TIDMRGP
RNS Number : 5346D
Ross Group PLC
29 June 2021
Ross Group Plc & Subsidiaries
Annual Report and Financial Statements
For the year ended 31 December 2020
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LEI: 213800PIS2QRIKPZB546 ROSS GROUP PLC
Ross Group Plc & Subsidiaries
Consolidated Financial Statements
Contents
Page
Company Information 1
Summary and Highlights 2
Chairman's Statement 3
Group Strategic Report 5
Report of the Directors 9
Corporate Governance Statement 12
Directors' Remuneration Report 15
Corporate Social Responsibility 16
Report of the Independent Auditors 17
Consolidated Income Statement 25
Company Income Statement 26
Consolidated Statement of Comprehensive Income 27
Company Statement of Comprehensive Income 28
Consolidated Statement of Financial Position 29
Company Statement of Financial Position 30
Consolidated Statement of Changes in Equity 31
Company Statement of Changes in Equity 32
Consolidated Statement of Cash Flow 33
Company Statement of Cash Flow 34
Notes to the Statement of Cash Flow 35
Notes to the Consolidated Financial Statements 36
Ross Group Plc & Subsidiaries
Company Information
For the year ended 31 December 2020
Directors: B R Pettitt
M J Simon MA(Cantab) FCA FCCA
S C Mehta BSc (Hons)
R E Tamraz
P M Fisher
Secretary: M J Simon MA(Cantab) FCA FCCA
Registered Office: 71-75 Shelton Street
Covent Garden
London
WC2H 9JQ
Registered Number: 00131902 (England and Wales)
Auditors: CBW Audit Limited
Chartered Accountants
& Statutory Auditors
66 Prescot Street
London
E1 8NN
Ross Group Plc & Subsidiaries
Summary and Highlights
For the year ended 31 December 2020
As we had reported in our interim accounts (first half 2020)
Ross Group Plc ("RGP") was in the process of restructuring its
recent acquisition of four start-up businesses in January 2019 that
were wholly-owned subsidiaries within Archipelago Aquaculture Group
(AAG) and which had also been primarily subjected to the
consequential effects of the COVID Pandemic.
This is therefore the first RGP Annual Report that includes and
consolidates AAG's results given the above COVID circumstances.
As a result, there is a fundamental difference in the 2020
results in comparison to its previous year.
RGP has, for many years now, been operating based on a
specialist professional supply chain management model. The AAG
acquisition subsequently caused that model to be modified; in order
to include and integrate other more specialist services and
functions, such as research and development, ("R&D") proof of
production concepts, and alike, as well as to also then transition
at some point in the future into sales of product and/or turn key
projects, in this instance, of high quality Chitin.
For our fiscal year 2020, no services or sales of Chitin were
recorded - as the R&D and implementation of pioneering
production processes are still the continued focus and are
currently in progress; particularly now through a new venture,
namely, RGP-525.
Your Board of Directors have always anticipated and estimated
that it would take some time in order to get this new technology
into production and have provisioned for it accordingly; albeit in
the form of the new venture with the founder of 525 who had
previously sub-licensed their proprietary technology.
Throughout this post-acquisition and COVID pandemic period,
there have been considerable costs incurred during development of
the start-up AAG businesses and management has been extremely
diligent in ensuring that such initial and consequential costings
are commensurate with real-time performance and actual
achievements, especially given the ensuing effects and constraints
of COVID. Therefore, wherever possible and/or necessary, the
Group's specialist supply chain management experience has been
highly focused upon implementing strategic disciplines, procedures
and protocols in order to try to provide the best possible
performance over time; hence the consideration and approval by the
Board to the RGP-525 new venture.
Production and administration costs have been subsequently
subjected to specific strategic reorganization; which has resulted
in the further impairment and/or reduction of certain contingent,
capitalized and considerable pre-existing liabilities that the AAG
companies were incurring both in advance of any production and with
all the logistical labour constraints of COVID.
The resulting loss for the year was GBP1.463m (2019: GBP3.597m)
which duly reflects the respective restructuring, R&D, working
capital costs and expenses to date.
