EVEREST GLOBAL PLC

Annual Report (ESEF) • Mar 5, 2024

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Annual report for the year ended 31 October 2023 Everest Global Plc Annual report for the year ended 31 October 2023 Everest Global Plc 1 Management report 3 Management report 2 Directors' report 17 Directors' report 3 Financial statements 36 Financial statements 4 Additional information 98 Additional information 4 Overview 18 Board of 37 Independent 99 Directors & Directors auditor’s report professional 5 Responsibility advisers statement 19 Key activities of 42 Statement of the Board during comprehensive 100 Overseas 5 Strategy the year income subsidiary operations 6 Our purpose & values 7 Chief Executive Officer’s statement 19 Directors duties 20 Corporate governance 26 Board diversity 43 Statement of financial position 44 Group statement of changes in 101 102 Substantial shareholdings Glossary of terms and abbreviations 9 Financial equity review 28 Task force on 103 General meeting 11 Principal climate related financial 45 Company statement of 103 Annual general risks disclosures (TCFD) changes in equity meeting 13 Specific 103 Auditor subsidiary risks & uncertainties 30 Remuneration Committee 46 Statement of cash flows 103 Directors’ & report officers’ 15 Managing risks 47 Notes to the insurance & internal controls 32 Audit Committee report group annual financial statements 16 Going concern & viability statement 33 Directors' report Annual report for the year ended 31 October 2023 3 Everest Global Plc Management report 4 Overview 5 Responsibility statement 5 Strategy 6 Our purpose & values 7 Chief Executive Officer’s statement 9 Financial review 11 Principal risks 13 Specific subsidiary risks & uncertainties 15 Managing risks & internal controls 16 Going concern & viability statement Annual report for the year ended 31 October 2023 4 Everest Global Plc Overview The objective of the management report of Everest Global Plc ('the Company') is to provide sufficient detailed information to both shareholders and stakeholders to make an informed decision as to how they assess how the Directors have performed their duty, under section 172 of the Act, to promote the success of the Company and to provide context for the related financial statements as well as assist them in their decision making. The duty of a director, as set out in section 172 of the Act, is to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members, and in so doing have regard, amongst other matters, to: 1. the likely consequences of any decision in the long term; 2. the interests of the Company's employees; 3. the need to foster the Company's business relationships with suppliers, customers and others; 4. the impact of the Company's operations on the community and the environment; 5. the desirability of the Company maintaining a reputation for high standards of business conduct; and 6. the need to act fairly as between members of the Company. As a Board we consider the wider environment within which we operate and as such ensure that we have considered the impact of our decisions on key stakeholders. We also ensure that we are aware of any significant changes in the market or the external environment, including the identification of emerging risks, which can be fed into our strategy discussions and our risk management process. The Board considered its strategic stakeholders in the year as follows: community & Annual report for the year ended 31 October 2023 5 Everest Global Plc In accordance with Section 414C (11) of the Companies Act 2006, the Group chooses to report the review of the business, the outlook and the risk and uncertainties faced by the Company in the principal risks section starting on page 11. The Directors’ assessment of the risks faced by the Group are set out in the specific subsidiary risks and uncertainties and can be found on page 13 of the financial statements. Responsibility statement The Directors, whose names and functions are set out on page 18 of this annual report and accounts under the sub-heading ‘Board of Directors’ with registered office located at 1st Floor, 48 Chancery Lane, London WC2A 1JF, accept responsibility for the information contained in this annual report and accounts for the year ended 31 October 2023. To the best of the knowledge of the Directors: • the financial statements are prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of Everest Global Plc and the undertakings included in the consolidation taken as a whole; and • the management report includes a fair review of the development and performance of the business and the position of Everest Global Plc and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. Everest Global Plc acknowledges that it is responsible for all information drawn up and made public in this report and accounts for the period ended 31 October 2023. Strategy As set out in the Company’s prospectus dated 31 October 2023, the Company recently extended its acquisition strategy to cover the wider food and beverage industry with a focus on the beverage distribution and production sector in the UK and the rest of Europe. The Directors of the Company believe that the recently announced acquisition of Precious Link (UK) Limited ('PL') will provide