TIDMAPQ
RNS Number : 7202B
APQ Global Limited
06 June 2023
APQ Global Limited
("APQ Global" or the "Company")
FINANCIAL HIGHLIGHTS
For the year ended 31 December 2022
Book Value at 31 December 2022 was $7.23m, a decrease from
$23.59m at the start of the year. The term "book value" herein
includes the assets of APQ Global Limited and its subsidiaries[1]
net of any liabilities, presented in US dollars.
Book Value per share in the year decreased from 30.07 cents to
9.21 cents.
Loss per share for the year was $0.20843 (2021: $0.09684).
Dividends paid are considered a Key Performance Indicator[2]
(KPI) of the business. No dividends were paid or declared during
the year due to dividend hold in place (2021: nil).
In the year covered by these financial statements, the share
price of the Company has consistently traded at a discount to the
Book Value of the Company.
Since 1 January 2022, the following securities have been
admitted to the Official list of the International Stock Exchange
and to trading on AIM:
Entity Type of instrument No. of instruments Date admitted
APQ Global Limited Ordinary shares 26,578 24 January 2022
APQ Global Limited Ordinary shares 26,578 3 May 2022
APQ Global Limited Ordinary shares 26,578 29 July 2022
APQ Global Limited Ordinary shares 26,578 7 October 2022
There have been further AIM market trades since 31 December
2022, details of these can be found on the London Stock Exchange
website by following the link below. Monthly book values and
semi-annual reports are also made available as they fall due.
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GG00BZ6VP173GGGBXASQ1.
html
For further enquiries, please contact:
APQ Global Limited
Bart Turtelboom - Chief Executive
Officer 020 3478 9708
Singer Capital Markets - Nominated
Adviser and Broker
James Maxwell / Justin McKeegan
Carey Group - TISE sponsor
Claire Torode 01481 737 279
Investor Relations
IR@APQGlobal.com
Notes to Editors
APQ Global (ticker: APQ LN) is an investment company
incorporated in Guernsey. The Company focuses its investment
activities globally (in Asia, Latin America, Eastern Europe, the
Middle East, Africa and the Channel Islands, particularly).
The objective of the Company is to steadily grow its earnings to
seek to deliver attractive returns and capital growth through a
combination of building growing businesses as well as earning
revenue from income generating operating activities in capital
markets*. APQ Global run a well-diversified and liquid portfolio,
take strategic stakes in selected businesses and plan to take
operational control of companies through the acquisition of
minority and majority stakes in companies with a focus on emerging
markets.
*Where we refer to revenue from income generating operating
activities this relates to the revenue of our investee
companies.
For more information, please visit apqglobal.com
DIRECTORY Company number: 62008
Registered Office and Business Address: Directors:
PO Box 142 Bart Turtelboom
Suite 2 Block C Wayne Bulpitt CBE
Hirzel Court, St Peter
Port Philip Soulsby
Guernsey Wadhah Al-Adawi
GY1 3HT
Company Secretary and Nominated Adviser and Broker:
Singer Capital Markets
Corporate Services Provider: Limited
Parish Group Limited 1 Bartholomew Lane
PO Box 142 London
Suite 2 Block C United Kingdom
Hirzel Court, St Peter
Port EC2N 2AX
Guernsey
GY1 3HT
Registrar and Transfer
Agent: Principal Bankers:
Link Group Credit Suisse
10(th) Floor Paradeplatz 8
Central Square CH-8070
29 Wellington Street Zurich
Leeds Switzerland
LS1 4DL
Solicitors Advocates
As to English law: As to Guernsey law:
Stephenson Harwood LLP Mourant Ozannes
1 Finsbury Circus St Julian's Avenue
London St Peter Port
United Kingdom Guernsey
EC2M 7SH GY1 4HP
Independent
CISEA Sponsor: auditor:
Carey Commercial Limited BDO LLP
1st & 2nd Floors 55 Baker Street
Elizabeth House London
Les Ruettes Brayes United Kingdom
St Peter Port W1U 7EU
Guernsey
GY1 4LX
For the latest information,
please visit:
www.apqglobal.com
CHAIRMAN'S STATEMENT
For the year ended 31 December 2022
The aim of the Board is to steadily grow the Company's earnings
seeking to deliver attractive returns and capital growth through a
combination of building growing businesses globally as well as
earning revenue from income generating operating activities[3].
Specifically, our goals are to deliver a dividend yield of 6% per
annum (based on capital subscribed)[4] and in addition to generate
returns to grow the Company by a further 5-10% per annum[5]. The
Company focuses its investment activities globally (in Asia, Latin
America, Eastern Europe, the Middle East, Africa, as well as the
Channel Islands).
Book Value per share in the year decreased from 30.07 cents to
9.21 cents. The Total Return for the year was -69.38%[6].
Direct Investment Portfolio
In the third quarter of 2022, the company completed the 100%
acquisition of WDM Lex Advisory Limited and WDM Trustees Limited.
Lex Advisory provides legal advisory and corporate services,
trustee services and incorporation services to its clients
primarily based in Malta. WDM Trustees Limited provides all
services pertinent to trustees in a trust context and
administrators in the context of private foundations.
This investment is considered an excellent addition to the
Corporate Service package which is held by APQ and complements the
jurisdictional cover provided by the existing investments.
Dividends
As of 31 December 2022, the dividend remains on hold until
further notice.
Total Return
Book Value per share in the year decreased from 30.07 cents to
9.21 cents. The Total Return for the year was -69.38%(6) . Further
details on the breakdown of the Total Return are shown on page 6,
Under the section 2022 in Review.
Corporate Governance
During 2022 there were no changes to the Board of APQ Global and
the Board has established corporate governance arrangements which
are appropriate for the operation of the Company. Further details
of these may be found in the appropriate sections of this
Report.
Conclusion
The Investment performance and outlook for Emerging Markets are
discussed in more detail in the CEO's statement on page 5. Whilst
the headwinds have significantly buffeted our liquid portfolio, the
Board are pleased to have been able to take opportunities to
develop the Direct Investment Portfolio which is now very well
positioned to capitalise from several growing trends globally.
Wayne Bulpitt CBE
Chair, APQ Global Limited
CEO'S STATEMENT
For the year ended 31 December 2022
Following the spike in COVID infections during Q4 2021, Q1 2022
saw a significant reduction in cases and substantial easing of
national and international restrictions. These events were
overshadowed by Russia's invasion of Ukraine in February which sent
shockwaves across global markets. Both equities and bonds declined,
and commodity prices soared. Inflation which was already on the
rise following COVID supply disruptions, hit levels not seen since
the 1980s, prompting many central banks, including the FED to hike
interest rates.
The world's economies responded, with real GDP across the OECD
area increasing an estimated 2.77% throughout 2022[7].
Following the rollercoaster year of 2021, the S&P 500, MSCI
Emerging Markets and MSCI World Indices decreased -19.4%, -21.78%
and -19.46% respectively over the 12 months ending on 31 December
2022 on a Total Return basis[8]. The CBOE Volatility Index (VIX)
increased 25.84% to 21.7 across the same period. Emerging Market
currencies such as the Russian Rouble, Brazilian Real appreciated
and the South African Rand depreciated against the US Dollar (1.1%,
5.4%, -6.4% respectively).
The Company suffered a drawdown across the year, with the Book
Value decreasing substantially (for a breakdown of the Total Return
on the year, please see page 6, Under the section 2022 in Review).
A decline in the value of the liquid markets portfolio and currency
effects in the valuation of the direct investment portfolio drove
this result.
Despite the above, following the Company's recent acquisitions,
I believe our Direct Investment Portfolio is now very well
positioned to benefit from several growing trends across Emerging
Markets globally, particularly with reference to impact and
socially responsible investing. Delphos International based out of
Washington has seen significant growth with many opportune hires
and extremely well-placed mandates being signed. Parish Group, a
corporate service provider, has continued to perform at an
excellent level providing a sustainable return to the group, as
well as the newest addition of WDM providing an increased service
offering to Parish Group to widen our corporate service
portfolio.
Bart Turtelboom
CEO, APQ Global Limited
2022 IN REVIEW
Direct Investment Portfolio
As of 31st December 2022, the Company held majority investment
stakes in seven private businesses, with WDM Lex Advisory and WDM
Trustees being the most recent acquisition in Q3 2022. The
valuation of the Direct Investment Portfolio has a net reduction
following adverse exchange rate movements as well as a small
reduction in the value of New Markets Media; this is as a result of
adjustments from the Company's external valuation provider. We
expect investments in Parish, New Markets, Palladium and Delphos
International and Delphos FMA to remain stable.
The final approval for the acquisition was given by FINRA, for a
US based broker dealer in January 2023 and the deal was closed in
February 2023.
Delphos Holdings Limited
Delphos International and Delphos FMA continued to go from
strength to strength with both businesses showing positive steps
for all key performance indicators as well as financial analysis.
Across the group the top line revenue, Notional of deals raised and
average deal size have all increased year on year as shown in the
table below.
Notional of Deals Average Deal Size
Calendar Year No of Clients ($) ($)
2019 5 328,320,000 65,664,000
2020 13 880,500,000 67,730,769
2021 49 3,671,900,000 74,936,735
2022 34 3,738,168,552 109,946,134
=============== ===================
As well as the financial growth Delphos has continued to grow
out its experience and knowledge base with 100 employees, in house
advisors and strategic partners located across the world.
APQ Corporate Services Limited
The corporate services portion of the direct investment
portfolio has seen the additional acquisition of WDM Lex Advisory
and WDM Trustees Limited in 2022, providing coverage across the
Channel Islands, the UK and now Malta. This has helped provide an
additional service offering across the groups.
Calendar Average per Client
Year No of Clients (GBP)
2019 357 4,422
2022 409 3,815
2021 375 4,416
2022 343 4,544
===============
Liquid Market Portfolio
At the end of the fourth quarter our gross exposure was largely
unchanged from the previous quarter. The bulk of the exposure was
to equities with minimal exposure to interest rates and credit
markets. As shown in the chart below, our largest exposure remains
to Financials, followed by Materials, Industrials and Health Care
sectors.
After a strong start to 2022, financial markets suffered another
difficult year following the invasion of Ukraine by Russia. The
perfect storm of supply chain disruptions due to Covid and the
resulting volatility in commodity prices due to the Ukraine war,
led to inflation reaching multi-decade highs. Central banks across
the globe were prompted to hike interest rates aggressively to
anchor inflation expectations and bond markets suffered their
largest price decline this century.
At the end of December, the audited Book Value Per Share was
$0.0921 (equivalent to GBP0.073) at the end of the period, compared
to $0.1063 (GBP0.0952) at the end of Q3 2022. The Company
maintained a very healthy cash position of 80.0% of the liquid
market portfolio assets.
The chart below shows the breakdown of the equity exposure by
sector. The largest exposure at the end of December was to
Financials (27.2%), followed by Materials (21.2%), Information
Technology (12.9%) and Industrials (8.9%).
Equity Exposure by Sector % Holding
Financials 27.2%
============================ ===========
Materials 21.2%
============================ ===========
Information Technology 12.9%
============================ ===========
Industrials 8.9%
Health Care 8.2%
Consumer Discretionary 5.2%
Consumer Staples 4.5%
Energy 4.3%
Communication Services 3.8%
Utilities 2.5%
Real Estate 1.3%
At the end of December 2022, 96.8% of the Company's exposure
(excluding cash and FX hedges) was to equities, whilst the rates
exposure accounted for a further 3.2%.
Asset Class Exposure as %
Total as of 31(st)
December 2022
Credit 0.0%
=====================
Equity 96.8%
=====================
FX(1) 0.0%
=====================
Rates 3.2%
=====================
TOTAL 100.0%
=====================
(1) excluding FX hedges
BUSINESS MODEL AND STRATEGY
For the year ended 31 December 2022
The objective of the Company is to steadily grow its earnings to
seek to deliver attractive returns and capital growth through a
combination of building growing businesses as well as earning
revenue from income generating operating activities in capital
markets[9].
The Company's strategy is to:
(i) gain exposure to sovereign, corporate and banking entities
for a range of business purposes, including for acquisition
financing, working capital and investment purposes. The terms of
any bonds or loans will vary but are typically expected to range
from six months to five years. The Company expects that the loans
will typically be secured;
(ii) invest in different parts of the capital structure, both
public and private, of corporate and banking entities in as well as
structured finance instruments; and
(iii) take operational control of businesses through the
acquisition of minority and majority stakes in public and private
companies.
The Company may utilise borrowings in connection with its
business activities. Although there is no prescribed limit in the
Company's Articles of Incorporation (the 'Articles') or elsewhere
on the amount of borrowings that the Company may incur, the
Directors will adopt a prudent borrowing policy and oversee the
level and term of any borrowings of the Company and will review the
position on a regular basis.
The Company has no investment restrictions and investing will
not be subject to any maximum exposure limits. No material change
will be made to the Company's objective or investing policy without
the approval of Shareholders by ordinary resolution. The Company
may gain exposure to emerging markets by investing in assets on
other, non-emerging markets (such as the London Stock Exchange) as
long as the underlying asset has exposure to emerging markets.
Key performance indicators ("KPIs") for the Company will be the
growth of the earnings of the Company and the Dividend paid. The
Company's KPI's have been selected in accordance with the above
strategy to provide both capital gain and income to the Company's
shareholders. These KPIs are:
(i) A sufficient per annum increase in earnings to allow a 6%
dividend to be paid to shareholders. This target was not achieved
in 2021 or 2022 and no dividends have been paid in respect of the
current or previous year
(ii) Additional per annum increase in earnings to grow the
Company's Book Value by 5 - 10% per annum. For the year ended 31
December 2022, this KPI was not met as earnings decreased from the
prior year (see consolidated statement of comprehensive income),
and hence the Book Value Per Share fell Year on Year. The main
factor driving the earnings decrease was the performance of the
Liquid Market Portfolio. In 2022, the Company did not meet this
criterion, following operating losses at the Company amidst tough
trading conditions in Emerging Markets.
Alternative Performance Measure ("APM") for the Company:
(iii) One of the Company's KPI's is to pay a 6% Dividend Yield
(based on capital subscribed), making income received a key
component of the return on investment. The Company makes use of the
Total Return, which factors in income received, as well as capital
growth, when tracking the performance of the Company and its
ability to meet the above KPI. The Total Return for the year was
-69.38%.
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties
The Board has carried out a robust assessment of the Company's
principal risks. These are classified as current risks, being those
that the company is currently managing and could impact achieving
the Company's objectives, and emerging risks, being those risks
with a future impact from external or internal opportunities or
threats. The Directors believe the risks described below are the
material risks relating to the Company:
Business Perceived risk Current Mitigation
Area/Process or emerging
risk
Environment Changes in law or regulation Current Considered on an ongoing basis
or tax legislation may and emerging by the Board during quarterly
adversely affect the board meetings. Further advice
Company's ability to comes from the Investment Advisory
carry on its business Committee. Where deemed necessary
or adversely impact its the Directors will engage external
tax position and liabilities. legal and professional advisers.
---------------------------------- --------------- --------------------------------------
Key man risk The Company's performance Current The Board monitors the dependency
is dependent on the performance of the Company upon any individual
of key members of management. on an ongoing basis and where
The departure of any appropriate plans to reduce
key individual from the the impact from this risk.
management team may adversely
affect the returns available
to the Company.
---------------------------------- --------------- --------------------------------------
FX The Company and its Investees Current The Company has taken the decision
will have an exposure not to hedge its foreign currency
to foreign exchange rate exposure, in regards to the
risk as a result of changes, Ordinary shares, and thus accepts
both unfavourable and this risk as part of its investment
favourable, in exchange strategy. The Board may engage
rates between United in currency hedging in the
States Dollars and the future, seeking to mitigate
currencies in which some foreign exchange risk although
assets and liabilities there can be no guarantees
are denominated. The or assurances that the Group
Company's functional will successfully hedge against
and presentational currency such risks.
is US Dollars. Therefore,
there is currency risk
as Ordinary Shares are
traded on AIM in Pounds
Sterling. Further detail
on foreign exchange risks
are discussed in Note
25 of the Financial Statements.
---------------------------------- --------------- --------------------------------------
Cyber Security The Company and Service Current The Company makes use of Dual
providers will be subject Signing Authority and two factor
to Cyber Risk in the authentication across its banking
form of both risk of and other key functional areas
failure of systems and where it is available. The
also of the risk of malignant Company relies on its service
action against the Company providers to have in place
by way of Information proper cybersecurity systems
Technology. and monitors its providers
through the annual third-party
service provider review.
---------------------------------- --------------- --------------------------------------
Dividend There can be no guarantee Current The Group monitors its income
Risk that the Group will achieve through its management accounts
the target rates of return and targets investments that
referred to in this document provide income in accordance
or that it will not sustain with its strategy, laid out
any capital losses through on the Strategy section on
its activities. The ability page 8 above.
to pay dividends is dependent
on a number of factors
including the level of
income returns from the
Company's investee entities.
---------------------------------- --------------- --------------------------------------
Financial The Company will, through Current These risks and the controls
Risk the implementation of and emerging in place to mitigate them are
its business model and reviewed at board meetings.
strategy, face financial Further detail on financial
risks including market risks are discussed in Note
risk, credit risk and 25 of the Financial Statements.
liquidity risk. Further
details of these risks
can be found in table
2 below.
---------------------------------- --------------- --------------------------------------
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
Business Perceived risk Current Mitigation
Area/Process or emerging
risk
Volatility There may be volatility Current To optimise returns, Shareholders
in the price of the Ordinary and emerging may need to hold the Ordinary
Shares and the market Shares for the long term.
price of the Ordinary
Shares may rise or fall
rapidly. The price of
the Ordinary Shares may
decline below their respective
issue price and Shareholders
may not be able to sell
their Ordinary Shares
at a price equal to or
greater than their issue
price.
----------------------------------- --------------- -------------------------------------
Liquidity Shareholders will have Current The Board monitors the liquidity
no right of redemption of the stock during its quarterly
and must rely, in part, board meetings. The Company
on the existence of a employs market making firms
liquid market in order to ensure a live market is
to realise their investment. available in its ordinary shares.
Although the Ordinary
Shares are admitted to
trading on AIM, there
can be no assurance as
to the levels of secondary
market trading in Ordinary
Shares or the prices at
which Ordinary Shares
may trade. The Ordinary
Shares may trade at a
discount to the Net Asset
Value per Ordinary Share.
----------------------------------- --------------- -------------------------------------
Leverage The Company has CULS which Current The Board monitors the leverage
it is required to repay present in the Company via
interest on quarterly, its monthly management accounts.
at a rate 3.5% pa. The
Company must ensure that
it has liquid resources
available to repay this
interest. Furthermore,
any CULS not previously
redeemed, purchased or
converted will be repaid
by the Company on 30 September
2024 at its nominal amount
and thus the Company must
ensure it has resources
available at this time
to make these repayments.
----------------------------------- --------------- -------------------------------------
Brexit The Directors note that Current The Board monitors the ongoing
the Company's future performance situation and is prepared to
may be adversely affected respond accordingly as situations
by the economic and political evolve.
instability surrounding
the impacts of Britain's
exit from the EU.
----------------------------------- --------------- -------------------------------------
Ukraine Russia initiated miliary Current The Company and Group does
unrest action against Ukraine and Emerging not have any investments that
in February 2022. To deter are directly or indirectly
these actions, western affected by the sanctions levied
governments levied sanctions to date thus the impact of
against the Russian government this risk is limited to the
and connected enterprises effect of global uncertainty
and individuals. arising as a result. Directors
continue to monitor the conflict
and investment portfolio and
will implement necessary actions
where possible to reduce the
impact from further escalation
of military actions and sanctions.
