Ross Group Plc & Subsidiaries

Company Information

For the year ended 31 December 2020

 

 

 

Ross Group Plc & Subsidiaries

Summary and Highlights

For the year ended 31 December 2020

 

	2020	2019	2018
	£ 000's	£ 000's	£ 000's
Revenues	43	-	60
Other income	128	13,981	10
Total costs	(1,634)	(17,578)	(320)
	────	────	────
(Loss) for the year	(1,463)	(3,597)	(250)
	════	════	════

 

 

 

 

Ross Group Plc & Subsidiaries

Chairman's Statement

For the year ended 31 December 2020

 

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 2020.

 

After many years of diligently researching and exploring specific strategic opportunities for the Group, primarily involving potential start-ups, mergers, acquisitions and/or business alliances, we were faced with the unprecedented occurrence of COVID which doubtless took everyone by surprise.

 

Nevertheless, we are pleased and proud to announce that your Board has responded as best as possible through taking diligent and prudent measures accordingly.

 

The collective Chitin-related business operations of Archipelago Aquaculture Group ("AAG") which was acquired and duly approved at our Annual General Meeting on 27th September 2018 has been subsequently restructured; resulting in an announced new venture, named RGP-525, with Professor Robin Roger's 525 Solutions LLC, that had previously sub-licensed their existing proprietary Ionic Liquid extraction invention. Whilst RGP-525 is continuing its research and development into mass production of Chitin, your Board is confident that this will become a worthy investment in the future.

 

In addition, the Group is still deploying our specialist supply chain management services on a project-by-project basis and we are also, particularly at present, evaluating several synergistic opportunities; although, to date, we have found most, if not all, to fall short of our rigorous Regulatory requirements and/or expectations. Notwithstanding this, we believe it is reasonable to anticipate that after the COVID pandemic has dissipated for there to be possibly more opportunities for us to be able to explore.

 

Since becoming Chairman, I have always been mindful - even while our Board of Directors were constantly busy with such exploratory and research work - that our operating businesses and Premium Listing Company status should always be capable of generating sufficient cashflow and/or profit from its traditional specialist supply chain management services, in order to primarily cover running costs of the business on a potentially worst-case scenario. Therefore, given this exceptionally unusual year we have had to rightfully incur such significant restructuring expenses - which are considered to be reasonable given our previous years of careful and conservative costings - the fact that, as a company, we have managed to proverbially weather the COVID storm is in itself a testimonial to our fortitude.

 

In this respect, our 2020 result of a £1.463m loss (2019: £3.597m loss) is both understandable and justifiable under the current COVID circumstances.

 

The revenues this year arose from a new start-up within one of our subsidiaries, government grants received to support the business through COVID both in the UK and the US as well as sales of excess and/or redundant assets. Costs too have decreased during 2020 - largely due to various restructuring expenses, charges and fees incurred last year not being repeated.

 

The Board and myself are satisfied with the progress that we have made over this last exceptional and challenging year in the identifying, initiating, and implementing of our emergency strategic plans.

 

We will continue to be prudent and focused in our various supply chain cost management controls and also our Board remains conservatively confident that we will be progressively focusing in on identifying and being able to put forward an appropriate refined strategy for the Board to consider and to hopefully be able to then recommend to our Shareholders at some stage in the foreseeable future.

 

Regarding the consequential subject of Brexit, given the departure from the EU, the terms and impact of the United Kingdom's exit are very difficult to predict; especially with the combined confluence of COVID. Regardless of the anticipated, terms and conditions of the United Kingdom's exit from the European Union, the result with regard to the political and economic outlook of the United Kingdom and the European Union, has largely not resulted in any major volatility on the exchange rate between the Pound Sterling ("£") and the Euro ("€") and more generally, between the £/Pound and other international currencies such as the US Dollar ("US$").

 

 

 

 

 

Ross Group Plc & Subsidiaries

Chairman's Statement

For the year ended 31 December 2020

 

 

 

Because the operating subsidiaries of RGP are presently based both in the United States and also with start-up business beginning to be generated outside of Europe, they are therefore predominately in a US$ currency environment and while this could lead to adverse consequences in terms of US$/£ exchange rates, our respective subsidiaries and/or joint ventures are not yet fully trading or selling products, and therefore we do not anticipate any present material negative impact and if necessary we intend to take specific measures to cover fluctuations of the currency market at this stage through, for example, the buying forward of currency in order to protect our profit margin wherever possible.

 

At this time, 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 towards achieving its aims during such an adverse period.

 

However, it is with enormous sadness to have to announce the untimely passing and loss of our Executive Director, Mr. Wade Lionel Hopkins, which upon reflection and in recognition of his esteemed extraordinary and excellent service to Ross Group Plc for over 30 years, he will be sadly missed by us all.

 

We welcome on to the Board, as Wade's successor, Mr. Philip Michael Fisher, who has also had a very long distinguished career and relationship with Ross Group Plc for over 35 years.

 

As always, I would also like to personally thank our extraordinary loyal shareholders for their continued support, patience and understanding.

 

We wish everyone the very best of health during these difficult and dangerous COVID times.

 

Sincerely,

 

 

Barry Richard Pettitt

Chairman & Group Managing Director

Ross Group Plc                               

Date: 29^th June 2021
 

Ross Group Plc & Subsidiaries

Group Strategic Report

For the year ended 31 December 2020

 

The existing management team that took over control of the Ross Group Plc approximately twelve years ago has been consistent in their prime objective to search for suitable 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 enter into more major mergers and acquisitions, whenever deemed appropriate, that in turn could create a sizeable, stable and potentially prosperous long term enlarged Group going forward.

 

 

Business Strategy: 2021 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, patented and licensed the Ionic Liquid extraction process that was exclusively sub-licensed by AAG and who together in 2018 they had respectively collaborated together to win the environmentally prestigious USA EPA Green Chemical Award. Given the constraints of COVID together with a more refined proactive strategy, it was the considered opinion of both Ross Group Plc and 525 that given 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 strategic new venture, namely RGP-525 in order to try to successfully attain such a World class, ground breaking achievement. Therefore, in 2021, it is envisioned that RGP-525 will be able to continue to further its attainment more as a separate business unit, thus enabling Ross Group Plc to continue to maintain its prime objective to search for suitable 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 2020

The Group as at 31 December 2020 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 contains 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 involved and integrated within the main Chitin-based business of AAG.

 

 

 

Ross Group Plc & Subsidiaries

Group Strategic Report

For the year ended 31 December 2020

 

Regarding the revenue performance in 2020, as outlined in the summary, pilot production trials did not reach a point to allow consideration of commercial mass production of Chitin. This was not wholly unexpected as this was - and still is - a new innovative technology; requiring further time to develop and with the constraints of COVID all operations were either suspended and/or shut-down respectively. 

 

Focus now is on 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.

  

During this period other respective resources of senior management are endeavouring to explore more macro merger and/or additional acquisition opportunities for the Group. The Directors are confident that, given its resolute structure and strategies, the underlying value of the Group will remain strong and that the Group will hopefully become successful in securing the strategic business that it is currently seeking.

 

Regarding the financial position at year-end 2020, the Board is pleased that the Group's statement of financial position shows a positive cash balance and that through our recent restructuring efforts total assets have been maintained at £1,450k compared to £2,175k in 2019.

 

It is also worth noting that, in prior years, one of the largest items in the Group's balance sheet was the long-term "Interest-bearing loans and borrowings" of £6.072m that has since been restructured into Convertible Loan Debentures, which were approved by the Board and Shareholders accordingly in 2019. Subsequently, the Group has managed to maintain a relatively healthy cashflow position.

 

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 - both short-term and longer-term - for its business to be sustained and also for potential growth to be considered in the future.

