices, recession and/or inflation impinge the
activities of the Group. Based on the sensitivity testing and
additional resources available the directors are satisfied the
group can continue as a going concern for the foreseeable
future.
Due to the emergency measures implemented by the respective
Governments, which are still ongoing in certain respects, and also
given the subsequent strategic RGP-525 new venture regarding the
development cycle of Chitin, the Group has already taken prudent
steps to minimise the cost exposure of its activities
accordingly.
The Group is regularly reviewing its initial projections and
also aiming to minimise any potential deficits over the next
financial year by trying to reduce all non-essential
expenditure.
Section 172(1) Statement
Within the strategic report for this financial year is the
mandated Section 172(1) Statement which hereby describes how the
Board of Directors have acted in regard to the matters set out in
Section 172(1)(a) to (f) when performing their duties under this
Section.
These duties have included, but are also not necessarily limited
to, their responsibility to earnestly promote the success of the
Group and its companies, to act in the way that he or she considers
to be in good faith and would be most likely to promote the success
of the Group and its companies for the benefits of its shareholders
as a whole, and other stakeholders.
The Directors welcome the opportunity to also engage with our
shareholders and other stakeholders, wherever possible, in
promoting and discussions regarding reasonable, non-price sensitive
information on subjects that are only available within the Public
Domain.
In both the Chairman's Statement and in this Strategic Report,
the Chairman and directors have detailed the matters affecting the
Group during the year particularly the subsequent restructuring of
AAG.
The acquisition of AAG during 2018/2019 together with the
effects of COVID, a reduction of pre-agreed financing from the
seller of AAG and ongoing restructuring implementation have had
significant impacts on the Group and have subsequently resulted in
a consecutive loss for the year.
The details given in these reports, particularly on pages 6
& 7, outline the Directors strategy for the business both in
the short and the longer term.
The main factor facing the Directors is the ongoing financing of
the group and/or any impact that the COVID-19 pandemic may have on
the business. These matters have had due consideration by the
directors and are detailed in the Strategic Review, in the Business
Review 2021, Business Outlook and Corona Virus pandemic
considerations on pages 6 & 7 and Principal Risks and
Uncertainties on page 9.
At the end of last year it was reported that there was only one
employee (excluding the directors) remaining at the year-end (none
UK) and that employee is now on a part-time employment. During the
current year more employees had joined the group as the previously
dormant subsidiary, Ross Diversified Trading Limited had now become
more active, however, it has since been decided to restructure
their employment, respective roles and responsibilities while also
considering other opportunities that may perhaps be presented by
them and/or other parties in the foreseeable future.
The main stakeholders are the shareholders and the directors are
committed to acting in their best interest and communicate to them
at the AGM and through regular correspondence and/or webinars,
whenever deemed relevant, as well as through timely filing of
informative interim and year-end financial statements, stock
exchange announcements and as detailed in the Governance Report on
page 12.
As detailed in the Strategic Report on pages 6 to 11 the
directors are proud of the Group's Premium Listing on the Main
Board of the London Stock Exchange and therefore always have the
desirability of the Group and its companies maintaining a
reputation for high standards of business conduct as also detailed
in the Governance Report on page 15.
As the Group is continuing to be focused on research and
development through its relationship in the RGP-525 new venture
with 525 Solutions and the key relationship with Professor Robin
Rogers, it can confirm that there is little or no impact that the
Group has on its community or environment as detailed on page 10 of
the Strategic Report.
Whilst the Group has sufficient cash and reserves to meet its
current needs as detailed in the Strategic Report on page 7, the
directors are always striving to increase revenue and raise funds
for strategic opportunities they view are beneficial to the Group
shareholders.
Principal Risks and Uncertainties
Notwithstanding the Coronavirus Pandemic, the main risk to the
existing operations of the Group is the possibility of depleting
necessary working capital. The Board is both fully aware of these
risks and, as a result, has always endeavoured to managed its cash
and cashflow as conservatively and prudently as possible; ensuring
that its exposure to any RGP-525 liabilities in this instance are
primarily limited to its initial investment.
Due to time constraints the company has not been able to publish
the 2021 accounts before the deadline of 30 June 2022. As a result
of this the trading of the company's shares has been suspended on
the London Stock Exchange. It is understood that this suspension
will be removed when the financial statements are published.
In addition, the Board is equally endeavouring to ensure that
funds are being made available to the Group, through the issuance
of new shares and/or other financial instruments, whilst also
exploring other opportunities for future growth.
Your Directors are therefore reasonably confident that the Group
currently has both the financial resources and capability to fund
existing expenses for future growth.
Viability Statement
The Group's business activities, together with the factors
likely to affect the future performance and position are set out in
the Group Strategic Report and Going Concern Statement on pages 6
to 11
Having endured a protracted period of the COVID Pandemic over
the last 2 years, the Group has now begun to take a longer term
view of various post-COVID Pandemic potential factors, ranging from
Global and/or Continental inflation and recession, through to
perhaps other opportunities arising in such markets, for example,
in Crypto exchanges and/or Supply Chain Management (SCM)
services.
Given the current listing of the Group on the Main Board of the
London Stock Exchange and also it's present Premium Listing status,
both of which individually and/or collectively are of considerable
value, the Group believes that it is in a viable position to be
able to enter into either possible start-ups, joint ventures,
mergers and/or acquisitions; any of which would probably involve an
injection of new management and business(es) that could transform
the Group significantly.
In addition, the Group's existing business potential is
presently beginning to take shape in its commodity-based trading
and supply chain management services; with initial contracts being
forecasted and/or envisioned accordingly.
As recently demonstrated, new share issuances have been
successfully placed to date and there seems to be a continued
interest for possible or potential further new share issuances in
the foreseeable future.
Breakdown by sex of directors
At 31 December 2021 there are five directors: five men and no
women.
Environmental matters
1 - UK Companies
In the year under review, the activities of all of the RGP UK
companies (Ross Group, the parent) and Ross Diversified Trading (a
subsidiary) involved no direct manufacturing, mining or materials
processing. The UK based Directors mostly worked from home, made
frequent use of telecoms/remote conferencing to discuss company
business and occasionally met at hired premises.
The Board considers that in such circumstances, the carbon
emissions arising from those Directors' activities (excluding the
Chairman) are minimal.
The Chairman, Mr Barry Richard Pettitt who in the past has
previously travelled extensively around the world, accompanied
occasionally by other directors, had in fact not travelled
internationally at all during 2020 however he has started to travel
more extensively in 2021 in pursuit of new opportunities.
Therefore, the total number of business miles the Ross directors
travelled in 2021 is calculated at 44,443 which, per the conversion
factor taken from the Carbonify.com, website amounts to 23.2 kg
CO2.
2 - US Companies
The acquisition of AAG in January 2019 meant that the Group now
had for the first time in many years research and development
facilities with industrial processing/manufacturing premises. Given
aforesaid circumstances, these were restructured accordingly, as
discussed elsewhere in this report, so that the commercial
production of Chitin - a powerful, natural polymer containing
characteristics with the potential to alter industries and improve
the environment - now forms an integral part of a new venture,
namely, RGP-525 which intends to use its best endeavours to produce
market-ready, premium quality Chitin in an environmentally
conscious manner at some time in the future. This investment is
being monitored and managed through Ross Group PLC Inc., which is
also responsible for the Group's other USA investments and
activities. All US Companies have managed to maintain a minimal
number of employees and/or sub-contractors.
The Board of Directors are very proud to be partly responsible
for such an environmentally friendly new venture operation and
subsidiaries that are also, wherever possible, committed to similar
standards, ethics and governance.
The Board of Directors, who are responsible for the day-to-day
management of the Group, have considered the requirements of the
FCA new Listing Rule to enhance climate- related financial
disclosures for periods beginning on or after I January 2021 and
the associated recommendations of the Task Force on Climate Related
Financial Disclosures (TCFD).
The TCFG recommend disclosures are made specifically in the
areas of governance and risk management with regard to climate
related risks and opportunities and where material the strategy and
metrics and targets used to assess such risks and
opportunities.
The Board at their regular meetings consider all risks and
opportunities facing the Group. The current limited operations of
the Group, in the judgement of the Board, do not give rise to
significant risks and opportunities related to climate - related
matters and the Board have therefore not fully made all disclosures
consistent with the some or all of the TCFD's recommendations and /
or recommended disclosures on the grounds of materiality.
The Board at regular meetings, from a governance perspective,
has continued oversight of operations, they consider any climate
-related matters that may arise from changing activities and any
risks or opportunities that may arise. These matters are considered
for the short, medium and long-term impact they may have and the
Board continues to strive to support a low carbon economy.
From a risk management perspective any opportunities being
considered by the Board must also highlight as part of that due
diligence any risks associated with the opportunity. The impact any
climate- related matters may have resulting from its location,
changing climate conditions we are seeing develop that may impact
the future of such an opportunity be it from rising temperatures
resulting in flood, fire, rising sea levels or such other climate -
related matters, climate related policy or emerging technologies.
The risks are not only considered from the Group's perspective but
from that of our supply chain and customers also. The Board
consider the impact any such risks may also have on our ability to
raise future capital or restructure debt should that be
required.
There are no such climate -related risks identified at this time
and the possible opportunities being considered by the Board be it
through the investment in RGP-525 or other opportunities under
consideration do not give any additional climate - related
risks.
On behalf of the Board
.......................................... Barry Richard Pettitt
- Chairman
Date: 2022
The directors present their report with the financial statements
of the company and the group for the year ended 31 December
2021.
Dividends
No dividends will be distributed for the year ended 31 December
2021.
Events since the end of the year
Information relating to events since the end of the year is
given in the notes to the financial statements.
Directors
B R Pettitt (Chief Executive Officer)
Barry Richard Pettitt, aged 62, was appointed to the board on 22
December 2008 as the CEO of the group and elected as its Chairman
and CEO on 28 April 2009. He has more than 30 years' experience
within the consumer electronics and supply chain management
industries, during which time he successfully started a specialist
supply chain management services company. ISO International
(Holdings) Ltd, which was subsequently purchased by a Hong Kong
Public Company for HK$ 155,000,000 in 2003. In addition, he has
managed a number of Public Company divisions (in the capacities of
President and Managing Director) and successfully relisted a Hong
Kong Public Company, Vision Tech Ltd, as its CEO in 2007. Prior to
that, he was the joint Managing Director of Ross Consumer
International Ltd and a main board director of the Ross Group
(formerly Ross Consumer Electronic Plc) in 1987 after which he has
continued to be a shareholder in Ross Group for the last 34
years.