an entry into the beverage industry and allow it to access industry know-how and expertise. This follows the £200,000 loan advance made to PL during the financial year. The Company believes PL operates in a complementary sector and the acquisition will pave the way in expanding its activities into the wider food and beverage sector. The Company is focusing on additional acquisitions of businesses in the beverage distribution and production sector in the UK and the rest of Europe. The Company’s primary objective is that of securing the best possible value for Shareholders, consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments on a sustainable basis. Annual report for the year ended 31 October 2023 6 Everest Global Plc Our purpose & values The Company's purpose and values are the fundamental beliefs and principles that guide our decision making and actions. These shape our culture and promotes teamwork. They assist differentiation although the values are generic. These core principles assist us to stay true to our vision. The Company's purpose and values is: Teamwork Quality Innovation Integrity Leadership Commitment to Customers Annual report for the year ended 31 October 2023 7 Everest Global Plc Chief Executive Officer's statement The last financial year has been very rewarding albeit not without its challenges. With that said we consider it successful in terms of achieving what we set out to achieve. In October 2022, the Company name was changed to Everest Global Plc and a new board was constituted. The new board has integrated well and is working particularly well together. Much was achieved in the past 12 months. In late 2022 our existing auditors resigned as they exited the Public Interest Entity ('PIE') audit space which left the business without an auditor. It took some time to appoint a PIE registered auditor, with a false start announced in December 2022. Eventually in April 2023 a PIE registered auditor, RPG Crouch Chapman LLP ('RPGCC') was appointed. The Annual Financial Statements for October 2022 were produced and lodged late on 27 July 2023. Both Companies House and the Financial Conduct Authority ('FCA') were informed of the Company's situation. During this period the shares were suspended by the FCA. On 4 August 2023 the suspension was lifted. New shareholders invested in the Company on 23 January 2023. 12,726,000 new Ordinary Shares were issued at a subscription price of 5.5 pence per share raising a total of £699,930. The subscription price represented a premium of 119 per cent to the closing price of 2.51 pence on 19 January 2023. Allied to this on 25 January 2023 Golden Nice International Group Limited, the major shareholder, converted £300,000 convertible loan notes ('CLNs') to 6,000,000 new Ordinary Shares. The conversion price being 5 pence per share. This represented a premium of 85 per cent to the closing price of 2.70 pence on 23 January 2023. On 29 September 2023, Golden Nice International Group Limited, being the holder of the outstanding CLNs in the Company, agreed to extend the redemption date by 18 months from 30 September 2023 to 31 March 2025, at a conversion price of 5 pence per share. On 31 October 2023 the Company issued a prospectus. This allowed the shares issued since 3 October 2022 to be listed. The shares were as follows: Number of Ordinary Shares immediately prior to prospectus 25,789,714 Number of Ordinary Shares issued pursuant to the previously announced subscriptions 25,726,000 Number of Ordinary Shares issued pursuant to the previously announced conversions 13,373,141 Total number of Ordinary Shares in issue and listed on 31 October 2023 64,888,855 On 4 July 2023 the Company advanced £200,000 to PL as part of its strategic pivot. The Company was of the opinion that PL operated in a complementary sector and would therefore assist the Company in expanding its activities into the wider food and beverage sector. Post year-end, on 10 January 2024, the Company completed the acquisition of PL which was announced on 18 December 2023. The acquisition price for 100% of PL, was £500,000, to be settled by the issue of 12,500,000 new Ordinary Shares at a value of 4 pence per Ordinary Share, being a premium of 23.08 per cent, compared to the closing middle market price of 3.25 pence per Ordinary Share on 15 December 2023. PL is a wine retailer consisting of 2 retail liquor outlets in the Southeast of England. The Company would like to assist in expanding the footprint and product range of PL. Following the acquisition of PL, the Company and K2 Spice Limited ('K2') exercised the put and call option agreement which was detailed in the previous Annual Financial Statements for the year ended October 2022. This resulted in the Company selling its remaining 51% holding in Dynamic Intertrade (PTY) Ltd ('DI') in January 2024. I would like to thank the team at DI. The Company currently has only one subsidiary, although the results for DI have been fully consolidated for the year ended October 2023. Annual report for the year ended 31 October 2023 8 Everest Global Plc The focus for 2024 will be the growth in the food and beverage business via acquisition and joint ventures. The Company will be looking for additional capital during the next financial year in