 

CoronaVirus Considerations

As at the reporting date, the Group held £91k in cash, total assets of £1,450k and net current liabilities of £4,573k, including amounts owed to associated undertakings of £2,226k.

 

The budget and cashflow set for 2021, given COVID Pandemic provisions, indicated that there were sufficient working capital reserves.

 

In the light of the ongoing COVID pandemic and the uncertainties this brings, the Directors have prepared cashflow forecasts to December 2022. These cashflows have been sensitized to assess the adequacy of cash available should further lockdowns impinge the activities of the group. The directors have also confirmed additional independent financial support should additional resources be required. 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 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.

 

To try to mitigate such risks, the Group has, wherever possible, been able to utilize any Government-related fiscal schemes available.

 

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.

 

 

 

Ross Group Plc & Subsidiaries

Group Strategic Report

For the year ended 31 December 2020

 

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 this opportunity to engage with our shareholders and other stakeholders in this way.

 

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 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 5&6, 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 2020, Business Outlook and Corona Virus pandemic considerations on pages 5&6 and Principal Risks and Uncertainties on page 7.

 

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 has subsequently left the business and is on a part-time retainer, during the current year more employees have joined the group as the previously dormant subsidiary, Ross Diversified Trading Limited has now become active. During the year including directors there was an average of 11 employees.  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, 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 5 to 8 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 12.

 

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 there is little or no impact the group has on its community or environment as detailed on page 8 of the Strategic Report.

 

Whilst the Group has sufficient cash reserves to meet its current needs as detailed in the Strategic Report on page 6, 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 in the event of not being able to achieve mass production of Chitin and/or incurring excessive expenses and/or overhead within a viable period of time. As this type of Chitin production has never been undertaken or achieved before, the Board is both fully aware of these risks and, as a result, has always endeavoured to managed its cash and cashflow.
 

Ross Group Plc & Subsidiaries

Group Strategic Report

For the year ended 31 December 2020

 

conservatively and prudently; ensuring that its exposure to any RGP-525 liabilities in this instance are primarily limited to its initial investment. In addition, the Board is equally endeavouring to ensure that funds are being made available to the Group, 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.

 

Breakdown by sex of directors

At 31 December 2020 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 activities are minimal.

 

The Chairman, Mr Barry Richard Pettitt who in the past has previously travelled extensively around the world, accompanied occasionally by other directors, has in fact not travelled internationally at all. Therefore, the total number of business miles the Ross directors travelled in 2020 is calculated at zero, which, per the conversion factor taken from the Carbonify.com, website amounts to zero 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. These were restructured accordingly and, as discussed elsewhere in this report, so that the commercial production of Chitin business of AAG - 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 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.

 

 

On behalf of the Board

 

 

 

……………………………………

Barry Richard Pettitt - Chairman

 

 

Date: 29^th June 2021
 

Ross Group Plc & Subsidiaries

Report of the Directors

For the year ended 31 December 2020

 

 

 

 

Ross Group Plc & Subsidiaries

Report of the Directors

For the year ended 31 December 2020

 

Newly Elected Directors

 

R E Tamraz (Non- Executive Director)

Roger Tamraz aged 81, was appointed to the Board in Dec 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 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.

 

 

 

Financial Instruments

Details of the financial instruments used by the group can be found in note 26 of the accounts.

 

Employee Involvement

During the year there was an average of 8 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 28,232,203 (12.91%).

 

The following directors also owned shares in Ross Group Plc during the year:

 

                                                                  No of Ordinary Shares         % of Issued Share Capital

 

Michael Simon                                                           624,302                               0.29%

Wade Hopkins deceased                                             92,962                               0.04%

Robin Rogers                                                          4,201,721                               1.92%

 

Substantial shareholdings

As at 31 December 2020 the following were registered as being materially interested in 4% or more of the company's issued share capital, or being a related shareholder.

 

	No of Ordinary Shares	% of Issued Share Capital
Keniworth Capital Limited	40,000,000	18.28%
Vidacos Nominees Limited	37,343,697	17.07%
Lynchwood Nominees Limited Des: 2006442	28,004,963	12.80%
Escalating Investments Limited	20,200,720	10.15%
BBHISL Nominees Limited	8,850,000	4.05%

 

Ross Group Plc & Subsidiaries

Report of the Directors

For the year ended 31 December 2020

 

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;

-      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 2021.

 

 

On behalf of the Board

 

 

 

…………………………..

M Simon

Secretary

Date: 29^th June 2021
 

Ross Group Plc & Subsidiaries

Corporate Governance Statement

For the year ended 31 December 2020

 

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.

 

 

Ross Group Plc & Subsidiaries

Corporate Governance Statement

For the year ended 31 December 2020

 

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 to written communication from its shareholders.  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.

 

 

 

 

Ross Group Plc & Subsidiaries

Corporate Governance Statement

For the year ended 31 December 2020

 

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 2020 comprised of the non-executive directors, Mr Simon and Professor Rogers, as well as Executive Directors Mr Mehta and Mr Hopkins.  The committee was chaired by Professor Rogers. 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: 29^th June 2021

 

 

Ross Group Plc & Subsidiaries

Directors' Remuneration Report

For the year ended 31 December 2020

 

Name	Position	Gross salary	Benefits	Notice Pay	Total Remuneration 2020	Total Remuneration 2019
B R Pettitt	Chairman/ Group Chief Executive	£1	Nil	Nil	£1	£1
M J Simon	Non-executive Director	£1	Nil	Nil	£1	£1
S C Mehta	Executive Director	£1	Nil	Nil	£1	£1
R E Tamraz	Executive Director	£1	Nil	Nil	£1	£1
W L Hopkins	Executive Director	£1	Nil	Nil	£1	£1
P M Fisher undertook W L Hopkins position upon his death on the same terms and conditions.		Nil	Nil	Nil	Nil	Nil

 

 

No director currently has a service contract with a notice period in excess of 12 months.  All executive directors have contracts that require a notice period of one month.  The contracts of the non-executive directors would normally be renewed for a period of one year.  All directors are presented for re-election by the members at the Annual General Meeting on a maximum cycle of three years.

 

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. 

 

 

 

Ross Group Plc & Subsidiaries

Corporate Social Responsibility (CSR)

For the year ended 31 December 2020

 

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.

 

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 end were suspended. Consequently, at the year-end 2019 there was only one employee left on the payroll of the AAG companies. During 2020 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.

 

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.

 

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.

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

 

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 2020 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 European Union.

 

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 2020 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 European Union; 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 European Union, 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 2020 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.

 

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the director's assessment of the entity's ability to continue to adopt the going concern basis of accounting includes:

-     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 December 2022, 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.

-     Obtaining appropriate comfort regarding financial support offered to the group, if required, and verifying the ability of relevant parties to provide this level of support.

-     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.

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Management override of controls Due to the nature of activities and operations, there is a risk that management override could occur in a number of areas, and in particular through journal entries being processed. The risk is that unauthorised journal entries could be entered.

In order to address this risk, we reviewed journal entries at the group and subsidiary levels, inquired of management the risks of fraud and the controls put in place to address management override and assessed the possibility of fraud arising as a result of errors identified during our audit.   The key observations with regards to these risks were that our testing of journal entries did not uncover any unauthorised entries. Due to the nature of testing conducted throughout the audit, and the low materiality level, there is limited scope for management to be able to process unauthorised journal entries.