S C Mehta (Executive Director)
Shashi Mehta, aged 64, was appointed on the board on 22 December
2009. He holds a BSc (Hons) in Manufacturing and has had a
distinguished career in a variety of industrial and manufacturing
trouble- shooting roles. He brings a wealth of experience and
expertise to the Group. He spent many years working for the Ford
Motor Company, and was Operations Manager in Ross Consumer
Electronics during the 1980's.
R E Tamraz (Non- Executive Director)
Roger Tamraz aged 81, was appointed to the Board in December
2020 as a Non-Executive Director. He is an international banker and
venture capital investor who has had an active business career in
banking, oil and gas spanning from Middle East to USA. Fluent in
English, French and Arabic, he was Chairman of Kidder, Peabody
& Co. Middle East. Also has owned and controlled banks in the
Middle East and in the United States; Also, having led the takeover
and then re- built the largest bank in Lebanon, Intra Bank.
P M Fisher
Philip Fisher aged 68, was appointed to the board in February
2021. He was the joint Managing Director of Ross Consumer
International Ltd., a subsidiary of Ross Group (formerly Ross
Consumer Electronic Plc) in 1988/89 and has since maintained an
excellent working relationship with its senior management for many
years. He will oversee new business divisions and/or developments
within the UK.
Newly Elected Directors
M J L d'Hombres (Non- Executive Director)
Marc d'Hombres aged 75, was appointed to the board in December
2021 as a Non-Executive Director. He is a loan and economics
graduate from Paris university and has in-depth experience managing
boutique investment banks and private equity funds. He is well
versed in the African markets and an expert in trade and project
financing.
Financial Instruments
Details of the financial instruments used by the group can be
found in note 22 of the accounts.
Employee Involvement
During the year there was an average of 3 employees, and 5 Main
Board directors.
Directors Interests Directors
Mr Barry Pettitt has from time to time entered into contracts
with Ross Group concerning the provision of professional services
to third parties and/or subsidiaries. Apart from this, no director
had any interests in contracts of significance with the
company.
In accordance with the Articles of Association members will be
asked to confirm the appointment of all directors.
The total number of shares controlled by Barry Pettitt, directly
and indirectly through Lynchwood Nominees Limited (previously Prime
Growth Enterprises Limited) at the date of this report was
27,305,609 (11.72%). Mr Pettitt has sought and obtain Board
approval to specifically negotiate and possibly increase his
shareholding interests as well as to further his loan position with
Group on existing financial instruments
Substantial shareholdings
As at 31 December 2021 the following were registered as being
materially interested in 4% or more of the company's issued share
capital, or being a related shareholder.
No of Ordinary % of Issued
Shares Share Capital
Keniworth Capital Limited 40,000,000 17.17%
------------------------ -------------------
Vidacos Nominees Limited 37,033,448 15.89%
------------------------ -------------------
Lynchwood Nominees Limited Des: 2006442 27,078,369 11.62%
------------------------ -------------------
Escalating Investments Limited 22,200,720 9.53%
------------------------ -------------------
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards as adopted by the UK
and the Republic of Ireland. Under company law the directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
company and the group and of the profit or loss of the group for
that period. In preparing these financial statements, the directors
are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have bene
followed, subject to any material departures disclosed and
explained in the financial statements;
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's and
the group's transactions and disclose with reasonable accuracy at
any time the financial position of the company and the group and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the company and the group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
1. The financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by the UK
and the Republic of Ireland, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
company and the undertakings included in the consideration taken as
a whole; and
2. The management's report, which is incorporated into the
Directors' Report together with the information provided in the
Chairman's Statement, the Strategic Report, includes a fair review
of the development and performance of the business and the position
of the company and the undertakings included in the consolidation
as a whole, together with a description of the principal risks and
uncertainties that they face.
Statement as to disclose of information as Auditors
So far as the directors are aware, there is no relevant audit
information (as defined by Section 418 of the Companies Act 2006)
of which the group's auditors are unaware, and each director has
taken all the steps that he ought to have taken as a director in
order to make himself aware of any relevant audit information and
to establish that the group's auditors are aware of that
information.
Auditors
In accordance with section 485 of the Companies Act 2006, a
resolution proposing that CBW Audit Limited be re-appointed will be
put at the forthcoming Annual General Meeting in 2022.
On behalf of the Board
................................ M J L d'Hombres Director
Date: 2022
Application of The Principles of the UK Corporate Governance
Cod
The group is pleased to present its report on Corporate
Governance and the UK Corporate Governance Code. The board strives
to comply with the high standards set by the UK Corporate
Governance Code as incorporated in the UK Listing Rules of the
Financial Conduct Authority. The Code requires the company to make
a two-part disclosure statement, firstly on how the principles of
the code are applied and secondly confirmation of compliance or
explanation of any reason for deviation from the Code. Throughout
the year the company has complied with the main principles of the
Code.
The Board
There is an effective and appropriately constituted board which
in the year under review consisted of five directors. The Chief
Executive, Mr Pettitt who is normally based overseas, also serves
as Chairman. The board is fully aware that this is contrary to Code
provision A.2.1, which states that the roles of chairman and chief
executive should not be exercised by one individual. The board is
of the opinion that, given the current size of the business, and
also Mr Pettitt's undoubted and considerable knowledge, experience
and contacts in the Group's field of operations that the
shareholders' interests are best served by this arrangement. The
board is active in its management of the group and meets and
confers regularly on business matters arising. These frequent and
robust discussions serve to ensure that no one individual has
unfettered powers of decision.
During 2021 Mr Pettitt was supported by four other directors: Mr
P.M. Fisher being appointed in January 2021 and Mr M J Simon, who
was appointed in April 2009 and retired in December 2021, Mr S C
Mehta who was appointed in December 2009, and Mr R Tamraz being
appointed in December 2020.
Mr Simon who acted as company secretary since April 2009,
resigned on 14 September 2022. Mr S C Mehta was appointed as the
company secretary on 14 September 2022.
One director resigned from the board in December 2021 Mr M J
Simon. One new director was appointed December 2021 Mr M J L
D'Hombres.
The two non-executive directors, Mr D'Hombres and Mr Tamraz, are
considered to be independent as there are no circumstances or
relationships as described by Code provision B.1.1 which apply to
their appointments. The group's definition of a non-executive
director is one who considers the interest of all the shareholders
and this is demonstrated during the board meetings. As part of
their role, the non- executive directors constructively challenge
decisions and help develop strategies and plans for the benefit of
the board.
Board procedure
The board is responsible for decisions concerning strategic and
financial planning and matters involving the overall direction of
the company. Management will seek board approval of the annual
budget and rolling business plan. Reforecasts are presented as
updates to the budget throughout the year to account for variances
and provide forward vision. The operational business decisions are
taken by local management with reference to the board where
necessary.
The board has established several separate committees for the
following: Appointments (Chaired by Mr Pettitt);
Audit & Remuneration (Chaired by Mr D'Hombres); Governance
& Compliance (Chaired by Mr Mehta)
All of the directors are subject to periodic re-election and
also the full board considers all appointments. A director will
require re-election within a maximum period of three years.
Biographies of the board are included in the financial
statements. These indicate a wealth of experience, which is
essential in effectively managing the activities of the group. In
addition to this the board members, wherever deemed appropriate
and/or possible, endeavour to attend relevant seminars and courses
of their respective professional organisations.
Attendance
Board meetings are held regularly throughout the year. Due to
the location of the directors, the meetings are often held
electronically. The board is supplied with all the information
relevant to the meeting in a timely manner and in a form and
quantity appropriate to enable it to discharge its duties during
the meetings.
The board has now established procedures in respect of access to
the company secretary and the directors have access to consult the
company secretary when required.
All shareholders have the opportunity to put forward questions
to the board during the company's Annual General Meeting and the
board communicates with the shareholders via the notices and other
papers relating to the Annual General Meeting. The company also
welcomes and responds wherever possible to communication,
preferably in a written form, from its Shareholders regarding
reasonable, non-price sensitive information requests on subjects
that are only available within the Public Domain.
The company website allows shareholders to contact the directors
by email.
The board has carried out a formal and rigorous annual
evaluation of its performance and of its committees and individual
directors. This evaluation covers contribution, commitment and the
manner in which board related duties have been completed. The
chairman has discussed the review with individual directors where
necessary to ensure the board operates as an effective unit. The
performance review was conducted using recognised evaluation
processes. The independent non- executive director has conducted a
performance review on the chairman which included the consideration
of the views expressed by the executive directors.
Internal audit and control
The respective responsibilities of the directors and the
auditors in connection with the financial statements are set out in
the audit report. The directors have overall responsibility of the
effectiveness of the group's whole system of internal control,
including financial and other controls, which are designed to
provide reasonable but not absolute assurance against material
misstatement or loss. The key procedures that the directors have
established to provide effective internal financial control are as
follows:
Financial Reporting
There is a comprehensive system for reporting performance.
During the course of the year, a one year rolling budget is
prepared for each company within the group and a consolidated
budget is prepared for the whole group. The board then formally
approves the budgets. The results are then reported regularly to
the board for their consideration and forecasts are revised
accordingly.
Quality and Integrity of Personnel
The integrity of the group is maintained through the appointment
of experienced and professional staff and the application of
appropriate policies and procedures.
Capital Investment
The group has set procedures for capital expenditure. These
include annual budgets, appraisals and review of the required
expenditure, approvals at the right levels of authority and the
commissioning of independent professional advice where
appropriate.
Professional Advice
Professional advice is usually sought on contentious and
disclosure issues, this being as a result of discussions during the
Board Meetings. During the year the Chairman can seek independent
professional advice in relation to matters affecting the group.
The group has an ongoing system for identifying, evaluating and
managing the significant risks faced by the group which has been in
place for the whole of the year under review up to the date of
approval of the annual report and accounts and which is regularly
reviewed by the board to ensure it continues to accord with the UK
Corporate Governance Code. The directors have reviewed the
effectiveness of the system of internal financial control during
the year from information provided by the management and the
group's external auditors. It must be recognised that such a system
can only provide reasonable and not absolute assurance, and in that
context, the review revealed nothing which, in the opinion of the
directors, indicates that the system was inappropriate or
unsatisfactory.
The group has no formal internal audit function and the board
has determined that there is no need for one. The board considers
that internal audit is dealt with in other ways and the situation
is regularly reviewed.