2020 2019 2018
GBP 000's GBP 000's GBP 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 GBP1.463m loss (2019:
GBP3.597m 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 ("GBP") and the Euro ("EUR") and more generally, between
the GBP/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$/GBP exchange rates, our respective
subsidiaries and/or joint ventures are not yet fully trading or
selling products, and therefore we do not anticipate any 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 Directors are pleased to present their strategic report of
the Group and the Company for the year ended 31 December 2020.
Background and History
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 GBP1,450k compared to
GBP2,175k 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 GBP6.072m 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 GBP91k in cash, total
assets of GBP1,450k and net current liabilities of GBP4,573k,
including amounts owed to associated undertakings of GBP2,226k.
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
The directors present their report with the financial statements
of the company and the group for the year ended 31 December
2020.
Dividends
No dividends will be distributed for the year ended 31 December
2020.
Events since the end of the year
Information relating to events since the end of the year is
given in the notes to the financial statements.
Directors
B R Pettitt (Chief Executive Officer)
Barry Richard Pettitt, aged 61, was appointed to the board on 22
December 2008 as the CEO of the group and elected as its Chairman
and CEO on 28 April 2009. He has more than 30 years' experience
within the consumer electronics and supply chain management
industries, during which time he successfully started a specialist
supply chain management services company. ISO International
(Holdings) Ltd, which was subsequently purchased by a Hong Kong
Public Company for HK$ 155,000,000 in 2003. In addition, he has
managed a number of Public Company divisions (in the capacities of
President and Managing Director) and successfully relisted a Hong
Kong Public Company, Vision Tech Ltd, as its CEO in 2007. He has
resided in Hong Kong since 1989. Prior to that, he was the joint
Managing Director of Ross Consumer International Ltd and a main
board director of the Ross Group (formerly Ross Consumer Electronic
Plc) in 1987 after which he has continued to be a shareholder in
Ross Group for the last 33 years.
M J Simon (Senior Non-Executive Director)
Michael Jonathan Simon MA(Cantab) FCA FCCA, aged 61, was duly
reappointed to the board in April 2009. He is an economics graduate
from the University of Cambridge and a fellow of the Institute of
Chartered Accountants in England and Wales and also of the
Association of Chartered Certified Accountants. Mr Simon is in a
partnership in public practice and a non-executive director of
several other companies. He has maintained his independence by
submitting himself for annual re-election at the Group's Annual
General Meeting and is currently Chairman of the Audit and
Remuneration sub-committees whilst also offering to serve for
annual re-election by rotation.
.
S C Mehta (Executive Director)
Shashi Mehta, aged 63, was appointed on the board on 22 December
2009. He holds a BSc (Hons) in Manufacturing and has had a
distinguished career in a variety of industrial and manufacturing
trouble-shooting roles. He brings a wealth of experience and
expertise to the Group. He spent many years working for the Ford
Motor Company, and was Operations Manager in Ross Consumer
Electronics during the 1980's.
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 % of Issued
Ordinary Shares 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
The group is pleased to present its report on Corporate
Governance and the UK Corporate Governance Code. The board strives
to comply with the high standards set by the UK Corporate
Governance Code as incorporated in the UK Listing Rules of the
Financial Conduct Authority. The Code requires the company to make
a two-part disclosure statement, firstly on how the principles of
the code are applied and secondly confirmation of compliance or
explanation of any reason for deviation from the Code. Throughout
the year the company has complied with the main principles of the
Code.
Application of The Principles of the UK Corporate Governance
Code
The Board
There is an effective and appropriately constituted board which
in the year under review consisted of five directors. The Chief
Executive, Mr Pettitt who is normally based overseas, also serves
as Chairman. The board is fully aware that this is contrary to Code
provision A.2.1, which states that the roles of chairman and chief
executive should not be exercised by one individual. The board is
of the opinion that, given the current size of the business, and
also Mr Pettitt's undoubted and considerable knowledge, experience
and contacts in the Group's field of operations that the
shareholders' interests are best served by this arrangement. The
board is active in its management of the group and meets and
confers regularly on business matters arising. These frequent and
robust discussions serve to ensure that no one individual has
unfettered powers of decision.
During 2020 Mr Pettitt was supported by four other directors: Mr
W L Wade (Deceased - Thereafter with Mr P.M. Fisher being appointed
in January 2021) and Mr M J Simon, who was appointed in April 2009,
and Mr S C Mehta who was appointed in December 2009. Professor R D
Rogers was appointed in December 2019 and retired in December 2020
- with Mr R Tamraz being appointed in December 2020.