 

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

Key Audit Matter	How our scope addressed this matter
Revenue recognition Revenue is recognised in accordance with the accounting policy set out in the notes to the consolidated financial statements (set out in note 2). The accounting policy contains a number of judgements with regards to revenue earned from contracts. This is considered to be a significant risk due to it often being contingent on external variables.	In order to address this risk, we performed substantive testing. We tested a sample of transactions from the point of origin, which were the original contracts, and traced these to the financial statements. There was revenue included for the current year relating to the subsidiary Ross Diversified Trading Limited (RDT), which started to trade in the year, and tested substantively per the above. However, it was found that there was no further trading income to be recognised in the year, which is consistent with understanding of the business. We assessed the appropriateness of the related disclosures on page 42 (note 4) of 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 customers and is materially appropriate or accurate.
Non-compliance with laws and regulations Ross Group Plc has a premium listing on the London Stock Exchange, and therefore needs to comply with a high level of regulation. Non-compliance with these laws and regulation could result in the parent company being de-listed from the London Stock Exchange, which would threaten the group and parent company's ability to continue. This is considered to be a significant risk.	In order to address this risk, testing was conducted to ensure that the parent company is up to date with relevant fees due to regulators, and that all returns are submitted in accordance with requirements and within the specified timescales. A detailed analysis of the relevant laws and regulations has been undertaken and discussed with management to outline the control processes to ensure compliance with these.   They key observation with regards to this risk was that the parent company is compliant with the requirements of the London Stock Exchange.

 

 

 

 

 

 

 

 

 

 

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

Key Audit Matter

How our scope addressed this matter

Going concern The group is considered by the board to be a going concern, and the accounts have been prepared as appropriate on this basis, and therefore this judgement should be assessed. As the majority of the group companies do not trade and generate revenues (except for RDT which started to trade again during the year), and the group is in a net liabilities position, there is a risk of material uncertainty relating to going concern, compounded with the current economic climate as a result of COVID-19.

In order to address this risk, a detailed review of going concern was conducted, which involved reviewing management's forecasts for the period up to December 2022, and challenging the assumptions made in preparation of this. Sensitivity analysis was conducted, and a 'worse' case scenario was assessed to consider the impact of this. Detailed discussions have been had with management on future plans, availability of financial support (including verification from a third party that this level of support can be given), review of board meeting minutes, and review of the appropriateness of the going concern disclosure in note 2. The application of materiality is not as applicable in this area since this relates to the overall appropriateness of applying the going concern principle.   The key observations with regards to this risk are that the group have prepared flexed forecasts, which consider various different events, and the financial impact of these over the period of review, and with the support available, it has been concluded that the director's used of the going concern basis of accounting is considered appropriate.

 

 

Our application of materiality

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: group and parent company materiality for the financial statements as a whole at £29,500 and £11,800 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 85% of this figure, which was calculated as £25,000 and £10,000 respectively. This is deemed by the audit team to be an appropriate level to identify material errors. The materiality at completion has been assessed and it was noted that the loss before tax had increased as a result of an audit adjustment, however it was concluded that materiality should not be amended. Materiality has influenced our workings not only for the key audit matters but also for the rest of the work performed during the audit. Anything below £1,400 and £500 was considered trivial from a group and parent company perspective respectively.

 

We agreed with the audit committee that we would report to them misstatements identified during our audit above £1,400 or £500 as appropriate as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

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.

 

 

 

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

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.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

 

 

Other matters which we are required to address

Following the recommendation of the audit committee, we were appointed by the board of directors on 20 May 2021 to audit the financial statements for the year ending 31 December 2020 and subsequent financial periods. The period of total uninterrupted engagement is 2 years, covering the years ending 31 December 2019 to 31 December 2020.

 

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.

 

 

 

 

 

 

 

Report of the Independent Auditors to the Members of Ross Group Plc & Subsidiaries

For the year ended 31 December 2020

 

 

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.

 

 

 

CBW Audit Limited

 

 

 

Daniel Howarth FCA (Senior Statutory Auditor)

for and on behalf of CBW Audit Limited

Chartered Accountants

Statutory Auditors

66 Prescot Street

London

E1 8NN

 

 

 

Dated: 29 June 2021

 

 

 

 

Ross Group Plc & Subsidiaries

Consolidated Income Statement

For the year ended 31 December 2020

 

                                                                                                             2020                        2019

                                                                               Notes                     £'000                       £'000

 

 

Revenue                                                                                                    43                              -

 

Production expenses                                                                                (39)                     (1,940)

                                                                                                           ────                      ────

Gross profit / (loss)                                                                                    4                      (1,940)

 

Other operating income                                               5                           127                     13,680

Administrative expenses                                                                       (1,056)                   (15,160)

                                                                                                           ────                      ────

Operating (loss)                                                                                     (925)                     (3,420)

 

Finance income                                                           8                              1                          301

Finance expense                                                         8                          (539)                        (478)

                                                                                                           ────                      ────

(Loss) before income tax                                            7                       (1,463)                     (3,597)

 

Income tax                                                                  9                               -                              -

                                                                                                           ────                      ────

(Loss) for the year                                                                               (1,463)                     (3,597)

                                                                                                           ════                      ════

 

 

 

Continuing operations loss for the year                                              (1,463)                        (836)

 

Discontinuing operations loss for the year                10                              -                      (2,761)

 

                                                                                                           ────                      ────

(Loss) for the year                                                                               (1,463)                     (3,597)

                                                                                                           ════                      ════

 

 

 

(Loss) attributable to:

Owners of the parent                                                                            (1,463)                     (3,597)

                                                                                                           ════                      ════

 

 

Earnings per share expressed in pence per share:        11

Basic                                                                                                   (0.67)                       (1.64)

Diluted                                                                                                 (0.67)                       (1.64)

                                                                                                           ════                      ════

 

 

 

Earnings per share from continuing operations             

Basic                                                                                                   (0.67)                       (0.38)

Diluted                                                                                                 (0.67)                       (0.38)

                                                                                                           ════                      ════

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Company Income Statement

For the year ended 31 December 2020

 

 

                                                                                                             2020                        2019

                                                                               Notes                     £'000                       £'000

 

Continuing operations

Revenue                                                                                                      -                              -

 

Other operating income                                               5                             30                              -

Administrative expenses                                                                         (220)                        (541)

                                                                                                           ────                      ────

Operating (loss)                                                                                     (190)                        (541)

 

Finance costs                                                             8                          (421)                        (358)

                                                                                                           ────                      ────

(Loss) before income tax                                            7                          (611)                        (899)

 

Income tax                                                                  9                               -                              -

                                                                                                           ────                      ────

(Loss) for the year                                                                                  (611)                        (899)

                                                                                                           ════                      ════

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2020

 

                                                                                                             2020                        2019

                                                                                                            £'000                       £'000

 

(Loss) for the year                                                                               (1,463)                     (3,597)

 

 

Exchange gains arising on translation of foreign operations                        64                          306

 

                                                                                                           ────                      ────

Total comprehensive income for the year                                           (1,399)                     (3,291)

                                                                                                           ════                      ════

 

 

Total comprehensive income attributable to:

Owners of the parent                                                                            (1,399)                     (3,291)

                                                                                                           ════                      ════

 

 

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Company Statement of Comprehensive Income

For the year ended 31 December 2020

 

                                                                                                             2020                        2019

                                                                                                            £'000                       £'000

 

(Loss) for the year                                                                                  (611)                        (899)

 

Other comprehensive income                                                                     -                              -

 

                                                                                                           ────                      ────

Total comprehensive income for the year                                              (611)                        (899)

                                                                                                           ════                      ════

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries (Registered Number: 00131902)

Consolidated Statement of Financial Position

31 December 2020

 

                                                                               Notes                     £'000                       £'000

Assets

Current assets

Inventories                                                                 18                              -                           39

Trade and other receivables                                        19                          269                           85

Cash and cash equivalents                                         20                            91                          649

                                                                                                         ─────                    ─────

                                                                                                               360                          773

                                                                                                         ─────                    ─────

Non-Current assets

Investments                                                               13                          424                              -