Going Concern
The directors confirm that after making the appropriate
enquiries, they are of the opinion that the group as a whole has
adequate resources to continue in operational existence for the
foreseeable future and therefore have prepared the financial
statements on a going concern basis.
External Audit and Audit Committee
The Audit Committee during 2021 comprised of the non-executive
directors, Mr Simon and Mr D'Hombres, as well as Executive
Directors Mr Mehta and Mr Fisher. The committee was chaired by Mr
Simon until 31 December 2021 when this role was passed to Mr
D'Hombres. It met periodically to review the adequacy of the
group's internal control systems, accounting policies, corporate
governance policies and compliance with applicable accounting
standards and to consider the appointment of the external auditors
and to review their fees. CBW Audit Limited is invited to attend
these meetings. The Audit Committee is authorised by the board to
investigate any activity within its terms of reference and obtain
external professional advice as is necessary.
By order of the Board
...................................... Barry Richard Pettitt
Chairman & Group Chief Executive Officer Date: 2022
The board is pleased to present its remuneration report in
accordance with section 12.43A(c) of The Listing Rules.
The board has in place a remuneration committee, comprising Mr
Michael Simon, non-executive director to 31 December 2021, and Mr B
Pettitt, Chief Executive, to determine the remuneration of the
board. Post year end Mr Tamraz joined the committee following Mr
Simon's resignation.
The company policy during the restructuring period throughout
2021 was to continue to pay directors only a nominal GBP1 salary
(which has been in place since 2008). This policy will be
reconsidered as occasion arises and as the new business
opportunities open to the group are realised. The directors feel it
would be inappropriate to take any reward until that has been
achieved.
Total Total
Name Position Gross Benefits Notice Remuneration Remuneration
salary Pay 2021 2020
B R Pettitt Chairman/ GBP1 Nil Nil GBP1 GBP1
Group Chief
Executive
--------------- ---------- ----------- ------------ --------------- --------------
M J Simon Non- executive GBP1 Nil Nil GBP1 GBP1
Director
--------------- ---------- ----------- ------------ --------------- --------------
S C Mehta Executive GBP1 Nil Nil GBP1 GBP1
Director
--------------- ---------- ----------- ------------ --------------- --------------
R E Tamraz Executive GBP1 Nil Nil GBP1 GBP1
Director
--------------- ---------- ----------- ------------ --------------- --------------
P M Fisher Executive GBP1 Nil Nil GBP1 GBP1
Director
--------------- ---------- ----------- ------------ --------------- --------------
M J L D'Hombres Non- executive Nil Nil Nil Nil Nil
. Director
--------------- ---------- ----------- ------------ --------------- --------------
No director currently has a service contract with a notice
period in excess of 12 months. All executive directors have
contracts that require a notice period of one month. The contracts
of the non-executive directors would normally be renewed for a
period of one year. All directors are presented for re-election by
the members at the Annual General Meeting on a maximum cycle of
three year.
The group does not currently operate a director's share option
scheme or a long-term incentive system. The group also does not
currently have an employees' share scheme or other long-term
incentive.
The board has instructed local management to ensure the
companies address those corporate social responsibilities which are
recognised as being of prime importance. The responsibility for CSR
rests with the Chief Executive Officer, Barry Pettitt, who will
bring to the board's attention any major issues which require their
approval and regularly updates the board on CSR matters. The views
of shareholders and interested external parties are considered when
developing the ongoing policy to CSR.
Figures are available for the board to review to enable them to
assess the trend towards improvement in CSR matters and to direct
the policy towards those areas that require further attention.
For the year ended 31 December 2021
Employees
For several years the only employees of the company were its
directors. This changed with the acquisition of AAG in January
2019. When this happened, the Group inherited 25 employees, this
has now reduced on the reorganisation of AAG.
The group has always taken the view that employees constitute a
group's most valuable asset and therefore it has always been
committed to ensuring they should enjoy the best environment in
which to perform their duties, one of equal opportunity and free
from discrimination and harassment.
For reasons discussed elsewhere, it was not possible to continue
operations with the four businesses of AAG constituted as they
were, and those facilities during and by the year ended 2019 were
suspended. Consequently, at the year-end 2019 there was only one
employee left on the payroll of the AAG companies. During 2021 this
has increased to three and they have been joined by three new
employees in Ross Diversified Trading Limited as this, previously
dormant subsidiary commenced trading in the year 2020. In 2021
trading results proved difficult and numbers have been reduced
again.
The group strongly believes in the future of the AAG technology,
and we have developed a corporate structure to facilitate that
development through the RGP-525 new venture. We will aim to promote
a culture which suits the recruitment and retention of the highest
calibre of staff and to ensure that all staff will be trained to
the appropriate standard required to fully meet their job
specifications.
The health and safety of the employees is paramount to the
group. Staff are issued with data sheets on the handling of any
substances which might be toxic and will be trained in the correct
procedures to follow. Any potential issues can be raised with Mr
Pettitt.
Environment
The board is fully aware of its responsibilities and fully
supports the drive for ongoing improvement in this area. The impact
the group's activities on the environment are regularly assessed to
enable action to be directed at areas where any harmful impact
could be reduced. As noted above the travel and energy use in the
group have been limited over the past two years.
The group has worked with its suppliers during the year to
ensure the products used in manufacturing and any waste arising
from the use of those products have a minimal impact on the
environment. The use of energy is closely monitored, and the
available controls are used to good effect to reduce consumption
where possible.
Customers
Customer satisfaction is one of the main targets for the group
and this is aided by a rigorous quality policy. The Quality
procedures adopted by the group require the recording of customer
feedback and measures our performance against customer expectation.
The group strives to meet the demands of its customers, but also
ensures that solutions to their requirements are designed with
efficiency.
Local Community
The group seeks to inter act with the local community and
develop close relationships within its area of operation. It has
established links with the local schools and colleges.
Commitment
The group will continue to enhance its approach to CSR to ensure
that it supports the principles as it expands its range of
activities and welcomes any suggestions on how it can improve in
this area.
Opinion
We have audited the financial statements of Ross Group Plc (the
'parent company') and its subsidiaries (the 'group') for the year
ended 31 December 2021 which comprise the group and parent
company's Income Statements, Statements of Comprehensive Income,
Statements of Financial Position, Statements of Changes in Equity,
Statements of Cash Flows and notes to the consolidated financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
- give a true and fair view of the state of the group's and of
the parent company's affairs as at 31 December 2021 and of the
group's and the parent company's loss for the year then ended;
- have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and
- have been prepared in accordance with the requirements of the
Companies Act 2006 and, as regards the group financial statements,
Article 4 of the IAS regulation.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 2 to the group financial statements, the
group in addition to complying with its legal obligation to apply
IFRSs as adopted by the United Kingdom, has also applied IFRSs as
issued by the International Accounting Standards Board (IASB).
In our opinion the group financial statements give a true and
fair view of the consolidated financial position of the group as at
31 December 2021 and of its consolidated financial performance and
its consolidated cash flows for the year then ended in accordance
with IFRSs as issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which
indicates that there are events or conditions identified that may
cast significant doubt on the entity's ability to continue as a
going concern. The Company's listing with the London Stock Exchange
is currently suspended, which creates uncertainty in respect of the
timing of its re-listing. This unknown time frame has an effect on
future trading and cash flows. In addition to this, the Company and
Group have presented a loss for the year ended 31 December 2021,
and, at the balance sheet date, both have net current liabilities.
As stated in note 2, these events or conditions, along with the
other matters as set forth in note 2, indicate that a material
uncertainty exists that may cast significant doubt on the company's
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting
included
- Obtaining management's assessment of going concern of the
Group and challenged the appropriateness of the assumptions used by
utilising our knowledge of the Group gained throughout the audit
and obtaining further corroborative audit evidence.
- Analysing forecasts prepared by management covering a period
to 31 December 2023, which have been flexed using different
variables for events over the corresponding period.
- Reviewing minutes of meetings of the Board for any factors that may affect going concern.
- Assessing the wider macro-economic environment over the
period, in particular with respect of COVID-19 and Brexit.
- Considered publicly available information to identify if there
is anything to contradict the assessment made by management, or if
there are any indicators of potential risk to the group of
industry.
- Assessing the appropriateness of going concern disclosure.
In relation to the entity's reporting on how they have applied
the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors' statement in the
financial statements about whether the director's considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
Tailoring of the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls, and
the industry in which they operate
The group consists of the parent company and a subsidiary
incorporated in the UK, for which a full scope audits were
conducted, and an American based group (AAG), which consists of
five companies and Ross Group Plc Inc. All subsidiaries were
considered to be significant components, therefore audit work was
completed on material balances. These group companies are listed in
note 12 of the financial statements. There were no acquisitions
during the reporting period, therefore the scope has not changed
significantly compared to the prior period.
Procedures have been conducted on a group level to ensure the
amounts brought into the consolidation are not materially
misstated.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Key Audit Matter How our scope addressed this
matter
Revenue recognition
Revenue is recognised in accordance Performed substantive testing.
with the accounting policy set We tested a sample of transactions
out in the notes to the consolidated from the point of origin, which
financial statements (set out were the original contracts,
in note 2). The accounting policy and traced these to the financial
contains a number of judgements statements. Revenue of Ross Diversified
with regards to revenue earned Trading (RDT) tested substantively
from contracts. This is considered per the above. However, it was
to be a significant risk due to found that there was no further
it often being contingent on external trading income to be recognised
variables. in the year, which is consistent
with understanding of the business.
Assessed whether income transactions
were recorded in compliance with
IFRS 15 and constitute an agent
or principal relationship. Assessed
the appropriateness of the related
disclosures in the financial
statements and consider them
to be reasonable.
The key observations with regards
to these risks were that we concurred
that revenue had been recognised
in accordance with IFRS 15 Revenue
from contracts with customersand
is materially appropriate or
accurate.
------------------------------------------------
Non-compliance with laws and
regulations Ross Group Plc has Performed testing to ensure that
a premium listing on the London the parent company is up to date
Stock Exchange, and therefore with relevant fees due to regulators.
needs to comply with a high level Performed testing to ensure that
of regulation. Non- compliance all returns are submitted in
with these laws and regulation accordance with requirements
could result in the parent company and within the specified timescales.
being de- listed from the London Performed a detailed analysis
Stock Exchange, which would threaten of the relevant laws and regulations
the group and parent company's and discussed with management
ability to continue. This is considered to outline the control processes
to be a significant risk. to ensure compliance with these
rules.