Mr Simon has acted as company secretary since April 2009.
One director resigned from the board in December 2020 Professor
R D Rogers.
One new director was appointed December 2020 Mr R E Tamraz. One
director has been appointed after the year end in February 2021 Mr
P M Fisher, following the death of Mr W L Hopkins.
The two non-executive directors, Mr Simon and Mr Tamraz, are
considered to be independent as there are no circumstances or
relationships as described by Code provision B.1.1 which apply to
their appointments. The group's definition of a non-executive
director is one who considers the interest of all the shareholders
and this is demonstrated during the board meetings. As part of
their role, the non-executive directors constructively challenge
decisions and help develop strategies and plans for the benefit of
the board.
Board procedure
The board is responsible for decisions concerning strategic and
financial planning and matters involving the overall direction of
the company. Management will seek board approval of the annual
budget and rolling business plan. Reforecasts are presented as
updates to the budget throughout the year to account for variances
and provide forward vision. The operational business decisions are
taken by local management with reference to the board where
necessary.
The board has established separate committees for: Appointments
(Chaired by Mr Pettitt); Audit (Chaired by Mr Simon up to April
2019 when the chair passed to Professor Georg Hollander, who
resigned as a director in December 2019 whereupon the chair was
taken by Professor Robin Rogers and thereafter the Audit &
Remuneration has been Chaired by Mr Simon).
All of the directors are subject to periodic re-election and
also the full board considers all appointments. A director will
require re-election within a maximum period of three years.
Biographies of the board are included in the financial
statements. These indicate a wealth of experience, which is
essential in effectively managing the activities of the group. In
addition to this the board members, wherever deemed appropriate
and/or possible, endeavour to attend relevant seminars and courses
of their respective professional organisations.
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
The board is pleased to present its remuneration report in
accordance with section 12.43A(c) of The Listing Rules.
The board has in place a remuneration committee, comprising Mr
Michael Simon, non-executive director, and Mr B Pettitt, Chief
Executive, to determine the remuneration of the board.
The company policy during the restructuring period throughout
2020 was to continue pay directors only a nominal GBP1 salary
(which has been in place since 2008). This policy will be
reconsidered as occasion arises and as the new business
opportunities open to the group are realised. The directors feel it
would be inappropriate to take any reward until that has been
achieved.
Total Total
Gross Notice Remuneration Remuneration
Name Position salary Benefits Pay 2020 2019
B R Pettitt Chairman/ GBP1 Nil Nil GBP1 GBP1
Group Chief
Executive
-------------- --------- ----------- --------- -------------- --------------
M J Simon Non-executive GBP1 Nil Nil GBP1 GBP1
Director
-------------- --------- ----------- --------- -------------- --------------
S C Mehta Executive GBP1 Nil Nil GBP1 GBP1
Director
-------------- --------- ----------- --------- -------------- --------------
R E Tamraz Executive GBP1 Nil Nil GBP1 GBP1
Director
-------------- --------- ----------- --------- -------------- --------------
W L Hopkins Executive GBP1 Nil Nil GBP1 GBP1
Director
-------------- --------- ----------- --------- -------------- --------------
P M Fisher Nil Nil Nil Nil Nil
undertook
W L Hopkins
position
upon his
death on
the same
terms and
conditions.
-------------- --------- ----------- --------- -------------- --------------
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 In order to address this risk,
Due to the nature of activities we reviewed journal entries
and operations, there is a at the group and subsidiary
risk that management override levels, inquired of management
could occur in a number of the risks of fraud and the
areas, and in particular through controls put in place to address
journal entries being processed. management override and assessed
The risk is that unauthorised the possibility of fraud arising
journal entries could be entered. 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 In order to address this risk,
Revenue is recognised in accordance we performed substantive testing.
