TIDMAPQ
RNS Number : 5149V
APQ Global Limited
15 April 2021
APQ Global Limited
("APQ", "APQ Global" or the "Company")
Final results for the year to 31 December 2020
APQ Global today announces its audited financial results for the
year ended 31 December 2020.
FINANCIAL HIGHLIGHTS
For the year ended 31 December 2020
Book Value at 31 December 2020 was $31.24m, a decrease from
$72.92m since 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 93.19 cents to
39.88 cents.
Earnings loss per share for the year was $0.51642 (2019 -
earnings gain per share $0.02951).
Dividends paid, a Key Performance Indicator ([2]) (KPI) of the
business, totalled 1.5 pence/2 cents (2019 - 6 pence/7.6 cents) per
share and were declared and paid during the year as follows:
-- 1.50 pence (1.97 cent) per share Ex Dividend 30 January 2020
Paid 2 March 2020*
*Dividend relates to the quarter ended 31 December 2019.
No further dividends were declared during the year.
In the year covered by these financial statements, the share
price of the Company has consistently traded at a discount to the
actual Book Value of the Company.
Since 1 January 2020, the following securities have been
admitted to the Official list of the International Stock
Exchange:
Entity Type of instrument No. of instruments Date admitted
30th January
APQ Global Limited Share warrants 1,000,000 2020
APQ Capital Services Convertible preference 30th January
Ltd shares 268,000 2020
5th February
APQ Global Limited Ordinary shares 26,578 2020
APQ Global Limited Ordinary shares 26,578 8th June 2020
APQ Global Limited Ordinary shares 26,578 7th August 2020
14th October
APQ Global Limited Ordinary shares 26,578 2020
The Ordinary Shares disclosed in the above table were also
admitted to trading on AIM. There have been further AIM equity
issuances since 31 December 2020, details of these can be found on
the London Stock Exchange website by following the link below.
Monthly book values and quarterly 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
N+1 Singer - 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
CHAIRMAN'S STATEMENT
For the year ended 31 December 2020
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 93.19 cents to
39.88 cents. After adjusting for the Dividends above, the Total
Return for the year was -56.3% ([6]) .
Strategic Investment Portfolio
During November 2020, the Company's investee, APQ Cayman
Limited, sold its investment in City of London Investment Group
('CLIG'). It held 1,680,495 ordinary shares in CLIG, and the sales
took place between 18 and 24 November. The net proceeds from the
sales of the CLIG shares were approximately GBP7.2 million (c.$9.6
million) (see 2020 in review for further details).
Direct Investment Portfolio
In the first quarter of 2020, the Company completed the 100%
acquisitions of Parish Group Ltd., Guernsey and Delphos
International, Washington DC, USA. The investments were made via
the holding company, APQ Corporate Services Limited, Guernsey,
which is 100% owned by APQ Global Limited. Further details on the
acquisition terms can be found in the notes below.
Founded in 2010 with a focus on financial services innovation,
Parish Group has been dedicated to delivering value-driven,
efficient corporate and private client services to clients around
the world. Parish are renowned for tailored corporate structures
including setup, management and ongoing administration of companies
in Guernsey and other jurisdictions and have over GBP800m of assets
under administration.
Established in 1987 in Washington DC, Delphos operates a global
network of financial solution advisors with additional offices in
New York, Los Angeles, Miami, London, Montreal, Hong Kong, Beijing,
Guatemala City, and Abuja. Languages spoken include English,
Spanish, French, Portuguese, German, Dutch, Flemish. Hindi,
Russian, Arabic, Bahasa, Greek, and Chinese. For almost 35 years,
Delphos has provided market leading advisory services and secured
impactful capital for corporates, fund managers, developers, SMEs,
sovereigns, and entrepreneurs.
The Board continues to seek selective opportunities to add to
its Direct Portfolio, further to the Company's strategy of
diversifying its portfolio of global corporate service
providers.
In May 2019, APQ Global commenced trading in telecommunications
minutes, generating revenue of $1,026,160, with a net loss of
$227,604. The intention of undertaking this activity was to
ultimately provide investors with capital return or investment
income in combination with its other telecommunication investments,
BARTR Holdings Limited and its subsidiary undertakings. Trading was
performed by a third-party service provider, and the contracts were
initially held by APQ Global, to reduce counterparty risk.
Management's intention was to novate these contracts into APQ
Connect at a subsequent point in time. By June 2020, this activity
had ceased entirely. This activity was a one-off activity and was
immaterial in the context of the firm's operations.
CHAIRMAN'S STATEMENT (continued)
For the year ended 31 December 2020
Gearing
In January 2020, in relation to the acquisition of Parish Group
Limited (PGL), the Company issued 268,000 Convertible Preference
Shares (Prefs) with a nominal value of $10. The Prefs were issued
with a discretionary cumulative dividend of 6%, a fixed conversion
ratio and are nonredeemable ([7]) .
The Company's leverage is now 120% ([8]) (2019: 47%). The Board
has confidence in the long-term prospects for the emerging markets
sector and believes that the gearing should enable the Company to
generate increased total returns over the longer term. However, the
gearing could potentially expose the Company to more sizeable
downswings when markets are falling.
Dividends
During the first quarter of 2020, facing unprecedented
uncertainty caused by COVID-19 and the significant drawdown in the
Book Value, the Board took the decision to temporarily suspend the
regular 1.5p quarterly dividend of the Company. As of 31 December
2020, the dividend remains on hold until further notice. The
Company paid 1.5p (2.0 cents) during the year related to the fourth
quarter of 2019.
Total Return
Book Value per share in the year decreased from 93.19 cents to
39.88 cents. After adjusting for the Dividends above, the Total
Return for the year was -56.3%(4) . Further details on the
breakdown of the Total Return are shown below in the 2020 in
Review.
Board Change
There were no changes to the composition of the Board during
2020.
Conclusion
2020 was undoubtedly a challenging year and we considered the
impact of the first half in our Interim Statements and below in the
2020 in Review section below; however, I am pleased to report that
the Company has emerged from that period resolute, with growth in
its Liquid Markets Portfolio, while maintaining a measured risk
exposure, and continuing to build its Direct Investment
Portfolio.
The Investment performance and outlook for Emerging Markets are
discussed in more detail in the CEO's statement.
Wayne Bulpitt
Chairman, APQ Global Limited
CEO'S STATEMENT
For the year ended 31 December 2020
Going into the year, I could never have imagined the profound
impact COVID-19 would have on our world and on global markets. The
virus rapidly became a global health emergency, devastating our way
of life and forcing us to stay at home.
The world's economies responded, with real GDP across the OECD
area plummeting an estimated -9.8% throughout Q2 2020 ([9]) .
Governments around the world responded enforcing lockdowns. The
situation was dire.
By 23 March 2020, global equity markets had recognised the
systemic impact of COVID-19 in-tandem. The S&P 500, MSCI
Emerging Markets and MSCI World Indices plunged -33.8%, -31.2% and
-34.0% respectively from 19 February 2020 levels (1-month prior) on
a Total Return basis ([10]) . The CBOE Volatility Index (VIX)
([11]) climbed to the highest level since the Global Financial
Crisis, to 61.6%, across the same period. Emerging Market
currencies such as the Russian Rouble, Brazilian Real and the South
African Rand depreciated significantly against the US Dollar (-25%,
-19%, -18% respectively).
And yet there was light at the end of tunnel, workforces around
the world transformed their homes into offices and into schools.
The people responded, fighting the virus on the front line and,
through the aid of corporations, created vaccines to combat the
virus in record time.
The Company suffered a significant drawdown across the first
half of the year, with the Book Value for 2020 decreasing -56.3%
(for a breakdown of the Total Return on the year, please see the
2020 in Review section). After a tumultuous beginning to the year,
the Company partially recovered throughout the last quarter of the
year, returning 51.6%, increasing its Book Value by $10.6m across
the quarter, on the right path to rebuild its balance sheet. In
addition to this, 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.
There is still much work to be done, however it is the
unfathomable human capacity to resolve that gives me confidence
that we can do it.