They key observation with regards
to this risk was that the parent
company is generally compliant
with the requirements of the
London Stock Exchange. It is
noted that the Company is not
currently compliant with the
London Stock Exchange rules with
regards to the filing of the
financial statements, and the
shares are currently suspended.
------------------------------------------------
Key Audit Matter How our scope addressed this
matter
Going concern
The group is considered by the In order to address this risk,
board to be a going concern, and a detailed review of going concern
the accounts have been prepared was conducted, which involved
as appropriate on this basis, reviewing management's forecasts
and therefore this judgement should for the period up to December
be assessed. As the majority of 2023, and challenging the assumptions
the group companies do not trade made in preparation of this.
or generate revenues, and the Sensitivity analysis was conducted,
group is in a net liabilities and a 'worse' case scenario was
position, there is a risk of material assessed to consider the impact
uncertainty relating to going of this. Detailed discussions
concern, compounded with the current have been had with management
economic climate as a result of on future plans, review of board
COVID-19. meeting minutes, and review of
the appropriateness of the going
concern disclosure in note 2.
The application of materiality
is not as applicable in this
area since this relates to the
overall appropriateness of applying
the going concern principle.
The key observations with regards
to this risk are that due to
the suspension of the shares
with the London Stock Exchange,
and the lack of financial support
for the Company, there is a material
uncertainty relating to going
concern.
-----------------------------------------------
Accounting estimates
We will assess the impairments We obtained an understanding
made by management to ensure that of the impairment process and
investments and fixed assets are evaluated the impairment methodology
not materially misstated in the and, tested the accuracy and
financial statements. completeness of the impairment
review assessments. We gathered
evidence from third parties,
where possible, to corroborate
cost assumptions included in
calculations for future activity
of operations for the forecasts.
For those assets or investments
impaired previously, we evaluated
the actual results and the assumptions
made and considered if reversals
were required. We checked the
recoverability of the receivables
in AAG's accounts to gain direct
written confirmations on the
existence of these assets from
third parties. And obtained evidence
from third parties of financial
stability and ability to repay
to test recoverability. We enquired
management regarding the intention
of the group balances, and whether
these should be netted off.
-----------------------------------------------
Our application of materiality
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows: group and
parent company materiality for the financial statements as a whole
at
GBP29,100 and GBP26,300 respectively, which is based on 2% of
loss before tax after the removal of exceptional items at the
planning stage. Materiality has been set using this measure as this
is considered to represent the most appropriate measure of
underlying performance, which is the most sensitive measure being a
listed group. The group and parent company performance materiality
adopted is 50% of this figure, which was calculated as GBP14,500
and GBP13,100 respectively. This is deemed by the audit team to be
an appropriate level to identify material errors, which is used for
a high-risk audit. The materiality at completion has been assessed
and it was noted that the loss before tax had increased as a result
of an audit adjustment, however it was concluded that materiality
should not be amended. Materiality has influenced our workings not
only for the key audit matters but also for the rest of the work
performed during the audit. Anything below GBP1,450 and GBP1,300
was considered trivial from a group and parent company perspective
respectively.
We agreed with the audit committee that we would report to them
misstatements identified during our audit above GBP1,450 or
GBP1,300 as appropriate as well as misstatements below that amount
that, in our view, warranted reporting for qualitative reasons.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006. In our opinion, based on the work undertaken in
the course of the audit:
- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial statements
and those reports have been prepared in accordance with applicable
legal requirements;
- the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
- information about the company's corporate governance code and
practices and about its administrative, management and supervisory
bodies and their committees complies with rules 7.2.2, 7.2.3 and
7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in;
- the strategic report or the directors' report; or
- the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
- the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement
with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- a corporate governance statement has not been prepared by the parent company.
Corporate governance statement
The Listing Rules require us to review the directors' statement
in relation to going concern, longer- term viability and that part
of the Corporate Governance Statement relating to the group's
compliance with the provisions of the UK Corporate Governance
Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
- Directors' statement with regards the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified (set out on page 10);
- Directors' explanation as to its assessment of the entity's
prospects, the period this assessment covers and why they period is
appropriate (set out on page 13).
- Directors' statement is fair, balanced and understandable (set out on page 14);
- Board's confirmation that it has carried out a robust
assessment of the e-merging and principal risks (set out on page
14);
- The section of the annual report that describes the review of
effectiveness of risk management and internal control systems (set
out on page 13); and;
- The section describing the work of the audit committee (set out on page 14).
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 11, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error. In preparing the financial
statements, the directors are responsible for assessing the
company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
We ensured that the engagement team collectively had the
appropriate competence, capabilities and skills to identify or
recognise non-compliance with applicable laws and regulations. The
laws and regulations applicable to the company were identified
through discussions with directors and other management, and from
our commercial knowledge and experience of a premium listed group
undertaking various global activities. Of these laws and
regulations, we focused on those that we considered may have a
direct material effect on the financial statements or the
operations of the company, including the Listing Rules of the
Financial Conduct Authority (FCA), Companies Act 2006, taxation
legislation, data protection, anti-bribery, anti-money-laundering,
employment, environmental and health and safety legislation. The
extent of compliance with these laws and regulations identified
above was assessed through making enquiries of management and
inspecting legal correspondence. The identified laws and
regulations were communicated within the audit team regularly and
the team remained alert to instances of non-compliance throughout
the audit.
We assessed the susceptibility of the company's financial
statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:
- making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
- considering the internal controls in place to mitigate risks
of fraud and non-compliance with laws and regulations; and
- understanding the design of the company's remuneration policies.
To address the risk of fraud through management bias and
override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in
determining the accounting estimates set out in note 2 were
indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC, relevant regulators
including the FCA and the company's legal advisors.
There are inherent limitations in our audit procedures described
above. The more removed that laws and regulations are from
financial transactions, the less likely it is that we would become
aware of non- compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and
regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities is available on
the Financial Reporting Council's website at: https ://www.fr c
.org.uk /a uditorsresponsibilities. This description forms part of
our auditor's report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the board of directors on 20 May 2021 to audit the
financial statements for the year ending 31 December 2021 and
subsequent financial periods. The period of total uninterrupted
engagement is 3 years, covering the years ending 31 December 2019
to 31 December 2021.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the parent company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the parent company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the parent company and the
parent company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Daniel Howarth FCA (Senior Statutory Auditor) for and on behalf
of CBW Audit Limited Chartered Accountants
Statutory Auditors 66 Prescot Street London
E1 8NN
Date:
Revenue 2021 2020
Notes GBP'000 GBP'000
Restated
-
43
Production expenses - (39)
-------- --------
Gross profit / (loss) - 4
Other operating income 5 5 135
Administrative expenses (1,878) (894)
-------- (1,873) * (755)
Operating (loss)
Finance income 8 1 1
Finance expense 8 (491)
(704) --------
(Loss) before income tax 7 -------- (2,576) (1,245)
Income tax -
- --------
(Loss) for the year 9 -------- (2,576) (1,245)
(Loss) attributable to: Owners
of the parent (2,576) (1,245)
Earnings per share expressed in
pence per share: Basic 10 (1.11) (0.57)
Diluted (0.85) (0.44)
Earnings per share from continuing
operations Basic (1.11) (0.57)
Diluted (0.85) (0.44)
The notes form part of these financial statements.
Continuing operations 2021 2020
Notes GBP'000 GBP'000
Restated
Revenue - -
Other operating income 5 22 30
Administrative expenses (2,782) (220)
-------- (2,760) * (190)
Operating (loss)
Finance costs 8
(612) (366)
(Loss) before income tax 7 -------- (3,372) * (556)
Income tax
- -
(Loss) for the year 9 -------- (3,372) * (556)
2021 2020
GBP'000 GBP'000
Restated
(Loss) for the year (2,576) (1,245)
Exchange losses arising on translation
of foreign operations (13) (89)
--------
Total comprehensive income for the year -------- (2,589) (1,334)
Total comprehensive income attributable
to: Owners of the parent (2,589) (1,334)
2021 2020
GBP'000 GBP'000
Restated
(Loss) for the year (3,372) (556)
Exchange losses arising on translation - -
of foreign operations
-------- (3,372)
Total comprehensive income for the year * (556)
Assets 2021 2020
Notes GBP'000 GBP'000
Restated
Current assets
Trade and other receivables 16 117 310
209 91
---------- ----------
Cash and cash equivalents 326 401
Non-Current assets 17 ---------- ----------
Investments 12 - 424
Property, plant and equipment 13 27 313
Right-of-use assets 14 41 311
- -
---------- * 1,048
68
Intangible assets ----------
Total assets Equity 15 394 * 1,449
Shareholders' equity
Called up share capital 18 11,232 11,218
Share premium 19 3,540 3,146
Other reserves 19 15,384 15,384
Convertible debenture 19 4,692 5,145
Translation reserve 19 (212) (199)
(39,820)
(41,943) * (5,126)
----------
Retained earnings (7,307)
Total equity Liabilities 19 ---------- ----------
Non-current liabilities
Lease liabilities 14 10 183
Financial liabilities 21 3,003 2,551
-
813 * 2,734
----------
Provisions 3,826
Current liabilities 26 ---------- ----------
Trade and other payables 20 3,315 3,408
Lease liabilities 14 37 208
225
* 3,841
523
----------
3,875 * 6,575
----------
Financial liabilities 7,701
Total liabilities 21 ---------- ----------
Total equity and liabilities 394 1,449
The financial statements were approved by the Board of Directors
on 2022 and were signed on its behalf by:
..............................................
..............................................
B Pettitt - Director M J L d'Hombres - Director
Assets 2021 2020
Notes GBP'000 GBP'000
Restated
Current assets
Trade and other receivables 16 78 763
193 44
---------- ----------
Cash and cash equivalents 271 807
Non-Current assets 17 ---------- ----------
Investments 12 - 627
16 20
---------- ----------
16 647
Property, plant and equipment 13 ---------- ----------
287 1,454
Total assets ---------- ----------
Equity
Shareholders' equity
Called up share capital 18 11,232 11,218
Share premium 19 3,540 3,146
Other reserves 19 30,938 30,938
Convertible debenture 19 4,692 5,145
(52,320)
(55,239) * (1,873)
Retained earnings ----------
(4,837)
Total equity 19 ---------- ----------
Liabilities
Non-current liabilities
Financial liabilities 21 3,003 2,551
-
813 * 2,551
----------
3,816
Provisions 26 ---------- ----------
Current liabilities
Trade and other payables 20 914 551
394 225
---------- ----------
1,308 776
Financial liabilities 21 ---------- ----------
5,124 3,327
Total liabilities ---------- ----------
Total equity and liabilities 287 1,454
The financial statements were approved by the Board of Directors
on 2022 and were signed on its behalf by:
....................................