with the accounting policy We tested a sample of transactions
set out in the notes to the from the point of origin, which
consolidated financial statements were the original contracts,
(set out in note 2). The accounting and traced these to the financial
policy contains a number of statements. There was revenue
judgements with regards to included for the current year
revenue earned from contracts. relating to the subsidiary
This is considered to be a Ross Diversified Trading Limited
significant risk due to it (RDT), which started to trade
often being contingent on external in the year, and tested substantively
variables. 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 In order to address this risk,
regulations testing was conducted to ensure
Ross Group Plc has a premium that the parent company is
listing on the London Stock up to date with relevant fees
Exchange, and therefore needs due to regulators, and that
to comply with a high level all returns are submitted in
of regulation. Non-compliance accordance with requirements
with these laws and regulation and within the specified timescales.
could result in the parent A detailed analysis of the
company being de-listed from relevant laws and regulations
the London Stock Exchange, has been undertaken and discussed
which would threaten the group with management to outline
and parent company's ability the control processes to ensure
to continue. This is considered compliance with these.
to be a significant risk. 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 In order to address this risk,
The group is considered by a detailed review of going
the board to be a going concern, concern was conducted, which
and the accounts have been involved reviewing management's
prepared as appropriate on forecasts for the period up
this basis, and therefore this to December 2022, and challenging
judgement should be assessed. the assumptions made in preparation
As the majority of the group of this. Sensitivity analysis
companies do not trade and was conducted, and a 'worse'
generate revenues (except for case scenario was assessed
RDT which started to trade to consider the impact of this.
again during the year), and Detailed discussions have been
the group is in a net liabilities had with management on future
position, there is a risk of plans, availability of financial
material uncertainty relating support (including verification
to going concern, compounded from a third party that this
with the current economic climate level of support can be given),
as a result of COVID-19. 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 GBP29,500 and GBP11,800 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 GBP25,000
and GBP10,000 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 GBP1,400 and GBP500 was considered trivial
from a group and parent company perspective respectively.
We agreed with the audit committee that we would report to them
misstatements identified during our audit above GBP1,400 or GBP500
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 GBP'000 GBP'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 GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'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
2020 2019
Notes GBP'000 GBP'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
2020 2019
Notes GBP'000 GBP'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
GBP'000 GBP'000 GBP000
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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP000
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
GBP'000 GBP'000 GBP'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 GBP'000 GBP'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 GBP'000 GBP'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
1. Cash and cash equivalents
The amounts disclosed on the Cash Flow Statements in respect of
cash and cash equivalents are in respect of these Balance Sheet
amounts:
Group Company
Year ended 31 December 2020
31/12/20 01/01/20 31/12/20 01/01/20
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 91 649 44 636
Year ended 31 December 2019
31/12/19 01/01/19 31/12/19 01/01/19
GBP'000 GBP'000 GBP'000 GBP'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
1. Statutory Information
Ross Group Plc is a public company, limited by shares,
registered in England and Wales. The company's registered number
and registered office address can be found on the General
Information page. The subsidiary, Ross Diversified Trading Limited,
is a private company limited by shares and registered in England
and Wales. The subsidiary, Ross Group Plc Inc, is a close
corporation, limited by shares and registered in USA. The
subsidiary, Archipelago Aquaculture Group LLC, is a limited
liability company registered in USA.
The following companies are all subsidiaries of Archipelago
Aquaculture Group LLC.
The subsidiary, Mari Signum Limited, is a company limited by
shares and registered in USA. The subsidiary Mari Signum
Mid-Atlantic LLC, is a limited liability company registered in USA.
The subsidiary Mari Signum Dragon Drying - MS LLC, is a limited
liability company registered in USA. The subsidiary Prometheus
Progeniture Genetics Technologies Limited LLC, is a limited
liability company registered in USA.
2. Accounting Policies
Basis of preparation
The consolidated financial statements of Ross Group Plc have
been prepared in accordance with International Financial Reporting
Statements (IFRS) and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) as adopted by the UK and the
Republic of Ireland and with the Companies Act 2006 as applicable
to companies reporting under IFRS. The financial statements have
been prepared on a historical cost basis and on a going concern
basis.
Items included in the financial statements of each of the
group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
British Pounds (GBP), which is Ross Group Plc's functional and
presentation currency. Amounts are rounded to the nearest
thousand.
In preparing the financial statements for the current period,
the group has adopted the following new IFRS's, amendments to
IFRS's and IFRS Interpretations Committee (IFRIC) Interpretations.