Bart Turtelboom
CEO, APQ Global Limited
2020 IN REVIEW
The Company returned 51.6% to its shareholders in the fourth
quarter of 2020, measured in USD, resulting in a performance for
calendar 2020 of -56.3%. The Book Value Per Share was $0.40
(equivalent to GBP0.29) at year end ([12]) .
During the year, exposure to equity markets lost -38.8%, whilst
local currency bond exposure returned -0.7% and FX exposure
contributed -13.3%. Exposure to credit fell by -3.5%.
Asset Class Quarter-to-31 December Year-to-31 December
20 20
Credit 0.0% -3.5%
======================== =====================
Equity 46.9% -38.8%
======================== =====================
FX 5.5% -13.3%
======================== =====================
Rates -0.9% -0.7%
======================== =====================
TOTAL* 51.6% -56.3%
======================== =====================
*Note: the contribution for each asset class also includes the
relative contribution of other adjustments impacting total return
for the period under review. The overall return to shareholder for
the year reflects the movements in book value plus dividends
paid.
During the year, the Company's largest exposure was to equities.
It maintained a very healthy cash position of 43.7% of the liquid
market portfolio assets. During the last quarter of the year,
exposure to equity markets made 46.9%, whilst local currency bond
exposure returned -0.9% and FX exposure contributed 5.5%. There was
no exposure to credit during the quarter.
Following a challenging period in Q1 driven by extreme market
volatility owing to the initial onset of the COVID-19 pandemic, the
Company continued to focus on rebuilding its Book Value, which
increased by $10.6m, from $20.6m to $31.2m, during the last quarter
of the year. The Board of the Company reviewed its quarterly
dividend, which remains on hold whilst the Company endeavors to
rebuild its Book Value.
Liquid Markets Portfolio
The Year-to-Date performance attribution of the equity portfolio
is shown below by sector. The largest contributor to the negative
performance of the equity portfolio on the year was exposure to the
Technology sector (-33.1%). Whilst exposure to the Consumer
Cyclical sector contributed positively (+21.6%).
Year-to-31 Dec 20 Equity Portfolio
Attribution
Sector % Contribution
----------------
Technology -33.1%
----------------
Energy -31.2%
----------------
Consumer Discretionary -18.9%
----------------
Health Care -15.7%
----------------
Communications -9.4%
----------------
Consumer Staples -6.2%
----------------
Industrials -3.7%
----------------
Real Estate -2.6%
----------------
Utilities -1.6%
----------------
Financials -1.5%
----------------
Materials -1.4%
----------------
Information Technology -0.5%
----------------
Cash +4.3%
----------------
Consumer, Cyclical +21.6%
----------------
The Quarter-to-Date performance attribution of the equity
portfolio is shown below by sector. The largest contributor to the
performance of the equity portfolio on the quarter was Consumer
Cyclicals (+31.1%).
Quarter-to-31 Dec 20 Equity Portfolio
Attribution
Sector % Contribution
----------------
Consumer, Cyclical 31.1%
----------------
Financial 28.3%
----------------
Industrials 14.5%
----------------
Energy 10.8%
----------------
Communications 7.6%
----------------
Utilities 2.5%
----------------
Technology 1.6%
----------------
Consumer Discretionary 1.3%
----------------
Materials 1.3%
----------------
Consumer Staples 0.6%
----------------
Health Care 0.3%
----------------
Real Estate 0.1%
----------------
The Company believes the global economic recovery following the
COVID-19 pandemic will be supportive for global equity markets. As
such, the Company's largest exposure by sector at the end of the
year was Consumer Cyclicals (25.7%). The second and third largest
sector exposures were in the Financial and Energy sectors, 20.5%
and 10.8% respectively.
Equity Exposure by Sector
Sector %
-------
Consumer, Cyclical 25.7%
-------
Financial 20.5%
-------
Energy 10.8%
-------
Communications 7.5%
-------
Industrial 7.0%
-------
Materials 5.7%
-------
Consumer Staples 5.4%
-------
Consumer Discretionary 4.5%
-------
Utilities 3.8%
-------
Industrials 3.2%
-------
Health Care 2.8%
-------
Technology 2.6%
-------
Real Estate 0.5%
-------
At the end of 2020, the Company's largest exposure was to global
equities, which accounted for 97% of the total liquid portfolio
exposure (excluding cash). It maintained a healthy cash position of
43.7% of the liquid assets. The Company significantly decreased its
EM currency and credit exposure, holding no trading positions at
the end of the year. The Company held one small position in
Argentina forming its EM rates exposure (approximately 2%).
At the end of the year, the liquid market portfolio's 1-day
Value at Risk (VaR) was -3.7% ([13]) . The Standalone VaR by Asset
class was largely concentrated to Equity (3.5%). By Region, the
largest risk was concentrated in Europe (2.4%) and Latin America
(1.1%).
Standalone VaR by Asset Class ([14])
Asset Class Standalone VaR
Credit 0.0%
================
Equity 3.5%
================
FX 0.4%
================
Rates 0.0%
================
Standalone VaR by Region(14)
Region Standalone VaR
Europe 2.4%
================
North America 0.5%
================
Latin America 1.1%
================
Emerging Markets
Other 0.3%
================
Strategic Investment Portfolio ([15])
The Company's investee, APQ Cayman Limited, took profits on its
entire investment in City of London Investment Group ('CLIG')
during the last quarter of the year, freeing up $9.6m of cash to
increase liquidity. It intends to partially redeploy the proceeds
in the near future.
Direct Investment Portfolio ([16])
As of the year end, the Company held majority investment stakes
in four private businesses, following its acquisitions of Delphos
International, based in Washington DC and Parish Group Limited,
based in Guernsey, earlier in the year. The Fair Value of the
Direct Investment Portfolio was down -0.7% year on year. Parish
Group Limited and BARTR were the biggest negative contributors to
the performance, whilst Delphos International and New Markets Media
and Intelligence pared back some of the fall.
From a financial and operational perspective, these holdings
were resilient over the year, notwithstanding difficult
circumstances brought about by the COVID-19 pandemic. Of particular
note, Delphos International begun hiring additional staff to
facilitate an increase in its business development. Parish Group
Limited has also begun to make additional hires across the Group.
New Markets Media and Intelligence (NMMI) has progressed nicely
year on year, with revenue growth of 51% over the year.
The Company has an active pipeline of investment opportunities
in the corporate services and financial sectors, with a global
focus, and will update shareholders on these discussions at the
appropriate time.
Post Balance Sheet Events (PBSE)
On 20 January 2021, APQ Global Limited, through its wholly owned
Subsidiary, APQ Corporate Services Limited, entered into an
agreement to purchase 70% of the FMA- Frontier Markets Advisors Inc
("FMA Inc"), a company incorporated and domiciled in Canada. The
total cash consideration of this purchase agreement was $260,000.
FMA is a consulting firm that provides investment and risk
management services to investors in the emerging and frontier
markets. FMA's expertise includes impact investing and development
financing. FMA is a member of CAFIID - Canada Forum for Impact
Investment and Development.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
2020 2019
Note $ $
Revenue 5 11,405,149 12,688,702
Net loss on financial assets at fair value
through profit and loss 15 (48,194,038) (3,016,884)
Administrative expenses 6 (2,438,278) (5,441,673)
Other income 9 739,512 -
Operating (loss) / profit for the year
before tax (38,487,655) 4,230,145
Interest receivable 10 7,119 352,182
Interest payable 11 (2,525,532) (2,274,831)
Net gain on financial liabilities at fair
value through profit and loss 19 570,507 -
(Loss) / profit on ordinary activities
before taxation (40,435,561) 2,307,496
Tax on (loss) / profit on ordinary activities - -
Total (loss) / profit for the year (40,435,561) 2,307,496
============== ==================
Other comprehensive (loss) / income - -
Total comprehensive (loss) / income for
the year (40,435,561) 2,307,496
============== ==================
Basic earnings per share 12 (0.51642) 0.02951
Diluted earnings per share 12 (0.51642) 0.02938
The notes below form an integral part of the Financial
Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Company No.