Property, plant and equipment                                    15                          355                          887

Right-of-use assets                                                    16                          311                          515

Intangible assets                                                        17                              -                              -

                                                                                                         ─────                    ─────

                                                                                                            1,090                       1,402

                                                                                                         ─────                    ─────

Total assets                                                                                         1,450                       2,175

                                                                                                         ═════                    ═════

Equity

Shareholders' equity

Called up share capital                                               21                      11,218                     11,218

Share premium                                                           22                       3,146                       3,146

Other reserves                                                            22                      15,384                     15,384

Convertible debenture                                                 22                       5,815                       5,489

Retained earnings                                                       22                     (40,574)                   (39,175)

                                                                                                         ─────                    ─────

Total equity                                                                                         (5,011)                     (3,938)

                                                                                                         ─────                    ─────

Liabilities

Non-current liabilities

Lease liabilities                                                           16                          183                          389

Financial liabilities                                                      24                       1,705                       1,891

                                                                                                         ─────                    ─────

                                                                                                            1,888                       2,280

                                                                                                         ─────                    ─────

Current liabilities

Trade and other payables                                           23                       3,408                       2,931

Lease liabilities                                                           16                          208                          206

Financial liabilities                                                      24                          957                          696

                                                                                                         ─────                    ─────

                                                                                                            4,573                       3,833

                                                                                                         ─────                    ─────

Total liabilities                                                                                     6,461                       6,113

                                                                                                         ─────                    ─────

Total equity and liabilities                                                                    1,450                       2,175

                                                                                                         ═════                    ═════

The financial statements were approved by the Board of Directors on 29^th June 2021 and were signed on its behalf by:

 

……………………………………….

B Pettitt - Director

 

……………………………………….

M Simon - Director

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries (Registered Number: 00131902)

Company Statement of Financial Position

31 December 2020

 

                                                                               Notes                     £'000                       £'000

 

Assets

Current assets

Trade and other receivables                                        19                          763                          494

Cash and cash equivalents                                         20                            44                          636

                                                                                                         ─────                    ─────

                                                                                                               807                       1,130

                                                                                                         ─────                    ─────

Non-Current assets

Investments                                                               13                          627                          203

Property, plant and equipment                                    15                            20                              -

                                                                                                         ─────                    ─────

                                                                                                               647                          203

                                                                                                         ─────                    ─────

                                                                                                                   

Total assets                                                                                         1,454                       1,333

                                                                                                         ─────                    ─────

 

Equity

Shareholders' equity

Called up share capital                                               21                      11,218                     11,218

Share premium                                                           22                       3,146                       3,146

Other reserves                                                            22                      30,938                     30,938

Convertible debenture                                                 22                       5,815                       5,489

Retained earnings                                                       22                     (52,876)                   (52,265)

                                                                                                         ─────                    ─────

Total equity                                                                                         (1,759)                     (1,474)

                                                                                                         ─────                    ─────

Liabilities

Non-current liabilities

Financial liabilities                                                      24                       1,705                       1,891

                                                                                                         ─────                    ─────

 

Current liabilities

Trade and other payables                                           23                          551                          220

Financial liabilities                                                      24                          957                          696

                                                                                                         ─────                    ─────

                                                                                                            1,508                          916

                                                                                                         ─────                    ─────

 

Total liabilities                                                                                     3,213                       2,807

                                                                                                         ─────                    ─────

 

Total equity and liabilities                                                                    1,454                       1,333

                                                                                                         ═════                    ═════

 

The financial statements were approved by the Board of Directors on 29th June 2021 and were signed on its behalf by:

 

 

………………………………

B Pettitt - Director

 

………………………………

M Simon- Director

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Consolidated Statement of Changes in Equity

For the year ended 31 December 2020

 

 

                                                                                Called up              Retained               Share

                                                                              Share capital           earnings            premium

                                                                                    £'000                    £'000                   £000

 

Balance at 1 January 2019                                           11,179                  (35,884)                 2,803

 

Changes in equity

Issue of share capital                                                         39                           -                     343

Total comprehensive income                                                 -                   (3,291)                        -

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2019                                      11,218                  (39,175)                 3,146          ───── ─────                                                                                 ─────

 

Changes in equity

Issue of share capital                                                            -                           -                         -

Total comprehensive income                                                 -                   (1,399)

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2020                                      11,218                  (40,574)                 3,146

                                                                                 ─────                 ─────               ─────

 

 

                                                                                   Other               Convertible             Total

                                                                                 reserves              debenture             equity

                                                                                    £'000                    £'000                  £'000

 

Balance at 1 January 2019                                           15,384                    5,127                 (1,391)

 

Changes in equity

Issue of share capital                                                            -                           -                     382

Total comprehensive income                                                 -                           -                 (3,291)

Value of conversion rights on convertible loans                     -                       362                     362

 

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2019                                      15,384                    5,489                 (3,938)

                                                                                 ─────                 ─────               ─────

 

Changes in equity

Issue of share capital                                                            -                           -                         -

Total comprehensive income                                                 -                           -                 (1,399)

Value of conversion rights on convertible loans                     -                       326                     326

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2020                                      15,384                    5,815                 (5,011)

                                                                                 ═════                 ═════               ═════

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Company Statement of Changes in Equity

For the year ended 31 December 2020

 

                                                                                Called up              Retained               Share

                                                                              Share capital           earnings            premium

                                                                                    £'000                    £'000                   £000

 

Balance at 1 January 2019                                           11,179                  (51,366)                 2,803

 

Changes in equity

Issue of share capital                                                         39                           -                     343

Total comprehensive income                                                 -                      (899)                        -

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2019                                      11,218                  (52,265)                 3,146

                                                                                 ─────                 ─────               ─────

 

Changes in equity

Issue of share capital                                                            -                           -                         -

Total comprehensive income                                                 -                      (611)                        -

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2020                                      11,218                  (52,876)                 3,146

                                                                                 ─────                 ─────               ─────

 

 

                                                                                   Other               Convertible             Total

                                                                                 reserves              debenture             equity

                                                                                    £'000                    £'000                  £'000

 

Balance at 1 January 2019                                           30,938                    5,127                 (1,319)

 

Changes in equity

Issue of share capital                                                            -                           -                     382

Total comprehensive income                                                 -                           -                    (899)

Value of conversion rights on convertible loans                     -                       362                     362

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2019                                      30,938                    5,489                 (1,474)

                                                                                 ─────                 ─────               ─────

 

Changes in equity

Issue of share capital                                                            -                           -                         -

Total comprehensive income                                                 -                           -                    (611)

Value of conversion rights on convertible loans                     -                       326                     326

                                                                                 ─────                 ─────               ─────

Balance at 31 December 2020                                      30,938                    5,815                 (1,759)

                                                                                 ═════                 ═════               ═════

 

 

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Consolidated Statement of Cash Flows

For the year ended 31 December 2020

 

                                                                                                             2020                        2019

                                                                               Notes                     £'000                       £'000

 

Cash flows from operating activities

(Loss) before income tax                                                                      (1,399)                     (3,291)

Investment impairment provision                                                                   -                           36

Depreciation of property, plant and equipment                                             4                          123

Loss of sale of property, plant and equipment                                            84                              -

Reverse impairment of property, plant and equipment                              (167)                             -

Impairment of property, plant and equipment                                            207                       5,170

Amortisation of right-of-use assets                                                           191                          189

Impairment of intangible assets                                                                    -                       1,684

Foreign exchange adjustments                                                                   28                              -

Finance expense                                                                                      539                          478

Finance income                                                                                          (1)                        (301)

                                                                                                           ────                      ────

                                                                                                              (514)                      4,088

(Increase) / decrease in trade and other receivables                                  (146)                          27