----------------------------------- --------------- -------------------------------------
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
The Directors believe the risks described below are the material
risks relating to the Company through its investment in APQ Cayman
Limited:
Business Perceived risk Current Mitigation
Area/Process or emerging
risk
Emerging APQ Cayman Limited will Current The Company engages a team
Markets have investment exposure to actively monitor treasury
to emerging markets, exposures live in high-end
which are subject to risk management software applications.
certain risks and special The team monitors exposure
considerations that are and uses a comprehensive framework,
not typically associated utilising its administrator,
with more developed markets banking counterparts and other
and economies. third-party vendors, to ensure
exposure levels are correctly
measured and reported daily.
-------------------------------- -------------- -----------------------------------------
Derivative APQ Cayman Limited will Current The Company employs a highly
Risk invest in derivative experienced management team
instruments which can that monitors exposure on a
be highly volatile and daily basis and captures derivative
may be difficult to value exposure using high-end risk
and/or liquidate. Derivatives software applications. Daily
will be used for gearing reports are generated from
purposes which may expose the software and reviewed by
investors to a high risk the team.
of loss.
-------------------------------- -------------- -----------------------------------------
Credit Risk APQ Cayman Limited is Current The Company chooses reputable
subject to the risk of financial service providers,
the inability of any and uses a spread of counterparties
counterparty to perform to lessen the impact should
with respect to transactions, one counterparty fail.
whether due to insolvency,
bankruptcy or other causes.
Where the Company utilises
derivative instruments,
it is likely to take
credit risk with regard
to such counterparties
and bear the risk of
settlement default.
-------------------------------- -------------- -----------------------------------------
Liquidity The Company could suffer Current The Company chooses reputable
Risk losses as a result of financial service providers,
a decrease in liquidity and uses a spread of providers
in the capital markets to lessen the impact should
in which it invests. one be unable to provide a
A decrease in liquidity market price.
could result in higher
exit costs for a given
investment, such as the
commission or spread
charged by the counterparties
with which it trades.
-------------------------------- -------------- -----------------------------------------
Third party APQ Cayman Limited will Emerging The Company chooses reputable
risk be subject to custody financial service providers
risk in the event of as its counterparties and uses
the insolvency of any multiple service providers
custodian or sub-custodians to lessen the impact should
with which it transacts. one become insolvent.
-------------------------------- -------------- -----------------------------------------
The Directors believe the risks described below are the material
risks relating to the Company through its unquoted investments:
Business Perceived risk Current Mitigation
Area/Process or emerging
risk
Valuation The Company's Direct Current The Company values its investments
Risk Investment portfolio in accordance with International
comprises unquoted investments Financial Reporting Standards,
purchased and sold privately, and employs external valuation
for which there is no experts to perform these valuations.
market price available.
As a result, management
is required to make forecasts
and assumptions about
certain inputs used in
the valuation of these
investments. The Company
could suffer losses,
should these forecasts
or assumptions not materialise.
---------------------------------- -------------- ---------------------------------------
BUSINESS MODEL AND STRATEGY (continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties (continued)
These risks are mitigated by the control and oversight of the
Board. The Board will consider the risks of the Company as a whole
on a regular basis at its Board meetings and on an annual basis
shall review the effectiveness of its risk management systems,
ensuring that all aspects of risk management and internal control
are considered. The processes for its annual reviews includes
reporting and recommendations from the Board as well as adoption
and review of a formal risk matrix documenting the current and
emerging risks facing the Company, as well as the assessed
probability and impact of the identified risks. Other risk
mitigation measures include, but are not limited to:
-- oversight by Executive Directors and key management with the
requisite knowledge and experience in emerging and credit
markets;
-- oversight by Non-Executive Directors;
-- dual signing authority on bank accounts;
-- business Continuity Plans of the various service providers;
-- ongoing Cyber Risk training; and
-- ongoing review of third party service providers by the Board.
DIRECTORS' REPORT
For the year ended 31 December 2022
The Directors present the consolidated financial statements of
APQ Global Limited (the "Group") for the year ended 31 December
2022. The Group comprises the Company and its subsidiaries [10]
.
The Company
The Company was incorporated in Guernsey on 10 May 2016. The
Company's shares ("Shares") were admitted to The International
Stock Exchange on 11 August 2016 and admitted to trading on the AIM
segment of the London Stock Exchange on 26 August 2016. The CULS
have been admitted to the Order Book for Fixed Income Securities on
the London Stock Exchange's International Securities Market, with
effect from 7 September 2017.
Principal Activities
The principal activity of the Company is to invest in Companies
in emerging markets through the purchase of a variety of financial
instruments, including equity, bonds and derivatives through the
subsidiary APQ Cayman Limited, and through direct investments in
private companies. The Company seeks to earn revenue from dividends
and interest income from these investments and realise gains on
sales of these investments. Additionally, the Company aims to take
majority stakes in private businesses, seeking to earn income
throughout the holding period and capital gains upon resale. The
anticipated holding period between purchase and sale is expected to
be three to seven years.
Functional and presentational currency
The Group's functional and presentational currency is US
Dollars. The Group's main activities and returns for the year ended
31 December 2022 are from its subsidiary APQ Cayman Limited and
were in US Dollars.
Results and Dividends
The consolidated results for the year are set out in the
consolidated statement of comprehensive income on page 34 and the
Statement of Financial Position at that date is set out on page
35.
The Company did not pay any dividends during the year (2021:
none).
Share Capital
As at 31 December 2022 the Company had in issue 78,559,983
(2021: 78,453,671) Ordinary Shares of nil par value. During the
year 106,312 (2021: 106,312) Ordinary shares were issued.
Principal Risks and Uncertainties
Principal Risks and Uncertainties are disclosed in the Business
Model and Strategy section
During the first quarter of 2020 and into 2021, the Company
experienced difficult trading conditions in its liquid portfolio
due to large market movements in emerging markets currencies, bonds
and equities.
The Company took decisive action to mitigate further risk to the
balance sheet, de-risking its portfolio of liquid market
securities, furthermore, due to ongoing uncertainty, the Board
implemented the following cash preservation measure to facilitate a
smooth recovery as the world exited the pandemic. These measures
are still in existence:.
-- suspension of dividends paid to ordinary shareholders until further notice;
-- the management bonus scheme to be cut from 20% of profits to
10% (no bonuses paid in current year or prior year due to losses);
and
-- significant cost reduction across all of the Group.
In addition to the above a new risk identified as of the start
of 2022 was the ongoing uncertainty caused by Russia's invasion of
Ukraine. This direct risk has been mitigated by ensuring there is
no Russian exposure across any investments by APQ Global.
Going Concern
The Directors believe that it is appropriate to adopt the going
concern basis in preparing the Financial Statements since the
ultimate assets of the Company mainly consist of securities which
are readily realisable and, accordingly, the Company has adequate
financial resources to continue in operational existence for at
least 12 months from the date of this report. The Company will be
able to meet all its liabilities as they fall due. See below for
the Stress Testing applied in coming to this conclusion.
Stress Testing
After assessing the Company as a Going Concern in normal (poor)
economic conditions across a two year horizon, the Company would
maintain a sufficient expense coverage ratio net of paying all its
operating expenses and net of its financial payment obligations to
the CULS. The Company would not breach any debt covenants and would
retain USD 30.0 (+8.3) million in cash as of June 30, 2024 [11]
.
Under normal market assumptions, the Company assumes that it
meets all its financial obligations as well as its operating
expenses. It earns a nominal income/growth yield on its Liquid
Market Portfolio based on prevailing market risk premiums. The
Company forecasts to receive dividend income from its Direct
Investment Portfolio ($8 million). Under poor economic conditions,
the earnings assumptions are reduced, and $4.8m dividends are
received from the Company's Direct Investment Portfolio, whilst the
financial obligations and expenses are held constant. There are
zero Fair Value Profit or Losses assumed on the Direct Investment
Portfolio throughout the period under review.
Dividend Suspension
The suspension of the dividend paid to ordinary shareholders
will increase the liquidity available to the Company by
approximately $6m per annum based on level of dividends paid prior
to implementation of the dividend hold. The Board reviews the
dividend policy quarterly. The dividend remains on hold until
further notice.
Long Term Viability Statement
There is currently no strict regime of Corporate Governance to
which the Company must adhere to, however there are guidelines set
out for AIM companies. The Company complies with the UK code on
Corporate Governance, issued July 2018 for periods beginning on or
after 1 January 2019 to the extent outlined in the Corporate
Governance section below on pages 16 and 17. In accordance with
provision 31 of the UK Corporate Governance Code, the Directors
have assessed the prospects of the Company over a longer period
than the 12 months minimum required by the 'Going Concern'
provision. Three years is deemed to be an appropriate time period
for management to implement its medium-term strategic objectives
set out in the Business Model and Strategy section (page 8) of
these financial statements.
Further to this page - Going Concern, the Company extends its
above analysis to a three-year cash flow forecast (to June 2026 )
using newly targeted budgets and concluded that:
Assuming normal (poor) economic conditions [12] , the Company
would preserve an expense coverage ratio net of its financial
obligations of 143 (96), retaining USD 29 (10) million in cash on
its balance sheet as of June 30, 2026 providing considerable
headroom to absorb poor conditions. These figures include the
settlement of the CULS of $36m in September 2024. The group will
liquidate the portfolio over the next two years in preparation for
the redemption in addition to dividend generation from the private
investment portfolio.
Based on the Company's processes for monitoring operating costs,
share discount, internal controls, invested asset allocation, risk
profile, liquidity risk and the assessment of the principal risks
and uncertainties facing the Company, the Directors have concluded
that there is a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall
due over the forecasted period to 31 December 2025.
Directors
The details of the Directors of the Company during the year and
at the date of this Annual Report are set out in the Directors'
report.
As of 31 December 2022, and the date of these financial
statements, the following Directors, their close relatives and
related trusts, held the following beneficial interests in the
Company:
Director Shares held % of issued share capital
Bart Turtelboom 22,448,953 28.58%
Wayne Bulpitt 237,000 0.30%
International Tax Reporting
For the purposes of the US Foreign Accounts Tax Compliance Act,
the Company registered with the US Internal Revenue Service ("IRS")
as a Guernsey reporting Foreign Financial Institution ("FFI") in
November 2016, received a Global Intermediary Identification Number
(B2KS93.99999.SL.831) and can be found on the IRS FFI list.
The Common Reporting Standard ("CRS") is a standard developed by
the Organisation for Economic Co-operation and Development ("OECD")
and is a global approach for the automatic exchange of tax
information. Guernsey has adopted the CRS which came into effect on
1 January 2016. The CRS replaced the intergovernmental agreement
between the UK and Guernsey to improve tax compliance that had
previously applied.
The Board will take the necessary actions to ensure that the
Company is compliant with Guernsey regulations and guidance in this
regard.
Auditor
BDO LLP were reappointed as auditors at the AGM on 9 August 2022
in relation to the year ended 31 December 2022 audit. BDO LLP will
be reconsidered for appointment for the December 2023 audit at the
AGM scheduled for 8 August 2023.
Statement of directors' responsibilities
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable Guernsey
law and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to
prepare financial statements for each financial year. Under that
law the Directors have elected to prepare the Group financial
statements in accordance with UK adopted International Accounting
Standards ("UK IAS") and the Companies (Guernsey) Law, 2008.
Under the Companies (Guernsey) Law, 2008 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 Group
and of the profit or loss of the Group for that period.
The directors are also required to prepare financial statements
in accordance with the rules of the London Stock Exchange for
companies trading securities on AIM.
In preparing these financial statements the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures being disclosed and
explained in the financial statements; and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
Statement of directors' responsibilities (continued)
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group and its results for the year and to
enable them to ensure that the financial statements comply with the
Companies (Guernsey) Law, 2008. They are also responsible for
safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The maintenance and integrity of the company's website is the
responsibility of the directors. The directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
Responsibility Statement
The Directors confirm that to the best of their knowledge the
Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for the
shareholders to assess the Group's performance, business model and
strategy.
Disclosure of Information to Auditor
Each of the persons who was a Director at the date of approval
of the financial statements confirms that:
-- so far as they are aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- he has taken all steps that he ought to have taken as a
Director to make himself aware of any relevant audit information
and to establish that the Company's auditor is aware of that
information.
This confirmation is given and should be interpreted in
accordance with the provision of section 249 of the Companies
(Guernsey) Law, 2008.
Corporate Governance
The Directors recognise the importance of robust Corporate
Governance and meet regularly to review corporate strategy, the
risk profile of the Group and its operating businesses and to
monitor the performance of the service providers appointed to the
Group. The Board assesses and monitors the culture of the Company,
and reviews the sustainability of the Company's business model and
its impact on external stakeholders. Due to the size of the Company
the Board are able to monitor the culture through regular contact
with employees. More information with respect to the Company's
Business Model can be found on page 9.
There is currently no strict regime of Corporate Governance to
which the Directors must adhere over and above the general
fiduciary duties and duties of care, diligence and skill imposed on
such directors under the Companies (Guernsey) Law, 2008 ; however,
there are guidelines set out for AIM companies. The Directors
recognise the importance of sound corporate governance and the
Group will seek to take appropriate measures to ensure that the
Group complies with the UK Code on Corporate Governance to the
extent appropriate and taking into account the size of the Group
and the nature of its business. The Directors, having reviewed the
UK Code on Corporate Governance, considers that it has complied
with the Code throughout the period under review with the exception
of the following areas of non-compliance, each of which applied
throughout the period:
Areas of non-compliance with the UK Corporate Governance Code
which were disclosed at the launch of the Company:
-- Provision 5 - The Board does not use any of the methods
outlined for engagement with the workforce, further information on
the Board's engagement with the workforce is listed below;
-- Provision 9 - The Chairman is not independent;
-- Provision 11 - At least half the Board, excluding the
chairman are not independent non-executive directors;
-- Provision 12 - The non-executive directors, led by the senior
non-executive director do not meet without the chair at least
annually to appraise his performance or on other such occasions
which are deemed appropriate;
-- Provision 13 - The chair does not hold meetings without the
executive directors present;
-- Provision 17 - The Company does not have a nominations committee;
-- Provision 20 - The Company did not use open advertising
and/or an external search consultancy when appointing the chair and
the non-executive directors;
-- Provision 21 - The Board does not have a regular externally
facilitated board evaluation;
-- Provision 24 - The audit committee does not contain two
independent non-executive directors. The chairman of the Company is
a member of the audit committee;
-- Provision 23 - The Company does not have a formal policy on
diversity and inclusion; and
-- Provision 32, 33 and 41 - The Company does not have a remuneration committee.
Corporate Governance (continued)
The Directors do not believe that compliance with these sections
of the code are necessary due to the size of the Group and the
nature of its business. Following the resignation of the Aspida
Group (formerly Active Group) as Company Secretary on 10 June 2020
the Company no longer has a material business relation with the
Chairman, and he will be formally deemed to be independent after
three years from this date. With regards to a remuneration and
nomination committee, these responsibilities are undertaken by the
full board as appropriate. The Chair meets with fellow Directors
and executives regularly. The Board has recently undertaken an
independent Governance Review to ensure it continues to meet all
appropriate governance standards.
As a Company with its shares admitted to listing on TISE, the
Directors comply with the Model Code of TISE and take all
reasonable and proper steps to ensure compliance by applicable
employees as required by the Listing Rules. The Directors and the
Company also comply at all times with the applicable provisions of
the Listing Rules.
The Company has adopted an anti-bribery policy and adheres to
the requirements of the Prevention of Corruption (Bailiwick of
Guernsey) Law, 2003 and the UK Bribery Act 2010.
Board engagement with the workforce and other stakeholders
Due to the size and nature of the business, the directors do not
believe that compliance with Provision 5 of the code is necessary.
All members of the workforce have access to the executive and
non-executive directors and the Board maintains an open dialogue
with all members.
The Board considers the impact of the Group's culture,
management, and strategic decisions on both the workforce and other
external stakeholders. These external stakeholders include, but are
not limited to suppliers, the environment and other stakeholders of
investments held by the Group.
Internal Audit
The Directors have determined that no internal audit function is
required, as the bookkeeping and valuation of assets are performed
by third parties, which provides checks and balances on the
operations of the Group. The Directors believe that an internal
audit function would largely duplicate this oversight and represent
additional cost for no additional benefit. The Directors reassess
this annually.
Role of the Board
The Board is the Company's governing body and has overall
responsibility for maximising the Company's success by directing
and supervising the affairs of the business and meeting the
appropriate interests of Shareholders and relevant stakeholders,
while enhancing the value of the Company and also ensuring
protection of Shareholders. A summary of the Board's
responsibilities is as follows:
-- statutory obligations and public disclosure;
-- strategic matters and financial reporting;
-- risk assessment and management including reporting
compliance, governance, monitoring and control; and
-- other matters having a material effect on the Company.
The Board's responsibilities for the Annual Reports are set out
in the Statement of Directors' Responsibilities section.
The Board needs to ensure that the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for Shareholders to assess
the Group's performance, business model and strategy.
In seeking to achieve this, the Directors have set out the
Group's business strategy and have explained how the Board and its
delegated committee operate and how the directors review the risk
environment within which the Company operates and set appropriate
risk controls. Furthermore, throughout the Annual Report the Board
has sought to provide further information to enable Shareholders to
have a fair, balanced and understandable view.
Composition and Independence of the Board
The Board comprises two executive directors, one independent
non-executive director and one non-independent non-executive
director.
Role of the Board (continued)
Composition and Independence of the Board (continued)
Wayne Bulpitt is responsible for leadership of the Board and
ensuring its effectiveness as Non-executive Chairman, a role he has
held since 20 April 2017.
Bart Turtelboom continues to serve as Chief Executive
Officer
Philip Soulsby continues to serve as Finance Director.
Wadhah Al-Adawi continues to serve as Chairman of the Audit
Committee.
Board Audit Committee
Held Attended Held Attended
Bart Turtelboom 4 4 2 2
Wayne Bulpitt 4 3 2 2
Phil Soulsby 4 4 2 2
Wadhah Al-Adawi 4 3 2 2
Re-election
At every Annual General Meeting any Director appointed by the
Board since the last annual general meeting or who held office at
the time of the two preceding annual general meetings and who did
not retire at either of them shall retire from office and may offer
themselves for re-appointment by the Shareholders.
Terms and Conditions of Appointment on Non-Executive
Directors
Each of the Non-Executive Directors shall be subject to
re-elections at the first annual general meeting of the Company and
thereafter in accordance with the provisions of the Company's
articles of incorporation in respect of re-election and retirement.
Neither of the Non-Executive Directors has been appointed for a
fixed term.
The conditions attached to the appointment of the Non-Executive
Directors include the following:
-- termination in the event of any serious breach of obligations
to the Company or through any act of dishonesty, fraud or serious
misconduct;
-- attendance at quarterly and ad hoc board meetings and
consideration of all board papers pertaining to such meetings;
-- compliance with all applicable legal and regulatory requirements; and
-- compliance with all applicable legal and regulatory
requirements including the TISE model share dealing code and the UK
Corporate Governance Code.
Board Evaluation and Succession Planning
The Directors consider how the Board functions as a whole taking
into account the balance of skills, experience and length of
service into consideration and also reviews the individual
performance of its members on an annual basis.