....................................
B Pettitt - Director M J L d'Hombres - Director
Called up Retained Share
Share capital earnings premium
GBP'000 GBP'000 GBP000
Restated
Balance at 1 January 2020 11,218 (38,784) 3,146
Changes in equity
Issue of share capital - - -
Total comprehensive income - (1,245) -
Derecognition of conversion rights - - -
on loans
Value of conversion rights on - 209 -
convertible loans * 11,218 ---------- * 3,146
(39,820)
Balance at 31 December 2020 ----------
---------- ----------
Changes in equity
Issue of share capital 14 - 394
Total comprehensive income - (2,576) -
Derecognition of conversion rights - - -
on loans
Value of conversion rights on - 453 -
convertible loans ---------- ---------- ----------
11,232 (41,943) 3,540
Balance at 31 December 2021 ---------- ---------- ----------
Translation Other Convertible Total
reserves reserves debenture equity
GBP'000 GBP'000 GBP'000 GBP'000
Restated Restated Restated
Balance at 1 January 2020 (110) 15,384 5,354 (3,792)
Changes in equity
Issue of share capital - - - -
Total comprehensive income (89) - - (1,334)
Derecognition of conversion rights
on loans - - (5,354) (5,354)
Value of conversion rights on
convertible loans - - 5,145 5,354
---------- ---------- ---------- ----------
Balance at 31 December 2020 (199) 15,384 5,145 (5,126)
---------- ---------- ---------- ----------
Changes in equity
Issue of share capital - - - 408
Total comprehensive income (13) - - (2,589)
Derecognition of conversion rights
on loans - - (5,145) (5,145)
Value of conversion rights on
convertible loans - - 4,692 5,145
---------- ---------- ---------- ----------
Balance at 31 December 2021 (212) 15,384 4,692 (7,307)
Called up Retained Share
Share capital earnings premium
GBP'000 GBP'000 GBP000
Restated
Balance at 1 January 2020 11,218 (51,973) 3,146
Changes in equity
Issue of share capital - - -
Total comprehensive income - (556) -
Derecognition of conversion rights - - -
on loans
Value of conversion rights on - 209 -
convertible loans * 11,218 ---------- * 3,146
(52,320)
Balance at 31 December 2020 ----------
---------- ----------
Changes in equity
Issue of share capital 14 - 394
Total comprehensive income - (3,372) -
Derecognition of conversion rights - - -
on loans
Value of conversion rights on - 453 -
convertible loans ---------- ---------- ----------
11,232 (55,239) 3,540
Balance at 31 December 2021 ---------- ---------- ----------
Other reserves Convertible Total equity
GBP'000 debenture GBP'000
GBP'000 Restated
Restated
Balance at 1 January 2020 30,938 5,354 (1,317)
Changes in equity
Issue of share capital - - -
Total comprehensive income - - (556)
Derecognition of conversion rights
on loans - (5,354) (5,354)
Value of conversion rights on - 5,145 5,354
convertible loans * 30,938 * 5,145 * (1,873)
Balance at 31 December 2020
---------- ---------- ----------
Changes in equity
Issue of share capital - - 408
Total comprehensive income - - (3,372)
Derecognition of conversion rights
on loans - (5,145) (5,145)
Value of conversion rights on
convertible loans - 4,692 5,145
---------- ---------- ----------
Balance at 31 December 2021 30,938 4,692 (4,837)
2021 2020
Notes GBP'000 GBP'000
Restated
Cash flows from operating activities
(Loss) before income tax (2,576) (1,125)
Investment impairment provision 486 -
Depreciation of property, plant and equipment 6 4
Loss of sale of property, plant and equipment 2,711 121
Reverse impairment of property, plant and
equipment (3,048) (167)
Impairment of property, plant and equipment - 207
Amortisation of right-of-use assets 33 202
Impairment of intangible assets - -
Foreign exchange adjustments (4) 9
Finance expense 704 282
Finance income (1) (1)
-------- (1,689) * (468)
Decrease / (Increase) in trade and other
receivables 212 (187)
Decrease in inventories - 39
(Decrease) / increase in trade and other 592 453
payables Net cash from operating activities -------- * (163)
(885)
--------
--------
Cash flows from investing activities
Purchase of fixed asset investments (62) (424)
Purchase of property, plant and equipment (13) (65)
Proceeds from sale of property, plant and
equipment 867 470
1 1
Interest received on loans -------- --------
793 (18)
Net cash from investing activities -------- --------
Cash flows from financing activities
Issue of ordinary shares 408 -
Proceeds from new loans issued 401 162
Repayment of loans and borrowings (3) -
Interest paid on loans and borrowings (247) (250)
Principal paid on lease liabilities (345) (219)
Interest paid on lease liabilities (4) (32)
Amount withdrawn by directors Net cash - (38)
from financing activities -------- * (377)
210
--------
--------
(Decrease) / increase in cash and cash
equivalents 118 (558)
Cash and cash equivalents at beginning
of year 1 91 649
Cash and cash equivalents at end of year -------- --------
1 209 91
2021 2020
Notes GBP'000 GBP'000
Restated
Cash flows from operating activities
(Loss) before income tax (3,372) (347)
Impairment provision 689 -
Foreign exchange adjustment 11 -
Finance cost 612 157
Depreciation 4 -
-------- (2,056) * (190)
Decrease / (Increase) in trade and other
receivables 703 (236)
331
1,157 --------
Increase in trade and other payables Net -------- (196) (95)
cash from operating activities -------- --------
Cash flows from investing activities
Purchase of fixed asset investments (62) (424)
Purchase of property, plant and equipment - (20)
Net cash from investing activities -------- * (444)
(62)
--------
--------
Cash flows from financing activities 408 -
Issue of ordinary shares
Proceeds from new loans issued 160 138
Repayment of loans and borrowings (3) -
Interest paid on loans and borrowings (159) (158)
Amount withdrawn by directors - (33)
1 -
-------- --------
Amount introduced by directors Net cash 407 (53)
from financing activities -------- --------
Increase / (decrease) in cash and cash
equivalents 149 (592)
Cash and cash equivalents at beginning
of year 1 44 636
Cash and cash equivalents at end of year -------- --------
1 193 44
1. Cash and cash equivalents
The amounts disclosed on the Cash Flow Statements in respect of
cash and cash equivalents are in respect of these Balance Sheet
amounts:
Group Company
Year ended 31 December
2021
31/12/21 01/01/21 31/12/21 01/01/21
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 209 91 193 44
Year ended 31 December
2020 31/12/20 01/01/20 31/12/20 01/01/20
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 91 649 44 636
For the year ended 31 December 2021
1. Statutory Information
Ross Group Plc is a public company, limited by shares,
registered in England and Wales. The company's registered number
and registered office address can be found on the General
Information page. The subsidiary, Ross Diversified Trading Limited,
is a private company limited by shares and registered in England
and Wales. The subsidiary, Ross Group Plc Inc, is a close
corporation, limited by shares and registered in USA. The
subsidiary, Archipelago Aquaculture Group LLC, is a limited
liability company registered in USA.
The following companies are all subsidiaries of Archipelago
Aquaculture Group LLC.
The subsidiary, Mari Signum Limited, is a company limited by
shares and registered in USA. The subsidiary Mari Signum
Mid-Atlantic LLC, is a limited liability company registered in USA.
The subsidiary Mari Signum Dragon Drying - MS LLC, is a limited
liability company registered in USA. The subsidiary Prometheus
Progeniture Genetics Technologies Limited LLC, is a limited
liability company registered in USA.
2. Accounting Policies Basis of preparation
The consolidated financial statements of Ross Group Plc have
been prepared in accordance with International Financial Reporting
Statements (IFRS) and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) as adopted by the UK and the
Republic of Ireland and with the Companies Act 2006 as applicable
to companies reporting under IFRS. The financial statements have
been prepared on a historical cost basis and on a going concern
basis.
Items included in the financial statements of each of the
group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
British Pounds (GBP), which is Ross Group Plc's functional and
presentation currency. Amounts are rounded to the nearest
thousand.
In preparing the financial statements for the current period,
the group has adopted the following new IFRS's, amendments to
IFRS's and IFRS Interpretations Committee (IFRIC) Interpretations.
These standards do not have a significant impact on the results or
net assets of the group.
IFRS 7 (amended) Financial Instruments: Disclosures IFRS 9 (amended) Financial Instruments
IFRS 16 (amended) Leases
New standards, amendments and interpretations that are not
effective for the year ended 31 December 2021
On the date of approval of these financial statements, the
following accounting standards have been issued by the
International Accounting Standards Board but were not yet
effective:
2. Accounting policies - continued
New standards and amendments which are not effective for the
current year and have been endorsed by the UK and the Republic of
Ireland.
-- Amendments to IAS 1 Presentation of Financial Statements
(Effective for annual reporting periods beginning on or after 1
January 2023)
-- Amendment to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors (Effective for annual reporting periods
beginning on or after 1 January 2023)
-- Amendment to IAS 12 Income Taxes (Effective for annual
reporting periods beginning on or after 1 January 2023)
-- Amendment to IAS 16 Property, Plant and Equipment (Effective
for annual reporting period beginning on or after 1 January
2022)
-- Amendment to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets (Effective for annual reporting periods beginning
on or after 1 January 2022)
-- Amendment to IFRS 3 Business Combinations (Effective for
annual reporting period beginning on or after 1 January 2022)
-- IFRS 17 Insurance Contracts (Effective for annual reporting
periods beginning on or after 1 January 2023)
The Group is in the process of assessing the impact of new and
revised standards but does not expect that the application of the
new standards will have a significant impact on the Group's
financial statements.
Going concern
The Group's business activities, together with the factors
likely to affect the future performance and position are set out in
the Strategic Report on pages 6 to 11.
As described in the Business Review on pages 6 to 7 the Group
has restructured its Chitin operations in favour of entering into
an agreement with 525 Solutions who have undertaken a controlling
shareholding in RGP 525 - with the Group holding a balance 19.9%
shareholding in RGP525 - in order to continue to explore
opportunities to mass produce Chitin in a way never before
undertaken and, given this, there is undoubtably an uncertainty as
to how long it will take to achieve these aims and generate income.