These standards do not have a significant impact on the results or
net assets of the group.
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
GBP'000 GBP'000
Government grants receivable 127 -
Deferred consideration written off - 13,680
-------- --------
127 13,680
Company 2020 2019
GBP'000 GBP'000
Other miscellaneous income 30 -
6. Employees and directors
Employee benefit expenses (including directors) comprise:
2020 2019
GBP GBP
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
GBP'000 GBP'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
GBP'000 GBP'000
Finance income
Interest income on financial assets 1 301
2020 2019
GBP'000 GBP'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
GBP'000 GBP'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 GBP13.23m (2019: GBP12.56m).
A deferred tax asset of GBP2.51m (2019: GBP2.39m) 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
GBP'000 GBP'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
GBP GBP
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
GBP'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
GBP'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
GBP'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
GBP'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 GBP424k into RGP - 525
receiving in return 19.9 % of the shareholding in this company.
15. Property, plant and equipment
Land and Motor vehicles Plant
Group buildings and machinery Totals
GBP'000 GBP'000 GBP'000 GBP'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
Plant
Company and machinery Totals
GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'000
Raw materials and consumables - 39 - -
19. Trade and other receivables
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 Authorised share capital:
195,000,000 Deferred shares of 4.8p each 9,360 9,360
67,052,306 Deferred shares of 4p each 2,682 2,682
300,000,000 Ordinary shares of 0.1p each 300 300
2,700,000,000 Deferred shares of 0.1p 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 GBP5,000 on each ordinary share for the time being
in issue. On a winding up the holders of deferred shares of 0.1p
each shall be entitled to receive 0.1p per share after the payment
of GBP5,000 on each ordinary share for the time being in issue but
shall not confer the right to participate in any surplus.
The deferred shares of 4.8p each are redeemable at the company's
option any time at a price of 1p for each of the deferred shares
held by any member. The deferred shares of 0.1p each are
transferable at the company's option at any time to any person at a
total price of 1p for all of the shares held by the shareholder.
The deferred shares of 0.1p each are redeemable or cancellable at
the company's option at any time at a total price of 1p for all of
the shares held by a shareholder.
As the deferred shares rank behind the ordinary shares, they are
recognised as equity.
Managing capital
The Group considers only the allotted share capital set out
above to be the capital of the group. There are no financial
liabilities considered to be part of the capital, and no components
of equity excluded from it.
The Group's objectives when managing capital are:
- To safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders.
- To provide an adequate return to shareholders by pricing
products and services at an appropriate level taking into account
the level of risk.
The Group sets an amount of capital in proportion to risk. The
Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and risk
characteristics of the underlying assets.
The entity is not subject to any externally imposed capital
requirements.
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements
For the year ended 31 December 2020
22. Reserves
Retained Share Other Convertible
Group earnings premium reserves debenture Totals
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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)
Retained Share Other Convertible
Company earnings premium reserves debenture Totals
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP1.92m (2019: GBP1.92m), a non-distributable capital
reserve of GBP3.33m (2019: GBP3.33m) and a special reserve of
GBP10.13m (2019: GBP10.13m).
Convertible debenture of the group consists of the equity
portion of convertible loan debentures of GBP5.82m (2019:
GBP5.49m).
Other reserves of the company consist of a capital redemption
reserve of GBP1.92m (2019: GBP1.92m) and a special reserve of
GBP29.02m (2019: GBP29.02m).
Convertible debenture of the company consists of the equity
portion of convertible loan debentures of GBP5.82m (2019:
GBP5.49m).
23. Trade and other payables
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 GBP4,010k and GBP2,062k at a coupon rate of
5%.
The notes are convertible into Ordinary shares of the parent
entity in three years after the date of issue. 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 GBP1 Million CLD owed by the long-term loan holders correspond
to 4.925% of the issued share capital at the date of conversion,
resulting in a fixed percentage of the issued share capital of the
company to be allocated to the loan holders regardless of the
value/amount of the share capital of the company.
2020 2019
GBP'000 GBP'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
GBP'000 GBP'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
GBP'000 GBP'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 GBP'000 GBP'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 GBP'000 GBP'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)
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END
FR ZZGZVDLVGMZM
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June 29, 2021 10:31 ET (14:31 GMT)
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