62008
As at 31 December 2020
2020 2019
Note $ $
Assets
Non-current assets
Property, plant and equipment 14 13,500 17,670
Right of use assets 23 160,376 84,802
Investments 15 67,764,691 105,414,240
----------------------- -----------------------
Total non-current assets 67,938,567 105,516,712
Current assets
Trade and other receivables 16 1,105,234 871,691
Cash and cash equivalents 509,928 1,505,234
----------------------- -----------------------
Total current assets 1,615,162 2,376,925
Total assets 69,553,729 107,893,637
======================= =======================
Current liabilities
Trade and other payables 17 (652,644) (912,783)
----------------------- -----------------------
Total current liabilities (652,644) (912,783)
Long term liabilities
3.5% Convertible Unsecured Loan Stock 18 (36,226,778) (34,064,993)
6% Convertible preference shares 19 (1,347,099) -
Lease liabilities 23 (83,781) -
Total long term liabilities (37,657,658) (34,064,993)
Net assets 31,243,427 72,915,861
======================= =======================
Equity
Share capital 20 99,869,252 99,733,054
Equity component of 3.5% Convertible Unsecured
Loan Stock 18 6,919,355 6,919,355
Equity component of 6% Convertible preference
shares 19 100,813 -
Other capital reserves 21 259,460 300,798
Share warrants reserve 22 107,702 -
Retained earnings (71,085,642) (29,109,833)
Exchange reserve 2.15 (4,927,513) (4,927,513)
Total equity 31,243,427 72,915,861
======================= =======================
Net asset value per ordinary share 39.88c 93.19c
======================= =======================
The Financial Statements below were approved by the Board of
Directors of APQ Global Limited and signed on
14 April 2021 on its behalf by:
Bart Turtelboom Wesley Davis
Chief Executive Officer Director
The notes below form an integral part of the Financial
Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2020
Convertible
CULS preference Other
equity shares Share capital
Share component equity warrants reserves Retained Exchange
Notes capital component earnings reserve Total
As at 1 January 2019 99,596,856 6,919,355 - - 264,076 (25,409,610) (4,927,513) 76,443,164
Comprehensive income
for the year
Profit for the year - - - - - 2,307,496 - 2,307,496
Equity after total comprehensive
income for the year 99,596,856 6,919,355 - - 264,076 (23,102,114) (4,927,513) 78,750,660
Contributions by and
distributions to owners
Share based payments 21 - - - - 186,391 - - 186,391
Share based payments
settled in cash 21 - - - - (13,471) - - (13,471)
Issue of share awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - (6,007,719) - (6,007,719)
As at 31 December 2019 99,733,054 6,919,355 - - 300,798 (29,109,833) (4,927,513) 72,915,861
============ ============= ============= =========== =========== ============== =============== =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2020
Convertible
CULS preference Other
equity shares Share capital
Share component equity warrants reserves Retained Exchange
Notes capital component earnings reserve Total
As at 1
January 2020 99,733,054 6,919,355 - - 300,798 (29,109,833) (4,927,513) 72,915,861
Comprehensive
income
for the year
Loss for the
year - - - - - (40,435,561) - (40,435,561)
Equity after
total
comprehensive
income for
the year 99,733,054 6,919,355 - - 300,798 (69,545,394) (4,927,513) 32,480,300
Contributions
by and
distributions
to owners
Issue of share
warrants 22 - - - 107,702 - - - 107,702
Adjustment to
preference
share terms 19 - - 100,813 - - - - 100,813
Share based
payments 21 - - - - 108,333 - - 108,333
Share based
payments
settled in
cash 21 - - - - (13,473) - - (13,473)
Issue of share
awards 20 136,198 - - - (136,198) - - -
Dividends 13 - - - - - (1,540,248) - (1,540,248)
As at 31
December 2020 99,869,252 6,919,355 100,813 107,702 259,460 (71,085,642) (4,927,513) 31,243,427
============ ============= ============= =========== =========== ============== ============= ==============
The notes below form an integral part of the Financial
Statements.
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2020
2020 2019
Cash flow from operating activities Note $ $
Cash generated from operations
(Loss) / profit for the financial year (40,435,561) 2,307,496
Adjustments for non-cash income and expenses
Equity settled share-based payments 21 108,333 186,391
Depreciation on property, plant and equipment 14 14,298 13,541
Depreciation on right of use assets 23 84,802 84,803
Net loss on financial assets at fair value
through profit and loss 15 48,194,038 3,016,884
Net gain on financial liabilities at fair
value through profit and loss 19 (570,507) -
Net gain on amendment to 6% convertible
preference share terms 19 (661,581) -
Net gain on deferred compensation no longer
payable 9 (77,931) -
Exchange rate fluctuations (343,618) 1,331,787
Changes in operating assets and liabilities
Decrease / (increase) in trade and other
receivables 16 463,758 (498,538)
Increase in trade and other payables 17 78,089 24,030
Increase in receivables from group undertakings 16 (697,301) (281,489)
Increase in payables from group undertakings 17 31,282 1,960
-------------- -------------
Cash generated from operations 6,188,101 6,186,865
Interest received 10 (7,119) (352,182)
Interest paid 11 2,525,532 2,274,831
Net cash inflow from operating activities 8,706,514 8,109,514
Cash flow from investing activities
Payments to acquire investments (8,045,778) (338,066)
Payments to acquire property, plant and
equipment 14 (10,128) (5,490)
Interest received 10 7,119 352,182
Loan to APQ Cayman Limited - 349,504
Net cash inflow / (outflow) from investing
activities (8,048,787) 358,130
Cash flow from financing activities
Equity dividends paid 13 (1,540,248) (6,007,719)
Preference share dividends paid 11 (147,936) -
Interest on CULS 18 (1,319,273) (1,347,911)
Cash settled share-based payments 21 (13,473) (13,471)
Principal paid on lease liabilities 23 (68,432) (110,379)
Net cash outflow from financing activities (3,089,362) (7,479,480)
Net (decrease) / increase in cash and cash
equivalents (2,431,635) 988,164
Cash and cash equivalents at beginning of
year 1,505,234 511,871
Exchanged rate fluctuations on cash and
cash equivalents 1,436,329 5,199
Cash and cash equivalents at end of year 509,928 1,505,234
-------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2020 (continued)
2020 2019
$ $
Reconciliation of cash flows to debt
Brought forward 34,132,003 31,834,626
Cash flows used in servicing interest payments
of CULS (1,319,273) (1,347,911)
Cash flows used in principal payments of
lease liabilities (68,432) (110,379)
Non cash flows - recognition of lease liability 160,376 143,850
Non cash flows - net impact of recognition 1,347,099 -
of convertible preference shares
Non cash flows - amortisation of discount
on CULS issue 2,375,068 2,264,716
Non cash flows - amortisation of discount
on lease liabilities 2,528 10,115
Exchange differences 1,104,884 1,336,986
Closing balance 37,734,253 34,132,003
------------- -------------
Net debt comprises the following:
Convertible Unsecured Loan Stock 2024 36,226,778 34,064,993
6% convertible preference shares 1,347,099 -
Lease liabilities 160,376 67,010
------------- -------------
37,734,253 34,132,003
------------- -------------
The notes below form an integral part of the Financial
Statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
1. Corporate information
The financial statements of APQ Global Limited (the "Group") for
the year ended 31 December 2020 were authorised for issue in
accordance with a resolution of the Board of Directors on 13 April
2021. 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, The Beehive,
Rohais, 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
([17]) .
The Company and its subsidiaries ([18]) 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 with International Financial Reporting
Standards (IFRS) as adopted by the European Union 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
Following the measures taken in the first quarter of the year,
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 one 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 and Preference Shareholders. The Company would not breach
any debt covenants and would retain USD 37.4 (+26.5) million in
cash as of March 1, 2022.
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 in line with those paid throughout 2020
($348k). Under poor economic conditions, the earnings assumptions
are halved, and zero 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.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.2 Going concern (continued)
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. 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 10 of the financial statements.