Although this uncertainty exists, the Group are working with such
experts in this field who are also integrally involved in this
process and are therefore confident in the possibility of its long
term success. The Directors have instituted measures to preserve
cash by also restructuring the Group's finances and through the
RGP525 venture have ensured the limiting of any further cost
exposure, although if the proof of mass production is proven to be
successful, the Group will look to secure additional finance, if so
required. In this respect, our strategic approach and
implementation has ceased to create any cash flow issues flows from
this particular sector of the Group's business.
The Directors have now decided to re-focus their efforts on
pursuing other opportunities during these exceptional post COVID
times and have commenced trading within the wholly owned subsidiary
company, Ross Diversified Trading Limited, regarding supply chain
management contracts in the commodities sector. A number of other
such opportunities are also currently being explored in other
sectors and it is anticipated that a number of transactions in
these areas will conclude during the 2022 and/or 2023 financial
years with a view to increasing both revenue and profitability in
the group.
The Board is reasonably confident, notwithstanding the COVID
Pandemic and its subsequent ongoing economic effects, that there
will still be various unique and exciting opportunities ahead- both
in the short term and longer term - in order for its overall
business to be sustained and for potential growth to be considered
in the future.
.
2. Accounting policies - continued
The Group continues to negotiate the sale of certain assets and
the settlement of the current and contingent liabilities, following
the restructure of the AAG group and would hope to bring these to
conclusion in the next twelve to eighteen months. The Board have
prepared cash flow forecasts to December 2023 - including
sensitivity testing on these forecasts - and are reasonably
satisfied that once the temporary suspension of the shares is
released on filing of the financial statements the Group has
sufficient cash available to it from various sources and letters of
interest to invest in new share offerings in order to meet its
liabilities as they fall due for a period of at least twelve months
from the signing of the financial statements.
Based on the above, the Board believe that it remains
appropriate to prepare the financial statements on a going concern
basis. However, these circumstances represent a material
uncertainty that may cast doubt on the Company's and Group's
ability to continue as a going concern and therefore to continue
realising its assets and discharging its liabilities in the normal
course of business. The financial statements do not include any
adjustments that would result from this basis of preparation being
inappropriate.
Basis of consolidation
The group financial statements consolidate those of the company
and of its subsidiary undertakings drawn up to 31 December 2021.
Profits or losses on intra-group transactions and intra-group
balances are eliminated in full. On acquisition of a subsidiary,
all of the subsidiary's assets and liabilities which exist at the
date of acquisition are recorded at their fair values reflecting
their condition at that date.
The AAG group has not generated any revenue, the decision has
been made to restructure this group of companies, post new venture
in 2020 and continued in 2021.
Revenue recognition
Revenue is the total amount receivable by the group for goods
supplied and services provided to third parties, excluding VAT.
Revenue from the sale of goods is recognised when the
significant risks and rewards of ownership of the goods has
transferred to the buyer. This is usually when the goods have been
delivered to customers such that the risks and removal of ownership
have been transferred to them.
Revenue from contracts for the provision of professional
services is recognised by reference to the stage of completion,
when the stage of completion, costs incurred and costs to complete
can be estimated reliably. The stage of completion is calculated by
comparing costs incurred, mainly in relation to contractual hourly
staff rates and materials, as a proportion of total costs. Where
the outcome cannot be estimated reliably, revenue is recognised
only to the extent of the expenses recognised that are recoverable.
A level of judgement is exercised by management in this regard.
Goodwill
Goodwill represents the excess of the cost of a business
combination over the group's interest in the fair value of
identifiable assets, liabilities and contingent liabilities
acquired.
Goodwill is capitalised as an intangible asset with any
impairment in carrying value being charged to the consolidated
statement of comprehensive income. Where the fair value of
identifiable assets, liabilities and contingent liabilities exceed
the fair value of consideration paid, the excess is credited in
full to the consolidated statement of comprehensive income on the
acquisition date.
2. Accounting policies - continued Property, plant and equipment
Property plant and equipment are carried at cost or deemed cost
(fair value on acquisition through business combination) less
accumulated depreciation and impairment provisions.
Acquisition cost includes the purchase price plus other costs
related to acquisition, such as freight, postage, duties,
commissions, interest on investment loans recorded before the
tangible assets are capitalised or before they are put into
use.
The costs of expansion, modernisation, or improvements leading
to increased productivity, capacity or efficiency are capitalised.
Maintenance and repair expenses are expensed as incurred.
Where the carrying amount of an asset is greater than the amount
that it is estimated to be recoverable, it is written down to its
recoverable amount.
The Group depreciates its property, plant and equipment on a
straight line basis in order to write off the cost of each asset
less the estimated residual value over its estimated useful life as
follows:
Building 39 years straight line basis
Leasehold improvements Over the term of the lease Plant,
machinery and equipment
7 years straight line basis Right of use assets Over the term of
the lease
Financial instruments
Financial assets and liabilities are recognised on the statement
of financial position when the entity becomes party to the
contractual provisions of the instrument.
The Group's financial instruments consist primarily of cash and
cash equivalents, accounts receivable and accounts payable.
Financial liabilities
The group recognises financial debt when the group becomes a
party to the contractual provisions of the instruments.
Financial liabilities, including borrowings, trade payables and
other short-term monetary liabilities, are initially measured at
fair value net of transactions costs directly attributable to the
issuance of the financial liability. They are subsequently measured
at amortised cost using the effective interest method. For the
purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as
well as any interest or coupon payable while the liability is
outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
group's obligations are discharged, cancelled, or they expire.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents includes cash on hand and deposits held
at call with financial institutions.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective method,
less loss allowance.
2. Accounting policies - continued
Prepayments from clients
Payments received in advance on sale contracts for which no
revenue has been recognised yet are recorded as prepayments from
clients as the reporting date and carried under liabilities.
Investments and other financial assets
The group classifies its debt instruments in the category those
to be measured at amortised cost, which are assets held for
collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest. Financial
assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the
group has transferred substantially all the risks and rewards of
ownership.
Any gain or loss arising on derecognition is recognised directly
in profit or loss and presented in other gains/(losses) together
with foreign exchange gains and losses. Impairment losses are
presented as a separate line item in the income statement. The
group subsequently measures all equity investments at cost.
The group assesses, on a forward-looking basis, the expected
credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months
after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the
effective interest method.
Deferred taxation
A deferred tax asset is provided for if material, using the tax
rates estimated to arise when the timing differences reverse and is
accounted for to the extent that it is probable that an asset will
crystallise.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the statement of financial
position date.
Foreign currencies
Transactions denominated in foreign currencies are translated at
the exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the year end date. These transaction
differences are dealt with in the income statement. The financial
statements of foreign subsidiaries are translated at the rate of
exchange ruling at the year end date. The exchange differences
arising from the retranslation of the opening net investment in
subsidiaries are taken directly to reserves.
3. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Estimates and assumptions
- The determination of lease term for some lease contracts in
which the Group is a lessee, including whether the Group is
reasonably certain to exercise lessee options (see note 16)
- The determination of the incremental borrowing rate used to
measure the lease liabilities (see note 14)
- Depreciation of property, plant and equipment - Estimate of
the useful economic life (see note 13)
- The determination of the discount rate used to measure the
convertible loan debenture (see note 21)
- Impairment of property, plant and equipment - Estimate of the
net realisable value of property, plant and equipment held at the
year end (see note 13).
- Provision for legal expenses - Estimate of the expenses
payable (see note 26).
- Impairment of investments - Estimate of the profitability of
the companies (see note 12).
- Related party debtors - Estimate of the recoverability of the
debts (see note 16).
4. Segmental reporting
The directors feel that due to no revenue earned this year and
little trading during the previous year it is not possible to
identify any segments and as a result cannot follow IFRS 8. The
entire turnover in the previous year was generated within the UK
but delivered overseas through the rendering of services related to
the principal activity of the Group.
The loss for the year was incurred mainly by the parent company
itself, Ross Group Plc, based in the United Kingdom arising from
administration costs incurred in pursuit of new opportunities.
Whilst Ross Diversified Trading Limited had a small amount of trade
in 2020 this has reduced in 2021 but is anticipated to increase
again.
The main contributor to the loss incurred during the previous
year was the subsidiary group AAG LLC based in the USA. This group
was acquired in January 2019 and due to unforeseen circumstances
ceased to operate throughout 2020 being included in the prior year
financial statements as a discontinued operation. Expenses are
still being incurred for this group as operations are wound up
and/or transferred to its venture RGP-525.
The directors will review this assessment next year.
5. Other operating income
Group 2021 2020
GBP'000 GBP'000
Restated
Government grants receivable 1 135
4 -
-------- --------
Compensation receivable 5 135
Company 2021 2020
GBP'000 GBP'000
Restated
Other miscellaneous income 22 30
6. Employees and directors
Employee benefit expenses (including directors)
comprise: 2021 2020
GBP GBP
Wages and salaries - 129,923
Directors' remuneration 5 5
- 4,957
---------- ----------
Social security contributions and similar taxes 5 134,885
The average number of employees during the year
was as follows: 2021 2020
Number Number
Management 8 8
Production - -
- 3
-------- --------
Administrative 8 11
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements For the year
ended 31 December 2021
7. Loss before income tax
The loss before income tax is stated after
charging: 2021 2020
GBP'000 GBP'000
Restated
Auditor's remuneration 110 74
Impairment of investment 486 -
Amortisation of right-of-use assets 33 202
Depreciation of property, plant and equipment 6 4
Impairment of property, plant and equipment - 207
Reverse of impairment of property, plant and
equipment (3,048) (167)
Loss on disposal of property, plant and equipment 2,471 151
Loss on disposal of right-of-use assets 240 -
Associated undertaking loan write back (30) (25)
8. Finance income and expense
Group 2021 2020
GBP'000 GBP'000
Restated
Finance income
Interest income on financial assets 1 1
2021 2020
GBP'000 GBP'000
Restated
Finance expense
Interest expense on financial liabilities 166 185
Interest expense on lease liabilities 4 32
Interest expense on convertible debenture 81 65
453 209
-------- --------
Reserves adjustment of convertible debenture 704 491
Company 2021 2020
GBP'000 GBP'000
Restated
Finance expense
Interest expense on financial liabilities 78 92
Interest expense on convertible debenture 81 65
453 209
-------- --------
Reserves adjustment of convertible debenture 612 366
9. Income tax
No liability for UK corporation tax arose on ordinary activities
for the year ended 31 December 2021 or for the year ended 31
December 2020. The Group made a loss during the year.