Board Evaluation and Succession Planning (continued)
To enable this evaluation to take place, the Board has put in
place a process whereby the Company Secretary circulates a
questionnaire plus a separate questionnaire for the evaluation of
the Chairman. Upon completion, the questionnaires are returned to
the Company Secretary for collation and summary before distribution
to the Chairman and the other Directors.
The Board considers that it has a breadth of experience relevant
to the Company's needs and that any changes to the Board's
composition can be managed without undue disruption. Future
Directors will undertake an induction programme.
With regards to board composition and external evaluation, the
board has considered its effectiveness at least annually and
composition on a regular basis. It is both mindful of good practice
and the need to continually review the matter. With regards to
external evaluation,
it is considered that the size and the activity of the Company
do not justify such an expense at this stage, however a recent
change of service providers and Company Secretary will allow the
company to benefit from a "fresh pair of eyes" and informal
review.
The Board is cognisant of good practice and recent reviews into
the composition of boards. It continually reviews its own
composition and believes that it has available an appropriate range
of skills and experience. The Board will always ensure that the
best candidates available are appointed irrespective of their
background, gender or ethnicity.
Company Secretary
Parish Group Limited continues to serve as Company Secretary.
All Directors have direct access to the Company Secretary and the
Company Secretary is responsible for ensuring that Board procedures
are followed and that there is good communication within the Board
and between the committees of the Board listed below and the
Board.
Committees of the Board
The Board has established the following committees:
Audit committee
The audit committee is chaired by Wadhah Al-Adawi, the
independent Director, with all the other Directors as members. The
audit committee meets no less than once a calendar year and
meetings can also be attended by the Auditors.
The audit committee is responsible for monitoring the integrity
of the financial statements of the company and any formal
announcements relating to the company's financial performance and
reviewing significant financial reporting judgements contained in
them before their submission to the Board. In addition, the audit
committee is specifically charged under its terms of reference to
advise the Board on the terms and scope of the appointment of the
Auditors, including their remuneration, independence, objectivity
and reviewing with the Auditors the results and effectiveness of
the audit, and in ensuring that the Company's annual report and
financial statements are fair, balanced and understandable. The
audit committee is also responsible for reviewing the Company's
internal financial controls and internal control and risk
management systems. They also consider annually the need for an
internal audit function.
The audit committee last met on 28 September 2022. It also met
in May 2022 to approve / review the accounts. The audit committee
met to approve the latest set of accounts in June 2023. A report of
the Audit Committee detailing their responsibilities is presented
in the Audit Committee Report.
The Audit Committee's Terms of Reference state that the Audit
Committee shall review the need for any non-audit services provided
by the external auditor and authorise on a case-by-case basis. The
Audit Committee's Terms of Reference are available from the
registered office of the Company.
Audit fees for the external auditor, BDO LLP, for the year ended
31 December 2022 were $161,750 (2021: $168,238). No other fees were
paid to the Company's auditors for non-audit or audit related
services during the year. (2021: none).
BDO LLP has served as the Company's auditor for 6 years. The
current audit partner is Elizabeth Hooper, who replaced Neil
Fung-On, for the current year audit.
Relations with Shareholders
The Board welcomes shareholders' views and places great
importance on communication with its shareholders.
The Board monitors the trading activity on a regular basis and
maintains contact with the Company's Nominated Adviser and Broker
to ascertain the views of the shareholders, with whom they maintain
a regular dialogue. Shareholders' sentiment is also ascertained by
the careful monitoring of the discount/premium that the Shares are
traded in the market against the book value calculation per
Share.
The Company reports to shareholders twice a year and produces a
semi-annual update which is posted on the Company's website. In
addition, it has an Annual General Meeting and a notice convening
this together with a proxy voting card is sent with the Annual
Report and Financial Statements. The Registrar monitors the voting
of the shareholders and proxy voting is taken into account when
votes are cast at the Annual General Meeting. Shareholders may
contact the Directors via the Company Secretary.
The Chairman and other Directors are available to meet
shareholders if required and the AGM of the Company provides a
forum for shareholders to meet and discuss issues with the
Directors.
Further information regarding the Company can be found on its
website at www.apqglobal.com .
Post Balance Sheet Events
On 18 March 2022, APQ Global Limited incorporated Delphos MMJ 1,
LLC and Delphos MMJ 2, LLC for the purposes of acquiring an
investment broker in United States of America. The acquisition was
concluded in FY 2023 for a consideration of $100.
In April 2023, APQ Global announced a tender offer to all CULS
holders for the repurchase of the company's issued CULS for
GBP2,500 per unit of GBP5,000 nominal CULS. 80 CULS units were
tendered in total at a total cost approximately of GBP0.2
million.
Annual General Meeting
The Company's Annual General Meeting is due to be held on 8(th)
August 2023. The last Annual General Meeting was held on 9 August
2022.
Related Party Transactions
Transactions entered into by the Company with related parties
are disclosed in note 27 of the financial statements.
Signed on behalf of the Board of Directors by:
_____________________ _____________________
Wayne Bulpitt Philip Soulsby
Chairman Director
Date: 5 June 2023
AUDIT COMMITTEE REPORT
For the year ended 31 December 2022
On the following we are pleased to present the Audit Committee's
Report for the year ended 31 December 2022, setting out the
responsibilities of the Audit Committee.
Members of the Audit Committee will be available at the AGM to
respond to any shareholder questions on the activities of the Audit
Committee.
The Audit Committee was formed on 4 November 2016.
Responsibilities
The Audit Committee reviews and recommends to the Board the
Financial Statements of the Company and is the forum through which
the external auditor reports to the Board of Directors.
The Audit Committee responsibilities include:
-- review of the annual financial statements prior to approval,
focusing on changes in accounting policies and practices, major
judgemental areas, significant audit adjustments, going concern and
compliance with accounting standards, listing and legal
requirements;
-- receiving and considering reports on internal financial
controls, including reports from the auditors and reporting their
findings to the Board;
-- considering the appointment and removal of the auditors,
their effectiveness and their remuneration including reviewing and
monitoring of independence and objectivity;
-- meeting with the auditors to discuss the scope of the audit,
issues arising from their work and any matters the auditors wish to
raise;
-- reviewing the Company's corporate review procedures and any
statement on internal control prior to endorsement by the Board;
and
-- providing advice to the Board upon request as to whether the
annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
The Audit Committee reports its findings, identifying any
matters on which it considers that action or improvement is needed,
and make recommendations on the steps to be taken.
The audit committee met in June 2023 and were joined by the
external auditors, to review the accounts and reports on the
operations of the Company. After due consideration they reported to
the Board of the Company that in their view the accounts were fair,
balanced, understandable and presented the information necessary to
allow shareholders to assess the Company's performance, business
model and strategy.
_____________________
Wadhah Al-Adawi
Audit Committee Chairman
Date: 5 June 2023
BOARD MEMBERS
For the year ended 31 December 2022
Bart Turtelboom (Chief Executive Officer and Executive
Director)
Bart is Chief Executive Officer of APQ Global Limited and is on
the board of APQ Cayman Limited. Previously he was the co-founder
and Chief Investment Officer and partner of APQ Partners LLP. Prior
to APQ Partners LLP, Bart was Co-Head of the Emerging Markets
business at GLG and Co-Portfolio Manager of the GLG emerging
markets funds. He was previously the Global Co-Head of Emerging
Markets at Morgan Stanley, where he ran a multi-billion US Dollar
business spanning Asia, Latin America, the Middle East and Africa,
and head of its Global Capital Markets Group. Prior to that Bart
was a Portfolio Manager at Vega Asset Management and a Director at
Deutsche Bank, where he held several roles culminating in coverage
of the bank's largest European clients. Bart was an Economist for
the International Monetary Fund in Washington D.C. from 1994 until
1997. Bart received a Ph.D. in Economics from Columbia
University.
Wayne Bulpitt CBE (Non-Executive Chairman)
Wayne Bulpitt has over 36 years of experience in business
leadership in banking, investment and administration services.
Having left National Westminster Bank Plc in 1992 to join CIBC Bank
& Trust Company, he developed and launched CIBC Fund Managers
(Guernsey) Limited in 1994. As Managing Director, Wayne spent the
next four years managing and developing the offshore funds and
building a third party fund administration capacity.
In 1998 this experience was to prove crucial for the Canadian
Imperial Bank of Commerce where, as Director of Offshore Investment
Services Global Private Banking & Trust Division, his main
priority was to restructure the delivery of their investment
management services outside of Canada.
Wayne founded Active Group Limited in 2002, which renamed to
Aspida Group following its merger with Optimus in 2019. Aspida is
an innovative provider of practical and professional support
services such as compliance, corporate secretarial and management
services to the finance industry. Wayne is on the boards of various
investment management companies and funds (both listed and
un-listed), overseeing a diverse range of investment
activities.
Philip Soulsby (Executive Director and Finance director)
Philip Soulsby is a mathematics graduate. He qualified as a
chartered accountant in London with BDO Binder Hamlyn, before
transferring to KPMG in Guernsey in 1990. There he spent two years
specialising in the audit of financial services companies and
offshore mutual funds. In 1992 he joined Credit Suisse Fund
Administration Limited in charge of finance and compliance, later
moving to a role more involved in structuring and marketing mutual
fund services, helping the business grow from 12 staff to over 130.
During this time he acted as director to a number of funds and fund
managers, and gained a broad knowledge of hedge funds, derivatives
and risk control. In 2006, he left Credit Suisse to establish his
own business, The Mundi Group Ltd, a fair-trade and ethical
products business. He remains a director of several funds and fund
management companies and was also Douzenier to the Parish of St
Martin, his term of office expired on 31 December 2018.
Wadhah Al-Adawi (Non-executive Director and Chairman of the
Audit Committee)
Mr Al Adawi has over '10 years' experience within asset
management and equity trading. In 2017, he joined Hydrocarbon
Finder, the oil and gas exploration and development company in
Oman, as Vice Chairman. Between 2012 and 2017, he was a Portfolio
Manager with Harvard Management Company, Boston, in which he
managed a $300 million Long/Short Emerging Market Portfolio. Prior
to this, Wadhah spent 4 years in London with GLG Partners, where he
was responsible for investing and managing Emerging Market equity
exposure in both Long/Short and Long Only strategies. He also has
experience in asset management with Morgan Stanley, EMSO Partners
and HSBC. Mr Al Adawi is a CFA Charter holder.
REMUNERATION POLICY
For the year ended 31 December 2022
No advice or services were provided by any external person in
respect of the Board's consideration of the Directors'
remuneration.
The Company's policy is that the fees payable to the Directors
should reflect the time spent by the Directors on the Company's
affairs and the responsibilities borne by the Directors and be
sufficient to attract, retain and motivate directors of a quality
required to run the Company successfully. The policy is to review
fee rates periodically, although such a review will not necessarily
result in any changes to the rates, and account is taken of fees
paid to directors of comparable companies.
A management share plan was formalised on 7 April 2017 and
amended on 17 July 2018. The plan allows for certain members of the
management to benefit from 20% of any increase in the year end book
value per share for a given year. Awards can be issued as an
allocation of a specified number of shares or as an option (a right
to acquired shares under the plan for nil consideration). Cash
consideration is an option at the Board's discretion. It could
disadvantage other shareholders if cash is taken and cash
consideration exceeds the share price. The vesting period for any
awards issued can be up to 5 years and subject to certain
conditions. Share awards were with respect to the performance
period ended 31 December 2017, which have continued to vest over
the period. No awards have been issued with respect to the year
ended 31 December 2021 and the year ended 31 December 2022 as the
performance criteria has not been met.
Remuneration
The non-executive directors are remunerated for their services
at such a rate as the Directors determine provided that the
aggregate amount of such fees does not exceed $270,550 per annum.
No engagement with the workforce has taken place to explain how
remuneration aligns with wider company pay policy, this is due to
the small size of the Company.
The directors are remunerated in the form of fees, payable
monthly in arrears. Bart Turtelboom agreed to waive his entitlement
to director's fees whilst he was Chairman. From April 2017 Bart
Turtelboom received an annual salary of $148,237 (GBP120,000) as
Chief Executive Officer. From 1 April 2018 the salary was amended
to be settled as GBP60,000 from the Company and GBP60,000 from APQ
Cayman Limited.
From 1 May 2020 the salary was amended to be settled as
GBP24,000 from the Company and GBP96,000 from APQ Cayman
Limited.
The Board considers that the salary is reasonable and
commensurate with the level of the appointment.
Bart Turtelboom is eligible for a grant of share awards in
accordance with the management share plan. For the performance
period ended 31 December 2017, Bart Turtelboom was awarded 467,313
share awards which vest quarterly over a 5 year period ending 31
December 2022. In order for the shares to vest Bart Turtelboom must
continue to be in employment at each vesting milestone. For the
year ended 31 December 2022, 93,463 shares had vested of which
70,098 had been issued. The charge for the year ended 31 December
2022 is $15,800 (2021: $46,033) and the remaining portion yet to
vest is $nil (2021: $15,800).
No other remuneration has been paid to directors apart from
reimbursement of their expenses.
REMUNERATION POLICY (CONTINUED)
For the year ended 31 December 2021
2022 APQ
APQ Global APQ Capital APQ Corporate
APQ Global -Limited APQ Cayman Services Knowledge Services
-Limited - Share -Limited -Limited -Limited -Limited
- based - - - -
Remuneration remuneration Remuneration Remuneration Remuneration Remuneration Total
$ $ $ $ $ $ $
Chief
Bart Executive
Turtelboom Officer 29,618 15,800 118,619 - - - 164,037
Wayne Non-Executive
Bulpitt Chairman 40,644 - - - - - 40,644
Philip Finance
Soulsby Director 36,998 - - - - - 36,998
Wadhah Non-Executive
Al-Adawi Director 24,255 - - - - - 24,255
-------------- -------------- -------------- -------------- -------------- -------------- ---------
131,515 15,800 118,619 - - - 265,934
============== ============== ============== ============== ============== ============== =========
2021 APQ
APQ Global APQ Capital APQ Corporate
APQ Global -Limited APQ Cayman Services Knowledge Services
-Limited - Share -Limited -Limited -Limited -Limited
- based - - - -
Remuneration remuneration Remuneration Remuneration Remuneration Remuneration Total
$ $ $ $ $ $ $
Chief
Bart Executive
Turtelboom Officer 32,968 46,033 131,984 - - - 210,985
Wayne Non-Executive
Bulpitt Chairman 54,880 - - - - - 54,880
Philip Finance
Soulsby Director 32,050 - - 2,062 - - 34,112
Wesley Executive
Davis Director 45,000 - 45,000 1,484 1,768 1,863 95,115
Wadhah Non-Executive
Al-Adawi Director 14,657 - - - - - 14,657
-------------- -------------- -------------- -------------- -------------- -------------- -----------
179,555 46,033 176,984 3,546 1,768 1,863 409,749
============== ============== ============== ============== ============== ============== ===========
At 31 December 2022, $nil (2021: $nil) was payable to the
directors.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF APQ GLOBAL
LIMITED
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 December 2022 and of its loss for the year then ended;
-- have been properly prepared in accordance with UK adopted
international accounting standards; and
-- have been prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008.
We have audited the financial statements of APQ Global Limited
(the 'Parent Company') and its subsidiaries (the 'Group') for the
year ended 31 December 2022 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flow and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted international
accounting standards.
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 believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's
Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Group's ability to
continue to adopt the going concern basis of accounting
included:
-- Obtaining the Directors' assessment of the going concern
status of the Group and evaluating the method of assessing going
concern in light of market volatility and the present uncertainties
such as the impact of the Russian/Ukraine conflict.
-- Challenging the assumptions and judgements made, such as
forecast revenue and expenditure against historic information.
-- Assessing the stress testing forecasts which included the
impact of poor economic conditions on income arising from the
investment portfolio and the ability to cover expenditure and
interest payments under these conditions. We considered these
stressed scenarios against the performance in 2022 in which poor
economic conditions had occurred to determine the appropriateness
of the stress test and the effect on going concern.
-- Assessing the Group's current and forecast compliance with
covenants under the base case and stress tested scenarios.
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 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 Parent Company's voluntary reporting on how
it has 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 Directors
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.
Overview
100% (2021: 100%) of Group profit
Coverage before tax
100% (2021: 100%) of Group revenue
100% (2021: 100%) of Group total assets
2022 2021
Valuation & existence of ü ü
investments - Cayman Subsidiary
and directly held listed
Key audit matters investments
Valuation & existence of ü ü
investments -Other investments
Investment Entity Status ü ü
----------------------------------------------------------
Group financial statements as a whole
Materiality
$381,000 (2021: $597,000) based on
1% (2021: 1%) of the gross investment
value.
----------------------------------------------------------
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group's system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there
was evidence of bias by the Directors that may have represented a
risk of material misstatement.
The group comprises the Parent Company, APQ Global Limited, one
subsidiary, APQ Partners LLP which is consolidated, four 100% owned
subsidiaries that are not consolidated but measured at fair value
through profit and loss due to APQ Global Limited meeting the
definition of an investment entity and one 50% owned entity also
valued at fair value through profit and loss. All components in the
group were in scope for our audit with APQ Cayman Limited and
Delphos Holdings Limited deemed significant components due to
financial factors. For the parent company and for the subsidiary
that is consolidated a full scope audit was performed by the group
audit team and for the entities that were not consolidated, the
group audit team performed audit procedures over the investment
balances held within these entities.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Key audit matter How the scope of our audit addressed
the key audit matter
Valuation The Company has an Our procedures included:
& Existence investment in its Cash
of Investments subsidiary APQ Cayman In respect of the cash balances:
- Cayman Limited (the "Cayman * 100% of cash balances have been confirmed to third
Subsidiary subsidiary") which party bank or custodian statements.
and directly represents the largest
held listed balance in the financial
investments statements. * Agreed foreign exchange rates used to convert
balances held in foreign currency to independent
Note 2.6, As described in note sources.
2.7, 15 2.6, 2.7, 15 and
and 25 25, the fair value
of the investment Valuation of Listed Equity Investments
in the Cayman subsidiary In respect of 100% of the quoted investment
is based on the net valuations:
asset value (NAV) * Confirmed year end prices to independent sources and
of the Cayman subsidiary. verified that there are no contra indicators, such as
The Cayman Subsidiary's liquidity considerations, to suggest year end prices
NAV is made up of are not the most appropriate indication of fair
cash balances (81%), value.
a diverse portfolio
of listed equity
and derivative instruments Valuation of Derivative Investments
(18%) and other assets Derivative investments comprised bonds,
and liabilities (1%). futures and forwards. For 100% of the
derivative investment valuations:
The Cayman subsidiary * Recalculated the derivative contracts using external
has a portfolio of sources (e.g. Bloomberg).
level 1 and level
2 investments that
are recognised at * Checked that the aggregate valuation of each
fair value and there reconciled to the fair value of the investment in the
is a risk these may Cayman subsidiary financial statements.
not be appropriately
stated and/or title
over these investments Existence of Investments
may not exist. For 100% of investments held either directly
by APQ Global limited or by the Cayman
Furthermore, the subsidiary we obtained evidence to support
Group holds direct existence by obtaining independent confirmations
listed investments. from custodians and brokers.
There is a risk that Other Assets and Liabilities
the prices used for Concerning the other assets and liabilities
these listed investments that make up the NAV of the Cayman subsidiary
are not reflective we performed a combination of analytical
of fair value and procedures and detailed testing as appropriate
the risk that errors agreeing to supporting documentation
made in the recording including supplier invoices and independent
of investment holdings confirmations.
result in the incorrect Key Observations
reflection of investments Based on the procedures performed we
owned directly by considered management's valuations of
the Group. these investments to be appropriate and
that there is appropriate title supporting
Valuation and existence the existence of investments.
of these investments
were considered to
be a key audit matter
due to the significance
of the balance and
the level of audit
effort required.
