ROSS GROUP PLC

Interim / Quarterly Report • Mar 24, 2023

National Storage Mechanism | Additional information

RNS Number : 2088U

Ross Group PLC

24 March 2023

Ross Group Plc Half Yearly Financial Report  31st December 2022

HALF YEARLY FINANCIAL REPORT

FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2022

Financial Summary (12 months to 31 December 2022)

	2022		2021
	£'000		£'000		Change
Group Revenue	-		-		-
Gross Profit/(Loss)	-		-		-
Profit/(Loss) before tax	(854)		(85)		1,004.7%
Basic earnings per share	-0.35p		-0.04p		875.0%
Diluted earnings per share	-0.29p		-0.03p		966.7%

Chairman's Statement

For the half year (interim) period to the 31st December 2022

I would like to report that, during this particular period, Ross Group PLC ("the Group") decided to change its financial year end to the 30th June and, as a result of this change, the reporting period from 1st January 2022 to 31st December 2022 is hereby termed as an interim or half year set of Accounts.  This is primarily due to the Board of Directors' restructuring and implementation of its planned business strategy, notwithstanding continuing to endure exceptional and extended circumstances related to COVID and its consequential economic effects, all of which as a result has therefore subsequently resulted in a net loss after tax of £854,000 without revenue.

The Board during the last half of 2022 announced a specific Supply Chain Management Agreement ("SCMA") and is in the process of endeavouring to integrate this respective start-up business within the existing overall operations, since the AAG acquisition in 2019/2020 which was subsequently effected by COVID during the last 2 years and required restructuring.

Ross Diversified Ltd, a subsidiary, has been renamed as the Energy Group International Ltd ("EGIL") as a result of the SCMA and is in the process of becoming a more defined water, hydrogen, oil and gas specialist supply chain management and service-providing operation, including, but not limited to, supply chain financing.

Consequently, this division is currently in detailed discussions with a number of companies that are wanting to engage in such specialist supply chain management services and related operations.

As a result, the Group is therefore currently in the process of implementing and/or amending its specialistic supply chain management protocols, procedures and respective disciplines, in order to put in place a more appropriate robust financial and investment infrastructure through the adoption and application of a more horizontal integrational sub-strategy that will hopefully place the Group to be in a better position so as to try to provide more efficient and successful specialist supply chain management services in the foreseeable future.

The Group has also recently approved and appointed Mr Stephen Johanns to become a Group Director and also the CEO of EGIL.  The Board believes that his specialist skill set in both the Group's supply chain management services and also in areas of energy and infrastructure, as well as his own expertise in critical mineral supply chain solutions, will help the Group through EGIL produce some exciting opportunities in the very near future.

Whilst there has been no revenue during this particular period from any outside third party contracts, it is now the Group's intention to significantly revert and re-implement resources that will enable the Group to grow its global supply chain services and produce a more substantial revenue stream in the future.

Business Outlook

For the first half of 2023 the Board will continue, along with our team of Advisors and Consultants, to work tirelessly with our specialist supply chain management team in trying to successfully build a business of a specialist supply chain strategy centered around its Standard Incorporate Coding of Mining & Mineral business in order to try and ensure that the Group has a more balanced structure that can allow and enable the exploring other opportunities that may also arise during this uncertain and unique time.

The Directors have prepared preliminary cashflow forecasts in accordance with the new financial year. These cashflows have been sensitized to assess the adequacy of cash and funding available should future economic effects of recession and/or inflation impinge the activities of the Group.  Certain Directors have also confirmed to be ably to provide additional independent financial support should additional resources be required. Based on the sensitivity testing and additional resources available the Directors are satisfied the Group can continue as a going concern for the foreseeable future.