Subject to the agreement with HM Revenue and Customs, the Group
has allowable trading losses at 31 December 2021 for set-off
against future trading profits of GBP13.78m (2020: GBP13.25m).
A deferred tax asset of GBP3.45m (2020: GBP2.46m) arises due to
the large losses described above. As the timing of when the Group
will be able to make use of these losses the asset has not been
recognised in the financial statements.
10. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares.
Reconciliations are set out below.
2021 Pre- share
Weighted
average number
Earnings of shares amount
GBP'000 pence
Basic EPS
Earnings attributable to ordinary
shareholders (2,576) 233,000,000 (1.11)
Effect of dilutive securities - 68,851,000 -
---------- ---------------- ----------
Diluted EPS
Adjusted earnings (2,576) 301,851,000 (0.85)
Pre- share
2020
Weighted
average number
Basic EPS Earnings of shares amount pence
GBP'000
Restated
Earnings attributable to ordinary
shareholders (1,245) 218,767,475 (0.57)
Effect of dilutive securities - 64,645,789 -
---------- ---------------- ----------
Diluted EPS
Adjusted earnings (1,245) 283,413,264 (0.44)
11. Subsidiaries
At 31 December 2021 the company held 100% of the allotted equity
share capital of the following:-
Country of
Name of subsidiary registration and Class of
share
undertaking incorporation capital held Nature of business
Ross Diversified Trading Limited England and Wales Ordinary
Supply chain management (formerly Sansui Electronics (UK)
Limited)
The costs of this fixed asset investment have been written off
over the previous periods.
Archipelago Aquaculture USA USA Ordinary Ordinary Intermediate holding
Group LLC Mari Signum USA Ordinary company Aquaculture
Limited USA Ordinary support
Mari Signum Dragon Drying-MS Drying Shrimp hulls
LLC
Aquaculture support
Mari Signum Mid-Atlantic
II LLC
Prometheus Progeniture
Genetics Technologies USA Ordinary Genetic enhancement
Limited LLC of
colossal shrimp for
higher quality chitin.
Ross Group Plc Inc USA Ordinary Supply chain management
12. Investments
Unlisted
Group investments
GBP'000
Cost
At 1 January 2021 424
Additions 62
Disposals -
--------
At 31 December 2021 486
--------
Provisions
At 1 January 2021 -
Impairments 486
Disposals -
--------
At 31 December 2021 486
Net book value
At 31 December 2021 -
At 31 December 2020 424
Unlisted
Company investments
GBP'000
Cost
At 1 January 2021 643
Additions 62
Disposals -
--------
At 31 December 2021 705
--------
Provisions
At 1 January 2021 16
Impairments 689
Disposals -
--------
At 31 December 2021 705
Net book value
At 31 December 2021 -
At 31 December 2020 627
13. Property, plant and equipment
Group Land and Plant and
buildings machinery Totals
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2021 293 20 313
Additions - 13 13
Disposals (293) (3,048) (3,341)
Impairment reversal - 3,048 3,048
-------- ---------- ----------
At 31 December 2021 - 33 33
Depreciation
At 1 January 2021 - - -
Charge for the year - 6 6
Disposals - - -
Impairment - - -
-------- ---------- ----------
At 31 December 2021 - 6 6
Net book value
At 31 December 2021 - 27 27
At 31 December 2020 293 20 313
In December 2019 the group ceased trading in its US
subsidiaries, Archipelago Aquaculture Group LLC, at the time the
plant and machinery operated by the group were impaired to nil as
the assets were no longer in use. During 2021 some of the equipment
was sold to third parties resulting in the impairment been
reversed.
Plant and
Company machinery Totals
GBP'000 GBP'000
Cost
At 1 January 2021 20 20
Additions - -
Disposals - -
---------- ----------
At 31 December 2021 20 20
Depreciation
At 1 January 2021 - -
Charge for the year 4 4
Disposals - -
---------- ----------
At 31 December 2021 4 4
Net book value
At 31 December 2021 16 16
At 31 December 2020 20 20
14. Leases
Right-of-use Assets
Land and
buildings Total
GBP'000 GBP'000
At 1 January 2021 311 311
Disposals (240) (240)
Amortisation (33) (33)
Foreign exchange movements 3 3
---------- ----------
At 31 December 2021 41 41
Lease liabilities Land and
buildings Total
GBP'000 GBP'000
At 1 January 2021 391 391
Interest expense 4 4
Lease payments (345) (345)
Foreign exchange movements (3) (3)
---------- ----------
At 31 December 2021 47 47
Current liabilities 37 37
Non Current liabilities 10 10
15. Intangible assets
Group Goodwill Total
GBP'000 GBP'000
Cost
At 1 January 2021 1,684 1,684
Additions - -
Foreign exchange - -
-------- ----------
At 31 December 2021 1,684 1,684
Amortisation
At 1 January 2021 1,684 1,684
Charge for the year - -
Impairment - -
Foreign exchange - -
-------- ----------
At 31 December 2021 1,684 1,684
Net Book Value
At 31 December 2021 - -
At 31 December 2020 - -
16. Trade and other receivables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Current: Restated Restated
Trade receivables - 83 - -
Amounts owed by group undertakings - - 1,374 1,310
Provision for impairment - - (1,374) (609)
Amounts owed by associated undertakings - 14 - -
Directors' current accounts 63 63 57 58
Taxation 19 - 19 -
VAT 2 - 2 -
Prepayments and accrued income 9 109 - 4
24 41 - -
-------- -------- -------- --------
Other debtors 117 310 78 763
17. Cash and cash equivalents
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Bank accounts 209 91 193 44
18. Called up share capital
Group and company 2021 2020
GBP'000 GBP'000
Authorised share capital:
195,000,000 Deferred shares of 4.8p each 9,360 9,360
67,052,306 Deferred shares of 4p each 2,682 2,682
300,000,000 Ordinary shares of 0.1p each 300 300
2,700,000,000 Deferred shares of 0.1p 2,700 2,700
each ---------- * 15,042
15,042
Allotted, called up and fully paid:
147,745,300 Deferred shares of 4.8p each 7,092 7,092
67,052,306 Deferred shares of 4p each 2,682 2,682
233,000,000 Ordinary shares of 0.1p each 233 218
1,225,628,316 Deferred shares of 0.1p 1,225 1,226
each ---------- * 11,218
11,232
The ordinary shares have both voting rights and the right to
dividends. The deferred shares have no rights to dividends and no
voting rights.
On a winding up the holders of the deferred shares of 4.8p each
shall be entitled to receive 1p per share after the repayment of
all amounts payable to the holders of any other class of share and
the payment of GBP5,000 on each ordinary share for the time being
in issue. On a winding up the holders of deferred shares of 0.1p
each shall be entitled to receive 0.1p per share after the payment
of GBP5,000 on each ordinary share for the time being in issue but
shall not confer the right to participate in any surplus.
The deferred shares of 4.8p each are redeemable at the company's
option any time at a price of 1p for each of the deferred shares
held by any member. The deferred shares of 0.1p each are
transferable at the company's option at any time to any person at a
total price of 1p for all of the shares held by the shareholder.
The deferred shares of 0.1p each are redeemable or cancellable at
the company's option at any time at a total price of 1p for all of
the shares held by a shareholder.
As the deferred shares rank behind the ordinary shares, they are
recognised as equity.
Managing capital
The Group considers only the allotted share capital set out
above to be the capital of the group. There are no financial
liabilities considered to be part of the capital, and no components
of equity excluded from it.
The Group's objectives when managing capital are:
- To safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders.
- To provide an adequate return to shareholders by pricing
products and services at an appropriate level taking into account
the level of risk.
The Group sets an amount of capital in proportion to risk. The
Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and risk
characteristics of the underlying assets.
The entity is not subject to any externally imposed capital
requirements.
Share Issue
On 15 September 2021 the company issued 13,126,051 ordinary
shares for a total consideration amounting to GBP377,883.
On 15 October 2021 the company issued 1,106,474 ordinary shares
for a total consideration amounting to GBP30,981.
19. Reserves
Group Retained Share Other Translation Convertible Totals
earnings premium reserves reserve debenture
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 (39,820) 3,146 15,384 (199) 5,145 (16,344)
Total comprehensive
income for the
year (2,576) - - (13) - (2,589)
Premium on issue
of share capital - 394 - - - 394
Debenture derecognition - - - - (5,145) (5,145)
Debenture re-
recognition 453 - - - 4,692 5,145
---------- -------- ---------- ---------- -------- ----------
At 31 December
2021 (41,943) 3,540 15,384 (212) 4,692 (18,539)
Company Retained Share Other Convertible Totals
earnings premium reserves debenture
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 (52,320) 3,146 30,938 5,145 (13,091)
Loss for the year (3,372) - - - (3,372)
Premium on issue
of share capital - 394 - - 394
Debenture derecognition - - - (5,145) (5,145)
Debenture re-
recognition 453 - - 4,692 5,145
---------- -------- ---------- -------- ----------
At 31 December
2021 (55,239) 3,540 30,938 4,692 (16,069)
Other reserves of the Group consist of a capital redemption
reserve of GBP1.92m (2020: GBP1.92m), a non-distributable capital
reserve of GBP3.33m (2020: GBP3.33m) and a special reserve of
GBP10.13m (2020: GBP10.13m).
Convertible debenture of the group consists of the equity
portion of convertible loan debentures of GBP4.692m (2020:
GBP5.145m).
Other reserves of the company consist of a capital redemption
reserve of GBP1.92m (2020: GBP1.92m) and a special reserve of
GBP29.02m (2020: GBP29.02m).
Convertible debenture of the company consists of the equity
portion of convertible loan debentures of GBP4.692m (2020:
GBP5.145m).
20. Trade and other payables
Group Company
Current: 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Restated Restated
Trade payables 293 461 58 100
Amounts owed to associated undertakings 2,335 2,226 - -
Amounts owed to group undertakings - - 561 268
Taxation 19 - 19 -
Other creditors 388 376 23 23
280 345 253 160
-------- -------- -------- --------
Accruals and deferred income 3,315 3,408 914 551
21. Financial liabilities - borrowings
Group Company
Current: 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Restated Restated
Debentures 346 222 346 222
Bank loans 48 3 48 3
129 - - -
-------- -------- -------- --------
Other loans 523 225 394 225
Non-current: Debentures 1,256 846 1,256 846
Bank loans - 47 - 47
1,747 1,658 1,747 1,658
-------- -------- -------- --------
Other loans 3,003 2,551 3,003 2,551
Terms and debt repayment schedule:
1 year
Group or less 2-5 years Totals
GBP'000 GBP'000 GBP'000
Debentures 346 1,256 1,602
Bank loans 48 - 48
Other loans 129 1,747 1,876
Company -------- -------- --------
523 3,003 3,526
1 year or
less
GBP'000
2-5 years Totals
GBP'000 GBP'000
Debentures 346 1,256 1,602
Bank loans 48 - 48
- 1,747 1,747
-------- -------- --------
Other loans 394 3,003 3,397
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements For the year
ended 31 December 2021
21. Financial liabilities - borrowings - continued Convertible loan debenture
The parent entity issued two convertible loan debenture (CLD) on
27 September 2018 for GBP4,010k and GBP2,062k at a coupon rate of
5%.