------------------------------- ---------------------------------------------------------------
Valuation The Group holds investments For all investments we:
& Existence in a number of other * Challenged whether the valuation methodology was the
of Investments entities either directly most appropriate in the circumstances under the
- Other or indirectly through International Private Equity and Venture Capital
investments subsidiary holding Valuation ("IPEV") Guidelines and IFRSs;
companies.
Note 2.6, As described in note
2.7, 15 2.6, 2.7, 15 and * Inspected the share purchase agreements or share
and 25 note 25, the fair certificates, as well as the investee company's
values of the investments filings and correspondence between the Group and
are determined by their management expert to confirm existence and
a variety of techniques. ownership of investments; and
These unquoted investments
are recognised at
fair value and there * Recalculated the fair value attributable to the Group,
is a risk these may having regard to the application of enterprise value
not be appropriately across the capital structures of the investee
valued through utilising companies.
inappropriate valuation
methodologies or
assumptions. For 100% of investments that were valued
There is also the using more subjective techniques (discounted
risk that errors cash flow forecasts, revenue multiples
made in the recording and earnings multiples) we:
of investment holdings * Reviewed the valuations prepared by management's
result in the incorrect expert, challenged and corroborated the inputs to the
reflection of investments valuation with reference to management information on
owned by the Group. investee companies, market data and our own
For these reasons understanding;
we considered this
to be a key audit
matter. * Considered the competence, capabilities and expertise
of management's expert through consideration of the
qualifications held by the expert and the position
held in the firm employing the expert. We also
considered the services provided by the firm which
employs the expert. We considered the independence
and objectivity of the expert through review of the
independence declaration made by the expert to the
Group in its valuation report. We considered the
appropriateness of the methodology and assumptions
employed by the expert through review of the
accounting framework and valuation guidelines
followed;
* Reviewed management information available to support
assumptions about maintainable revenues, expenditure,
working capital and tax which formed the basis of the
cash flow forecasts used in the valuations. In order
to gain further comfort over this management
information we:
o Agreed a sample of revenue per the
investee companies management accounts
back to invoice to support the existence
of revenue in the current year;
o Considered the ability of management
to forecast accurately by comparing the
2022 actual figures to the 2022 forecasts
produced in 2021 and received as part
of our 2021 audit;
o Obtained an understanding for management's
forecasts for revenue and considered
that against our knowledge of the entity
and the wider market;
o Obtained management's forecast EBITDA
margins, depreciation and working capital
and reviewed for reasonableness based
on current year actuals and the forecast
for revenue;
o Considered management's forecast tax
rate and considered this against the
tax rates in place and future tax rates
announced for the relevant jurisdictions.
* Considered the discount rate applied to the cash flow
forecasts by reference to venture capital discount
rates and where relevant performed a recalculation of
the cost of equity calculation and validated the
inputs utilised, which included stress testing;
* Considered the appropriateness of the cash flow
forecast period with reference to our knowledge of
the subsidiaries and industry norms; and
* Considered the appropriateness of the comparator
market and transaction multiples used with regards to
the operating activities of these companies.
We assessed the impact of the estimation
uncertainty concerning the assumptions
by, w here appropriate, performing sensitivity
analysis by developing our own point
estimate where we considered that alternative
input assumptions could reasonably have
been applied. We considered the overall
impact of such sensitivities on the portfolio
of investments in determining whether
the valuations as a whole are reasonable
and free from bias.
For 100% of investments that were valued
using less subjective techniques (cost
and price of recent investment reviewed
for changes in fair value) we:
* Verified the cost or price of recent investment to
supporting documentation;
* Considered indicators that the cost or price of
recent investment were no longer representative of
fair value considering, inter alia, the current
performance of the investee company and the
milestones and assumptions set out in the investment
proposal; and
* Considered whether the price of recent investment is
supported by alternative valuation techniques under
the revised IPEV guidelines.
For 100% of investments held at nil we:
* Considered the rationale for a nil valuation and
obtained confirmation that the entities are newly set
up and have not been trading during 2022 and
therefore have no management accounts as they have no
assets, liabilities, income or expenses.
Key Observations
Based on the procedures performed considered
management's valuations of these investments
to be appropriate and that there is appropriate
title supporting the existence of investments.
------------------------------- ---------------------------------------------------------------
Investment As described in note We reviewed the Group's listing documents,
Entity Status 3 to the financial financial statement disclosures and website
statements, the Directors publications to confirm that the Group's
Note 2.5, have determined that business purpose, objectives and strategy
3 and 15 the Group continues were congruous with those of an Investment
to meet the definition entity.
of an Investment We obtained management's memorandum which
Entity and therefore details the rationale for why APQ Global
holds certain subsidiaries Limited continues to meet the definition
at fair value through of an Investment entity and checked that
profit and loss as the rationale applied was consistent
opposed to consolidating with the requirements of IFRS 10. We
them. also checked that the explanations and
rationale were consistent with our understanding
The assessment of of the Group and its activities.
whether the Group We obtained management's memorandum in
continues to meet respect of each of the underlying investments
the definition of which detailed the rationale for acquiring
an investment entity each of these investments and the exit
under IFRS 10 Consolidated strategy for each investment. We considered
Financial Statements whether the rationale for acquiring these
is judgemental and investments was in accordance with our
must be reconsidered understanding obtained throughout the
at each reporting audit and was consistent with that of
date, taking into an investment entity.
account changes in Where appropriate we agreed the details
the portfolio and included in management's memoranda to
the Group's activities. supporting evidence such as Board meeting
minutes, publications for investors and
Due to acquisitions fair value assessments.
in unquoted investments We reviewed management's fair value assessment
through the subsidiaries of each of the investments and checked
continuing to occur that all of the investments were evaluated
year on year, there on a fair value basis at the year end.
is a continuing need We reviewed the key disclosures in respect
to spend additional of this matter to test that they were
time and effort re-assessing complete, accurate, and appropriate in
whether the Group the context of the requirements of IFRS
continues to meet 10.
the definition of
an investment entity. Key Observations
Therefore, this together
with the related Based on the procedures performed we
disclosures were consider management's view regarding
considered to be the Group's investment entity status
a key audit matter. to be appropriate.
------------------------------- ---------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
Group financial statements
2022 2021
------------------------------------- --------------------------------------
Materiality $381,000 $597,000
------------------------------------- --------------------------------------
Basis for determining materiality 1% of the Gross investment value as 1% of the Gross investment value
at the audit planning phase.
------------------------------------- --------------------------------------
Rationale for the benchmark applied As an Investment entity, As an Investment entity, investments
investments are the key balance in are the key balance in the financial
the financial statements and a statements and a
key balance of interest to the key balance of interest to the
users. 1% was selected based on the users. 1% was selected based on the
nature of the portfolio nature of the portfolio
and the level of judgement inherent and the level of judgement inherent
in the valuation. in the valuation.
------------------------------------- --------------------------------------
Performance materiality $247,000 $358,000
------------------------------------- --------------------------------------
Basis for determining performance 65% of materiality 60% of materiality
materiality
When setting performance When setting performance materiality
materiality we considered a number we considered a number of factors
of factors including the expected including the expected
misstatements, the history of misstatements, the history of
misstatements and brought forward misstatements and brought forward
adjustments from the prior adjustments from the prior
years as well as the areas of the years as well as the areas of the
financial statements subject to financial statements subject to
estimation uncertainty. estimation uncertainty.
------------------------------------- --------------------------------------
Component materiality
We set materiality for each significant component of the Group
based on a percentage of between 70% and 95% (2021: 70% and 95%) of
Group materiality due to the size and our assessment of the risk of
material misstatement of the Group. Component materiality was set
between $266,000 and $361,000 (2021: $418,000 and $567,000). In the
audit of each component, we further applied performance materiality
levels of 65% (2021: 60%) of the component materiality to our
testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of $7,000 (2021:
$11,000). We also agreed to report differences below this threshold
that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the Annual
Report and Consolidated Financial Statements other than the
financial statements and our auditor's report thereon. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
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.
Corporate governance statement
As the Group has voluntarily adopted the UK Corporate Governance
Code 2018 we are required to review the Directors' statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Parent Company's
compliance with the provisions of the UK Corporate Governance Code
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.
Going concern
and longer-term * The Directors' statement with regards to the
viability appropriateness of adopting the going concern basis
of accounting and any material uncertainties
identified set out on page 41; and
* The Directors' explanation as to their assessment of
the Group's prospects, the period this assessment
covers and why the period is appropriate set out on
page 42.
Other Code
provisions * Directors' statement on fair, balanced and
understandable set out on page 13;
* Board's confirmation that it has carried out a robust
assessment of the emerging and principal risks set
out on page 8;
* The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 9; and
* The section describing the work of the Audit and Risk
Committee set out on page 21.
------------------------------------------------------------------------
Other Companies (Guernsey) Law, 2008 reporting
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law, 2008 requires us to report to
you if, in our opinion:
-- proper accounting records have not been kept by the Parent Company; or
-- the Parent Company financial statements are not in agreement
with the accounting records; or
-- we have failed to obtain all the information and explanations
which, to the best of our knowledge and belief, are necessary for
the purposes of our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors'
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or 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.
Extent to which the audit was capable of detecting
irregularities, including fraud
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:
Non-compliance with laws and regulations
Based on:
-- Our understanding of the Group and the industry in which it operates;
-- Discussion with management and those charged with governance; and
-- Obtaining and understanding of the Group's policies and
procedures regarding compliance with laws and regulations,
we considered the significant laws and regulations to be
Companies (Guernsey) Law, 2008, UK-adopted international accounting
standards, the AIM listing rules and the TISE listing rules.
The Group is also subject to laws and regulations where the
consequence of non-compliance could have a material effect on the
amount or disclosures in the financial statements, for example
through the imposition of fines or litigations. We identified such
laws and regulations to be US Foreign Accounts Tax Compliance Act,
Employment law and Health & safety and UK Bribery Act 2010.
Our procedures in respect of the above included:
-- Review of minutes of meeting of those charged with governance
for any instances of non-compliance with laws and regulations;
-- Enquiries of management, the Directors, and the Audit
Committee, as to whether they were aware of any non-compliance with
laws and regulations;
-- Obtaining an understanding of the control environment in
monitoring compliance with laws and regulations.
-- Review of financial statement disclosures and agreeing to supporting documentation; and
-- Review of legal invoice and legal correspondence to identify
potential non-compliance with laws and regulations or undisclosed
contingencies and commitments.
Fraud
We assessed the susceptibility of the financial statements to
material misstatement, including fraud. Our risk assessment
procedures included:
-- Enquiry with management and those charged with governance
including management, the Directors, and the Audit Committee,
regarding any known or suspected instances of fraud;
-- Obtaining an understanding of the Group's policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to
fraud.
-- Review of minutes of meeting of those charged with governance
for any known or suspected instances of fraud;
-- Discussion amongst the engagement team as to how and where
fraud might occur in the financial statements; and
-- Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud.
Based on our risk assessment, we considered the area's most
susceptible to fraud to be Management override of Controls,
Valuation of Unquoted Investments and Revenue Recognition.
Our procedures in respect of the above included:
-- Testing a sample of journal entries throughout the year,
which met a defined risk criteria, by agreeing to supporting
documentation;
-- Agreeing revenue to supporting documentation such as; bank
statements, management accounts of investee companies, and
subsidiary company Board approvals for dividend income as
appropriate to gain assurance over the existence of revenue;
and
-- the procedures outlined in our key audit matters above in
respect of unquoted investment valuations.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members who were
all deemed to have appropriate competence and capabilities and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a
body, in accordance with Section 262 of the Companies (Guernsey)
Law, 2008. 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.
The engagement partner on the audit resulting in this
independent auditor's opinion is Elizabeth Hooper.
BDO LLP
Chartered accountants
London, UK
Date: 5(th) June 2023
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
2022 2021
Note $ $
Revenue 5 7,198,826 6,897,187
Net loss on financial assets at fair value
through profit and loss 15 (20,202,661) (8,242,268)
Administrative expenses 6 (303,405) (4,186,954)
Other income 9 - 647,912
Operating loss for the year before tax (13,307,240) (4,884,123)
Interest receivable 10 15,165 13,748
Interest payable 11 (2,360,017) (2,722,318)
Impairment of financial assets at amortised
cost 16 (712,660) -
Loss on ordinary activities before taxation (16,364,752) (7,592,693)
Tax on loss from ordinary activities - -
Total loss for the year (16,364,752) (7,592,693)
============== =================
Other comprehensive income - -
Total comprehensive loss for the year (16,364,752) (7,592,693)
============== =================
Basic losses per share 12 (0.20843) (0.09684)
Diluted losses per share 12 (0.20843) (0.09684)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Company No.
62008
As at 31 December 2022
2022 2021
Note $ $
Assets
Non-current assets
Property, plant and equipment 14 26,982 34,168
Right of use assets 23 82,872 80,187
Investments 15 38,162,574 59,734,052
-------------- --------------
Total non-current assets 38,272,428 59,848,407
Current assets
Trade and other receivables 16 3,055,956 940,428
Cash and cash equivalents 586,040 670,644
-------------- --------------
Total current assets 3,641,996 1,611,072
Total assets 41,914,424 61,459,479
============== ==============
Current liabilities
Trade and other payables 17 (756,296) (840,406)
-------------- --------------
Total current liabilities (756,296) (840,406)
Long term liabilities
3.5% Convertible Unsecured Loan Stock 18 (33,922,606) (37,025,083)
6% Convertible preference shares 19 - -
Lease liabilities 23 - -
Total long term liabilities (33,922,606) (37,025,083)
Net assets 7,235,522 23,593,990
============== ==============
Equity
Share capital 20 100,141,648 100,005,450
Equity component of 3.5% Convertible Unsecured
Loan Stock 18 6,919,355 6,919,355
Equity component of 6% Convertible preference
shares 19 - -
Other capital reserves 21 37,417 167,331
Share warrants reserve 22 - -
Accumulated losses (94,935,385) (78,570,633)
Exchange reserve 2.15 (4,927,513) (4,927,513)
Total equity 7,235,522 23,593,990
============== ==============
Net asset value per ordinary share 9.21c 30.07c
============== ==============
The Financial Statements on pages 34 to 73 were approved by the
Board of Directors of APQ Global Limited and signed on 5 June 2023
on its behalf by:
___________________ ___________________
Bart Turtelboom Phil Soulsby
Chief Executive Officer Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2022
Convertible
CULS preference Other
equity shares Share capital
Share component equity warrants reserves Accumulated Exchange
Notes capital component losses reserve Total
$ $ $ $ $ $ $ $
As at 1
January 2021 99,869,252 6,919,355 100,813 107,702 259,460 (71,085,642) (4,927,513) 31,243,427
Comprehensive
loss for
the year
Loss for the
year - - - - - (7,592,693) - (7,592,693)
Equity after
total
comprehensive
loss for the
year 99,869,252 6,919,355 100,813 107,702 259,460 (78,678,335) (4,927,513) 23,650,734
Contributions
by and
distributions
to owners
Share warrants
cancelled 22 - - - (107,702) - 107,702 - -
Repurchase of
Convertible
Preference
Shares 19 - - (100,813) - - - - (100,813)
Share based
payments 21 - - - - 57,541 - - 57,541
Share based
payments
settled in
cash 21 - - - - (13,472) - - (13,472)
Issue of share
awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - - - -
As at 31
December 2021 100,005,450 6,919,355 - - 167,331 (78,570,633) (4,927,513) 23,593,990
============= ============= ============= =========== =========== ============== ============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
As at 31 December 2022
Convertible
CULS preference Other
equity shares Share capital
Share component equity warrants reserves Accumulated Exchange
Notes capital component losses reserve Total
$ $ $ $ $ $ $ $
As at 1
January 2022 100,005,450 6,919,355 - - 167,331 (78,570,633) (4,927,513) 23,593,990
Comprehensive
loss for
the year
Loss for the
year - - - - - (16,364,752) - (16,364,752)
Equity after
total
comprehensive
loss for the
year 100,005,450 6,919,355 - - 167,331 (94,935,385) (4,927,513) 7,229,238
Contributions
by and
distributions
to owners
Share based
payments 21 - - - - 19,756 - - 19,756
Share based
payments
settled in
cash 21 - - - - (13,472) - - (13,472)
Issue of share
awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - - - -
As at 31
December 2022 100,141,648 6,919,355 - - 37,417 (94,935,385) (4,927,513) 7,235,522
============= ============ ============= =========== =========== ============== ============= ==============
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2022
2022 2021
Cash flow from operating activities Note $ $
Cash generated from operations
Loss for the financial year (16,364,752) (7,592,693)
Adjustments for non-cash income and expenses
Equity settled share-based payments 21 19,756 57,541
Depreciation on property, plant and equipment 14 17,083 11,295
Depreciation on right of use assets 23 80,187 80,189
Net loss on financial assets at fair value
through profit and loss 15 20,202,661 8,242,268
Gain on repurchase of 6% convertible preference
shares - (647,912)
Exchange rate fluctuations (4,214,851) (360,458)
Changes in operating assets and liabilities
Increase in trade and other receivables 16 (492,077) (95,727)
(Decrease)/increase in trade and other payables 17 (77,456) 85,355
(Increase)/decrease in receivables from
group undertakings 16 (1,623,451) 260,533
(Decrease)/increase in payables from group
undertakings 17 (5,746) 282,526
-------------- -------------
Cash (utilised by)/generated from operations (2,458,646) 322,917
Interest received 10 (15,165) (13,748)
Interest paid 11 2,360,017 2,722,318
Net cash (outflow)/inflow from operating
activities (113,794) 3,031,487
Cash flow from investing activities
Payments to acquire investments (538,404) (612,310)
Payments to acquire property, plant and
equipment 14 (9,897) (31,963)
Proceeds from disposal of investments 1,907,221 203,371
Interest received 10 15,165 13,748
Net cash inflow/(outflow) from investing
activities 1,374,085 (427,154)
Cash flow from financing activities
Preference share dividends paid 11 - (120,600)
Repurchase of convertible preference shares - (800,000)
Interest on CULS 18 (1,268,504) (1,436,939)
Cash settled share-based payments 21 (13,472) (13,472)
Principal paid on lease liabilities 23 (79,490) (88,016)
Net cash outflow from financing activities (1,361,466) (2,459,027)
Net (decrease)/increase in cash and cash
equivalents (101,175) 145,306
Cash and cash equivalents at beginning of
year 670,644 509,928
Exchanged rate fluctuations on cash and
cash equivalents 16,571 15,410
Cash and cash equivalents at end of year 586,040 670,644
-------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2022 (continued)
2022 2021
$ $
Reconciliation of cash flows to debt
Brought forward 37,108,863 37,734,253
Cash flows used in servicing interest payments
of CULS (1,268,504) (1,436,939)
Cash flows used in principal payments of
lease liabilities (79,490) (88,016)
Cash flows used in repurchase of convertible
preference shares - (800,000)
Non cash flows - recognition of lease liability 82,872 -
Non cash flows - net impact of (derecognition)
of convertible preference shares - (547,099)
Non cash flows - amortisation of discount
on CULS issue 2,356,754 2,590,378
Non cash flows - amortisation of discount
on lease liabilities 3,263 10,773
Exchange differences (4,198,280) (354,487)
Closing balance 34,005,478 37,108,863
------------- -------------
Net debt comprises the following:
Convertible Unsecured Loan Stock 2024 33,922,606 37,025,083
6% convertible preference shares - -
Lease liabilities 82,872 83,780
------------- -------------
34,005,478 37,108,863
------------- -------------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022
1. Corporate information
The financial statements of APQ Global Limited (the "Group") for
the year ended 31 December 2022 were authorised for issue in
accordance with a resolution of the Board of Directors on 5 June
2023. The Company is incorporated as a limited company in Guernsey.
The Company was incorporated on 10 May 2016 for an unlimited
duration in accordance with the Companies (Guernsey) Law, 2008 .