Further to the above - Going Concern, the Company extends its
above analysis to a three-year cash flow forecast (to January 2024)
using newly targeted budgets and concluded that:
Assuming normal (poor) economic conditions ([19]) , the Company
would preserve an expense coverage ratio of 124 (88), net of its
financial obligations of 214 (102), retaining $64.5 (+$30.8)
million in cash on its balance sheet as of Jan 1, 2024. Providing
considerable headroom to absorb poor conditions.
Dividend Suspension
The suspension of the dividend paid to ordinary shareholders
will increase the cash available to the Company by approximately
$6m per annum based on last year's distributions. The Board reviews
the dividend policy quarterly. The dividend remains on hold until
further notice.
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 on or after
1 January 2020
The following standards, interpretations and amendments did not
have a significant impact on the financial position or performance
of the Group:
Amendments to References to the Conceptual Framework in IFRS
Standards (effective for financial years beginning on or after 1
January 2020)
Amendments to the definition of a business in IFRS 3 Business
Combinations (effective for financial years beginning on or after 1
January 2020)
Amendments to the definition of material in IAS I Presentation
of Financial Statements and IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors (effective for financial years
beginning on or after 1 January 2020)
Amendments to interest rate benchmark reform in IFRS 9 Financial
Instruments, IAS 39 Financial Instruments: Recognition and
Measurement and IFRS 7 Financial Instruments: Disclosures
(effective for financial years beginning on or after 1 January
2020)
Amendments to IFRS 16, COVID-19-Related Rent Concessions
(effective for financial years beginning on or after 30 June
2020)
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.4 Standards issued (continued)
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 Effective 1 January 2023
Amendments to standards issued but not yet effective
IAS 1 Presentation of Financial Statements Effective 1 January
2023
IFRS 3 Business Combinations Effective 1 January 2022
IFRS 4 Insurance Contracts Effective 1 January 2021
IFRS 7 Financial Instruments: Disclosures Effective 1 January
2021
IAS 8 Accounting policies: Changes in Accounting
Estimates and Errors Effective 1 January 2023
IFRS 9 Financial Instruments
Benchmark reform issues Effective 1 January 2021
Derecognition of financial liabilities Effective 1 January 2022
IAS 16 Property, Plant and Equipment Effective 1 January
2022
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 APQ
Cayman Limited, APQ Corporate Services Limited and APQ Knowledge
Limited 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 subsidiaries APQ Partners LLP
and APQ Capital Services Limited assist 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 and APQ
Knowledge Limited are measured at FVTPL. The results of APQ
Partners LLP and APQ Capital Services Limited are consolidated from
the date control commences. 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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.6 Financial instruments (continued)
Financial assets at FVTPL
The investments in APQ Cayman Limited, APQ Corporate Services
Limited and APQ Knowledge Limited 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 APQ Cayman Limited, APQ Corporate
Services Limited and APQ Knowledge Limited 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 and APQ Knowledge Limited are subsequently
measured at fair value with movements in fair value recognised as
net gain/(loss) on financial assets at fair value through profit
and loss in the consolidated statement of comprehensive income.
The investment in BARTR Holdings Limited is designated as fair
value through profit or loss with movements in fair value
recognised as net gain/(loss) on financial assets at fair value
through profit and loss in the consolidated statement of
comprehensive income.
Financial liabilities held at FVTPL
APQ Capital Services Limited, a subsidiary of the Company,
issued 6% convertible preference shares ("CPS") which were a
compound instrument containing a financial liability held at
amortised cost and a financial liability held at fair value through
profit and loss.
The fair value of the derivative component held at fair value
through profit and loss, containing a variable conversion rate, is
derived from the difference between the value of the consideration
determined for the total instrument and the fair value assigned to
the liability held at amortised cost.
Subsequent measurement at fair value was based on the value of
the conversion option. The liability was derecognised on 30 June
2020 as the terms of the instrument were changed to remove the
variable conversion rate. Please see 2.8 for more details on this
transaction.
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.6 Financial instruments (continued)
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 APQ Cayman Limited, APQ
Corporate Services Limited, APQ Knowledge Limited and BARTR
Holdings Limited 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 APQ Corporate Services Limited, APQ Knowledge
Limited and BARTR Holdings Limited, 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 cost approach - valuation based on the cost of
reproducing or replacing the asset being valued.
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.7 Fair value measurement (continued)
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.
Where an assets fair value cannot be determined the Company
measures these assets at a valuation of $nil.
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 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.
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.13 Share-based payments (continued)
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 Retained earnings
Retained earnings consists of profit or losses for the financial
year as disclosed in the statement of comprehensive income less
foreign currency translation differences. Dividends declared by the
Board of Directors are paid and accounted for as a deduction from
retained earnings.
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
above.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
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 Telecommunication minutes income
Telecommunications minutes income represents income received
with respect to the resale of minutes purchased by the Company. The
Company had a few customers each governed by separate contracts.
The performance obligations under the contracts with these
customers is the supply of these minutes. Minutes are supplied at
the point of customer utilisation and therefore income is
recognised in the period the customer has utilised the minutes. The
transaction price is valued per minute and is allocated to each
minute sold. This source of revenue has now ceased.
2.23 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).
2.24 Fee expense
Fees are recognised on an accrual basis. Refer to Note 6 for
details of fees and expenses paid in the period.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
2. Significant accounting policies (continued)
2.25 Taxes
The Company is taxable in Guernsey at the company standard rate
of 0% (2019 - 0%).
However, in some jurisdictions, investment income is subject to
withholding tax deducted at the source of the income. Withholding
tax is a generic term used for the amount of withholding tax
deducted at the source of the income and is not significant for the
Company. The Company presents the withholding tax separately from
the gross investment income in the statement of comprehensive
income. For the purpose of the statement of cash flows, cash
inflows from investments are presented gross of withholding taxes,
when applicable.
2.26 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.
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:
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
3. Significant accounting judgements, estimates and assumptions
(continued)
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 IFRS 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 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 in APQ Cayman Limited, APQ Corporate Services Limited,
APQ Knowledge Limited and BARTR Holdings Ltd at fair value through
profit or loss. The Board has also concluded that since APQ
Partners LLP and APQ Capital Services Limited provide services
related to the Company's investment activities, these subsidiaries
should be consolidated.
In May 2019 APQ Global commenced trading in telecommunications
minutes. In the year, this generated revenue of $712,946 (2019 -
$1,026,160), with a net loss of $17,646 (2019 - $227,604). The
intention of undertaking this activity was to ultimately provide
investors with capital return or investment income in combination
with its other telecommunication investments, BARTR Holdings
Limited and its subsidiaries. Trading was performed by a
third-party service provider, and the contracts were initially held
by APQ Global, to reduce counterparty risk. Management's intention
was to novate these contracts into APQ Connect at a subsequent
point in time. As this activity was a one-off activity and was
immaterial in the context of the firm's operations, the Directors
are satisfied that the Investment entity status is maintained, and
the financial statements continue to be prepared in accordance with
the investment entity provisions of IFRS 10. This activity ceased
entirely in June 2020.
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
3. Significant accounting judgements, estimates and assumptions
(continued)
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 in APQ Corporate Services
Limited, APQ Knowledge Limited and BARTR Holdings Limited 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.
Management were unable to determine a reliable methodology for
valuing BARTR Holdings Limited and has therefore recognised the
value of its investments as $nil.
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.
Fair value of 6% convertible preference shares
Fair value has been determined through a range of inputs and
modelling the results of the change in these inputs. Inputs are
determined based on past performance, comparable instruments and
management's determination of the suspected future time horizons
for the conversion of the instruments. These forecasted values are
by their nature estimates and therefore there is uncertainty with
relation to the valuation of these instruments. Further details in
relation to the valuation of these instruments can be found in note
19.
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.