Decrease / (Increase) in inventories                                                             39                          (39)

Increase in trade and other payables                                                         453                          413

                                                                                                           ────                      ────

Net cash from operating activities                                                            (168)                      4,489

                                                                                                           ────                      ────

 

Cash flows from investing activities

Purchase of fixed asset investments                                                       (424)                         (36)

Purchase of property, plant and equipment                                                (66)                     (6,180)

Purchase right of use assets                                                                        -                         (704)

Purchase of intangible assets                                                                       -                      (1,684)

Proceeds from sale of property, plant and equipment                               470                              -

New loans issued                                                                                         -                          (14)

Interest received on loans                                                                            1                          301

                                                                                                           ────                      ────

Net cash from investing activities                                                              (19)                     (8,317)

                                                                                                           ────                      ────

 

Cash flows from financing activities

Issue of ordinary shares                                                                               -                          382

Proceeds from new loans issued                                                              425                       4,152

Repayment of loans and borrowings                                                             -                         (179)

Interest paid on loans and borrowings                                                      (509)                        (436)

Principal proceeds on lease liabilities                                                            -                          816

Principal paid on lease liabilities                                                              (219)                        (221)

Interest paid on lease liabilities                                                                  (30)                         (42)

Redemption of loans                                                                              (326)                        (362)

Transfer of value of conversion rights on convertible loans                        326                          362

Amount withdrawn by directors                                                                  (38)                         (15)

                                                                                                           ────                      ────

Net cash from financing activities                                                            (371)                      4,457

                                                                                                           ────                      ────

 

(Decrease) / increase in cash and cash equivalents                                (558)                         629

 

Cash and cash equivalents at beginning of year         1                           649                           20

                                                                                                           ────                      ────

Cash and cash equivalents at end of year                   1                             91                          649

                                                                                                           ════                      ════

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Company Statement of Cash Flows

For the year ended 31 December 2020

 

                                                                                                             2020                        2019

                                                                               Notes                     £'000                       £'000

 

Cash flows from operating activities

(Loss) before income tax                                                                        (611)                        (899)

Impairment provision                                                                                    -                           36

Finance cost                                                                                            421                          358

                                                                                                           ────                      ────

                                                                                                              (190)                        (505)

 

Increase in trade and other receivables                                                     (236)                        (324)

Increase / (decrease) in trade and other payables                                      331                          (96)

                                                                                                           ────                      ────

Net cash from operating activities                                                             (95)                        (925)

                                                                                                           ────                      ────

 

 

Cash flows from investing activities

Purchase of fixed asset investments                                                       (424)                        (239)

Purchase of property, plant and equipment                                                (20)                             -

                                                                                                           ────                      ────

Net cash from investing activities                                                            (444)                        (239)

                                                                                                           ────                      ────

 

 

Cash flows from financing activities

Issue of ordinary shares                                                                               -                          382

Proceeds from new loans issued                                                              401                       1,950

Repayment of loans and borrowings                                                             -                         (179)

Interest paid on loans and borrowings                                                      (421)                        (358)

Redemption of loans                                                                              (326)                        (362)

Transfer of value of conversion rights on convertible loans                        326                          362

Amount withdrawn by directors                                                                  (33)                         (15)

                                                                                                           ────                      ────

Net cash from financing activities                                                              (53)                      1,780

                                                                                                           ────                      ────

 

(Decrease) / increase in cash and cash equivalents                                (592)                         616

 

Cash and cash equivalents at beginning of year         1                           636                           20

                                                                                                           ────                      ────

Cash and cash equivalents at end of year                   1                             44                          636

                                                                                                           ════                      ════

 

 

 

 

 

The notes form part of these financial statements.
 

Ross Group Plc & Subsidiaries

Notes to Statement of Cash Flow

For the year ended 31 December 2020

 

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 2020

                                                               31/12/20       01/01/20              31/12/20       01/01/20

                                                                 £'000           £'000                  £'000           £'000

 

Cash and cash equivalents                              91              649                       44              636

                                                                ════          ════                 ════          ════

 

 

 

Year ended 31 December 2019

                                                               31/12/19       01/01/19              31/12/19       01/01/19

                                                                  £'000           £'000                  £'000           £'000

 

Cash and cash equivalents                            649               20                     636                20

                                                                ════          ════                 ════          ════

 

 

 

 

 

The notes form part of these financial statements.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

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.

 

IAS 1 (amended)                  Presentation of Financial Statements

IAS 8 (amended)                  Accounting Policies, Changes in Accounting Estimates and Errors

IFRS 3 (amended)                Business Combinations

IFRS 7 (amended)                Financial Instruments: Disclosures

IFRS 9 (amended)                Financial Instruments

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

2.       Accounting policies - continued

 

 

New standards, amendments and interpretations that are not effective for the year ended 31 December 2020

 

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:

 

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 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 7 Financial Instruments: Disclosures (Effective for annual reporting periods beginning on or after 1 January 2021)

·      Amendments to IFRS 9 Financial Instruments (Effective for annual reporting periods beginning on or after 1 January 2021)

·      Amendments to IFRS 16 Leases (Effective for annual reporting periods beginning on or after 1 January 2021)

·      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.

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

2.       Accounting policies - continued

 

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 5 to 8.

 

As described in the Business Review on pages 5 to 6, the group is currently continuing to explore the opportunities to mass produce Chitin in a way never before undertaken and given this, there is uncertainty as to how long it will take to achieve these aims and generate income. Although this uncertainty exists, the group are working with experts in this field who are heavily involved in the process and are confident of its success. The Directors have instituted measures to preserve cash by restructuring the group and also have entered into a new venture in order to limit any further cost exposure, although if proven to be successful, will look to secure additional finance if required. This strategic approach and implementation has ceased to create any material uncertainties over future trading results and cash flows from this sector of the business. This opportunity is now being explored through the new venture RGP - 525 in which Ross Group Plc holds a 19.9% interest thus limiting the groups exposure in this area.

 

The Directors have pursued other opportunities within the year and have commenced trading within the wholly owned subsidiary company, Ross Diversified Trading Limited, regarding supply chain management contracts in the minerals sector. A number of other such opportunities are currently being explored in the mining, minerals, oil and gas sectors and it is anticipated that a number of transactions in these areas will conclude during the 2021 financial year 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 short term and longer term - for its business to be sustained and also for potential growth to be considered in the future.

 

The group continue to negotiate the sale of certain assets and the settlement of the current liabilities following the restructure of the AAG group and would hope to bring these to conclusion in the next twelve months. The Board have prepared cash flow forecasts to December 2022, including sensitivity testing on these forecasts and are satisfied the group has sufficient cash available to it from various sources 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. The Board have also received confirmation of further independent financial support should additional cash be required to fulfil this commitment. 

 

The Board are confident that the preparation of the financial statements on a going concern basis is appropriate and there is no significant uncertainty over the group continuing as a going concern during this period.

 

Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2020.  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 and in 2021.

 

 

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

2.       Accounting policies - continued

 

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.

         

          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.

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

2.       Accounting policies - continued

 

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.

 

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.

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

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 16)

 

-  Impairment of Goodwill - Estimate of future cash flows and determination of the discount rate (see note 17).

 

- Depreciation of property, plant and equipment - Estimate of the useful economic life (see note 15)

 

-  The determination of the discount rate used to measure the convertible loan debenture (see note 25)

 

-  Impairment of inventories - Estimate of the net realisable value of inventory held at the year end (see note 18)

 

-  Impairment of property, plant and equipment - Estimate of the net realisable value of property, plant and equipment held at the year end (see note 15).

 

 

 

4.       Segmental reporting

 

The directors feel that due to little revenue earned this year and no 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 current year was generated within the UK but delivered overseas through the rendering of services related to the principal activity of the Group. 