The Company's registered office is at PO Box 142, Suite 2 Block C,
Hirzel Court, St Peter Port, Guernsey, GY1 3HT.
The objective of the Company is to steadily grow its earnings to
seek to deliver attractive returns and capital growth through a
combination of building growing businesses in emerging markets as
well as earning revenue from income generating operating
activities[13].
The Company and its subsidiaries[14] have no investment
restrictions and no maximum exposure limits will apply to any
investments made by the Group, unless otherwise determined and set
by the Board from time to time. No material change will be made to
the Company's or subsidiaries objective or investing policy without
the approval of Shareholders by ordinary resolution.
The Group's investment activities are managed by the Board.
The shares are quoted on The International Stock Exchange for
informational purpose. The ordinary shares are admitted to trading
on AIM.
2. Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance UK adopted International Accounting
Standards (UK IAS) and applicable law. The financial statements
have been prepared on a historical-cost basis, except for financial
assets and financial liabilities held at fair value through profit
or loss (FVTPL) that have been measured at fair value. The
financial statements have been prepared on a going concern
basis.
The principal accounting policies are set out below.
2.2 Going concern
Going Concern
The Directors believe that it is appropriate to adopt the going
concern basis in preparing the Financial Statements since the
ultimate assets of the Company mainly consist of securities which
are readily realisable and, accordingly, the Company has adequate
financial resources to continue in operational existence for at
least 12 months from the date of this report. The Company will be
able to meet all its liabilities as they fall due. See below for
the Stress Testing applied in coming to this conclusion.
Stress Testing
After assessing the Company as a Going Concern in normal (poor)
economic conditions across a two year horizon, the Company would
maintain a sufficient expense coverage ratio net of paying all its
operating expenses and net of its financial payment obligations to
the CULS. The Company would not breach any debt covenants and would
retain USD 30.0 (+8.3) million in cash as of June 30th, 2024 [15]
.
Under normal market assumptions, the Company assumes that it
meets all its financial obligations as well as its operating
expenses. It earns a nominal income/growth yield on its Liquid
Market Portfolio based on prevailing market risk premiums. The
Company forecasts to receive dividend income from its Direct
Investment Portfolio ($7.9 million). Under poor economic
conditions, the earnings assumptions are reduced, and $4.8m
dividends are received from the Company's Direct Investment
Portfolio, whilst the financial obligations and expenses are held
constant.
2.2 Going concern (continued)
Dividend Suspension
The suspension of the dividend paid to ordinary shareholders
will increase the liquidity available to the Company by
approximately $6m per annum based on level of dividends paid prior
to implementation of the dividend hold. The Board reviews the
dividend policy quarterly. The dividend remains on hold until
further notice.
Long Term Viability Statement
There is currently no strict regime of Corporate Governance to
which the Company must adhere to, however there are guidelines set
out for AIM companies. The Company complies with the UK code on
Corporate Governance, issued July 2019 for periods beginning on or
after 1 January 2020 to the extent outlined in the Corporate
Governance section above on pages 16 and 17. In accordance with
provision 31 of the UK Corporate Governance Code, the Directors
have assessed the prospects of the Company over a longer period
than the 12 months minimum required by the 'Going Concern'
provision. Three years is deemed to be an appropriate time period
for management to implement its medium-term strategic objectives
set out in the Business Model and Strategy section (page 8) of
these financial statements.
Further to this page - Going Concern, the Company extends its
above analysis to a three-year cash flow forecast (to June 2026)
using newly targeted budgets and concluded that:
Assuming normal (poor) economic conditions[16], the Company
would preserve an expense coverage ratio net of its financial
obligations of 143, retaining USD 29 (10)million in cash on its
balance sheet as of June 30, 2026 providing considerable headroom
to absorb poor conditions. These figures include the settlement of
the CULS of $36m in September 2024. The group will if necessary
liquidate the portfolio over the next two years in preparation for
the redemption,
Based on the Company's processes for monitoring operating costs,
share discount, internal controls, invested asset allocation, risk
profile, liquidity risk and the assessment of the principal risks
and uncertainties facing the Company, the Directors have concluded
that there is a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall
due over the forecasted period to 30 June 2026
2.3 Functional and presentational currency
The Group's presentational and functional currency is US
Dollars.
2.4 Standards issued
Standards, amendments and interpretations effective for the
current year
The following standards, interpretations and amendments were
effective for the current year however did not have a significant
impact on the financial position or performance of the Group:
Amendments to IFRS 3 Reference to the Conceptual Framework
(effective for financial years beginning on or after 1 January
2022).
Amendments to IAS 16 Property, Plant and Equipment - Proceeds
before Intended Use (effective for financial years beginning on or
after 1 January 2022).
Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a
Contract (effective for financial years beginning on or after 1
January 2022).
Amendments to References to the Conceptual Framework in IFRS
Standards (effective for financial years beginning on or after 1
January 2022).
2.4 Standards issued (continued)
Standards, amendments and interpretations effective for the
current year (continued)
Amendments to interest rate benchmark reform in IFRS 9 Financial
Instruments, IAS 39 Financial Instruments: Recognition and
Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4
Insurance contracts and IFRS16 Leases (effective for financial
years beginning on or after 1 January 2021).
Amendments to IFRS 16, COVID-19-Related Rent Concessions
(effective for financial years beginning on or after 30 June 2021)
.
Early adoption of standards
The Group did not adopt new or amended standards in the year
that are yet to become effective.
Standards issued but not yet effective
IFRS 17 Insurance contracts Supersedes IFRS 4 Insurance contracts Effective 1 January
2023
Amendments to standards issued but not yet effective
IAS 1 Presentation of Classification of liabilities as Effective 1 January
Financial Statements current or non-current 2023
Disclosure of material accounting Effective 1 January
policies 2023
IAS 8 Accounting Policies, Definition of accounting estimates Effective 1 January
Changes in Accounting 2023
Estimates and Errors
IAS 12 Taxation Deferred tax related to assets and Effective 1 January
liabilities arising from a single 2023
transaction.
The impact of these standards is not expected to be material to
the reported results and financial position of the Group. The Group
has not adopted any of these standards early.
2.5 Basis of consolidation
The Directors have concluded that APQ Global Limited has all the
elements of control as prescribed by IFRS 10 "Consolidated
Financial Statements" in relation to its subsidiaries and that the
Company satisfies the criteria to be regarded as an investment
entity. For a detailed analysis of the assessment of the criteria
please refer to note 3; Significant accounting judgements,
estimates and assumptions. Based on this, the subsidiaries listed
in Note 15 are therefore measured at fair value through profit or
loss (FVTPL), in accordance with IFRS 13 "Fair Value Measurement"
and IFRS 9 "Financial Instruments".
Notwithstanding this, IFRS 10 requires subsidiaries that provide
services that relate to the investment entity's investment
activities to be consolidated. The subsidiary APQ Partners LLP
assists the Board with implementation of its business strategy,
provides research on business opportunities in emerging markets and
provides support for cash management and risk management purposes.
Accordingly, the consolidated financial statements of the Group
include the results of the Company, APQ Partners LLP and APQ
Capital Services Limited, whilst APQ Cayman Limited, APQ Corporate
Services Limited, Delphos Holdings Limited, Evergreen Impact
Limited and APQ Knowledge Limited are measured at FVTPL. The
results of APQ Partners LLP are consolidated from the date control
commenced. Intra-group balances and transactions and any unrealised
income and expenses arising from intra-group transactions are
eliminated in preparing these consolidated financial
statements.
2.6 Financial instruments
The Group classifies its financial assets and financial
liabilities at initial recognition into the following categories,
in accordance with IFRS 9 Financial Instruments.
2.6 Financial instruments
Financial assets at FVTPL
The investments listed in note 15 are designated at fair value
through profit or loss upon initial recognition on the basis that
they are part of a group of financial assets that are managed and
have their performance evaluated on a fair value basis, in
accordance with risk management and investment strategies of the
Company, as set out in the Company's offering document.
In accordance with the exception under IFRS 10 Consolidated
Financial Statement for an investment entity, the Company does not
consolidate its investments in the subsidiaries listed in note 15
and has designated the investments as fair value through profit or
loss in the financial statements. The investments in APQ Cayman
Limited, APQ Corporate Services Limited, Delphos Holdings Limited
and APQ Knowledge Limited are subsequently measured at fair value
with movements in fair value recognised as net loss on financial
assets at fair value through profit and loss in the consolidated
statement of comprehensive income.
Financial assets held at amortised cost
The Group recognises trade debtors, accrued income and other
debtors as financial assets classified as amortised cost. These
assets are held in order to collect the contractual cash flows and
the contractual cash flows are solely payments of principal and
interests. These are classified, at initial recognition, as
receivables at fair value plus transaction costs and are
subsequently measured at amortised cost. The Group has adopted the
simplified approach to the credit loss model. Under the simplified
credit loss model approach a provision is recognised based on the
expectation of default rates over the full lifetime of the
financial assets without the need to identify significant increases
on credit risk on these assets.
A financial asset (or, where applicable, a part of a financial
asset or a part of a group of similar financial assets) is
derecognised where the rights to receive cash flows from the asset
have expired, or the Group has transferred its rights to receive
cash flows from the asset, or has assumed an obligation to pay the
received cash flows in full without material delay to a third party
under a pass-through arrangement and either:
(a) the Group has transferred substantially all of the risks and
rewards of the asset; or
(b) the Group has neither transferred nor retained substantially
all the risks and rewards of the asset but has transferred control
of the asset.
When the Company has transferred its right to receive cash flows
from an asset (or has entered into a pass-through arrangement), and
has neither transferred nor retained substantially all of the risks
and rewards of the asset nor transferred control of the asset, the
asset is recognised to the extent of the Group's continuing
involvement in the asset. In that case, the Group also recognises
an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Further detail of the Group's financial assets held at amortised
cost are disclosed in Note 16 and Note 25 in these financial
statements.
Financial liabilities held at amortised cost
The Group recognises trade creditors, other creditors, accruals
liability component of convertible preference shares, and the
liability component of convertible loan stock as other financial
liabilities. Other financial liabilities are classified, at initial
recognition, as payables at fair value net of transaction costs and
are subsequently measured at amortised cost using the effective
interest method. Further details are disclosed in Note 17, Note 18,
Note 19, Note 23 and Note 25 in these financial statements.
The Group derecognises a financial liability when the obligation
under the liability is discharged, cancelled or expired.
2.7 Fair value measurement
The Company measures its investments in the subsidiaries listed
in note 15 at fair value at each reporting date.
For APQ Cayman Limited this is considered to be the carrying
value of the net assets of APQ Cayman Limited. APQ Cayman Limited
measures its underlying investments at fair value.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either in the
principal market for the asset or liability or, in the absence of a
principal market, in the most advantageous market for the asset or
liability. The principal or the most advantageous market must be
accessible to the Company. The fair value of an asset or a
liability is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their economic best
interest.
The fair value for financial instruments traded in active
markets at the reporting date is based on their quoted price (bid
price for long positions and ask price for short positions),
without any deduction for transaction costs.
For all other financial instruments, not traded in an active
market, including the subsidiaries listed in note 15, the fair
value is determined by using valuation techniques deemed to be
appropriate in the circumstances. These have been determined in
accordance with the International Private Equity and Venture
Capital Valuation (IPEV) Guidelines. These guidelines require the
valuer to make judgements with regards to the most appropriate
valuation method to be used and the results and inputs used to
determine these valuations.
Valuation methods that may be used include:
-- the income approach - valuation through discounted cash flow
forecast of future cash flows or earnings, using appropriate
discount rates.
-- the market approach - valuation by comparing the asset being
valued to comparable assets for which price information is readily
available. This price information can be in the form of
transactions that have occurred or market information on companies
operating in a similar industry.
The use of these guidelines requires management to make
judgements in relation to the inputs utilised in preparing these
valuations. These include but are not limited to:
-- determination of appropriate comparable assets and benchmarks; and
-- adjustments required to existing market data to make it more
comparable to the asset being valued.
The use of these guidelines additionally requires management to
make significant estimates in relation to the inputs utilised in
preparing these valuations. These include but are not limited
to:
-- future cash flow expectations deriving from these assets; and
-- appropriate discount factors to be used in determining the discounted future cash flows.
For assets and liabilities that are measured at fair value on a
recurring basis, the Company identifies transfers between levels in
the hierarchy by re-assessing the categorisation (based on the
lowest level input that is significant to the fair value
measurement as a whole) and deems transfers to have occurred at the
beginning of each reporting period.
2.8 6% Convertible preference shares
APQ Capital Services Limited, a subsidiary of the Company,
issued 6% convertible preference shares ("CPS"). The CPS contain a
perpetual 6% dividend rate and a conversion option for ordinary
shares of APQ Global Limited. On initial issue the CPS were
recognised as a liability comprising a liability held at amortised
cost and a derivative conversion option held at fair value through
profit and loss.
At the date of issue, the fair value of the liability component
held at amortised cost was estimated by assuming that an equivalent
non-convertible obligation of the Company would have a coupon rate
of 7.9%. The fair value of the derivative component, containing a
variable conversion rate, is derived from the difference between
the value of the consideration determined for the acquisition of
Parish Group Limited and the fair value assigned to the liability
held at amortised cost.
The terms of the CPS were amended on the 30 June 2020, to amend
the conversion option to a fixed ratio of CPS to ordinary shares.
Subsequent to this amendment to the CPS are regarded as a compound
instrument, comprising of a liability component and an equity
component. Due to the significant change in the terms of the CPS
the initial instrument was derecognised and then recognised at the
new fair value. The gain of $661,581 on the derecognition of the
liability is recognised within other income in the statement of
comprehensive income.
On amendment, the fair value of the liability component was
estimated by assuming that an equivalent non-convertible obligation
of the Company would have a coupon rate of 11.9%. The fair value of
the equity component was determined in based on the present value
of the average gain on conversion based on a range of simulated
share prices.
The dividends on the convertible preference shares are taken to
the statement of comprehensive income as finance costs.
The convertible preference shares were repurchased during 2021
as detailed in note 19.
2.9 Share warrants
Share warrants issued are measured at fair value at the date of
issue using the Black-Scholes pricing model, which incorporates
certain input assumptions including the warrant price, risk-free
interest rate, expected warrant life and expected share price
volatility. The fair value is included as a component of equity and
is transferred from the share warrant equity reserve to share
capital on exercise. If the warrants expire then the fair value is
transferred from the share warrant equity reserve to retained
earnings. The share warrants were cancelled during 2021 as detailed
in note 22.
2.10 Foreign currency translations
Transactions during the year, including purchases and sales of
securities, income and expenses, are translated at the rate of
exchange prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are retranslated at the functional currency rate of
exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates as at
the dates of the initial transactions. Non-monetary items measured
at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
Foreign currency transaction gains and losses on financial
instruments classified as at FVTPL are included in profit or loss
in the statement of comprehensive income as part of the 'net (loss)
or gain on financial assets at fair value through profit or
loss'.
2.11 Share capital
In the event of the liquidation of the Company the Ordinary
Shares entitle the holder to a pro rata share of the Company's net
assets. Shares are issued net of transaction costs, which are
defined as incremental costs directly attributable to the equity
transaction that otherwise would have been avoided.
2.12 3.5% Convertible Unsecured Loan Stock 2024
3.5% Convertible Unsecured Loan Stock 2024 ("CULS") issued by
the Company is regarded as a compound instrument, comprising of a
liability component and an equity component. At the date of issue,
the fair value of the liability component was estimated by assuming
that an equivalent non-convertible obligation of the Company would
have a coupon rate of 6.5%. The fair value of the equity component,
representing the option to convert liability into equity, is
derived from the difference between the issue proceeds of the CULS
and the fair value assigned to the liability. The liability
component is subsequently measured at amortised cost using the
effective interest rate.
Direct expenses associated with the CULS issue are allocated to
the liability and equity components in proportion to the split of
the proceeds of the issue. Expenses allocated to the liability
component are amortised over the life of the instrument.
The interest expense on the CULS is calculated according to the
effective interest rate method by applying the assumed rate of 6.5%
at initial recognition to the liability component of the
instrument. The difference between this amount and the actual
interest paid is added to the carrying amount of the CULS.
2.13 Share-based payments
On 19 April 2017, and amended on 17 July 2018, the Company
formalised a management share plan. The plan allows for certain
members of the management to benefit from 20% of any increase in
the year end book value per share for a given year (a performance
period). Awards can be issued as an allocation of a specified
number of shares or as an option (a right to acquired shares under
the plan for nil consideration). Since any awards granted are to be
settled by the issuance of equity, they are deemed to be equity
settled share-based payments accounted for in accordance with IFRS
2.
Equity-settled share-based payments are measured at fair value
at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payments is expensed over the
vesting period, together with a corresponding increase in other
capital reserves, based upon the Group's estimate of the shares
that will eventually vest, which involves making assumptions about
any performance and service conditions over the vesting period. The
vesting period is determined by the period of time the relevant
participant must remain in the Group's employment before the rights
to the shares transfer unconditionally to them. The total expense
is recognised over the vesting period, which is the period over
which all the specified vesting conditions are to be satisfied. At
the end of each period, the Group revises its estimates on the
number of awards it expects to vest based on service
conditions.
Where the terms of an equity-settled transaction are modified,
as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in
the value of the transaction as a result of the modification, as
measured at the date of modification.
Where an equity-settled transaction is cancelled, it is treated
as if it had vested on the date of the cancellation, and any
expense not yet recognised for the transaction is recognised
immediately. However, if a new transaction is substituted for the
cancelled transaction and designated as a replacement transaction
on the date that it is granted, the cancelled and new transactions
are treated as if they were a modification of the original
transaction, as described in the previous paragraph.
The Group retains the right to settle the share award in cash.
The transaction is accounted for as an equity settled payment and
vested over the life of the award. At the point the Group elects to
settle the share award in cash, or an expectation that the award
will be settled in cash, the value of the portion to be settled in
cash is reclassified from the share-based payment reserve to
liabilities. Any difference between the value recorded in the
share-based payment reserve and the value of the cash to be paid is
recognised as an expense in the statement of comprehensive
income.
Per the management share plan the vesting period for any awards
issued can be up to 5 years and subject to certain conditions. The
first awards were issued in the year with respect to the
performance period ended 31 December 2017.
2.14 Accumulated losses
Accumulated losses consists of profit or losses for the
financial year and prior years as disclosed in the statement of
comprehensive income less foreign currency translation
differences.
2.15 Exchange reserve
During the year ended 31 December 2017, the Company changed the
functional and presentational currency in which it presents its
financial statements from Pounds Sterling to US Dollars. A change
in presentational currency is a change in accounting policy which
is accounted for retrospectively. The financial information for the
period ended 31 December 2016 was previously reported in Pounds
Sterling and was restated in US Dollars using differing exchange
rates. The retained earnings were converted using an average rate
for the period they related to. Equity shares were converted using
the historical date which was the date of issue of the shares. The
assets and liabilities were converted at the closing exchange date
at 31 December 2016. Therefore, an exchange reserve is included in
the Statement of Financial Position to reflect the fact this change
in presentational currency from the functional currency to 31
December 2016.