Principal Risks and Uncertainties

The main risk to the existing operations of the Group is the possibility of depleting necessary working capital in the event of not being able to achieve enough specialist supply chain management service revenues and/or incurring excessive expenses and/or overhead within a viable period of time. The Board is both fully aware of these risks and, as a result, has always endeavoured to managed its cash and cashflow conservatively and prudently; having already ensured that its exposure to any RGP-525 or AAG related liabilities in this instance are primarily limited to its initial investment.  In addition, the Board is equally endeavouring to ensure that funds are being made available to the Group, whilst also exploring other opportunities, specifically in the supply chain of water, hydrogen, oil and gas sectors for future growth.

Your Directors are therefore reasonably confident that the Group currently has both the financial resources and capability to fund existing expenses for future specialist supply chain management growth.

Dividend

No ordinary interim dividend is proposed after considering the result for the first half of the year, and the existing deficiency of retained reserves.

I would very much like to thank the members of the Board of Directors, as well as our contractors, consultants and advisors for all their continued, and highly appreciated, support, expertise and hard work.

Finally, as always, on behalf of our Board of Directors, I would also like to personally extend my sincere thanks to our extraordinarily loyal and also new shareholders for all their continued confidence, patience and truly exceptional understanding.

Barry Richard Pettitt

Chairman

Approved:  24th March 2023

CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED
	12 months		6 months		Year
	ended 31 December		ended 30 June		ended 31 Dec
	2022		2021		2021
	£'000		£'000		£'000
			Restated
Group Revenue	-		-		-
Gross Profit	-		-		-
Profit / (Loss) before Finance Cost	(571)		131		(1,873)
Finance Cost	283		216		703
(Loss) before Taxation	(854)		(85)		(2,576)
Taxation	-		-		-
(Loss) for the Period	(854)		(85)		(2,576)
Earnings per share (pence)	-0.35		-0.04		-1.11
Diluted earnings per share (pence)	-0.29		-0.03		-0.85

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED

		Share Capital		Accumulated Losses		Translation Reserve		Other Reserves
				Restated		Restated
Balance at 1 Jan 2021		11,218		(39,820)		(199)		15,384
(Loss) / Profit for the period		-		(85)		-		-
Foreign exchange adjustment		-		-		(13)		-
Total comprehensive income / (deficit)		-		(85)		(212)		-
Balance at 30 June 2021		11,218		(39,905)		(212)		15,384
(Loss) / Profit for the period		-		(2,491)		-		-
Foreign exchange adjustment		-		-		-		-
Total comprehensive income / (deficit)		-		(2,491)		-		-
Share issue		14		-		-		-
Movement on convertible loans		-		453		-		-
Balance at 31 Dec 2021		11,232		(41,943)		(212)		15,384
Balance at 1 Jan 2022		11,232		(41,943)		(212)		15,384
(Loss) / Profit for the period		-		(854)		-		-
Foreign exchange adjustment		-		-		(387)		-
Total comprehensive income / (deficit)		-		(854)		(387)		-
Share issue		10		-		-		-
Balance at 31 December 2022		11,242		(42,797)		(599)		15,384

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED

	12 months		6 months		Year Ended
	ended 31 December		ended 30 June		31 Dec
	2022		2021		2021
	£'000		£'000		£'000
			Restated
Non Current Assets	32		802		68
Current Assets:
Trade and Other Receivables	114		129		117
Cash and Cash Equivalents	1		307		209
	115		436		326
Total Assets	147		1,238		394
Equity and Liabilities
Shareholders' Equity:
Share Capital	11,242		11,218		11,232
Share Premium Account	3,708		3,146		3,540
Other Reserves	15,384		15,384		15,384
Convertible debentures	4,692		5,145		4,692
Translation reserve	(599)		(212)		(212)
Retained Earnings	(42,797)		(39,905)		(41,943)
Total Equity	(8,370)		(5,224)		(7,307)
Non-Current Liabilities:
Lease Liabilities	12		28		10
Long Term Borrowings	3,345		2,552		3,003
Provisions	813		-		813
Current Liabilities:
Trade and Other Payables	3,716		3,178		3,315
Shareholders funds in advance	-		378		-
Lease Liabilities	20		35		37
Bank Overdraft and Loans	611		291		523
Total Liabilities	8,517		6,462		7,701
Total Equity and Liabilities	147		1,238		394