2020 2019
Group $ $
Cayman 53,586,488 102,885,960
United Kingdom 551,655 425,085
Guernsey 11,736,157 4,438,129
Europe 3,679,429 -
69,553,729 107,749,174
============ =============
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
5. Analysis of revenue
2020 2019
$ $
Dividends received from APQ Cayman Limited 9,355,112 11,663,216
Dividends received from APQ Corporate Services
Limited 1,255,533 -
Dividends received from APQ Knowledge Limited 81,558 -
Rental income - (674)
Telecommunications minutes income 712,946 1,026,160
11,405,149 12,688,702
============ ============
6. Analysis of administrative expenses
2020 2019
Notes $ $
Personnel expenses 8 598,103 495,435
Depreciation of property, plant and equipment 14 14,298 13,541
Depreciation of right of use assets 23 84,802 84,803
Audit fees 165,948 96,167
Auditors' remuneration - other accounting
services 60,770 7,992
Nominated advisor fees 63,473 63,217
Expenses incurred in relation to investment
in BARTR Holdings Limited 3,543 179,227
Costs of purchasing telecommunications minutes 730,592 1,253,764
Administration fees and expenses 194,387 182,892
Director's remuneration 7 169,348 227,716
Other expenses 252,731 423,495
Professional fees 1,384,504 810,138
Share based payment expenses 22 108,333 186,391
Insurance 11,380 11,265
Bad debt expenses 216,543 155,111
Recharge of expenses to APQ Cayman Limited (433,665) (341,595)
Net exchange (gains)/losses (1,186,812) 1,592,114
2,438,278 5,441,673
============= ===========
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
7. Directors' remuneration
2020 2019
$ $
Directors' remuneration 166,292 222,643
Share based payment expenses 86,666 149,113
Social security costs on directors' remuneration 3,056 5,073
256,014 376,829
========= =========
The highest paid director was Bart Turtelboom
(2019 - Bart Turtelboom) 132,971 225,974
========= =========
Average number of directors in the year 4 4
========= =========
8. Personnel expenses
2020 2019
$ $
Short term benefits - wage and salaries 256,037 221,652
Short term benefits - social security
costs 25,571 21,341
Short term benefits - other benefits 307,029 244,591
Short term benefits - Share based payment
expenses 21,667 37,278
Post-employment benefits 9,466 7,851
619,770 532,713
============ ===========
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:
Short term benefits - other benefits 300,062 238,350
Short term benefits - Share based payment
expenses 21,667 37,278
------------ -----------
321,729 275,628
============ ===========
Other benefits include drawings paid to the members of APQ Partners LLP
and staff benefits such as healthcare.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
9. Other income
2020 2019
$ $
Other income from early settlement of deferred
compensation 77,931 -
Other income from amendment to 6% convertible
preference share terms 661,581 -
739,512 -
========= ======
10. Interest receivable
2020 2019
$ $
Loan interest receivable from APQ Cayman
Limited - 350,046
Loan interest receivable from Palladium
Trust Services Limited 6,488 1,067
Loan interest receivable from New Markets
Media & Intelligence Ltd 631 1,069
7,119 352,182
======= =========
During 2018, the Company provided a loan of $7,249,304 to APQ
Cayman Limited from the proceeds of the CULS issue. The loan was
repayable on demand. During 2019, the balance of $33,372,357 was
converted into an investment. In addition, the Company charged
interest of $nil (2019 - $350,046) to APQ Cayman Limited for the
year ended 31 December 2020.
11. Interest payable
2020 2019
$ $
Interest on 3.5% Convertible Unsecured
Loan Stock 2024 2,375,068 2,264,716
Interest on lease liabilities 2,528 10,115
Dividend paid on 6% convertible preference
shares 147,936 -
2,525,532 2,274,831
=========== ===========
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
12. Earnings Per Share
The basic and diluted earnings per shares are calculated by
dividing the profit or loss by the average number of ordinary
shares outstanding during the year.
2020 2019
$ $
Total comprehensive (loss) / income for
the year (40,435,561) 2,307,496
Weighted average number of shares in
issue 78,299,359 78,196,993
Earnings per share (0.51642) 0.02951
============== ============
Diluted earnings per share (0.51642) 0.02938
============== ============
The Group had share awards vested but not yet issued, which are
not dilutive in 2020, as the impact of dilution would be to
decrease the loss per share. In 2019 these awards were dilutive.
The impact of these share awards would have no impact on the total
comprehensive income/loss for the year. They would increase the
weighted average number of shares by 233,657 (2019 - 350,485).
The Group has 6,000 (2019 - 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 (2019 - 6,000) exercise price on these conversion options
currently exceeds the traded share price of APQ Global. These are
not currently dilutive (2019 - not dilutive).
Potentially dilutive instruments issued during the year
On the 29 January 2020, APQ Global issued 1,000,000 share
warrants with an exercise price of 70.94p. The possible impact of
this dilution would be to increase the weighted average number of
shares by 1,000,000. These share warrants are not currently
dilutive.
On the 29 January 2020, APQ Global issued 268,000 convertible
preference shares which were convertible into a variable number of
shares linked to the relative assets attributable to the
convertible preference shares. On 30 June 2020, the terms of the
Convertible preference shares were changed so that they are now
convertible into 11.25 ordinary shares per convertible preference
share. The possible impact of this dilution would be to increase
the weighted average number of shares by 3,015,000. These
convertible preference shares are not currently dilutive.
13. Dividends
Dividends were declared in the year ended 31 December 2020 and
2019 as follows:
Dividend
per share Dividend
Ex-dividend Payment date Dividend Dividend (GBP) per share
date (GBP) ($) ($)
31 January
First dividend 2019 1 March 2019 1,172,420 1,511,601 0.015 0.019
--------------- ----------------- ----------- ------------ ------------ ------------
Second dividend 2 May 2019 31 May 2019 1,172,818 1,517,451 0.015 0.019
--------------- ----------------- ----------- ------------ ------------ ------------
23 August
Third dividend 25 July 2019 2019 1,173,217 1,464,644 0.015 0.019
--------------- ----------------- ----------- ------------ ------------ ------------
31 October 29 November
Fourth dividend 2019 2019 1,173,616 1,514,023 0.015 0.019
--------------- ----------------- ----------- ------------ ------------ ------------
Total 2019 4,692,071 6,007,719 0.060 0.076
----------- ------------ ------------ ------------
30 January
First dividend 2020 2 March 2020 1,174,014 1,540,248 0.015 0.020
--------------- ----------------- ----------- ------------ ------------ ------------
Total 2020 1,174,014 1,540,248 0.015 0.020
----------- ------------ ------------ ------------
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 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 businesses. 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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
14. Property, plant and equipment
Office Furniture Leasehold
equipment and fixtures improvements Total
$ $ $ $
Cost
At 1 January 2020 63,511 19,352 34,588 117,451
Additions during the
year 9,613 515 - 10,128
At 31 December 2020 73,124 19,867 34,588 127,579
============ =============== =============== =========
Accumulated depreciation
At 1 January 2020 49,474 15,719 34,588 99,781
Charge for the year 12,523 1,775 - 14,298
At 31 December 2020 61,997 17,494 34,588 114,079
============ =============== =============== =========
Net book value
At 31 December 2020 11,127 2,373 - 13,500
============ =============== =============== =========
At 31 December 2019 14,037 3,633 - 17,670
============ =============== =============== =========
15. Investments
APQ
APQ Corporate APQ BARTR
Cayman Services Knowledge Holdings Listed
Limited Limited Limited Limited Investments Total
$ $ $ $ $ $
At 1
January
2019 73,387,622 - - 766,680 - 74,154,302
Additions 33,372,357 290,518 613,947 - - 34,276,822
Fair value
movement (3,874,019) 562,351 270,721 24,063 - (3,016,884)
At 31
December
2019 102,885,960 852,869 884,668 790,743 - 67,764,691
Additions - 8,495,598 - - 2,048,891 10,544,489
Fair value
movement (49,299,472) (179,735) 445,374 (790,743) 1,630,538 (48,194,038)
At 31
December
2020 53,586,488 9,168,732 1,330,042 - 3,679,429 67,764,691
==================== =========== ============ =========== ============== ================
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")
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
15. Investments (continued)
Investments in subsidiaries
The following tables outlines the subsidiary undertakings of the
Company:
Country Immediate Acquisition/
of Registered Parent Holding Incorporation
Name incorporation Office Company % Date Activity Recognition
PO Box 142,
The
Beehive,
APQ Capital Rohais, St APQ
Services Peter Port, Global 31 July Investment
Limited Guernsey GY1 3HT Limited 100 2019 support Consolidated
Mourant
Ozannes
Corporate
Services
(Cayman)
Limited,
94 Solaris
Avenue,
Camana
Bay, PO
Box 1348,
Grand APQ
APQ Cayman Cayman Cayman Global 10 August Investment
Limited Islands KY1-1108 Limited 100 2016 entity FVTPL
PO Box 142,
The
APQ Beehive,
Corporate Rohais, St APQ Investment
Services Peter Port, Global 10 January holding
Limited Guernsey GY1 3HT Limited 100 2019 company FVTPL
PO Box 142,
The
Beehive,
APQ Rohais, St APQ Investment
Knowledge Peter Port, Global 1 March holding
Limited Guernsey GY1 3HT Limited 100 2019 company FVTPL
22a St.