2.16 Distributions to shareholders
Dividends are at the discretion of the Company. A dividend to
the Company's shareholders is accounted for as a deduction from
retained earnings. An interim dividend is recognised as a liability
in the period in which it becomes irrevocable, which is following
its payment. A final dividend is recognised as a liability in the
period when it becomes irrevocable, which is once it has been
approved at the annual general meeting of shareholders.
2.17 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprise cash on hand and short-term deposits in banks that are
readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, with original
maturities of three months or less.
Short-term investments that are not held for the purpose of
meeting short-term cash commitments and restricted margin accounts
are not considered as 'cash and cash equivalents'.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined .
2.18 Property, plant and equipment
Property, plant and equipment is recorded at historical cost
less accumulated depreciation and impairment losses.
Depreciation is provided on all property, plant and equipment at
rates calculated to write off the cost or valuation of each asset
on a straight-line basis over its expected useful life to estimated
residual values, as follows:
Office equipment over 3 years
Furniture and fixtures over 4 years
Leasehold improvements over 2 years
Residual values, useful lives and depreciation method are
reviewed, and adjusted if appropriate, at each year end.
2.19 Impairment of receivables from group undertakings
Impairment provisions for receivables from group undertakings
are recognised based on a forward-looking expected credit loss
model. The methodology used to determine the amount of the
provision is based on whether there has been a significant increase
in credit risk since initial recognition of the financial asset.
For those where the credit risk has not increased significantly
since initial recognition of the financial asset, no impairment is
recognised. For those that are determined to be credit impaired,
lifetime expected credit losses along with interest income on a net
basis are recognised.
2.20 Interest revenue and expenses
Interest revenue and expenses are recognised in the statement of
comprehensive income for all interest-bearing financial instruments
using the effective interest method.
2.21 Dividend income
Dividend income is recognised on the date when the Company's
right to receive the payment is established. This is ordinarily at
the ex-dividend date.
2.22 Net gain or loss on financial assets and liabilities at
fair value through profit or loss
Net gains or losses on financial assets and liabilities at FVTPL
are changes in the fair value of financial assets and liabilities
held for trading or designated upon initial recognition as at FVTPL
and exclude interest and dividend income and expenses.
Unrealised gains and losses comprise changes in the fair value
of financial instruments for the period and from reversal of the
prior period's unrealised gains and losses for financial
instruments which were realised in the reporting period. Realised
gains and losses on disposals of financial instruments classified
as at FVTPL are calculated using the first-in, first-out (FIFO)
method. They represent the difference between an instrument's
initial carrying amount and disposal amount, or cash payments or
receipts made on derivative contracts (excluding payments or
receipts on collateral margin accounts for such instruments).
2.23 Fee expense
Fees are recognised on an accrual basis. Refer to Note 6 for
details of fees and expenses paid in the period.
2.24 Taxes
The Company is taxable in Guernsey at the company standard rate
of 0% (2021: 0%).
2.25 Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- leases of low value assets; and
-- leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
expensed in the period to which they relate.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased
asset.
2.25 Leases (continued)
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made.
Right-of-use assets are amortised on a straight-line basis over
the remaining term of the lease or over the remaining economic life
of the asset.
3. Significant accounting judgements, estimates and
assumptions
The preparation of the Group's financial statements requires
management to make judgements, estimates and assumptions that
affect the reported amounts recognised in the financial statements
and disclosure of contingent liabilities. However, uncertainty
about these assumptions and estimates could result in outcomes that
could require a material adjustment to the carrying amount of the
asset or liability affected in future periods.
Judgements
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts recognised in the financial
statements:
Assessment as investment entity
Entities that meet the definition of an investment entity within
IFRS 10 are required to measure their subsidiaries at fair value
through profit or loss rather than consolidate them, except to the
extent that the subsidiary provides services that relate to the
investment entity's investment activities. The criteria which
define an investment entity are, as follows:
-- an entity that obtains funds from one or more investors for
the purpose of providing those investors with investment management
services;
-- an entity that commits to its investors that its business
purpose is to invest funds solely for returns from capital
appreciation, investment income, or both; and
-- an entity that measures and evaluates the performance of
substantially all of its investments on a fair value basis.
The Company's listing document details its objective of
providing investment management services to investors which
includes investing in equities, fixed income securities, private
equity and property investments for the purpose of returns in the
form of investment income and capital appreciation. This is via its
subsidiary APQ Cayman Limited. The Company also holds several
private investments either directly or through its other
subsidiaries for the purpose of investment income and capital
appreciation.
The Company reports to its investors via quarterly investor
information, and to its management, via internal management
reports, on a fair value basis. All investments are reported at
fair value to the extent allowed by UK IAS in the Company's annual
reports. The Company has an exit strategy for all of its underlying
investments.
The Board has concluded that the Company meets additional
characteristics of an investment entity, in that it has more than
one investment; the Companies ownership interests are predominantly
in the form of equities and similar securities; it has more than
one investor and its investors are all not related parties.
The Board has therefore concluded that the Company meets the
definition of an investment entity. These conclusions will be
reassessed on an annual basis, if any of these criteria or
characteristics change. The Board therefore recognises its
investment listed in note 15 at fair value through profit or loss.
The Board has also concluded that since APQ Partners LLP provides
services related to the Company's investment activities, these
subsidiaries should be consolidated.
Valuation of investments
There are a range of methods for determining the fair value of
the unquoted investments held by the Group. Determination of the
most appropriate method for valuing these is a key judgement of the
Board, and the use of different methods will result in variations
in the fair value determined for each investment. The Board
determines the most appropriate method based of the life stage of
the investment and available comparisons to existing companies
operating in the same investments. The Board utilises qualified
third parties to assist in deciding the most appropriate valuation
technique.
Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, 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. The Group based its assumptions and estimates
on parameters available when the financial statements were
prepared. However, existing circumstances and assumptions about
future developments may change due to market changes or
circumstances arising beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Fair value of investments
The Directors consider that the fair value of the investment in
APQ Cayman Limited should be based on the NAV of APQ Cayman
Limited, please refer to note 2.6 and note 15 for further
discussion regarding the fair value of investments.
The Directors measure the investments listed in note 15 in
accordance with the IPEV guidelines. As these investments are
unlisted, their fair value is determined through a range of inputs
using external comparisons and management generated forecasts.
Forecasts are by their nature estimated expectations and this leads
to uncertainty with respect to the valuation of these
investments.
The forecast future cash flows are a key estimate in the
determination of these valuations and are subject to uncertainty.
These forecasts are determined at the Statement of Financial
Position date and do not reflect changes in these forecasts from
events after the reporting periods.
4. Information
For management purposes, the Group is organised into one main
operating segment, which invests in equities and credit, government
and local currency bonds. All of the Group's activities are
interrelated, and each activity is dependent on the others.
Accordingly, all significant operating decisions are based upon
analysis of the Group as one segment. The financial results from
this segment are equivalent to the financial statements of the
Group as a whole.
The following table analyses the Group's assets by geographical
location. The basis for attributing the assets are the place of
listing for the securities or for non-listed securities, country of
domicile.
2022 2021
Group $ $
Cayman 26,197,356 44,555,286
United Kingdom 530,371 480,794
Guernsey 15,184,847 13,215,073
Europe - 3,208,326
41,912,574 61,459,479
============ ============
5. Analysis of revenue
2022 2021
$ $
Dividends received from APQ Cayman Limited 7,128,826 6,707,714
Dividends received from APQ Knowledge Limited 70,000 189,473
7,198,826 6,897,187
=========== ===========
6. Analysis of administrative expenses
2022 2021
Notes $ $
Personnel expenses 8 790,277 1,145,728
Depreciation of property, plant and equipment 14 17,083 11,295
Depreciation of right of use assets 23 80,187 80,189
Payments on short term leases 168,172 21,329
Auditor's remuneration - Audit fees 161,750 168,238
Nominated advisor fees 62,369 70,689
Administration fees and expenses 204,751 193,761
Directors' remuneration 7 131,515 200,272
Other expenses 769,612 301,889
Professional fees 2,355,235 2,703,067
Share based payment expenses 21 19,755 57,541
Insurance 17,478 13,848
Bad debt expenses - -
Recharge of expenses to APQ Cayman Limited (342,630) (442,521)
Net exchange gains (4,132,149) (338,371)
303,405 4,186,954
============= ===========
7. Directors' remuneration
2022 2021
$ $
Directors' remuneration 131,515 200,272
Share based payment expenses 15,800 46,033
147,315 246,305
============= =========
The highest paid director was Bart Turtelboom
(2021: Bart Turtelboom) 45,418 [17] 79,001
============= =========
Average number of directors in the year 4 4
============= =========
8. Personnel expenses
2022 2021
$ $
Short term benefits - wage and salaries 361,903 424,132
Short term benefits - social security
costs 30,046 46,215
Short term benefits - other benefits 387,325 657,322
Short term benefits - Share based payment
expenses 3,955 11,508
Post-employment benefits 11,003 18,059
794,232 1,157,236
========= ===========
Personnel expenses include expenses per note 6 and the portion of share
based payments relating to individuals who are not directors of the Company.
Key management personnel expenses, excluding Directors' remuneration
detailed in note 7, is as follows:
2022 2021
$ $
Short term benefits - other benefits 365,338 620,789
Short term benefits - Share based payment
expenses 3,955 11,508
------------ -----------
369,293 632,297
============ ===========
Other benefits include drawings paid to the members of APQ Partners LLP
and staff benefits such as healthcare.
9. Other income
2022 2021
$ $
Gain on repurchase of 6% convertible preference
shares - 647,912
- 647,912
====== =========
10. Interest receivable
2022 2021
$ $
Loan interest receivable from Palladium
Trust Services Limited 13,609 13,748
Loan interest receivable from WDM Lex
Advisory Limited 1,404 -
Bank interest receivable 152 -
-------- --------
15,165 13,748
======== ========
11. Interest payable
2022 2021
$ $
Interest on 3.5% Convertible Unsecured
Loan Stock 2024 2,356,754 2,590,378
Interest on lease liabilities 3,263 11,340
Dividend paid on 6% convertible preference
shares - 120,600
2,360,017 2,722,318
=========== ===========
12. Losses Per Share
The basic and diluted losses per share are calculated by
dividing the loss by the average number of ordinary shares
outstanding during the year.
2022 2021
$ $
Total comprehensive loss for the year (16,364,752) (7,592,693)
Weighted average number of shares in issue 78,514,452 78,408,067
Losses per share (0.20843) (0.09684)
============== =============
Diluted losses per share (0.20843) (0.09684)
============== =============
The Group had share awards vested but not yet issued, which are
not dilutive in 2022 or 2021, as the impact of dilution would be to
decrease the loss per share. The impact of these share awards would
have no impact on the total comprehensive loss for the year. They
would increase the weighted average number of shares by 23,366
(2021: 116,828).
The Group has 6,000 (2021: 6,000) units of Convertible Loan
Stock which are potentially dilutive if converted into ordinary
shares. This would increase the weighted average number of shares
by 6,000 (2021: 6,000) exercise price on these conversion options
currently exceeds the traded share price of APQ Global. These are
not currently dilutive (2021: not dilutive).
13. Dividends
No dividends were declared in the year ended 31 December 2022
(2021: none)
The stated dividend policy of the Company is to target an
annualised dividend yield of 6% based on the Placing Issue Price.
Due to the impact of Covid-19, and continuing negative performance,
the Company has ceased all dividends until further notice.
There is no guarantee that any dividends will be paid in respect
of any financial year. The ability to pay dividends is dependent on
a number of factors including the level of income returns from the
Company's investee entities. There can be no guarantee that the
Group will achieve the target rates of return referred to in this
document or that it will not sustain any capital losses through its
activities.
14. Property, plant and equipment
Office Furniture Leasehold
equipment and fixtures improvements Total
$ $ $ $
Cost
At 1 January 2022 104,703 20,251 34,588 159,542
Additions during the
year 9,897 - - 9,897
At 31 December 2022 114,600 20,251 34,588 169,439
============ =============== =============== =========
Accumulated depreciation
At 1 January 2022 71,689 19,097 34,588 125,374
Charge for the year 16,354 729 - 17,083
At 31 December 2022 88,043 19,826 34,588 142,457
============ =============== =============== =========
Net book value
At 31 December 2022 26,557 425 - 26,982
============ =============== =============== =========
At 31 December 2021 33,014 1,154 - 34,168
============ =============== =============== =========
15. Investments
APQ
APQ Corporate APQ Delphos Evergreen BARTR
Cayman Services Knowledge Holdings Impact Holdings Listed
Limited Limited Limited Limited Limited Limited Investments Total
$ $ $ $ $ $ $ $
At 1
January
2021 53,586,488 9,168,732 1,330,042 - - - 3,679,429 67,764,691
Additions - 340,000 - 75,000 - - - 415,000
Fair value
movement (9,031,202) (4,673,141) 107,029 5,826,149 - - (471,103) (8,242,268)
Disposal - (203,371) - - - - - (203,371)
At 31
December
2021 44,555,286 4,632,220 1,437,071 5,901,149 - - 3,208,326 59,734,052
Additions - 538,404 - - - - - 538,404
Fair value
movement (18,357,930) (918,557) (692,476) 1,067,407 - 1 (1,301,106) (20,202,661)
Disposal - - - - - (1) (1,907,220) (1,907,221)
At 31
December
2022 26,197,356 4,252,067 744,595 6,968,556 - - - 38,162,574
============== ============= ============ =========== =========== ========== ============== ==============
The above table refers to direct group investments and holding
companies with all other indirect investment holdings noted below.
The Company meets the definition of an investment entity, it is
therefore required to measure its investments, including its
subsidiary undertakings at fair value. Subsidiary undertakings
whose primary purpose is to support the investment activities of
the Company are consolidated on a line for line basis. Subsidiary
undertakings which act as an investment holding company are valued
based on the underlying trading investment companies they hold.
These investments are held solely for capital appreciation and
investment income and measured at fair value through profit and
loss ("FVTPL").
Investments in subsidiaries
The following table outlines the subsidiary undertakings of the
Company:
Country Immediate Acquisition/
of Registered Parent Holding Incorporation
Name incorporation Office Company % Date Activity Recognition
APQ England 22a St. APQ 100 10 August Investment Consolidated
Partners and Wales James's Global 2016 support
LLP Square, Limited
London,
SW1Y 4JH
15. Investments (continued)
Investments in subsidiaries (continued)
Country Immediate Acquisition/
of Registered Parent Holding Incorporation
Name incorporation Office Company % Date Activity Recognition
APQ Cayman Cayman Mourant APQ 100 10 August Investment FVTPL
Limited Islands Ozannes Global 2016 entity
Corporate Limited
Services
(Cayman)
Limited,
94 Solaris
Avenue,
Camana
Bay, PO Box
1348, Grand
Cayman
KY1-1108
APQ Corporate Guernsey PO Box 142, APQ 100 10 January Investment FVTPL
Services Suite 2, Global 2019 holding
Limited Block Limited company
C, Hirzel
Court, St
Peter
Port, GY1
3HT
APQ Knowledge Guernsey PO Box 142, APQ 100 1 March Investment FVTPL
Limited Suite 2, Global 2019 holding
Block Limited company
C, Hirzel
Court,
Rohais,
St Peter
Port, GY1
3HT
New Markets England 22a St. APQ 100 26 February Trading FVTPL
Media & and Wales James's Knowledge 2019 investment
Intelligence Square, Limited company
Ltd London,
SW1Y 4JH
Palladium Seychelles Global APQ 100 22 February Trading FVTPL
Finance Group Gateway 8, Corporate 2019 investment
Limited Rue Services company
de la Limited
Perle,
Providence,
Seychelles
Palladium New Zealand Level 8, APQ 100 22 February Trading FVTPL
Trust Company AIG Corporate 2019 investment
(NZ) Limited Building, Services company
41 Limited
Shortland
Street,
Auckland,
New
Zealand,
1010
Palladium England 22a St. APQ 100 22 February Trading FVTPL
Trust Services and Wales James's Corporate 2019 investment
Ltd Square, Services company
London, Limited
SW1Y 4JH
Delphos United States 2121 K St, Delphos 100 3 March Trading FVTPL
International, NW STE 620, Holdings 2020 investment
Ltd Suite 1020, Limited company
Washington,
DC 20037
Parish Guernsey PO Box 142, APQ 100 29 January Trading FVTPL
Corporate Suite 2, Corporate 2020 investment
Services Block Services company
Limited(1) C, Hirzel Limited
Court , St
Peter
Port, GY1
3HT
15. Investments (continued)
Investments in subsidiaries (continued)
Country Immediate Acquisition/
of Registered Parent Holding Incorporation
Name incorporation Office Company % Date Activity Recognition
Parish Guernsey PO Box APQ 100 29 January Trading FVTPL
Group 142, Suite Corporate 2020 investment
Limited(1) 2, Block Services company
C, Hirzel Limited
Court , St
Peter
Port, GY1
3HT
Parish Guernsey PO Box APQ 100 29 January Trading FVTPL
Nominees 142, Suite Corporate 2020 investment
Limited(1) 2, Block Services company
C, Hirzel Limited
Court , St
Peter
Port, GY1
3HT
Parish Guernsey PO Box APQ 100 29 January Trading FVTPL
Trustees 142, Suite Corporate 2020 investment
Limited(1) 2, Block Services company
C, Hirzel Limited
Court , St
Peter
Port, GY1
3HT
Delphos Canada 202-230 Delphos 70 20 January Trading FVTPL
FMA ch. du Holdings 2021 investment
- Frontier Golf, Limited company
Markets Montreal,
Advisors QC H3E
Inc(2) 2A8,
Canada
Delphos Guernsey PO Box APQ 100 13 August Investment FVTPL
Holdings 142, Suite Global 2021 holding
Limited 2, Block Limited company
C, Hirzel
Court , St
Peter
Port, GY1
3HT
Delphos Guernsey PO Box Delphos 100 18 August Trading FVTPL
Capital 142, Suite Holdings 2021 investment
Limited 2, Block Limited company
C, Hirzel
Court , St
Peter
Port, GY1
3HT
Evergreen Guernsey PO Box APQ 50 10 August Trading FVTPL
Impact 142, Suite Global 2021 management
Limited 2, Block Limited consultancy
C, Hirzel
Court , St
Peter
Port, GY1
3HT
Delphos England 22a St. Delphos 97 6 October Trading FVTPL
Partners and Wales James's Holdings 2021 investment
LLP Square, Limited company
London,
England,
SW1Y
4JH
15. Investments (continued)
Investments in subsidiaries (continued)
Country Immediate Acquisition/
of Registered Parent Holding Incorporation
Name incorporation Office Company % Date Activity Recognition
Delphos Guernsey PO Box 142, Delphos 100 27 September Trading FVTPL
Services Suite 2, Holdings 2021 services
Limited Block Limited company
C, Hirzel
Court , St
Peter
Port, GY1
3HT
Promethean Malta 35/14 Salvu APQ 100 4 July 2022 Trading FVTPL
Trustees Psaila Corporate investment
Limited Street, Services company
(previously Birkirkara, Limited
WDM BKR 9072,
Trustees Malta
Limited)(3)
Promethean Malta 35/14 Salvu Promethean 100 4 July 2022 Trading FVTPL
Advisory Psaila Trustees services
Limited Street, Limited company
(previously Birkirkara,
WDM Lex BKR 9072,
Advisory Malta
Ltd)(3)
Delphos MMJ United States The Delphos 100 18 March 2022 Trading FVTPL
1, LLC(4) of America Corporation Holdings investment
Trust Limited company
Center,
1209 Orange
Street,
Wilmington,
Delaware
19801
Delphos MMJ United States The Delphos 100 18 March 2022 Trading FVTPL
2, LLC(4) of America Corporation Holdings investment
Trust Limited company
Center,
1209 Orange
Street,
Wilmington,
Delaware
19801
(1) Parish Group Limited is a fiduciary and corporate services
provider. In consideration to the sellers for the acquisition the
Company, via its wholly owned subsidiary, APQ Corporate Services,
paid a net amount of $4,095,630 cash consideration to the sellers.