order to build up a war chest to allow it to acquire operating assets. The additional funding available to PL following the acquisition is expected to lead to growth due to development of new sites and extending the product range. We are looking forward to a busy year ahead. ............................. Xin (Andy) Sui Chief Executive Officer Date: 26 February 2024 Annual report for the year ended 31 October 2023 9 Everest Global Plc Financial review As stated above, DI was fully disposed of in January 2024. DI is involved in the importation, milling, blending, and packaging of products that include herbs, spices, seasonings and confectionery for the domestic market. DI achieved an increase in revenue during the year under review of 64.33% (2022: 20.98%) to £2.792 million (2022: £1.699 million). In DI's local currency of South African Rand turnover increased from R34.8 million to R60.8 million – a 74.71% increase. This was as a result of across the board increases in sales to existing customers and a handful of new customers. Product mix was similar to previous years and gross margins improved from 22.8% in 2022 to 24.6% during the year under review. Gross profits for the Group increased by 63.58% to £687,635 (2022: £420,358). Group operating losses for the year decreased to £721,902 (2022: £1,152,170). Total Group comprehensive loss amounted to £887,038 (2022: £4,570,562). The 2022 loss was after incurring a finance charge on consolidation, resulting from the assignment of the loans to K2, of £3.1 million. Basic and diluted loss per share from continuing operations for the year was 1.71p (2022:17.79p). As at 31 October 2023 the Group held £858,024 (2022: £925,814) in cash and cash equivalents. Financing and capital structure During the year under review, the Company issued 12,726,000 new Ordinary Shares at a subscription price of 5.5 pence per share raising a total of £699,930. Golden Nice International Group Limited, the major shareholder, converted £300,000 CLNs to 6,000,000 new Ordinary Shares at a conversion price of 5 pence per share. In the year ended 31 October 2022, the Company assigned certain debts, which amounted to £4,174,538, that were due by DI to K2. The Group uses warrants and CLNs to provide cash liquidity that allows the Directors to pursue investment opportunities. More details of the Company's financial instruments are at note 29 of our financial statements. Acquisition strategy The Company will be actively looking for new acquisitions to bolster its operations and will as a result in all likelihood seek to raise more capital by way of both debt and equity. Annual report for the year ended 31 October 2023 10 Everest Global Plc Key performance indicators ('KPI') Year ended 31 October Year ended 31 October 2023 £ 2022 £ Turnover 2,791,695 1,698,839 Gross profit 687,635 420,368 Cash on hand and in bank 858,024 925,814 Underlying operating loss (721,902) (1,152,170) The Board use these indicators as a high level indication of how the Group is performing and therefore how to actively improve the performance. The KPIs used are reflective of the business as at 31 October 2023 and therefore includes DI's financial information. As a result of the acquisition and subsequent disposal, the KPIs in future years will reflect this change in the group. Turnover is the income for the Group and therefore is vital to enable the Group to continue with its current business model. Turnover in 2023 has increased by 64%, which shows the business is growing and recovering from the pandemic. Gross profit is an indication that the underlying business is profitable. This is because gross profit is turnover less any direct costs. As with any business, growing turnover by more than 64% is a good sign but it needs to be making profit to allow the business to grow and reinvest in itself or pay out to its shareholders. It is also important to see the gross profit margin remain the same. In 2022 it was 24.7% and it has marginally decreased to 24.6%. This reiterates the point that the underlying business remains profitable and with good margins. As a Company that invests in companies, having cash in hand is invaluable to both pay for ongoing costs but also to be able to invest in new businesses. Investment opportunities can arise from anywhere and by having adequate cash, this allows the Group to actively scour the market for these opportunities. Finally, operating loss takes into consideration overheads of the Group. This can include impairment charges and also foreign exchange difference as a result of currency moving between South African Rand and British Pound. Given the Group lost £722k is not a direct indication of poor performance as we pivot the business from a South African focus to a European focus with retail footprint rather than manufacturing. We would hope to see improvements in these KPIs as we move forward. This isn't going to occur in the short term as we purchase businesses, however in the medium to long term we envisage a profitable group that is growing its turnover and producing cash. Annual report for the year ended 31 October 2023 11 Everest Global Plc Principal risks The Directors consider the following risk factors to be of relevance to the Group’s activities. It should be noted