James's
Square, APQ
APQ Partners England London, Global 10 August Investment
LLP and Wales SW1Y 4JH Limited 100 2016 support Consolidated
22a St.
New Markets James's
Media & Square, APQ Trading
Intelligence England London, Knowledge 26 February investment
Ltd and Wales SW1Y 4JH Limited 100 2019(1) company FVTPL
Global
Gateway 8,
Rue
Palladium de la APQ
Finance Perle, Corporate Trading
Group Providence, Services 22 February investment
Limited Seychelles Seychelles Limited 100 2019(2) company FVTPL
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
15. Investments (continued)
Level 8,
AIG
Building,
41
Shortland
Palladium Street,
Trust Auckland, APQ
Company New Corporate Trading
(NZ) Zealand Services 22 February investment
Limited New Zealand 1010 Limited 100 2019(2) company FVTPL
22a St.
Palladium James's APQ
Trust Square, Corporate Trading
Services England London, Services 22 February investment
Ltd and Wales SW1Y 4JH Limited 100 2019(2) company FVTPL
(1) The total consideration of the purchase agreement to acquire
New Markets Media & Intelligence Ltd was deferred over a 3 year
period. As at 31 December 2020, $187,304 (GBP137,023) (2019:
$355,859 (GBP279,423)) is still due with respect to this purchase
agreement and is included within deferred consideration in Note
17.
(2) The total consideration of the purchase agreement to acquire
Palladium was deferred over a 3 and a half year period. During the
year, the Company negotiated early settlement of the deferred
consideration due under the agreement. A gain of $77,931 has been
recognised within other income in Note 9 with respect to this
settlement. As at 31 December 2020, $nil (GBPnil) (2019: $210,540
(GBP158,929)) is still due with respect to this purchase agreement
and is included within deferred consideration in Note 17.
Investments in subsidiaries - additions in 2020
2121 K St,
N 2121 K
St,
NW, Suite APQ
Delphos 1020, Corporate Trading
International, United Washington, Services 3 March investment
Ltd(3) States DC 20037 Limited 100 2020 company FVTPL
PO Box 142,
The
Parish Beehive, APQ
Corporate Rohais, St Corporate Trading
Services Peter Port, Services 29 January investment
Limited(4) Guernsey GY1 3HT Limited 100 2020 company FVTPL
PO Box 142,
The
Beehive, APQ
Rohais, St Corporate Trading
Parish Group Peter Port, Services 29 January investment
Limited(4) Guernsey GY1 3HT Limited 100 2020 company FVTPL
PO Box 142,
The
Beehive, APQ
Parish Rohais, St Corporate Trading
Nominees Peter Port, Services 29 January investment
Limited(4) Guernsey GY1 3HT Limited 100 2020 company FVTPL
PO Box 142,
The
Beehive, APQ
Parish Rohais, St Corporate Trading
Trustees Peter Port, Services 29 January investment
Limited(4) Guernsey GY1 3HT Limited 100 2020 company FVTPL
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
15. Investments (continued)
The Company invested $8,495,598 in APQ Corporate Services
Limited in the year. This was to facilitate the investments it has
made in Delphos and Parish.
(3) In consideration to the shareholders of Delphos, a capital
raising and transaction advisory business, APQ Corporate Services
Limited, a wholly owned subsidiary of the Company, paid an upfront
amount of $1.5 million in cash. APQ Corporate Services Limited, was
also required to make an additional payment to clear the working
capital of Delphos prior to the acquisition, this amounted to
$112,265. The Company invested $1,612,266 to facilitate this
investment.
(4) 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 70.94 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.
Investments in subsidiaries - additions after the reporting
period
FMA - 202-230 Ch.
Frontier du Golf,
Markets Montreal, APQ Corporate Trading
Advisors QC H3E 2A8, Services 20 January investment
Inc(5) Canada Canada Limited 70 2021 company FVTPL
(5) 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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
15. Investments (continued)
Investments in subsidiaries - disposals during the year
On 4 December 2020, the Company, via its wholly owned
Subsidiary, APQ Corporate Services Limited, sold its investment in
GEO Strategic Partners Limited, a company registered in the Isle of
Man. GEO Strategic Partners Limited was not consolidated and was
recognised as an investment at fair value through profit or loss as
part of the valuation of APQ Corporate Services Limited.
On 1 December 2020, Palladium Trust Company (BVI) Limited, a
wholly owned subsidiary of the APQ Corporate Services Limited,
incorporated in the British Virgin Islands was dissolved.
On 18 December 2020, APQ Connect Limited, a subsidiary of the
Company, incorporated in Guernsey was dissolved. The Company wrote
off an amount of GBP216,543 which was due from APQ Connect
Limited.
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 Tobias House St. Marks Court,
Thornaby, Stockton-On-Tees, United Kingdom, TS17 6QW. BARTR
Holdings Limited wholly owns two subsidiaries, BARTR Connect
Limited, whose registered office is Tobias House St. Marks Court,
Thornaby, Stockton-On-Tees United Kingdom, TS17 6QW, and BARTR
Technologies Limited, whose registered office is 156 Great Charles
Street Queensway, Birmingham, England, B3 3HN. 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 is held as an investment at fair value
through profit or loss.
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, 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.
The fair value of BARTR Holdings Limited of nil. This is due to
BARTR Holdings Limited being a pre-revenue technology start-up
company for which future revenue is highly uncertain, and without
comparable companies to benchmark the valuation against. The income
approach and market approach therefore do not produce a reliable
valuation and management has therefore determined the valuation to
be $nil.
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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
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 BARTR Holdings
Limited, APQ Corporate Services Limited 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 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 Company has valued
its investment in BARTR Holdings Limited as $nil. 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 movement 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.
The movement of investments classified by level is as per the
below.
Level 1 Level Level 3 Total
2
$ $ $ $
At 1 January 2020 - - 105,414,240 105,414,240
Additions 2,048,891 - 8,495,598 10,544,489
Fair value movement 1,630,538 (49,824,576) (48,194,038)
3,679,429 - 64,085,262 67,764,691
========== ======= ============= =============
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
16. Trade and other receivables
2020 2019
$ $
Trade debtors 62,448 68,581
Amounts due from group undertakings 978,790 281,489
Prepayments and accrued income 39,437 466,914
Other debtors 24,559 54,707
1,105,234 871,691
=========== =========
No expected credit losses adjustments are included in the above
balances, as the majority of the balances relate to group
undertaking over which the Company has significant oversight, to
determine recoverability. Bad debts of $216,543 have been
recognised within the year (2019: $155,111).