APQ Capital Services Limited, a wholly owned subsidiary of the
Company, issued 268,000 Convertible Preference Shares (convertible
into ordinary shares in APQ Global) to the sellers at price of $10
per share. The Company additionally issued 1.0 million warrants in
APQ Global with an exercise price equal of 40.19 pence, to the
sellers. Total consideration is valued at $6,883,332 which the
Company invested in APQ Corporate Services Limited to facilitate
this investment. The share warrants and convertible preference
shares were cancelled during the prior year as set out in notes 19
and 22.
(2) On 20 January 2021, APQ Corporate Services Limited, a wholly
owned subsidiary of the Company, entered into an agreement to
purchase 70% of the FMA- Frontier Markets Advisors Inc a company
incorporated and domiciled in Canada which provide investment and
financing services. The total cash consideration of this purchase
agreement was $260,000. During the year ended 31 December 2021, a
further $155,000 was invested in Delphos FMA - Frontier Markets
Advisors Inc.
15. Investments (continued)
Investments in subsidiaries (continued)
(3) On 4 July 2022, APQ Corporate Services Limited, a wholly
owned subsidiary of the Company, acquired 100% of the equity in
Promethean Trustees Limited (previously WDM Trustees Limited) and
its subsidiary Promethean Advisory Limited (previously WDM Lex
Advisory Ltd) for a cash consideration of EUR500,000
($538,404).
(4) On 18 March 2022, APQ Global Limited incorporated Delphos
MMJ 1, LLC and Delphos MMJ 2, LLC for the purposes of acquiring an
investment broker in United States of America. The acquisition was
concluded in FY 2023 for a consideration of $100.
Investments in subsidiaries - disposals
On 23 December 2021, APQ Capital Services Limited was put into
voluntary strike off.
Other investments
On the 19 November 2018, APQ Global Limited acquired a capital
interest represents a 40% shareholding and equivalent voting rights
BARTR Holdings Limited, a company incorporated in England and
Wales, whose registered office is Suite 13 Durham Tees Valley
Business Centre, Orde Wingate Way, Stockton-On-Tees, England, TS19
0GD. BARTR Holdings Limited wholly owns two subsidiaries, BARTR
Connect Limited, whose registered office is Suite 13 Durham Tees
Valley Business Centre, Orde Wingate Way, Stockton-On-Tees,
England, TS19 0GD, and BARTR Technologies Limited, whose registered
office is Suite 13 Durham Tees Valley Business Centre, Orde Wingate
Way, Stockton-On-Tees, England, TS19 0GD. On 19 May 2020, the
capital interest was converted from ordinary shares to preference
shares which have no voting rights, but preferential dividends and
preferential rights on assets on wind up of BARTR Holdings Limited.
BARTR Holdings Limited was held as an investment at fair value
through profit or loss. On 3 February 2022, APQ Global exited its
investment in BARTR Holdings Limited for a total consideration of
GBP1.
The Company has made direct investments in equities that are
freely traded on international stock exchanges. These investments
are highly liquid and measured at fair value through profit and
loss.
Valuation techniques
APQ Cayman Limited has a portfolio of tradable assets and
liabilities which it values at fair value using the same policies
as the Company. The Company is able to redeem its holding of APQ
Cayman Limited at its net asset value. Fair value of the investment
in APQ Cayman Limited is therefore measured at its Net Asset Value
("NAV"). NAV is determined based on the observable market values of
its portfolio of assets and liabilities.
Fair value of the investment in APQ Corporate Services Limited,
has been determined by determining the valuation of its underlying
investments. The underlying investments have been valued through
the income approach, incorporating comparison with external sources
and the expected cash flows of the investment. The income approach
was determined to be the most appropriate as the underlying
investments are revenue generating businesses.
Fair value of the investment in Delphos Holdings Limited, has
been determined by determining the valuation of its underlying
investments. The underlying investments have been valued through
the income approach, incorporating comparison with external sources
and the expected cash flows of the investment. The income approach
was determined to be the most appropriate as the underlying
investments are revenue generating businesses.
The investment in APQ Knowledge Limited was completed on 1 March
2019. Fair value has been determined by determining the valuation
of its underlying investments. The underlying investments have been
valued through the income approach, incorporating comparison with
external sources and the expected cash flows of the investment. The
income approach was determined to be the most appropriate as the
underlying investments are revenue generating businesses.
Listed investments are measured at fair value using the current
market bid price for the underlying equity as quoted on the
applicable stock exchange the security is traded on.
15. Investments (continued)
Unlisted managed funds
The Company classifies its investments into the three levels of
the fair value hierarchy based on:
Level 1: Quoted prices in active markets for identical assets or
liabilities;
Level 2: Those involving inputs other than quoted prices
included in Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices);
and
Level 3: Those with inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
The Company has classified its investments in APQ Corporate
Services Limited, Delphos Holdings Limited, Evergreen Impact and
APQ Knowledge Limited as level 3 as the inputs utilised in valuing
the investments are deemed to be unobservable, as they are private
investments. The most significant unobservable input used in the
fair value of the investments in APQ Corporate Services Limited,
Delphos Holdings Limited and APQ Knowledge Limited are the future
expected cash flows of the investments these companies hold, used
in deriving a valuation using discounted cash flows.
Valuation is determined for these holding companies by the value
of the underlying investments held.
The unobservable inputs of future cash flows could not be
reliably determined due to the pre-revenue nature of the business
and therefore the most reliable fair value to be determined was
$nil. The movements in the investments in the year are shown above.
Sensitivity to these inputs are discussed in Note 25.
The Company has classified its investments in APQ Cayman Limited
as level 3. Valuation is determined based on the NAV. The majority
of underlying assets and liabilities of APQ Cayman Limited are held
at fair value based on observable markets.
The listed investments are designated as Level 1 instruments in
the fair value hierarchy as fair value can be determined by the
quoted market price for these assets. The movement of investments
classified by level is as per the below.
Level 1 Level 2 Level Total
3
$ $ $ $
At 1 January 2021 3,679,429 - 64,085,262 67,764,691
Fair value movement (471,103) - (7,559,536) (8,030,639)
At 1 January 2022 3,208,326 - 56,525,726 59,734,052
Additions - - 538,404 538,404
Fair value movement (1,301,106) - (18,901,555) (20,202,661)
Disposal (1,907,220) - (1) (1,907,221)
At 31 December 2022 - - 38,162,574 38,162,574
============ ========= ============= =============
16. Trade and other receivables
2022 2021
$ $
Trade debtors 554,265 128,526
Amounts due from group undertakings 2,341,708 718,257
Prepayments and accrued income 45,255 50,138
Other debtors 114,728 43,507
3,055,956 940,428
=========== =========
No expected credit losses adjustments are included in the above
balances, as the majority of the balances relate to group
undertakings over which the Company has significant oversight, to
determine recoverability. There are no Bad debts in 2022 (2021:
$nil) to be recognised in the statement of comprehensive income for
the year.
17. Trade and other payables
2022 2021
$ $
Trade creditors 127,716 146,060
Amounts due to group undertakings[18] 310,022 315,768
Other creditors 23,862 21,605
Accruals 211,824 273,193
Lease liabilities 82,872 83,780
756,296 840,406
========= =========
18. 3.5% Convertible Unsecured Loan Stock 2024
Nominal Liability Equity
number component component
of CULS
$ $ $
As at 1 January 2021 41,446,167 36,226,778 6,919,355
Amortisation of discount on issue 2,590,378
and issue expenses - -
Interest paid during the year - (1,436,939) -
Exchange differences - (355,134) -
As at 31 December 2021 41,446,167 37,025,083 6,919,355
Amortisation of discount on issue 2,356,754
and issue expenses - -
Interest paid during the year - (1,268,504) -
Exchange differences - (4,190,727) -
As at 31 December 2022 41,446,167 33,922,606 6,919,355
============ ============= ============
At an Extraordinary General Meeting held on 4 September 2017,
Resolutions were passed approving the issue of 4,018 3.5 per cent.
convertible unsecured loan stock 2024 ("CULS") to raise
GBP20,090,000 before expenses. The CULS were admitted to trading on
the International Securities Market, the London Stock Exchange's
market for fixed income securities and dealings commenced at 8.00
a.m. on 5 September 2017.
Following Admission there were 4,018 CULS in issue. Holders of
the CULS are entitled to convert their CULS into Ordinary Shares on
a quarterly basis throughout the life of the CULS, commencing 31
December 2017, and all outstanding CULS will be repayable at par
(plus any accrued interest) on 30 September 2024. The initial
conversion price is 105.358 pence, being a 10 percent. premium to
the unaudited Book Value per Ordinary Share on 31 July 2017.
Following conversion of 80 percent. or more of the nominal amount
of the CULS originally issued, the Company will be entitled to
require remaining CULS Holders to convert their outstanding CULS
into Ordinary Shares after they have been given an opportunity to
have their CULS redeemed.
On 22 January 2018, the Company raised a further GBP10,207,300
($14,492,418) before expenses through the issue of 1,982 units of
3.5 percent. convertible unsecured loan stock 2024 in denominations
of GBP5,000 ($7,099) nominal each, at an issue price of GBP5,150
($7,312) per unit.
19. 6% convertible preference shares
Liability
Liability held at
Nominal number held at fair value
of preference amortised through profit Equity
shares cost and loss component
$ $ $ $
As at 1 January 2021 268,000 1,347,099 - 100,813
Repurchase of preference
shares (268,000) (1,347,099) - (100,813)
As at 1 January 2022
and 31 December 2022 - - - -
================ ============= ================== =============
The 268,000 convertible preference shares, issued on 29 January
2020, were repurchased on 9 November 2021 at a rate of 2.9851 US
dollars per convertible preference share. This resulted in a gain
on repurchase of $647,912 which has been recognised in the profit
and loss for the year ended 31 December 2021. The convertible
preference shares were cancelled subsequent to repurchase.
20. Share Capital
The authorised and issued share capital of the Company is
78,559,983 ordinary shares of no par value listed on The
International Stock Exchange and AIM. All shares are fully paid
up.
Quantitative information about the Company's capital is provided
in the statement of changes in equity and in the tables below.
Holders of ordinary shares are entitled to dividends when
declared and to payment of a proportionate share of the Companies
net asset value on any approved redemption date or upon winding up
of the Company. They also hold rights to receive notice, attend,
speak and vote at general meetings of the Company.
The Company's objectives for managing capital are:
-- To invest the capital in investments meeting the description,
risk exposure and expected return indicated in its listing
documents.
-- To maintain sufficient liquidity to meet the expenses of the
Company, pay dividends and to meet redemption requests as they
arise.
-- To maintain sufficient size to make the operation of the Company cost-efficient.
-- The Board has authority to purchase up to 14.99 percent. of
the issued Ordinary Share capital of the Company. The Board intends
to seek a renewal of this authority at each annual general meeting
of the Company. No buy backs occurred during the period under
review.
Ordinary
shares
No GBP $
As at 1 January 2021 78,347,359 76,898,497 99,869,252
Shares issued from share awards
during the year 106,312 100,682 136,198
At 31 December 2021 78,453,671 76,999,179 100,005,450
Shares issued from share awards
during the year 106,312 100,682 136,198
At 31 December 2022 78,559,983 77,099,861 100,141,648
============ ============ =============
During the year ended 31 December 2022, 106,312 (2021: 106,312)
shares were issued as part of the share award scheme as detailed in
note 21.
21. Share awards
On 19 April 2017 (and amended 17 July 2018), the Company
established a share award scheme for the employees of the Company.
The scheme grants the Board the authority to allot share awards or
share options with service conditions attached. Share awards or
options can only be awarded for performance periods whereby the
book value per share (excluding dividend transactions) exceeds the
book value per share for all previous performance period ends. The
maximum amount of share awards or options is determined by
reference to 20% of the increased performance of the current book
value per share against all previous performance periods. The Board
retains the right to settle these awards in either shares or cash.
As the Company does not have a present obligation to settle in cash
the awards are all recognised as equity settled share awards.
The first share awards were granted in 2019 with respect to the
performance period ended 31 December 2017.
Fair value
Type No. of of instrument Final vesting
Grant date of award instruments granted Vesting conditions date
cents
Awards vest quarterly
over 5 years provided
the employee is
1 January still in service 31 December
2018 Shares 584,141 128.11 of the Group. 2022
Fair value for the award dated 1 January 2018 is calculated by
reference to the fixed value of cash per share that the Board is at
discretion to pay rather than settle the award in shares.
2022 2021
Weighted Weighted
average average of
of fair fair value
Number of value of Number of instrument
awards instrument of awards
cents cents
Outstanding at 1
January 146,036 128.11 262,864 128.11
Settled in equity (106,312) 128.11 (106,312) 128.11
Settled in cash (10,516) 128.11 (10,516) 128.11
----------- ------------- ------------ ----------------
Outstanding at 31
December 29,208 128.11 146,036 128.11
----------- ------------- ------------ ----------------
Charge for
awards to Charge for Total charge
be settled awards settled for share
in Equity in Cash based awards
$ $ $
Year ended 31 December
2021 44,071 13,472 57,541
============= ================= ===============
Year ended 31 December
2022 6,283 13,472 19,755
============= ================= ===============
The unvested portion of the share awards currently granted is
$nil (2021: $19,750). Of the awards outstanding the number vested
that are available for settlement amount to 23,366 (2021:
23,366).
22. Share warrants
On 29 January 2021, the Company issued 1,000,000 warrants as
part of the acquisition of Parish Group Limited. The fair value of
the warrants issued as part of the consideration for this
investment was determined using the Black Scholes option pricing
model. The assumptions used in the valuation are as follows:
Assumptions
Share price on issue (cents) 68.50
Exercise price of share warrants (cents) 70.94
Volatility 10.45%
Duration 6.6 years
Risk free rate 1.00%
Dividend yield 0.00%
Warrants Warrants Warrants Warrants
outstanding cancelled outstanding outstanding Exercise
at 1 January during at 1 January at 31 December price
Issue date 2021 the year 2022 2022 cents Expiry Date
29 January 30 August
2020 1,000,000 (1,000,000) - - 70.94 2026
1,000,000 (1,000,000) - -
=============== ============= =============== =================
The weighted average remaining life of the warrants outstanding
is nil (2021: nil) years.
The share warrants were cancelled during 2021 with an amount of
GBP107,702 transferred to retained earnings from the share warrants
reserve.
23. Leases
The Company's subsidiary, APQ Partners LLP, leases an office in
London from which support functions are conducted. The lease has a
full term of 24 months and ends on 24 December 2023. The lease has
been capitalised, as set out below, based on an incremental
borrowing rate of 9%.
Right of use asset Land and
buildings
$
Cost
At 1 January 2022 295,392
Addition 82,872
------------
At 31 December 2022 378,264
------------
Accumulated depreciation
At 1 January 2022 215,205
Charge for the year 80,187
------------
At 31 December 2022 295,392
------------
Net book value
At 31 December 2022 82,872
============
At 31 December 2021 80,187
============
23. Leases (continued)
Lease liability 2022 2021
$ $
Leased asset on 1 January 83,780 160,376
Interest on lease liability 3,263 10,773
Payments for lease (79,490) (88,016)
Exchange differences (7,553) 647
New lease commitment 82,872 -
At 31 December 82,872 83,780
---------- ----------
The lease falls due:
Within 1 year 82,872 83,780
82,872 83,780
========== ==========
The undiscounted cashflows on the lease are disclosed in note
25.
24. Net asset value per ordinary share
The net asset value per ordinary share is calculated by dividing
the net assets of the Group by the number of ordinary shares
outstanding at the statement of financial position date.
2022 2021
$ $
Net assets at 31 December 7,235,522 23,593,990
Shares in issue at 31 December 78,559,983 78,453,671
Net asset value per ordinary share 9.21c 30.07c
============ ============
25. Financial risk and management objectives and policies
The Group's objective in managing risk is the creation and
protection of shareholder value. Risk is inherent in the Group's
activities, but it is managed through a process of ongoing
identification, measurement and monitoring, subject to risk limits
and other controls. The process of risk management is critical to
the Group's continuing profitability. Further details of the
principal business risks are included on page 9. The Group is
exposed to market risk (which includes interest rate risk, currency
risk and price risk), liquidity risk, credit risk and investment
holding period risk arising from the financial instruments it
holds.
25. Financial risk and management objectives and policies
(continued)
The following table analyses the Group's financial assets and
liabilities in accordance with IFRS 9, which are exposed to these
market risks:
Financial Assets 2022 2021
Fair value Fair value
through through
profit Amortised profit Amortised
and loss cost Total and loss cost Total
$ $ $ $ $ $
Investments 38,162,574 - 38,162,574 59,734,052 - 59,734,052
Trade debtors - 554,265 554,265 - 128,526 128,526
Amounts due
from group undertakings - 2,341,708 2,341,708 - 718,257 718,257
Prepayments
and accrued
income - 45,255 45,255 - 50,138 50,138
Other debtors - 114,728 114,728 - 43,507 43,507
Cash and cash
equivalents - 586,040 586,040 - 670,644 670,644
Total 38,162,574 3,641,996 41,914,424 59,734,052 1,611,072 61,345,124
============ =========== ============ ============ =========== ============
Financial
Liabilities 2022 2021
Fair value
Fair value through
through profit Amortised profit and Amortised
and loss cost Total loss cost Total
$ $ $ $ $ $
Trade creditors - 127,716 127,716 - 146,060 146,060
Amounts due
to group
undertakings - 310,022 310,022 - 315,768 315,768
Other creditors - 23,862 23,862 - 21,605 21,605
Accruals - 211,824 211,824 - 273,193 273,193
Lease
liabilities - 82,872 82,872 - 83,780 83,780
CULS liability - 33,922,606 33,922,606 - 37,025,083 37,025,083
Total - 34,678,902 34,678,902 - 37,865,489 37,865,489
================= ============ ============ ============= ============ ============
Market risk
Market price risk arises from uncertainty about the future
prices and valuations of financial instruments held in accordance
with the Company's investment objectives. It represents the
potential loss that the Company might suffer through market price
movements in respect of quoted investments and also changes in the
fair value of unquoted investments that it holds.
Market price risk
Equity price risk arises from equity securities held as part of
the Group's portfolio of investments. The Group's investments
comprise unquoted investments via its subsidiaries (see note 15).
APQ Cayman Limited has investments in quoted equities and debt
instruments whose value is dependent on movements in markets. The
unquoted investments in the Group's other subsidiaries are subject
to fluctuations in markets which may impact their profitability and
the realisable value on exit from the investments.
25. Financial risk and management objectives and policies
(continued)
Market price risk (continued)
The Board seeks to manage this risk whilst also attempting to
maximise returns. The Board regularly reviews the portfolio of
investments and utilises an investment advisory committee to help
manage the risks of the portfolio.