 

The main contributor to the loss incurred during the 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 these financial statements as a discontinued operation, see note 10. Expenses are still being incurred for this group as operations are wound up and/or transferred to its new venture RGP-525

 

The remaining loss for the year was incurred by the parent company itself, Ross Group Plc, based in the United Kingdom.

 

The directors will review this assessment next year.

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

5.       Other operating income

 

          Group                                                                                                      2020            2019

                                                                                                                        £'000           £'000

 

          Government grants receivable                                                                     127                  -

          Deferred consideration written off                                                                   -         13,680

                                                                                                                       ────          ────

                                                                                                                          127         13,680

                                                                                                                       ════          ════

 

 

          Company                                                                                                 2020            2019

                                                                                                                        £'000           £'000

 

          Other miscellaneous income                                                                         30                  -

                                                                                                                       ════          ════

 

6.       Employees and directors

 

          Employee benefit expenses (including directors) comprise:

                                                                                                               2020            2019

                                                                                                                           £                 £  

          Wages and salaries                                                                              119,857        651,043

          Directors' remuneration                                                                                  5        440,241

          Social security contributions and similar taxes                                          4,706        131,131

                                                                                                                    ─────          ────

                                                                                                                    124,568     1,222,416

                                                                                                                    ═════          ════

                                                                                                              

The average number of employees during the year was as follows:

 

                                                                                                                      2020            2019

                                                                                                                   Number        Number

 

          Management                                                                                                 8                11

          Production                                                                                                     -                11

          Administrative                                                                                               3                 1

                                                                                                                       ────          ────

                                                                                                                            11                23

                                                                                                                       ════          ════

 

7.       Profit/(loss) before income tax

 

          The loss before income tax is stated after charging:

                                                                                                                         2020            2019

                                                                                                                        £'000           £'000

 

          Auditor's remuneration                                                                                 74                65

          Impairment of intangible assets                                                                       -           1,684

          Amortisation of right-of-use assets                                                             191              189

          Depreciation of property, plant and equipment                                                4              123

          Impairment of property, plant and equipment                                               207           5,170

          Reverse of impairment of property, plant and equipment                            (167)                 -

          Loss on disposal of property, plant and equipment                                       84                  -

          Associated undertaking loan write off                                                          (25)          6,141

                                                                                                                       ════          ════

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

8.       Finance income and expense

 

          Group

                                                                                                                         2020            2019

                                                                                                                        £'000           £'000

 

          Finance income

 

          Interest income on financial assets                                                                 1              301

                                                                                                                       ════          ════

         

 

                                                                                                                         2020            2019

                                                                                                                        £'000           £'000

 

          Finance expense

 

          Interest expense on financial liabilities                                                         180              123

          Interest expense on lease liabilities                                                               30                42

          Interest expense on convertible debenture                                                   329              313

                                                                                                                       ────          ────

                                                                                                                          539              478

                                                                                                                       ════          ════

 

 

          Company

         

                                                                                                                         2020            2019

                                                                                                                        £'000           £'000

 

          Finance expense

         

          Interest expense on financial liabilities                                                           92                45

          Interest expense on convertible debenture                                                   329              313

                                                                                                                       ────          ────

                                                                                                                          421              358

                                                                                                                       ════          ════

 

 

         

9.       Income tax

 

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2020 or for the year ended 31 December 2019.  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 2020 for set-off against future trading profits of £13.23m (2019: £12.56m).

 

A deferred tax asset of £2.51m (2019: £2.39m) 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.

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

10.     Discontinued operations

 

In December 2019 the group ceased trading in its US subsidiaries, Archipelago Aquaculture Group LLC.

 

The directors considered that as no revenue was generated by the AAG LLC Group during the prior financial year, it was decided to wind down the USA operations.

 

The loss of discontinued operations in the statement of comprehensive income are as follows

 

 

                                                                                                             2020                        2019

                                                                                                            £'000                       £'000

 

Results of discontinued operations

Revenue                                                                                             -                              -

Other operating income                                                                       -                     13,680

Expenses other than finance costs                                                      -                    (16,441)

Finance costs                                                                                     -                              -

Tax                                                                                                    -                              -

                                                                                                 ────                      ────

Loss for the year                                                                               -                      (2,761)

                                                                                                 ════                      ════

 

 

 

                                                                                                             2020                        2019

                                                                                                                  £                             £

 

Earnings per share from discontinued operations                             

Basic                                                                                                 -                       (1.26)

Diluted                                                                                               -                       (1.26)

                                                                                                           ════                      ════

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

11.     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.

                                                                                                              2020

                                                                                                          Weighted

                                                                                                            average

                                                                                                            number             Pre-share

                                                                                   Earnings               of                   amount

                                                                                      £'000               shares                pence

 

          Basic EPS

          Earnings attributable to ordinary shareholders         (1,463)          218,767,475                (0.67)

          Effect of dilutive securities                                            -                           -                       -

                                                                                    ─────             ───────             ─────

 

          Diluted EPS

          Adjusted earnings                                                 (1,463)          218,767,475                (0.67)

                                                                                   ═════             ═══════             ═════

 

 

                                                                                                              2019

                                                                                                           Weighted

                                                                                                            average

                                                                                                            number              Pre-share

                                                                                   Earnings                of                   amount

                                                                                      £'000               shares                 pence

 

          Basic EPS

          Earnings attributable to ordinary shareholders         (3,597)          218,767,475                (1.64)

          Effect of dilutive securities                                            -                           -                       -

                                                                                   ─────             ───────             ─────

 

          Diluted EPS

          Adjusted earnings                                                 (3,597)          218,767,475                (1.64)

                                                                                   ═════             ═══════             ═════

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

12.     Subsidiaries

 

At 31 December 2020 the company held 100% of the allotted equity share capital of the following:-

 

                                                    Country of

Name of subsidiary                      registration and      Class of share

undertaking                                  incorporation          capital held        Nature of business

 

Ross Diversified Trading Limited    England and Wales  Ordinary              Supply chain management

(formerly Sansui Electronics (UK)                                                           

Limited)                                                                                                

                           

 

The costs of this fixed asset investment have been written off over the previous periods.

 

 

Archipelago Aquaculture Group LLC    USA                   Ordinary              Intermediate holding company

 

Mari Signum Limited                           USA                   Ordinary              Aquaculture support

 

Mari Signum Dragon Drying-MS LLC   USA                   Ordinary              Drying Shrimp hulls

 

Mari Signum Mid-Atlantic II LLC           USA                   Ordinary              Aquaculture support

 

Prometheus Progeniture Genetics

Technologies Limited LLC                   USA                   Ordinary              Genetic enhancement of

colossal shrimp for higher quality chitin.

 

Ross Group Plc Inc                            USA                   Ordinary              Supply chain management

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

13.     Investments

 

                                                                                                                                 Unlisted

          Group                                                                                                        investments

                                                                                                                                      £'000

          Cost

          At 1 January 2020                                                                                                         -

          Additions                                                                                                                 424

          Disposals                                                                                                                    -

                                                                                                                                     ────

          At 31 December 2020                                                                                               424

                                                                                                                                     ────

          Provisions

          At 1 January 2020                                                                                                         -

          Impairments                                                                                                                 -

          Disposals                                                                                                                    -

                                                                                                                                     ────

          At 31 December 2020                                                                                                   -

                                                                                                                                     ════

 

          Net book value

 

          At 31 December 2020                                                                                               424

                                                                                                                                     ════

 

          At 31 December 2019                                                                                                   -

                                                                                                                                     ════

 

                                                                                                                                 Unlisted

          Company                                                                                                   investments

                                                                                                                                      £'000

          Cost

          At 1 January 2020                                                                                                     219

          Additions                                                                                                                 424

          Disposals                                                                                                                    -

                                                                                                                                     ────

          At 31 December 2020                                                                                               643

                                                                                                                                     ────

          Provisions

          At 1 January 2020                                                                                                      16

          Impairments                                                                                                                 -

          Disposals                                                                                                                    -

                                                                                                                                     ────

          At 31 December 2020                                                                                                 16

                                                                                                                                     ════

 

          Net book value

 

          At 31 December 2020                                                                                               627

                                                                                                                                     ════

 

          At 31 December 2019                                                                                               203

                                                                                                                                     ════

 

 

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

14.     Business combinations during the period

 

During the year Ross Group Plc invested £424k into RGP - 525 receiving in return 19.9 % of the shareholding in this company.