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

	12 months		6 months		Year Ended
	ended 31 December		ended 30 June		31 Dec
	2022		2021		2021
	£'000		£'000		£'000
Net Cash From/(Used In) Operating Activities	(516)		(281)		(885)
Net Cash Used In Investing Activities	(1)		567		793
Cash Flows From Financing Activities:
Amount withdrawn by Directors	38		5		-
Issue of ordinary shares	178		-		408
Net Increase/(Decrease) In Borrowings and Lease Liabilities	389		(75)		(198)
Net Cash Flow From Financing Activities	88		(70)		210
Net Increase/(Decrease) In Cash and Cash Equivalents	(208)		216		118
Cash and Cash Equivalent at Beginning of Period	209		91		91
Cash and Cash Equivalent at End of Period	1		307		209

Notes to the Interim Report

(1)      The financial information contained in these statements for the twelve months ended 31 December 2022 and 30 June 2021 is unaudited and does not constitute statutory

Accounts as defined in section 434 of the Companies Act 2006.

These statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

The interim financial statements have been prepared on the basis of the

accounting policies set out in the audited statutory accounts for the year ended

31 December 2021.

The comparative information at 30 June 2021 has been restated as detailed in note 11.

(2)      Reconciliation of Operating (Loss) / Profit to Net Cash Flows From Operating

Activities

	12 months		6 months		Year Ended
	ended 31 December		ended 30 June		31 Dec
	2022		2021		2021
	£'000		£'000		£'000
			Restated
Operating Profit / (Loss)	(571)		134		(1,873)
Profit on sale of fixed assets	-		(578)		(337)
Exchange differences	(391)		(13)		(4)
Depreciation and Amortisation	42		260		525
(Increase)/ Decrease In Trade and Other Receivables	3		135		212
Increase/(Decrease) In Trade and Other Payables	401		(219)		592
Net Cash Generated From/(Used In) Operations	(516)		(281)		(885)

(3)       No ordinary interim dividend is proposed for 2022 (2021 - £Nil).

(4)      The comparative cash flow for the year ended 31 December 2021 has been

extracted from the audited accounts. The cash flows for the six months ended 30

June 2021 and twelve months ended 31 December 2022 are unaudited.

(5)       Reconciliation of Movements In Equity

	12 months		6 months		Year Ended
	ended 31 December		ended 30 June		31 Dec
	2022		2021		2021
	£'000		£'000		£'000
			Restated
Share Premium Account
Brought Forward	3,540		3,146		3,146
Movement	168		-		394
Carried Forward	3,708		3,146		3,540
Other Reserves
Brought Forward	15,384		15,384		15,384
Movement	-		-		-
Carried Forward	15,384		15,384		15,384
Translation Reserve
Brought Forward	(212)		(199)		(199)
Foreign exchange adjustment	(387)		(13)		(13)
Carried Forward	(599)		(212)		(212)
Retained Earnings
Brought Forward	(41,943)		(39,820)		(39,820)
(Loss) / Profit for the Period	(854)		(85)		(2,576)
Value of conversion rights on convertible loans	-		-		453
Carried Forward	(42,797)		(39,905)		(41,943)
Convertible Debenture
Brought Forward	4,692		5,145		5,145
Movement	-		-		(453)
Carried Forward	4,692		5,145		4,692

On 14 June 2022 the company made an announcement to the London Stock Exchange confirming the issue of 9,087,000 shares equivalent to 4% of its existing shareholding at a fixed price of 1.79 pence per new ordinary share.