that the list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply. The risk factors are summarised below: i. Failure to identify or anticipate future risks Although the Directors believe that the Group’s risk management procedures are adequate, the methods used to manage risk may not identify or anticipate current or future risks or the extent of future exposures, which could be significantly greater than historical measures indicate. ii. The Company may The Company intends to make acquisitions in the food and beverage industry with be unable to raise a focus on the beverage distribution and production sector in the UK and the rest of funds to complete Europe. Although the Company has not formally identified any prospective an acquisition or targets, save for what is mentioned in Events Subsequent to Year End, it cannot fund the operations currently predict the amount of additional capital that may be required. of the target business if it does not obtain additional funding iii. Food safety and regulation Ensuring the safety and quality of food products is crucial for the Group. Contamination, improper handling, storage or processing can lead to foodborne illnesses, product recalls, legal issues and damage to the brand’s reputation. Any non- compliance with food safety regulations may adversely affect the Group’s operations and / or result in penalties, fines, product recalls and potential closure of the business. iv. Ownership and Reverse Takeover risks The Company’s next acquisition following our recent purchase of PL may be a Reverse Takeover. If an acquisition is made, its business risk will be concentrated in a single target until the Company completes an additional acquisition, if it chooses to do so. In the event that the Company acquires less than a 100 per cent interest in a particular entity, the remaining ownership interest will be held by third parties and the subsequent management and control of such an entity may entail risks associated with multiple owners and decision-makers. In circumstances where the Company were to undertake a Reverse Takeover (or analogous transaction) requiring the eligibility of the Company to be re-assessed, the Company would be required to meet the minimum market capitalisation requirement of £30,000,000 to maintain its listing. In the event that the Company is unable to satisfy the minimum market capitalisation requirement, the Company would be unable to meet the eligibility requirements to maintain its listing and would be required to de- list, meaning the shareholders of the Company would hold shares in a non- trading public company (assuming it would be unable to secure a listing or quotation on another exchange). v. Reliance on key customers and key suppliers DI, although disposed of, generated approximately 90 per cent of its revenues in the year ended October 2023 from its top ten customers. This dominance of a select few customers in any business has the potential to force erosion of prices and, by extension, profit margins. Additionally, there is the risk that loss of a key customer and inability to locate an alternative buyer for that proportion of product could result in a significant decrease in revenue. Annual report for the year ended 31 October 2023 12 Everest Global Plc vi. Reliance on delivery The food and beverage industry is dependent on prompt delivery and quality transportation of beverage ingredients. Disruptions such as adverse weather conditions, natural disasters and labour strikes in places where supplies of food / beverage ingredients are sourced could lead to delayed or lost deliveries or deterioration of ingredients and may, amongst other things, result in an interruption to the business of the Group or a failure of the Group to be able to comply with relevant environmental legislation and provide quality food / beverage and services to customers, thereby damaging its reputation. vii. Maintenance of quality of products and services In the food and beverage industry, it is essential that the quality of products is consistent. Any inconsistency in the quality of products may result in customer dissatisfaction and hence a decrease in their loyalty. viii. Identifying a suitable acquisition target DI has been disposed of in January 2024. As part of this disposal the board have adopted a wider acquisition strategy to make acquisitions in the food and beverage industry with a focus on the beverage distribution and production sector in the UK and the rest of Europe. This has directly lead the Company to invest in PL a wine retailer in the South of England. The Company will be dependent upon the ability of the Directors to identify suitable acquisition opportunities in the future and to implement the Company’s strategy. ix. Demand for the The Company’s success will depend heavily on the maintenance of the brands in Company’s which it invests and the ability of the Company to adapt the companies in which it products may be invests, taking into consideration the changing needs and preferences of its adversely affected customers. Consumer preferences, perceptions and spending habits may shift by changes in due to a variety of factors that are difficult to predict and over which the Group has consumer no control (including