The notes are convertible into Ordinary shares of the parent
entity in three years after the date of issue.
At the Annual General Meeting on 31 December 2020 it was agreed
to extend the conversion period to 26 September 2022.
At the Annual General Meeting on 31 December 2021 it was agreed
to extend the conversion period to 26 September 2025.
At each of the dates of modification the value of the conversion
rights were derecognised in the financial statements and a new
valuation of the conversion rights was recognised.
The convertible loan debenture will give right to a percentage
of the issued share capital of the parent company at the date of
conversion. Each tranche of GBP1 Million CLD owed by the long- term
loan holders correspond to 4.925% of the issued share capital at
the date of conversion, resulting in a fixed percentage of the
issued share capital of the company to be allocated to the loan
holders regardless of the value/amount of the share capital of the
company.
2021 2020
GBP'000 GBP'000
Restated
Face value of notes issued 6,072 6,072
4,692 5,145
Value of conversion rights -------- --------
1,380 927
Interest expense * 222 141
Interest paid - -
-------- --------
Total liability element 1,602 1,068
*Interest is calculated by applying the effective interest rate
of 5% to the total loan note amount.
The initial fair value of the liability portion of the debenture
was determined using a market interest rate for an equivalent
non-convertible debenture at the issue date. The liability is
subsequently recognised on an amortised cost basis until
extinguished on conversion or maturity of the bonds.
22. Financial instruments
The Group uses financial instruments, comprising borrowings,
cash, liquid resources and various items, such as trade debtors,
trade creditors etc., that arise directly from its operations. The
main purpose of these financial instruments is to raise finance for
the group's operations.
The Group did not enter into derivatives transactions such as
interest rate swaps, forward rate agreements and forward foreign
currency contracts.
The Board of the Group considers that the interest rate risk,
liquidity risk and foreign currency risks arising from the Group
financial instruments are low. However, it reviews policies for
managing each of these risks and they are summarised below. These
policies have remained unchanged from previous periods.
It is and has been throughout the year under review, the group
policy that no trading in financial instruments shall be
undertaken.
Short-term debtors and creditors
Short-term debtors and creditors have been excluded from all the
following disclosures, other than the currency risk
disclosures.
Interest rate risk
The Group finances its operations through a mixture of
borrowings. It relies on loans from its shareholders to ensure
sufficient liquidity is available to meet foreseeable needs.
Maturity of financial liabilities
For the Group financial liabilities analysis at 31 December 2021
see note 21.
Currency risk
The Group does have foreign investments held in foreign
currencies.
The Group's exposure to translation and transaction exchange
risk is considered to be low by the board.
There was no income in the current year. 100% of the Group's
worldwide income in the prior year was invoiced in US Dollars and
has been settled in 2021. As a result the board does not consider
there is a need for Group policy to manage the currency risk as it
considers the risk to be low.
Fair values
The board considers that the fair values of the Group's
borrowings are equal to their book values.
23. Related party disclosures Group
The Group had the following balances with related parties at the
year end.
31/12/21 31/12/20
GBP'000 GBP'000
Receivables
Barry Pettitt 63 63
Barry Pettitt, the Chairman and Chief Executive Officer of Ross
Group Plc, owns Lynchwood Nominees (previously Prime Growth
Enterprises Limited). Lynchwood Nominees owns 12% of the ordinary
share capital in Ross Group Plc.
Company
At the year end Ross Group Plc had the following outstanding
balances with its related parties:
31/12/21 31/12/20
GBP'000 GBP'000
Receivables
Barry Pettitt 57 58
Mari Signum Dragon Drying - MS LLC - 14
Prometheus Progeniture Genetics Technologies
Limited LLC - 164
Ross Group Plc Inc - 523
- -
-------- --------
Ross Diversified 57 759
Payables
Mari Signum Mid-Atlantic II LLC 268 268
293 -
-------- --------
Mari Signum Dragon Drying - MS LLC 561 268
Ross Group Plc owns 100% of the capital of Ross Diversified
Trading Limited, Mari Signum Limited, Mari Signum Dragon Drying -
MS LLC, Mari Signum Mid-Atlantic II LLC, Prometheus Progeniture
Genetics Technologies Limited LLC and Ross Group Plc Inc.
Barry Pettitt, the Chairman and Chief Executive Officer of Ross
Group Plc, owns Lynchwood Nominees (previously Prime Growth
Enterprises Limited). Lynchwood Nominees owns 12% of the ordinary
share capital in Ross Group plc.
24. Ultimate controlling party
The directors consider that there is no ultimate controlling
party of Ross Group Plc and subsidiaries for 2021: however, Barry
Pettitt, by virtue of his position as CEO within the Group and his
12% shareholding, exerts a significant influence.
25. Reconciliation of movements in reserves
31/12/21 31/12/20
Group GBP'000 GBP'000
Restated
(Loss) for the financial year (2,589) (1,334) Issue of share
capital 408 -
Derecognition of conversion rights (5,145) (5,354)
Value of conversion rights 4,692 5,145
Reserves adjustment of convertible debenture 453 209
-------- --------
Net addition to reserves (2,181) (1,334)
Opening reserves (5,126) (3,792)
-------- --------
Closing reserves (7,307) (5,126)
31/12/21 31/12/20
Company GBP'000 GBP'000
Restated
(Loss) for the financial year (3,372) (556) Issue of share
capital 408 -
Derecognition of conversion rights (5,145) (5,354)
Value of conversion rights 4,692 5,145
Reserves adjustment of convertible debenture 453 209
-------- --------
Net addition to reserves (2,964) (556)
Opening reserves (1,873) (1,317)
-------- --------
Closing reserves (4,837) (1,873)
26. Provisions
31/12/21 31/12/20
GBP'000 GBP'000
Restated
Balance brought forward - -
Movement in the year 813 -
-------- --------
Balance carried forward 813 -
The group is involved as defendants in a multi-party lawsuit
brought in the United States of America, a provision has been
included in the financial statements to provide for any potential
claim and legal expenses.
27. Prior Year Adjustment
Group 2020 Audited Correction 2020 Restated
of prior year
Audited Impact Restated
GBP'000 GBP'000 GBP'000
Assets
Inventories - - -
Trade and other receivables 269 41 310
Cash and cash equivalents 91 - 91
Investments 424 - 424
Property, plant and equipment 355 (42) 313
Right of use assets 311 - 311
Intangible assets - - -
-------- -------- --------
Total Assets 1,450 (1) 1,449
Liabilities and equity
Lease liabilities (non-current) 183 - 183
Financial liabilities (non-current) 1,705 (846) 2,551
Trade and other payables 3,408 - 3,408
Lease liabilities (current) 208 - 208
Financial liabilities (current) 957 732 225
-------- -------- --------
Total Liabilities 6,461 (114) 6,575
Equity attributable to equity holders of parent
Shareholders' equity 11,218 - 11,218
Share premium 3,146 - 3,146
Others reserves 15,384 - 15,384
Convertible debentures 5,815 670 5,145
Translation reserve - (199) (199)
Retained earnings (40,574) 754 (39,820)
-------- -------- --------
Total Equity (5,011) 115 (5,126)
Total Liabilities and Equity 1,450 1,449
27. Prior Year Adjustment - continued
Company 2020 Audited Correction 2020 Restated
of prior year
Audited Impact Restated
GBP'000 GBP'000 GBP'000
Assets
Trade and other receivables 763 - 763
Cash and cash equivalents 44 - 44
Investments 627 - 627
Property, plant and equipment 20 - 20
-------- -------- --------
Total Assets 1,454 - 1,454
Liabilities and equity
Financial liabilities (non-current) 1,705 (846) 2,551
Trade and other payables 551 - 551
Financial liabilities (current) 957 732 225
-------- -------- --------
Total Liabilities 3,213 (114) 3,327
Equity attributable to equity holders of parent
Shareholders' equity 11,218 - 11,218
Share premium 3,146 - 3,146
Others reserves 30,938 - 30,938
Convertible debentures 5,815 670 5,145
Retained earnings (52,876) (556) (52,320)
-------- -------- --------
Total Equity (1,759) 114 (1,873)
Total Liabilities and Equity 1,454 1,454
27. Prior Year Adjustment - continued
Consolidated Income Statement 2020 Correction 2020 Restated
Audited of prior year
Audited Impact Restated
GBP'000 GBP'000 GBP'000
Revenue 43 - 43
Production expenses (39) - (39)
Other operating income 127 8 135
Administrative expenses (1,056) 162 (894)
Finance income 1 - 1
Finance expense (539) 48 (491)
Income tax - - -
-------- -------- --------
Loss for the year (1,463) 218 (1,245)
Total comprehensive income (1,399) 65 (1,334)
Earnings per share (basic) (0.67) 0.10 (0.57)
Earnings per share (diluted) (0.67) 0.23 (0.44)
Company Income Statement 2020 Audited Correction 2020 Restated
of prior year
Audited Impact Restated
GBP'000 GBP'000 GBP'000
Revenue - - -
Other operating income 30 - 30
Administrative expenses (220) - (220)
Finance expense (421) 55 (366)
Income tax - - -
-------- -------- --------
Loss for the year (611) 55 (556)
27. Prior Year Adjustment - continued
The Company and Group has restated the balance sheet, statement
of other comprehensive income, statement of financial position, and
statement of changes in equity. This is due errors in the
accounting treatment for convertible loan debentures, foreign
exchange translation and recognition of a Group asset which was not
owned by the Group. This has been considered as a prior year error
and has been corrected in accordance with IAS 8 (Accounting
Policies, Changes in Accounting Estimates and Errors). The overall
impact of this restatement is disclosed in the note above.
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FR PPUBPBUPPGAU
(END) Dow Jones Newswires
September 20, 2022 11:43 ET (15:43 GMT)
Ross (LSE:RGP)
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