(6)       Non Current Assets

			Right of use assets		Property, Plant &
			Land & Buildings		Equipment		Total
			£'000		£'000		£'000
Cost
At 1 January 2022			138		33		171
Foreign exchange adjustment			4		1		5
Additions			-		1		1
At 31 Decembr 2022			142		35		177
Depreciation / Amortisation
At 1 January 2022			97		6		103
Charge for the period			36		6		42
On disposals			-		-		-
At 31 December 2022			133		12		145
Net Book Value
At 31 December 2022			9		23		32
At 1 January 2022			41		27		68

(7)       Current Assets

	31 Dec	31 Dec	30 June
	2022	2021	2021
	£'000	£'000	£'000
			Restated
Trade receivables	-	-	-
Prepayments and accrued income	14	9	11
Other debtors	62	45	47
Directors loan	38	63	58
Loans to associated undertakings	-	-	13
	114	117	129

Interest is charged on the Directors loan at a commercial rate.

(8)       Current Liabilities

	31 Dec	31 Dec	30 June
	2022	2021	2021
	£'000	£'000	£'000
			Restated
Trade payables	368	293	245
Other creditors	489	407	496
Accruals and deferred income	253	280	191
Amounts owed to associated undertakings	2,647	2,335	2,246
Lease creditor	20	37	35
Other loans	265	177	-
Debentures	346	346	291
Shareholders funds in advance		-	378
	4,388	3,875	3,882

(9)       Non Current Liabilities

	31 Dec	31 Dec	30 June
	2022	2021	2021
	£'000	£'000	£'000
			Restated
Lease creditor	12	10	28
Debentures	1,318	1,256	825
Other loans	2,027	1,747	1,727
Provision	813	813	-
	4,170	3,826	2,580

(10)  On 27 September 2018 two convertible loan debentures were issued for £4,010,000 and £2,062,172 with a coupon rate of 5%.

The loan notes are convertible into Ordinary shares of the parent entity in three years after the date of issue.

At the Annual General Meeting on 31 December 2020 it was agreed to extend the conversion period to 26 September 2022.

At the Annual General Meeting on 31 December 2021 it was agreed to extend the conversion period to 26 September 2025.

The convertible loan debenture will give right to a percentage of the issued share capital of the parent company at the date of conversion. Each tranche of £1 million debenture owed by the long term holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allotted to the loan holders regardless of the value / amount of the share capital of the company.

	31 Dec	31 Dec
	2022	2021
	£'000	£'000
Face value of notes issued	6,072	6,072
Value of conversion rights	4,692	4,692
Convertible loan debenture liability	1,380	1,380
Interest expense recognized in period	123	222

The other loans have been advanced to the company from One World Limited. The funding was provided for a three year period, and interest is charged on these loans at 6%.

(11)  The Group has restated the condensed consolidated income statement, condensed consolidated statement of financial position, and condensed consolidated statement of changes in equity for 30 June 2021. This is due errors in the accounting treatment for convertible loan debentures, foreign exchange translation and recognition of a Group asset which was not owned by the Group. This has been considered as a prior year error and has been corrected in accordance with IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors).Further details on the impact of the restatement were included in the financial statements for the year ended 31 December 2021.

(12)  As no revenue has been generated throughout the group in this period nor the prior period, the Chief Operating Decision Maker believes the information already disclosed in the interim financial statements is adequate to fulfill the requirements of IFRS8 segmental reporting.  This will be reconsidered at the year end and in future periods as the group begins to trade.

(13)  The Interim Report will be sent by mail to all registered shareholders

and copies will be available from the Company's registered office at 71-75 Shelton Street, London, WC2H 9JQ. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk

Responsibility statement:

The Directors confirm that, to the best of their knowledge: -

a)    the condensed set of financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 'Interim Financial Reporting';

b)    the financial statements give a true and fair view of the assets, liabilities, financial position and loss of the group:

c)    the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first twelve months and description of principal risks and uncertainties for the remaining six months of the year); and

d)    the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

On behalf of the Board

B Pettitt                          

Chief Executive Officer                        

Ross Group plc

Registered Office

71 - 75 Shelton Street

London WC2H 9JQ

Contact - S Mehta, Non Executive Director

Tel. - 07973 848349

Email - shashiuk@gmail.com

Website - www.ross-group.co.uk

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