 

 

 

15.     Property, plant and equipment

 

Group	Land and buildings	Motor vehicles	Plant and machinery	Totals
	£'000	£'000	£'000	£'000
Cost
At 1 January 2020	500	-	387	887
Additions	-	46	20	66
Disposals	-	-	(612)	(612)
Foreign exchange	-	-	-	-
Impairment	(207)	-	225	18
	─────	────	─────	─────
At 31 December 2020	293	46	20	359
	═════	════	═════	═════
Depreciation
At 1 January 2020	-	-	-	-
Charge for the year	-	4	-	4
Disposals	-	-	(58)	(58)
Foreign exchange	-	-	-	-
Impairment	-	-	58	58
	─────	────	─────	─────
At 31 December 2020	-	4	-	4
	═════	════	═════	═════

 

 

Net Book Value
At 31 December 2020	293	42	20	355
	═════	════	═════	════

 

At 31 December 2019	500	-	387	887
	═════	════	═════	════

 

 

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 2020 some of the equipment was sold to third parties resulting in the impairment been reversed.  

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

15.     Property, plant and equipment

 

Company					Plant and machinery			Totals
					£'000			£'000
Cost
At 1 January 2020					-			-
Additions					20			20
Disposals					-			-
					─────			─────
At 31 December 2020					20			20
					═════			═════
Depreciation
At 1 January 2020					-			-
Charge for the year					-			-
Disposals					-			-
					─────			─────
At 31 December 2020					-			-
					═════			═════
Net Book Value
At 31 December 2020						20	20
						═════	════

 

At 31 December 2019			-	-
			═════	════

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

16.     Leases

 

          Right-of-use Assets

                                                                                                                    Land and

                                                                                                                    buildings       Total

                                                                                                                        £'000           £'000         

          At 1 January 2020                                                                                      515              515

          Additions                                                                                                       -                  -

          Amortisation                                                                                             (191)            (191)         Foreign exchange movements                                                                                                          (13)              (13)

                                                                                                                    ─────        ─────

          At 31 December 2020                                                                                 311              311

                                                                                                                    ═════        ═════

 

         

 

          Lease liabilities

                                                                                                                    Land and

                                                                                                                    buildings       Total

                                                                                                                        £'000           £'000         

          At 1 January 2020                                                                                      595              595          Additions          -          -                                                                                             Interest expense                30          30

          Lease payments                                                                                        (219)            (219)         Foreign exchange movements                                                                                                          (15)              (15)                     ─────          ─────

          At 31 December 2020                                                                                 391              391

                                                                                                                    ═════        ═════

 

 

         

          Current liabilities                                                                                         208              208

                                                                                                                    ═════        ═════

 

 

          Non Current liabilities                                                                                  183              183

                                                                                                                    ═════        ═════

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

17.     Intangible assets

 

Group				Goodwill	Total
				£'000	£'000
Cost
At 1 January 2020				1,684	1,684
Additions				-	-
Foreign exchange				-	-
				────	─────
At 31 December 2020				1,684	1,684
				════	═════
Amortisation
At 1 January 2020				1,684	1,684
Charge for the year				-	-
Impairment				-	-
Foreign exchange				-	-
				────	─────
At 31 December 2020				1,684	1,684
				════	═════

 

 

Net Book Value
At 31 December 2020				-	-
				════	═════

 

At 31 December 2019				-	-
				════	═════

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

18.     Inventories

                                                                                Group                          Company

                                                                       2020              2019            2020            2019

                                                                      £'000              £'000           £'000           £'000

 

Raw materials and consumables                             -                  39                  -                  -

                                                                     ════            ════          ════          ════

 

 

 

19.     Trade and other receivables

                                                                                Group                          Company

                                                                       2020              2019            2020            2019

                                                                      £'000              £'000           £'000           £'000

Current:

Trade receivables                                                 83                  13                  -                13

Amounts owed by group undertakings                    -                    -           1,310           1,140

Provision for impairment                                         -                    -             (609)            (706)

Amounts owed by associated undertakings          14                  14                  -                  -

Directors' current accounts                                   63                  25               58                25

VAT                                                                       -                  11                  -                11

Prepayments and accrued income                      109                  22                 4                11

                                                                     ────            ────          ────          ────

                                                                         269                  85              763              494

                                                                     ════            ════          ════          ════

 

 

20.     Cash and cash equivalents

                                                                                Group                          Company

                                                                       2020              2019            2020            2019

                                                                      £'000              £'000           £'000           £'000

 

Bank accounts                                                     91                649               44              636

                                                                     ════            ════          ════          ════

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

21.     Called up share capital

 

          Group and company                                                                               2020            2019

                                                                                                                        £'000           £'000          Authorised share capital:

 

          195,000,000 Deferred shares of 4.8p each                                                9,360           9,360

          67,052,306 Deferred shares of 4p each                                                    2,682           2,682

          300,000,000 Ordinary shares of 0.1p each                                                   300              300

          2,700,000,000 Deferred shares of 0.1p each                                             2,700           2,700

                                                                                                                    ─────        ─────

                                                                                                                      15,402         15,402

                                                                                                                    ═════        ═════

 

          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

          218,767,475 Ordinary shares of 0.1p each                                                   218              218

          1,225,628,316 Deferred shares of 0.1p each                                             1,226           1,226

                                                                                                                    ─────        ─────

                                                                                                                      11,218         11,218

                                                                                                                    ═════        ═════

 

The ordinary shares have both voting rights and the right to dividends.  The deferred shares have no rights to dividends and no voting rights.

 

On a winding up the holders of the deferred shares of 4.8p each shall be entitled to receive 1p per share after the repayment of all amounts payable to the holders of any other class of share and the payment of £5,000 on each ordinary share for the time being in issue.  On a winding up the holders of deferred shares of 0.1p each shall be entitled to receive 0.1p per share after the payment of £5,000 on each ordinary share for the time being in issue but shall not confer the right to participate in any surplus.

 

The deferred shares of 4.8p each are redeemable at the company's option any time at a price of 1p for each of the deferred shares held by any member.  The deferred shares of 0.1p each are transferable at the company's option at any time to any person at a total price of 1p for all of the shares held by the shareholder.  The deferred shares of 0.1p each are redeemable or cancellable at the company's option at any time at a total price of 1p for all of the shares held by a shareholder.

 

As the deferred shares rank behind the ordinary shares, they are recognised as equity.

 

Managing capital

The Group considers only the allotted share capital set out above to be the capital of the group.  There are no financial liabilities considered to be part of the capital, and no components of equity excluded from it.

 

The Group's objectives when managing capital are:

 

-    To safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

-    To provide an adequate return to shareholders by pricing products and services at an appropriate level taking into account the level of risk.

 

The Group sets an amount of capital in proportion to risk.  The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and risk characteristics of the underlying assets.

 

The entity is not subject to any externally imposed capital requirements.