17. Trade and other payables
2020 2019
$ $
Trade creditors 100,808 75,260
Amounts due to group undertakings 33,242 1,960
Other creditors 22,749 61,409
Accruals 231,946 140,745
Lease liabilities 76,595 67,010
Deferred consideration 187,304 566,399
652,644 912,783
========= =========
18. 3.5% Convertible Unsecured Loan Stock 2024
Nominal number Liability Equity
of CULS component component
$ $ $
As at 1 January 2019 41,446,167 31,834,626 6,919,355
Amortisation of discount on issue 2,264,716
and issue expenses - -
Interest paid during the year - (1,347,911) -
Exchange differences - 1,313,562 -
As at 31 December 2019 41,446,167 34,064,993 6,919,355
Amortisation of discount on issue 2,375,068
and issue expenses - -
Interest paid during the year - (1,319,273) -
Exchange differences - 1,105,990 -
As at 31 December 2020 41,446,167 36,226,778 6,919,355
================ ============= ============
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
18. 3.5% Convertible Unsecured Loan Stock 2024 (continued)
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
held at fair
Nominal number Liability value through
of preference held at amortised profit and Equity
shares cost loss component
$ $ $ $
As at 1 January 2020 - - - -
Preference shares issued
during the acquisition
of Parish 268,000 2,026,016 653,984 -
Fair value movement
on derivative component - - (570,507) -
Derecognition on amendment
to conversion terms - (2,026,016) (83,477) -
Recognition following
the amendment to conversion
terms - 1,347,099 - 100,813
As at 31 December 2020 268,000 1,347,099 - 100,813
================ ===================== ================= =============
On the 29 January 2020, APQ Capital Services Limited, a
subsidiary of APQ Global, issued 268,000 convertible preference
shares at a value of $10 per share, which were convertible into a
variable number of shares linked to the relative assets
attributable to the convertible preference shares. These
convertible preference shares were admitted to trading on The
International Stock Exchange on 30 January 2020.
The conversion option into a variable number of shares was
identified as a derivative option which was designated at fair
value through profit and loss. This instrument was designated as a
Level 3 in accordance with the fair value hierarchy as per Note 15.
Fair value has been determined in conjunction with a third party
valuation firm, using forecasting of the share price at the date
the conversion option is exercised. The following assumptions were
used in the calculation of the value of the derivative option:
Assumptions
Implicit interest rate 7.9%
Duration 7 years
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
19. 6% convertible preference shares (continued)
On 30 June 2020, the terms of the Convertible preference shares
were changed so that they are now convertible into 11.25 ordinary
shares per convertible preference share. The fair value of the
convertible preference shares was remeasured at this date and the
previously recognised carrying values of these convertible
preference shares were derecognised. Fair value was remeasured
using the following assumptions:
Assumptions
Implicit interest rate 11.9%
Duration 6.6 years
20. Share Capital
The authorised and issued share capital of the Company is
78,347,359 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 2019 78,134,735 76,697,133 99,596,856
Shares issued from share awards
during the year 106,312 100,682 136,198
At 31 December 2019 78,241,047 76,797,815 99,733,054
Shares issued from share awards
during the year 106,312 100,682 136,198
At 31 December 2020 78,347,359 76,898,497 99,869,252
============ ============ ============
During the year ended 31 December 2020, 106,312 (2019 - 106,312)
shares were issued as part of the share award scheme as detailed in
note 21.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
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 2018 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.
2020 2019
Weighted Weighted
average average of
of fair fair value
Number of value Number of of instrument
awards of instrument awards
cents cents
Outstanding at 1
January 379,692 128.11 496,520 128.11
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 262,864 128.11 379,692 128.11
----------- ---------------- ----------- ----------------
Charge for
awards to be Charge for Total charge
settled in awards settled for share
Equity in Cash based awards
$ $ $
Year ended 31 December
2019 172,920 13,471 186,391
Year ended 31 December
2020 94,860 13,473 108,333
The unvested portion of the share awards currently granted is
$77,291 (2019 - $185,625). Of the awards outstanding the number
vested that are available for settlement amount to 29,207 (2019 -
29,207).
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
22. Share warrants
On 29 January 2020, 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 (pence) 68.50
Exercise price of share warrants (pence) 70.94
Volatility 10.45%
Duration 6.6 years
Risk free rate 1.00%
Dividend yield 0.00%
Warrants Warrants Warrants Warrants Warrants
outstanding issued exercised lapsed outstanding Exercise
at 1 January in the in the in the at 31 December price
Issue date 2020 period period period 2020 pence 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 5.7 years.
23. Leases
Finance lease commitments
The Company's subsidiary, APQ Partners LLP, leases rental space
and information with regards to this lease is outlined below:
2020 2019
Rental lease asset $ $
Leased asset on 1 January 2020 84,802 169,605
Depreciation for the year (84,802) (84,803)
Additions 160,376 -
At 31 December 2020 160,376 84,802
========== ==========
Rental lease liability $ $
Leased asset on 1 January 2020 67,010 143,850
Interest on lease liability 2,528 10,115
Payments for lease (68,432) (110,379)
Exchange differences (1,106) 23,424
New lease commitment 160,376 -
At 31 December 2020 160,376 67,010
========== ===========
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
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.
2020 2019
$ $
Net assets at 31 December 31,243,427 72,915,861
Shares in issue at 31 December 78,347,359 78,241,047
Net asset value per ordinary share 39.88c 93.19c
============ ============
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 above. 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. 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 2020 2019
Fair value Fair value
through through
profit Amortised profit Amortised
and loss cost Total and loss cost Total
$ $ $ $ $ $
Investments 67,764,691 - 67,764,691 105,414,240 - 105,414,240
Trade debtors - 62,448 62,448 - 68,581 68,581
Amounts due
from group
undertakings - 978,790 978,790 - 281,489 281,489
Prepayments
and accrued
income - - - - 253,532 253,532
Other debtors - 14,545 14,545 - 44,888 44,888
Cash and cash
equivalents - 509,928 509,928 - 1,505,234 1,505,234
Total 67,764,691 1,565,711 69,330,402 105,414,240 2,153,724 107,567,964
============ =========== ============ ============= =========== =============
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
25. Financial risk and management objectives and policies
(continued)
Financial 2019
Liabilities 2020
Fair value
Fair value through
through profit Amortised profit and Amortised
and loss cost Total loss cost Total
$ $ $ $ $ $
Trade creditors - 100,808 100,808 - 75,260 75,260
Amounts due
to group
undertakings - 33,242 33,242 - 1,960 1,960
Other creditors - 22,749 22,749 - 61,409 61,409
Accruals - 231,946 231,946 - 140,745 140,745
Lease
liabilities - 160,376 160,376 - 67,010 67,010
Deferred
consideration - 187,304 187,304 - 566,399 566,399
CULS liability - 36,226,778 36,226,778 - 34,064,993 34,064,993
6% convertible
preference
shares
liability - 1,347,099 1,347,099 - - -
Total - 38,310,302 38,310,302 - 34,977,776 34,977,776
================== ============ ============ ============= ============ ============
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. The market risk
on the fair value of unquoted investments is a new risk identified
in the year.
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),
listed equities and its investment in BARTR Holdings Limited. 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.
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 10% in the NAV based on these
valuations will have an impact of $5,358,649 (2019 - $10,288,596)
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 reasonable change of 15% in the value of the investment of APQ
Corporate Services Limited will have an impact of $1,375,310 (2019
- $127,931) on the profit of the business.
A reasonable change of 15% in the value of the investment of APQ
Knowledge Limited will have an impact of $199,506 (2019 - $132,700)
on the profit of the business.
A reasonable change in the market price of the directly held
listed equities of 20% will have an impact of $735,886 (2019 -
$nil) on the profit of the business.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
25. Financial risk and management objectives and policies
(continued)
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.
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.
The Group hold assets and liabilities in Pounds Sterling at year
end. The following table detail the Group's assets and liabilities
and the currency exposure to Pounds Sterling to the Group:
2020 2019
$ $
Cash and cash equivalents 441,975 407,423
Trade debtors 62,448 68,582
Other debtors 24,559 34,707
Amounts due from group undertakings 128,790 40,830
Trade creditors (100,808) (75,260)
Other creditors (22,749) (34,371)
Amounts due to group undertakings (33,242) (1,960)
Accruals (231,946) (140,745)
Lease liabilities (160,376) (67,010)
Deferred consideration (187,304) (566,399)
CULS (36,226,778) (34,064,993)
(36,305,431) (34,399,196)
============== ==============
A reasonable change of 5% in the Group's Pounds Sterling net
liabilities (2019 - liability) will have an impact of $1,815,272
(2019 - $1,719,960) 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.