lifestyle, nutritional and health considerations). Any preferences significant changes in consumer preferences or any failure to anticipate and react to such changes could result in reduced demand for the Group’s products and weaken its competitive position. x. Highly competitive sector Although the beverage distribution and production sector is a highly competitive one in which barriers to entry are often low, the alcohol industry, like any other, has its own set of barriers to entry that can make it challenging for new players, such as the Company, to establish themselves. xi. Actions of third parties, including contractors and partners The Group may be reliant on third parties to provide contracting services. There can be no assurance that these relationships will be successfully formed or maintained. A breach or disruption in these relationships could be detrimental to the future business, operating results and/or financial performance of the Company. Annual report for the year ended 31 October 2023 13 Everest Global Plc Specific subsidiary risks & uncertainties i. Sector risk The agriculture and agri-processing sectors are highly competitive markets and many of the competitors will have greater financial and other resources than the Company and as a result may be in a better position to compete for opportunities. The development of these enterprises involves significant uncertainties and risks including unusual climatic conditions such as drought, improper use of pesticides, availability of labour and seasonality of produce, any one of which could result in security of supply, damage to, or destruction of crops, environmental damage or pollution. Each of these could have a material adverse impact on the business, operations and financial performance of the Group. The market price of agricultural products and crops is volatile and affected by numerous factors which are beyond the Group’s control. These include international supply and demand, the level of consumer product demand, international economic trends, currency exchange rate fluctuations, the level of interest rates, the rate of inflation, global or regional political events, as well as a range of other market forces. Sustained downward movements in agricultural prices could render less economic, or un- economic, any development or investing activities to be undertaken by the Group. Certain agricultural projects involve high capital costs and associated risks. Unless such projects enjoy long term returns, their profitability will be uncertain resulting in potentially high investment risk. ii. Political and regulatory risk African countries experience varying degrees of political instability. There can be no assurance that political stability will persist in those countries where the Group may have operations going forward. In the event of political instability or changes in government policies in those countries where the Group may operate, the operations and financial condition of the Group could be adversely affected. iii. Environmental risks and hazards All phases of the Group’s operations are subject to environmental regulation in the areas in which it operates. Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased fines and penalties for non- compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, Directors and employees. There is no assurance that existing or future environmental regulation will not materially adversely affect the Group’s business, financial condition and results of operations. Environmental hazards may exist on the properties on which the Group holds interests that are unknown to the Group at present. The Board manages this risk by working with environmental consultants and by engaging with the relevant governmental departments and other concerned stakeholders. Annual report for the year ended 31 October 2023 14 Everest Global Plc iv. Internal control and financial risk management The Board has overall responsibility for the Group’s systems of internal control and for reviewing their effectiveness. The Group maintains systems which are designed to provide reasonable but not absolute assurance against material loss and to manage rather than eliminate risk. The key features of the Group’s systems of internal control are as follows: • Management structure with clearly identified responsibilities; • Production of timely and comprehensive historical management information presented to the Board; • Detailed budgeting and forecasting; • Day to day hands on involvement of the Executive Director and Senior Management; and • Regular Board meetings and discussions with the Non-Executive Directors. The Group’s activities expose it to several financial risks including cash flow risk, liquidity risk and foreign currency risk. More details on financial risk are at note 29 of our financial statements. v. Cashflow risk, liquidity risk and credit risk More details on each of these risks are at note 29 of our financial statements. Annual report for the year ended 31 October 2023 15 Everest Global Plc Managing risks & internal controls The Company continually identifies the risks that could affect its goals and operations. It assesses the likelihood and impact of each risk, and prioritises them accordingly. Internal controls