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

22.     Reserves

Group	Retained    earnings	Share    premium	Other  reserves	Convertible  debenture	Totals
	£'000	£'000	£'000	£'000	£'000
At 1 January 2020	(39,175)	3,146	15,384	5,489	(15,156)
Total comprehensive income for the year	(1,399)	-	-	-	(1,399)
Premium on issue of share capital	-	-	-	-	-
Reserves transfer	-	-	-	326	326
	─────	────	─────	────	─────
At 31 December 2020	(40,574)	3,146	15,384	5,815	(16,229)
	═════	════	═════	════	═════
Company	Retained    earnings	Share    premium	Other  reserves	Convertible  debenture	Totals
	£'000	£'000	£'000	£'000	£'000
At 1 January 2020	(52,265)	3,146	30,938	5,489	(12,692)
Loss for the year	(611)	-	-	-	(611)
Premium on issue of share capital	-	-	-	-	0
Reserves transfer	-	-	-	326	326
	─────	────	─────	────	─────
At 31 December 2020	(52,876)	3,146	30,938	5,815	(12,977)
	═════	════	═════	════	═════

 

Other reserves of the Group consist of a capital redemption reserve of £1.92m (2019: £1.92m), a non-distributable capital reserve of £3.33m (2019: £3.33m) and a special reserve of £10.13m (2019: £10.13m).

 

Convertible debenture of the group consists of the equity portion of convertible loan debentures of £5.82m (2019: £5.49m).

 

Other reserves of the company consist of a capital redemption reserve of £1.92m (2019: £1.92m) and a special reserve of £29.02m (2019: £29.02m).

 

Convertible debenture of the company consists of the equity portion of convertible loan debentures of £5.82m (2019: £5.49m).

 

 

23.     Trade and other payables

                                                                                Group                          Company

                                                                       2020              2019            2020            2019

                                                                      £'000              £'000           £'000           £'000

Current:

Trade payables                                                  461                177              100                57

Amounts owed to associated undertakings       2,226             2,202                  -                  -

Amounts owed to group undertakings                     -                    -              268                  -

Other creditors                                                   376                402               23                23

Accruals and deferred income                            345                150              160              140

                                                                     ────            ────          ────          ────

                                                                      3,408             2,931              551              220

                                                                     ════            ════          ════          ════

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

24.     Financial liabilities - borrowings

                                                                                Group                          Company

                                                                       2020              2019            2020            2019

                                                                      £'000              £'000           £'000           £'000

Current:

Debentures                                                        954                696              954              696

Bank loans                                                            3                    -                 3                  -

                                                                     ────            ────          ────          ────

                                                                         957                696              957              696

                                                                     ════            ════          ════          ════

 

Non-current:

Debentures                                                            -                256                  -              256

Bank loans                                                          47                    -               47                  -

Other loans                                                     1,658             1,635           1,658           1,635

                                                                     ────            ────          ────          ────

                                                                      1,705             1,891           1,705           1,891

                                                                     ════            ════          ════          ════

 

Terms and debt repayment schedule:

 

Group

                                                                                           1 year

                                                                                         or less       2-5 years       Totals

                                                                                           £'000           £'000           £'000

 

Debentures                                                                             954                  -              954

Bank loans                                                                                 3               47                50

Other loans                                                                                 -           1,658           1,658

                                                                                          ────          ────          ────

                                                                                              957           1,705           2,662

                                                                                          ════          ════          ════

 

Company

                                                                                           1 year

                                                                                         or less       2-5 years       Totals

                                                                                           £'000           £'000           £'000

 

Debentures                                                                             954                  -              954

Bank loans                                                                                 3               47                50

Other loans                                                                                 -           1,658           1,658

                                                                                          ────          ────          ────

                                                                                              957           1,705           2,662

                                                                                          ════          ════          ════

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

25.     Financial liabilities - borrowings - continued

 

          Convertible loan debenture

The parent entity issued two convertible loan debenture (CLD) on 27 September 2018 for £4,010k and £2,062k at a coupon rate of 5%.

 

The notes are convertible into Ordinary shares of the parent entity in three years after the date of issue.  The convertible loan debenture will give right to a percentage of the issued share capital of parent company at the date of conversion.  Each tranche of £1 Million CLD owed by the long-term loan holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allocated to the loan holders regardless of the value/amount of the share capital of the company.

 

                                                                                                               2020            2019

                                                                                                              £'000           £'000

 

Face value of notes issued                                                                      6,072           6,072

Value of conversion rights                                                                       5,815           5,489

                                                                                                             ────          ────

                                                                                                                                        

Interest expense                                                                                         697              585

Interest payable                                                                                         257              367

                                                                                                             ────          ────

Total liability element                                                                               954              952

                                                                                                             ════          ════

 

Interest is calculated by applying the effective interest rate of 5% to the total loan note amount. The interest payable has been deferred for a year.

 

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.

 

 

26.     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.

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

26.     Financial instruments - continued

 

          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 2020 see note 24 and 25.

 

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.

 

100% of the Group's worldwide income in the current year was invoiced in Sterling.  There was no income in the prior year. 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.

 

 

27.     Related party disclosures

 

          Group

          The Group had the following balances with related parties at the year end.

 

                                                                                                                     31/12/20       31/12/19

                                                                                                                        £'000           £'000

 

          Receivables

          Barry Pettitt                                                                                                 63                25

                                                                                                                       ════          ════

         

 

Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc, owns Lynchwood Nominees (previously Prime Growth Enterprises Limited).  Lynchwood Nominees owns 13% of the ordinary share capital in Ross Group Plc.

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

27.     Related party disclosures - continued

 

          Company

 

          At the year end Ross Group Plc had the following outstanding balances with its related parties:

 

                                                                                                                     31/12/20       31/12/19

                                                                                                                        £'000           £'000

 

          Receivables

          Barry Pettitt                                                                                                 58                25

          Mari Signum Dragon Drying - MS LLC                                                          14                  -

          Prometheus Progeniture Genetics Technologies Limited LLC                        164                  -

          Ross Group Plc Inc                                                                                    523              434

          Ross Diversified                                                                                            -                  -

                                                                                                                       ────          ────

                                                                                                                          759              459

                                                                                                                       ════          ════

 

          Payables

          Mari Signum Mid-Atlantic II LLC                                                                   268                  -

                                                                                                                       ────          ────

                                                                                                                          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 13% of the ordinary share capital in Ross Group plc.

 

 

 

 

 

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

For the year ended 31 December 2020

 

 

 

28.     Ultimate controlling party

 

The directors consider that there is no ultimate controlling party of Ross Group Plc and subsidiaries for 2020: however, Barry Pettitt, by virtue of his position as CEO within the Group and his 13% shareholding, exerts a significant influence.

 

 

29.     Reconciliation of movements in reserves

                                                                                                                     31/12/20       31/12/19

          Group                                                                                                    £'000           £'000

 

          (Loss) for the financial year                                                                     (1,399)         (3,291)

          Value of conversion rights                                                                          326              362

          Issue of share capital                                                                                     -              382

                                                                                                                       ────          ────

                                                                                                                                                  

          Net addition to reserves                                                                          (1,073)         (2,547)

          Opening reserves                                                                                   (3,938)         (1,391)

                                                                                                                       ────          ────

          Closing reserves                                                                                    (5,011)         (3,938)

                                                                                                                       ════          ════

 

 

         

                                                                                                                      31/12/20       31/12/19

          Company                                                                                               £'000           £'000

 

          (Loss) for the financial year                                                                       (611)            (899)

          Value of conversion rights                                                                          326              362

          Issue of share capital                                                                                     -              382

                                                                                                                       ────          ────

                                                                                                                                                  

          Net addition to reserves                                                                            (285)            (155)

          Opening reserves                                                                                   (1,474)         (1,319)

                                                                                                                       ────          ────

          Closing reserves                                                                                    (1,759)         (1,474)

                                                                                                                       ════          ════