The most significant input used in the fair value of APQ Cayman
Limited is the valuations of its underlying portfolio of assets and
liabilities. A reasonable change of 40% in the NAV based on these
valuations will have an impact of $10,478,942 (2021: $17,822,114)
on the profit of the business.
The valuation of the investments of the Group's other
subsidiaries make use of multiple independent unobservable inputs
and it is impractical to perform sensitivity analysis on one input
utilised in the calculation of the valuations. Estimates and
underlying assumptions are reviewed for reasonableness however
these inputs are highly subjective. Changes in any one of the
variables, earnings or revenue multiples or illiquidity discounts
could potentially have a significant effect on valuation.
A change of 25% in the value of the investment of APQ Corporate
Services Limited will have an impact of $1,063,017 (2021:
$1,158,055) on the profit of the business.
A change of 50% in the value of the investment of APQ Knowledge
Limited will have an impact of $372,298 (2021: $718,536) on the
profit of the business.
A change of 15% in the value of the investment of Delphos
Holdings Limited will have an impact of $1,045,283 (2021: $885,172)
on the profit of the business.
A change in the market price of the directly held listed
equities of 20% will have an impact of $nil (2021: $641,665) on the
profit of the business.
The fluctuations specified above for unquoted and quoted
investments are fluctuations that could reasonably occur given the
nature of the entities and the volatility arising from external
market factors. These fluctuations have been revised over those
used in prior years and are based on the actual fluctuations
observed on the respective investments.
Interest rate risk
The bank accounts of APQ Global Limited are not interest bearing
and so there is limited exposure to interest rate risk. In
addition, the CULS are at a fixed interest rate so there is no
exposure to interest rate risk on these instruments. The Board does
not feel it needs to actively manage this risk.
Interest rate benchmark reform
The Financial Conduct Authority have transitioned away from the
London InterBank Offered Rate (LIBOR) to the Sterling OverNight
Index Average (SONIA) from the end of the 2021 year and will no
longer persuade, or compel, banks to submit to LIBOR.
The Group does not have any derivative or financial instruments
that are valued and recognised using the LIBOR rate and thus is not
exposed to any risks from the Interest rate benchmark reform.
Currency risk
The Group's functional and reporting currency is denominated in
US Dollars. The Group's Ordinary Shares are denominated in
Sterling. Through its activities in emerging markets the Group will
have underlying exposure to a range of emerging market currencies.
Accordingly, the Group's earnings may be affected favourably or
unfavourably by fluctuations in currency rates. The Board may
engage in the future in currency hedging in seeking to mitigate
foreign exchange risk although there can be no guarantees or
assurances that the Group will successfully hedge against such
risks. The Board therefore does not feel it needs to actively
manage this risk at this time.
25. Financial risk and management objectives and policies
(continued)
Currency risk
The Group holds assets and liabilities in foreign currencies at
year end. The following table details the Group's assets and
liabilities and the currency exposure to the Group:
2022 2021
Pound Euro Pound Euro
sterling Total sterling Total
$ $ $ $ $ $
Cash and cash
equivalents 428,156 49,672 477,828 470,838 113,761 584,599
Trade debtors 28,405 - 28,405 128,526 - 128,526
Other debtors 93,466 21,262 114,728 43,507 - 43,507
Amounts due
from group
undertakings - 159,302 159,302 168,257 - 168,257
Trade creditors (12,522) (6,604) (19,126) (146,060) - (146,060)
Other creditors (23,862) - (23,862) (21,605) - (21,605)
Amounts due
to group
undertakings (45,612) - (45,612) (315,768) - (315,768)
Accruals (211,824) - (211,824) (273,193) - (273,193)
Lease liabilities (82,872) - (82,872) (83,780) - (83,780)
CULS (33,922,606) - (33,922,606) (37,025,083) - (37,025,083)
(33,749,271) 223,632 (33,525,639) (37,054,361) 113,761 (36,940,600)
============== ========= ============== ============== ========= ==============
A reasonable change of 5% in the Group's foreign currency net
liabilities (2021: liability) will have an impact of $1,676,282
(2021: $1,847,030) on the value of the net assets. This level of
change is considered to be reasonable based on observations of
current conditions.
Liquidity risk
Liquidity risk is the risk that the Group and the Company may
not be able to meet a demand for cash or fund an obligation when
due. The Board continuously monitor forecast and actual cash flows
from operating, financing and investing activities to consider
payment of dividends, repayment of the Group's outstanding debt or
further investing activities.
The Group may employ borrowings in connection with its business
activities. Prospective investors should be aware that in the event
that the Group's income falls for whatever reason, the use of
borrowings will increase the impact of such a fall on the net
revenue of the Group.
The Group will pay interest on any borrowing it incurs. As such,
the Group is exposed to interest rate risk due to fluctuations in
the prevailing market rates. Interest rate movements may affect the
level of income receivable by the Group and the interest payable on
the Group's variable rate borrowings.
25. Financial risk and management objectives and policies
(continued)
Liquidity risk (continued)
The following table details the Group's expected maturity for
its financial liabilities together with the contractual
undiscounted cash flow amounts:
Less than 5 + years Total
31 December 2022 1 year 1 - 5 years
$ $ $ $
Liabilities
Trade creditors 127,716 - - 127,716
Amounts due to group
undertakings 310,022 - - 310,022
Other creditors 23,862 - - 23,862
Accruals 211,824 - - 211,824
Lease liabilities 82,872 - - 82,872
CULS 981,105 37,350,045 - 38,331,150
1,737,401 37,350,045 - 39,087,446
=========== ============= =========== ============
Less than 5 + years Total
31 December 2021 1 year 1 - 5 years
$ $ $ $
Liabilities
Trade creditors 146,060 - - 146,060
Amounts due to group
undertakings 315,768 - - 315,768
Other creditors 21,605 - - 21,605
Accruals 273,193 - - 273,193
Lease liabilities 83,780 - - 83,780
CULS 1,104,712 43,477,844 - 44,582,556
1,945,118 43,477,844 - 45,422,962
=========== ============= =========== ============
Credit risk
Credit risk is the risk that the counterparty to a financial
instrument will cause a financial loss for the Group by failing to
discharge an obligation. The Group generates its returns through
its investments (See Note 15) and is thus exposed to the risk of
credit-related losses primarily through its investments. The risk
of default from the investment in APQ Cayman is considered minimal
because the Group is able to redeem its investment in APQ Cayman
Limited at any time. The underlying assets within APQ Cayman
Limited are readily tradable and thus liquid. The credit risk of
its other subsidiary investments are managed by those entities and
the credit risk on these receivables are factored into the fair
value of these investments held by the Group.
The Group's primary credit risk on its own assets are primarily
related to amounts due from group undertakings. These are deemed to
be low risk as the Group has significant oversight of these
entities and therefore does not recognise any expected credit
losses unless the group undertaking no longer has the facility to
repay these amounts. The Company will then provide against these
amounts in full and once confirmed they are irrecoverable these are
written off.
Other significant assets exposed to credit risk are the Group's
cash and cash equivalents. The Group banks with Credit Suisse,
JPMorgan Chase & Co, HSBC and Barclays. As per Fitch ratings,
Credit Suisse has a credit rating of BBB+ (with UBS the new parent
company of Credit Suisse holding AA- credit rating), JPMorgan Chase
& Co has a credit rating of AA-, HSBC has a credit rating of
AA- and Barclays has a credit rating of A+.
The Group's maximum exposure to credit risk in relation to the
financial assets is the carrying amount as disclosed in the
statement of financial position.
25. Financial risk and management objectives and policies
(continued)
Credit risk (continued)
The Group is also exposed to the following risks through its
investment in APQ Cayman Limited "Cayman"):
-- Cayman has investment exposure to emerging markets, which are
subject to certain risks and special considerations that are not
typically associated with more developed markets and economies.
-- Cayman invests in derivative instruments which can be highly
volatile and may be difficult to value and/or liquidate.
-- Cayman seeks exposure to emerging markets through the use of
structured products which carry additional credit risks, are
inherently difficult to value, illiquid and subject to counterparty
risk on maturity.
-- Cayman is subject to the risk of the inability of any
counterparty to perform with respect to transactions, whether due
to insolvency, bankruptcy or other causes. Where Cayman utilises
derivative instruments, it is likely to take credit risk with
regard to such counterparties and bear the risk of settlement
default.
-- Cayman is subject to custody risk in the event of the
insolvency of the custodian or any sub-custodians.
The Group intentionally exposes itself to these risks as part of
its operations. These risks are managed on an ongoing basis by
performance reviews of the underlying portfolio on a quarterly
basis by the Board of the Group.
26. Capital Management
The Group can raise new capital which may be implemented through
the issue of a convertible debt instrument or such other form of
equity or debt as may be appropriate. It also has a buy-back
authority subject to a maximum buy-back of 14.99 percent of the
issued Ordinary Shares.
The Group's objectives for managing capital are:
-- To invest the capital into investments through its subsidiaries.
-- To maintain sufficient liquidity to meet the expenses of the
Group and pay dividends.
-- To maintain sufficient size to make the operation of the Group cost-effective.
The Board reviews and approves the investment of capital into
illiquid investments and regularly reviews its dividend policy to
ensure it remains in accordance with its capital aims.
The Group may utilise borrowings in connection with its business
activities. Although there is no prescribed limit in the Articles
or elsewhere on the amount of borrowings that the Group may incur,
the Directors will adopt a prudent borrowing policy and oversee the
level and term of any borrowings of the Group and will review the
position on a regular basis. The Group's capital comprises:
2022 2021
$ $
Share capital 100,141,648 100,005,450
Equity component of 3.5% Convertible Unsecured
Loan Stock 2024 6,919,355 6,919,355
Other capital reserves 37,417 167,331
Accumulated deficit (94,935,385) (78,570,633)
Exchange reserve (4,927,513) (4,927,513)
Total shareholders' funds 7,235,522 23,593,990
============== ==============
27. Related party transactions
Wayne Bulpitt founded the Active Group, now renamed the Aspida
Group, who acted as administrator until 10 June 2020; he is also a
shareholder of the Company.
Bart Turtelboom founded APQ Partners LLP and is also a director
of APQ Cayman Limited as well as the largest shareholder of the
Company.
27. Related party transactions (continued)
The Directors are remunerated from the Company in the form of
fees, payable monthly in arrears. Bart Turtelboom was entitled to
an annual salary of GBP120,000 as Chief Executive Officer of the
Company. This is split between the Company and APQ Cayman
Limited.
2022 APQ Global APQ APQ
Limited APQ Capital Knowledge Corporate
APQ Global - Share APQ Cayman Services Limited Services
Limited - based Limited - Limited - - Limited -
Remuneration remuneration Remuneration Remuneration Remuneration Remuneration Total
$ $ $ $ $ $ $
Chief
Bart Executive
Turtelboom Officer 29,618 15,800 118,619 - - - 164,037
Wayne Non-Executive
Bulpitt Chairman 40,644 - - - - - 40,644
Philip Executive
Soulsby Director 36,998 - - - - - 36,998
Wadhah Non-Executive
Al-Adawi Director 24,255 - - - - - 24,255
-------------- -------------- -------------- -------------- -------------- -------------- -----------
131,515 15,800 118,619 - - - 265,934
============== ============== ============== ============== ============== ============== ===========
2021 APQ Global APQ APQ
Limited APQ Capital Knowledge Corporate
APQ Global - Share APQ Cayman Services Limited Services
Limited - based Limited - Limited - - Limited -
Remuneration remuneration Remuneration Remuneration Remuneration Remuneration Total
$ $ $ $ $ $ $
Chief
Bart Executive
Turtelboom Officer 32,968 46,033 131,984 - - - 210,985
Wayne Non-Executive
Bulpitt Chairman 54,880 - - - - - 54,880
Philip Executive
Soulsby Director 32,050 - - 2,062 - - 34,112
Wesley Executive
Davis Director 45,000 - 45,000 1,484 1,768 1,863 95,115
Wadhah Non-Executive
Al-Adawi Director 14,657 - - - - - 14,657
-------------- -------------- -------------- -------------- -------------- -------------- -----------
179,555 46,033 176,984 3,546 1,768 1,863 409,749
============== ============== ============== ============== ============== ============== ===========
27. Related party transactions (continued)
The directors represent key management personnel. Additional key
management personnel are the partners of the LLP, details of their
remuneration is disclosed in Note 8.
APQ Global Limited has incurred $129,454 (2021: $105,537) of
fees and expenses to Parish Group Limited as administrator of the
Company. As at 31 December 2022 the balance owed to Parish Group
Limited was $nil (2021: $nil).
As described in the Listing Document, and under the terms of the
Services Agreement, APQ Partners LLP assist the Board and the
Group's management based in Guernsey with the implementation of its
business strategy, provide research on business opportunities in
emerging markets and provide support for cash management and risk
management purposes. APQ Partners LLP are entitled to the
reimbursement of expenses properly incurred on behalf of APQ Global
Limited in connection with the provision of its services pursuant
to the agreement.
APQ Partners LLP has recharged expenses of $1,050,377 (2021:
$1,093,313) to APQ Global Limited during the year. As at 31
December 2022, APQ Global Limited owed $83,736 to APQ Partners LLP
(2021: $32,891 due from APQ Partners LLP). In the current and prior
year amounts have been eliminated on consolidation.
During the year, the Group recharged expenses to APQ Cayman
Limited of $361,450 (2021: $459,025) and was recharged expenses of
$42,653 (2021: $16,504) from APQ Cayman Limited. The Company
received dividends of $7,128,826 (2021: $6,707,714). At 31 December
2022, an amount of $27,202 was due from APQ Cayman Limited (2021:
$1,355 was due to APQ Cayman Limited).
During the year, APQ Global Limited received funding of $nil
(2021: $264,410) from APQ Corporate Services Limited. As at 31
December 2022, an amount of $264,410 (2021: $264,410) was due to
APQ Corporate Services Limited (See note 17).
During the year, the company received dividends of $70,000
(2021: $189,473) from APQ Knowledge Limited.
During the year, APQ Global Limited paid $nil (2021: $120,600)
as dividends to the holders of the convertible preference shares on
behalf of APQ Capital Services Limited.
During the year, APQ Global Limited provided a loan to Palladium
Trust Services Limited, a group undertaking, of $nil (2021:
$20,619). In addition, the loan attracts interest at a rate of 10%.
During the year, APQ Global Limited charged interest of $13,608
(2021: $13,748). As at year end, APQ Global Limited was owed
$162,662 (2021: $168,257) from Palladium Trust Services Limited
(See note 16). The balance owing has been provided for in full as
irrecoverable.
During the year, New Markets Media & Intelligence Ltd
provided funding to APQ Global Limited of $nil (2021: $19,014). The
loan is provided at a 10% interest fee. As at year end, APQ Global
Limited owed $45,612 (2021: $51,358) to New Markets Media &
Intelligence Ltd with the balance being included with the Amount
due to Group undertakings. (See note 17).
During the year, APQ Global Limited provided funding of $nil
(2021: $550,000) to Delphos Holdings Limited, the balance from the
prior year was written off in the current year. As at 31 December
2022, an amount of $nil (2021: $550,000) was due from Delphos
Holdings Limited (See note 16).
During the year, APQ Global Limited paid expenses totalling
$363,779 (2021: $nil) on behalf of Delphos Partners LLP. At 31
December 2022, an amount of $363,779 (2021: $nil) was due to APQ
Global Limited. The balance is interest free and repayable on
demand.
During the year, APQ Global Limited provided funding of $151,246
(2021: $nil) to Delphos International Limited. At 31 December 2022,
an amount of $151,246 (2021: $nil) was due to APQ Global Limited.
The balance is interest free and repayable on demand.
During the year, APQ Global Limited paid expenses totalling
$1,098,814 (2021: $nil) on behalf of Delphos Impact Limited and
provided funding to Delphos Impact Limited of $850,000. At 31
December 2022, an amount of $1,948,814 (2021: $nil) was due to APQ
Global Limited. The balance is interest free and repayable on
demand.
During the year, APQ Global Limited paid expenses totalling
$240,349 (2021: $nil) on behalf of Delphos Services Limited. At 31
December 2022, an amount of $240,349 (2021: $nil) was due to APQ
Global Limited. The balance is interest free and repayable on
demand.
27. Related party transactions (continued)
During the year, APQ Global Limited made a subordinated loan to
Promethean Advisory Limited amounting to $99,355 which bears
interest at 5%. Interest of $1,404 (2021: $nil) accrued on the loan
during the year. APQ Global Limited also paid expenses on behalf of
Promethean Advisory Limited amounting to $51,115 (2021: $nil). At
31 December 2022, a total amount of $159,302 (2021: $nil) was due
to APQ Global Limited. The balance is interest free and repayable
on demand.
28. Events after the reporting period
Subsequent to year end APQ Global, via its subsidiaries Delphos
MMJ 1, LLC and Delphos MMJ 2, LLC acquired 100% of MMJ Partners LP,
a limited partnership incorporated in United States of America for
a total consideration of $100 and made further capital
contributions to that entity totalling $200,000.
In April 2023, APQ Global announced a tender offer to all CULS
holders for the repurchase of the company's issued CULS for
GBP2,500 per unit of GBP5,000 nominal CULS. 80 CULS units were
tendered in total at a total cost approximately of GBP0.2
million.
[1] In accordance with IFRS 10, the Company, as an Investment
Entity, is required to follow certain accounting rules regarding
its Subsidiaries. Please refer to Note 15 for further details.
[2] See Page 8 for further details of the Company's KPI's.
([3]) Where we refer to revenue from income generating operating
activities this relates to the revenue of our investee
companies.
([4]) The Capital Subscribed on One Ordinary Share of the
Company being GBP1.00 and thus equivalent to GBP0.06 in dividends
per share.
[5] The dividend paid to ordinary shareholders and capital
growth rate of the Company are Key Performance Indicators (KPI's),
discussed further on Page 8.
[6] The Total Return of the Company is a KPI and an Alternative
Performance Measure in accordance with International Financial
Reporting Standards, The Total Return for a given month is
calculated as (Book Value Per Share (BVPS) at end of month +
Dividends received during month) divided by BVPS at end of previous
month. The Total Return on the YTD is then the compounded MTD Total
Return for each month in the year. The Company KPI's are discussed
further on Page 8.
[7] Using Data from Bloomberg Finance LP.
[8] Using Data from Bloomberg Finance LP.
[9] Where we refer to revenue from income generating operating
activities this relates to the revenue of our Investee
companies.
[10] See Note 15 for further details.
[11] Further details on the debt covenants are available on the
Company's website here:
https://www.apqglobal.com/wp-content/uploads/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf
- section 5.
(15) Normal (Poor) economic conditions are as stated in the
Stress Testing section above. There are no planned acquisitions or
disposals in the Direct Investment Portfolio during the period.
[13] Where we refer to revenue from income generating operating
activities this relates to the revenue of our investee
companies.
[14] See Note 15.
[15] Further details on the debt covenants are available on the
Company's website here:
https://wp-apqglobal-2020.s3.eu-west-2.amazonaws.com/media/2017/08/APQ-Global-Notice-and-Circular-for-EGM-15-August-2017.pdf
- section 5.
(16) Normal (Poor) economic conditions are as stated in the
Stress Testing section above. There are no planned acquisitions or
disposals in the Direct Investment Portfolio during the period.
[17] Full breakdown of Director remuneration shown in note 27
including director remuneration from other group entities.
[18] Amounts due to Group undertakings relates to payments made
by subsidiaries on behalf of the Parent company.
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END
FR FLFVTRLIEIIV
(END) Dow Jones Newswires
June 06, 2023 02:00 ET (06:00 GMT)
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