are designed and implemented to mitigate or reduce the risks, or transfer or avoid them if possible. The Directors monitor and evaluate the effectiveness and efficiency of the internal controls, and identify any gaps or weaknesses as well as review and update the internal controls periodically, or when there are significant changes in the business environment or objectives. The key features of the Group’s systems and internal controls have been detailed in risk four of the specific subsidiary risks and uncertainties on page 14. Annual report for the year ended 31 October 2023 16 Everest Global Plc Going concern & viability statement The Directors have reviewed the Group‘s forecast financial position for the 12 months following the Board approval of these financial statements. The Group‘s business activities, financial standing, and factors likely to influence its future development, performance, and position were reviewed by the Board. Following a full analysis of the Company, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. During the year, the Group raised additional equity funding of £699,930 (2022: £650,000) in gross funding through share subscriptions to fund working capital. In addition, the Company converted £300,000 (2022: £581,951.52) of CLNs into new ordinary shares. The Directors have prepared cash flow forecasts. These forecasts consider operating cash flows and capital expenditure requirements for the Company as well as its subsidiaries, available working capital and forecast expenditure, including overheads and other costs. The Directors are of the opinion that the Group has sufficient working capital and that no additional funding is required other than that what has been raised. Based upon the Company’s forecast, it has sufficient cash for the foreseeable future. Based on the results of this analysis, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its obligations as they fall due over the period to 2025. ............................. Xin (Andy) Sui On behalf of the board Date: 26 February 2024 Annual report for the year ended 31 October 2023 17 Everest Global Plc Directors' report 18 Board of Directors 19 Key activities of the Board during the year 19 Directors' duties 20 Corporate governance 26 Board diversity 28 Task force on climate related financial disclosures (TCFD) 30 Remuneration Committee report 32 Audit Committee report 33 Directors' report Annual report for the year ended 31 October 2023 18 Everest Global Plc Board of Directors The following Directors have held office in the year: Xin (Andy) Sui Robert Scott Simon Grant-Rennick Chief Executive Director Non-Executive Director Non-Executive Director Xin (Andy) Sui - Chief Executive Director Andy Sui has over 11 years of investment banking experience. Andy started his career at Barclays Capital on the trading desk. He eventually became Chief Risk Officer (CRO) at Union Bank of India (UK) managing a balance sheet of over $1 billion asset. Andy is also a co-founder of London Capital Homes Ltd managing over 120 residential properties and focusing on property development projects in the North of England. Andy has a Masters Degree from the London School of Economics (LSE) in Finance and a number of financial market qualifications. Robert Scott - Non-Executive Director Robert has principal responsibility as being the director responsible for the overview of the management of DI, the Group’s spice manufacturing business that was disposed of post year end, in January 2024. He has over 30 years’ financial and investment management experience with the last twenty years specifically focussed on, executive management, finance, corporate governance, acquisitions and investor management. Rob is a Chartered Accountant (CA(SA)) by profession. He served as Country Manager for Lonrho and has was the General Manager of Uramin’s South African operations. He held executive and senior positions with a number of companies across a number of countries in Southern Africa. He has been involved in such broad industries as mining, food manufacturing, hotels, agriculture, shipping, consumer products and construction amongst others. Robert has been a Director of DI for 12 years and is responsible for setting the strategy for DI with management and ensuring implementation. He has an intimate understanding of its day-to-day operations. He has served on a number of other public and private Company boards. Robert began his career and qualified with Deloitte South Africa after obtaining his Certificate of Theory of Accounting (CTA) from the University of Cape Town. Rob’s broad understanding of finance, markets, acquisitions and corporate governance will greatly assist the Group in its growth plans. Simon Grant-Rennick - Non-Executive Director Simon graduated from Camborne School of Mines (BSc Hons Mining Engineering, ACSM) and has been actively involved in the mining and metal trading industry for over 40 years. He has also been active in the agriculture space in Southern Africa, from the growing of macadamia nuts to chillies and paprika, amongst other crops and game farming with his own game farm. Simon has served as chairman and executive director of various private and public companies in Australia, America and UK (LSE, ASX) over various