The following table details the Group's expected maturity for
its financial liabilities together with the contractual
undiscounted cash flow amounts:
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
25. Financial risk and management objectives and policies
(continued)
Less than 5 + years Total
31 December 2020 1 year 1 - 5 years
$ $ $ $
Liabilities
Trade creditors (100,808) - - (100,808)
Amounts due to group
undertakings (33,242) - - (33,242)
Other creditors (22,749) - - (22,749)
Accruals (231,946) - - (231,946)
Lease liabilities (76,595) (83,781) - (160,376)
Deferred consideration (187,304) - - (187,304)
CULS - (46,429,300) - (46,429,300)
(652,644) (46,513,081) - (47,165,725)
=========== ============== =========== ==============
Less than 5 + years Total
31 December 2019 1 year 1 - 5 years
$ $ $ $
Liabilities
Trade creditors (75,260) - - (75,260)
Amounts due to group
undertakings (1,960) - - (1,960)
Other creditors (61,409) - - (61,409)
Accruals (140,745) - - (140,745)
Lease liabilities (67,010) - - (67,010)
Deferred consideration (249,268) (317,131) - (566,399)
CULS - (46,386,938) - (46,386,938)
(595,652) (46,704,069) - (47,299,721)
=========== ============== =========== ==============
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 generate 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 A, 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.
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
25. Financial risk and management objectives and policies
(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 per cent 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:
2020 2019
$ $
Share capital 99,869,252 99,733,054
Equity component of 6% Convertible preference
shares 100,813 -
Equity component of 3.5% Convertible Unsecured
Loan Stock 2024 6,919,355 6,919,355
Other capital reserves 259,460 300,798
Share warrants reserve 107,702 -
Retained earnings (71,085,642) (29,109,833)
Exchange reserve (4,927,513) (4,927,513)
Total shareholders' funds 31,243,427 72,915,861
============== ==============
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
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.
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.
APQ Global APQ Global APQ Cayman Limited APQ Capital
Limited - Limited - Share - Remuneration Services
Remuneration based Limited - Total
remuneration Remuneration
$ $ $ $ $
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Chief
Bart Executive
Turtelboom Officer 46,305 76,861 86,666 149,113 108,724 76,861 - - 241,695 302,835
Wayne Non-Executive
Bulpitt Chairman 51,724 51,384 - - - - - - 51,724 51,384
Philip Non-Executive
Soulsby Director 22,607 22,398 - - - - 2,406 - 25,013 22,398
Wesley Executive
Davis Director 43,250 72,000 - - 43,250 72,000 - - 86,500 144,000
163,886 222,643 86,666 149,113 151,974 148,861 2,406 - 404,932 520,617
========= ========= ======= ========= ========= ========== ========= ====== =========== ===========
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 $36,450 (2019 - $89,770) of fees
and expenses to Aspida Services (Guernsey) Limited as administrator
of the Company. As at 31 December 2020, APQ Global Limited owed
$678 (2019 - $21,677) to Aspida Services (Guernsey) Limited.
On 10 June 2020, the Company changed its administrator from
Aspida Services (Guernsey) Limited to Parish Group Limited, a
wholly owned subsidiary of APQ Global Limited. APQ Global Limited
has incurred $55,027 (2019 - $nil) of fees and expenses to Parish
Group Limited as administrator of the Company. As at 31 December
2020 the balance owed to Parish Group Limited was $nil (2019 -
$nil).
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
27. Related party transactions (continued)
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 $452,759 (2019 -
$446,488) to APQ Global Limited during the year. As at 31 December
2020, APQ Global Limited were owed $119,926 (2019 - $142,010) 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 $460,525 (2019 - $380,025) and was recharged expenses of
$26,860 (2019 - $38,430) from APQ Cayman Limited. The Company
received dividends of $9,355,112 (2019 - $11,663,216)
During the year, APQ Global Limited provided $nil (2019 -
$280,000) to BARTR Connect Limited, an entity over which the
Company has significant influence, in relation to its management of
telecommunication contracts. The Company additionally paid expenses
on behalf of BARTR Connect Limited that it did not seek to recover
from BARTR Connect Limited of $.3,543 (2019 - $117,764). At 31
December 2020, $nil (2019 - $nil) was due to BARTR Connect
Limited.
During the year, APQ Global Limited provided funding of $850,000
(2019 - $144,464) to APQ Corporate Services Limited. As at 31
December 2020, $850,000 (2019 - $144,464) was due from APQ
Corporate Services Limited (See Note 16). The Company received
dividends of $1,255,533 (2019 - $nil)
During the year, the company received dividends of $81,558 (2019
- $nil) from APQ Knowledge Limited
During the year, APQ Global Limited paid $147,936 (2019 - $nil)
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 $77,849 (2019 -
$37,431). In addition, the loan attracts interest at a rate of 10%.
During the year, APQ Global Limited charged interest of $6,489
(2019 - $1,067). As at year end, APQ Global Limited was owed
$128,790 (2019 - $40,831) from Palladium Trust Services Limited
(See Note 16).
During the year, APQ Global Limited provided a loan to New
Markets Media & Intelligence Ltd, a group undertaking, of $nil
(2019 - $24,299). In addition, the loan attracts interest at a rate
of 10%. During the year, APQ Global Limited charged interest of
$631 (2019 - $1,069). During the year, the loan has been fully
repaid. During the year, New Markets Media & Intelligence Ltd
also provided funding to APQ Global Limited of $2,405 (2019 -
$28,404). As at year end, APQ Global Limited owed $33,242 (2019 -
$1,960) to New Markets Media & Intelligence Ltd (See Note
17).
During the year, APQ Global Limited provided funding to APQ
Connect Limited, a group undertaking, of $120,347 (2019 - $96,195).
As at year end, APQ Global Limited was owed $nil (2019 - $96,195)
from APQ Connect Limited as the company wrote of a balance of
$216,542 due from APQ Connect Limited as it was dissolved (See Note
16).
28. Events after the reporting period
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 ("FMA Inc"),
a company incorporated and domiciled in Canada. The total cash
consideration of this purchase agreement was $260,000.
Since 31 December 2020, the following securities have been
admitted to the Official list of the International Stock
Exchange:
Entity Type of instrument No. of instruments Date admitted
12th January
APQ Global Limited Ordinary shares 26,578 2021
[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 10 of the Financial Statements 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).
[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.
[7] The Prefs are non-redeemable, except at the discretion of
the Company who have the right to call back the shares after 5
years. The Prefs are convertible into the ordinary shares of the
Company at a fixed ratio of 11.25.
[8] Leverage ratio = (Total CULS Debt in USD + Prefs Liability
in USD) / Book Value (Total Equity) USD as of 31(st) December
2020
([9])
https://www.oecd.org/sdd/na/gdp-growth-second-quarter-2020-oecd.htm.
[10] Using data from Bloomberg Finance LP.
[11] A measure of uncertainty around the expected returns of the
S&P 500 Index
[12] Accounting for the GBP/USD exchange rate and changes in the
Fair Value of the Direct Investment Portfolio. The changes in Fair
Value of the Direct Investment Portfolio are allocated to
Equity.
[13] 98% Confidence Interval, 700 day lookback period.
[14] Standalone VaR indicates the Value at Risk, a gauge of USD
exposure, at the individual risk category level, with zero
correlation applied across risk category.
[15] The Strategic Investment Portfolio is a sub-category of the
Liquid Markets Portfolio. There are currently no positions held in
this sub-category.
[16] The Direct Investment Portfolio comprises the Company's
Private Investments (Investees) held directly by APQ Global Limited
or via a wholly owned subsidiary of APQ Global Limited. See the
Note 15 of the Financial Statements for further details.
[17] Where we refer to revenue from income generating operating
activities this relates to the revenue of our investee
companies.
[18] See Note 15
(23) 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.
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END
FR FLFVASDISLIL
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April 15, 2021 02:00 ET (06:00 GMT)
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