global industries in agriculture, mining, property and technology. Annual report for the year ended 31 October 2023 19 Everest Global Plc Key activities of the board during the year Meetings attended: Xin (Andy) Sui Robert Scott Simon Grant- Rennick Board meetings 31/31 31/31 31/31 Audit Committee meetings 2/2 2/2 2/2 Remuneration Committee meetings 1/1 1/1 1/1 Directors duties The duties and responsibilities of the Board are: • To promote the success of the Company; • To exercise independent judgement; • To exercise reasonable care, skill and diligence; • To avoid conflicts of interest; • Not to accept benefits from third parties; and • To declare interests in transactions or arrangements. Annual report for the year ended 31 October 2023 20 Everest Global Plc Corporate governance As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code published by the Financial Reporting Council. Nevertheless, the Directors are committed to maintaining high standards of corporate governance and, so far as is practicable given the Group’s size and nature, adopts and complies with the QCA Corporate Governance Code 2023 ('QCA Code') on a comply or explain basis. A copy of the QCA Code is publicly available at https://www.theqca.com. The Company does depart from the QCA Code. This isn't the intention of the Board but is circumstantial for the Company. The complexity of the Board's needs remain limited and therefore the size of the board has matched the needs of the Company. It is hoped that as the Company progresses through its current cycle of investments, it will grow in both revenue and market capitalisation. With a bigger and more complex Company the Board will need to grow. This will provide greater governance with the addition of a chairperson, more independent Non- Executive Directors, the formation of a stand alone nomination committee and well as other committees being formed of individuals rather than the entire Board. Principle 1. The Company is a holding company. Its subsidiary, which makes up the group with the Company (‘the Group’), is a businesses involved in the production of food, agriculture and agricultural related products and more recently the wider food and beverage industry. The Company's strategy is to acquire profitable businesses within the sector and leverage existing management and the Company’s ability to access capital and new talent. Establish a purpose, strategy and business model which promotes long- term value for shareholders. The Company’s strategy for growth is to: • Acquire profitable businesses within the sectors we operate; • Leverage the internal skills that is has and where necessary bring in the appropriate skills; • Ensure the underlying business has access to sufficient growth capital while being aware of the actual cost of capital and the returns that are required to be generated; and • Create a company that engages all our people with a common set of values and goals. Our can-do culture feeds into our strategy, which is being pursued both organically and, as opportunities arise, by relevant acquisitions. Theme How the Company endeavours to achieve the theme Annual report for the year ended 31 October 2023 21 Everest Global Plc Principle 2. Promote a corporate culture that is based on ethical values and behaviours. The Board promotes a corporate culture that is based on sound ethical values and behaviours. The Board has a clear understanding of the business’s culture and works to ensure that these sound ethical values are reflected throughout the organisation. The Company has policies in place covering key matters such as ethical conduct; anti- bribery and corruption; data protection, equality, diversity and inclusion; and whistleblowing. These are communicated to all employees and rigorously enforced. The policy outcomes are reflected in the actions and decisions of the Board and staff within the Company. Principle 3. Seek to understand and meet shareholder needs and expectations. The Company is committed to listening and communicating frankly and honestly with its shareholders and stakeholders to ensure that its strategy, business model and performance are clearly understood. Communication with shareholders and stakeholders is undertaken through press releases, general presentations, the release of the annual and interim results, meetings and the website. There is regular dialogue with shareholders to ensure that the members of the Board develop an understanding of their views and concerns. The AGM is also a forum for dialogue between investors and the Board. Copies of these and other information for shareholders is provided on our website. Principle 4. Take into account wider stakeholder interests, including social and environmental responsibilities, and their implications for long-term success. The Company has acknowledged that its customers, suppliers, professional advisers and most specifically its own staff have been instrumental in the growth and success of the business to date. The Company prides itself on its high standard of customer service. It further relies on a number of suppliers to provide its products, raw materials and services and develops strong relationships with these suppliers. The Company works closely with relevant regulatory and statutory bodies as they shape policy to prevent harm to consumers and businesses and the environment within which the Company operates. The Company encourages development of existing staff and ensures that learning opportunities are available. The Company is committed to engaging with the communities in which it operates. Annual report for the year ended 31 October 2023 22 Everest Global Plc Principle 5. Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation. The Board has ultimate responsibility for the Group’s system of internal controls and for reviewing its effectiveness. The Company operates a robust structure for risk management in each area of the business which is designed to identify actual and potential risks that may impact the Group’s strategy and the daily operation of the business. This process includes the identification, evaluation and scoring of risks based on the likelihood of occurrence, the potential impact, and the adequacy of the mitigation or control actions in place. The Company’s principal risks are listed with a short description of their potential impact and what is being done to mitigate them annually in our Annual Report. The Company has an established framework of internal financial controls, the effectiveness of which is reviewed by the Audit Committee, the Board and the management of the underlying businesses. Financial controls The Board is responsible for reviewing and signing off the overall Company strategy, including approving revenue, profit and capital budgets. A detailed monthly board pack is provided to and discussed by the Board, which includes amongst other things: • the financial results of the Group (income statements, cash flows, capital expenditure and balance sheets); and • monthly variances to budget and prior year. Forecasts for the current financial year are regularly revised and presented to the Board, in light of actual performance, to ensure that information is up to date and any risks in meeting year-end numbers can be identified and mitigated as soon as possible. The board is conscious of Dynamic's financial controls and is fortunate to have Robert Scott in South Africa overseeing management and the implementation of the financial controls and ensuring risk is managed appropriately. The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal financial controls. There is a comprehensive annual budgeting process, producing a detailed integrated profit and loss, balance sheet and cash flow, which is approved by the Board. Non-financial controls The principal elements of the Group’s internal non-financial controls include: • close management of the day-to-day activities of the Group by the Executive Directors and the Board; • an organisational structure with defined levels of responsibility, which promotes entrepreneurial decision- making and rapid implementation while minimising risks; and • existence of a business risk register. Risks facing the business are periodically re- assessed, and mitigating actions are considered and implemented when necessary to help protect the business. Annual report for the year ended 31 October 2023 23 Everest Global Plc Principle 6. Establish and maintain the board as a well- functioning, balanced team led by the chair. The Board comprises three Directors, one of whom is an Executive Director and two of whom are Non-Executive Directors. This reflects an appropriate blend of different experience and backgrounds. Of the Non- Executive Directors, the Group regards Simon Grant-Rennick as an Independent Non-Executive Director within the meaning of the UK Corporate Governance Code 2018. Further details on the Board of Directors including their biographies are on page 18 on this report and on our website. Details of the Board and Committee meetings attendance are also detailed in our Annual Report. The Company has effective procedures in place to address conflicts of interest. The Board is aware of the other commitments and interests of its Directors and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. Principle 7. Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation. Board of Directors The role of the Board of Directors is to promote the long- term success of the Company and sustainably grow shareholder value. The Board has responsibility for the management, direction and performance of the Group and for ensuring that appropriate resources are in place to achieve its strategy. The Board directs and reviews the Group’s operations within an agreed framework of controls. This allows risk to be assessed and managed within agreed parameters. There is a clear division of responsibility across the Board: • the Chair (or acting chair) of the Board is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction; and • the Chief Executive Officer is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company. The Board has established Audit and Remuneration Committees. Risk and Environmental Social Governance (ESG) are dealt with within the Board directly. All of the Board committees operate under approved terms of reference. Each of the committees is made up of the entire board, comprising the three Directors. Furthermore there is only one board member that is an independent Non- Executive Director. Audit Committee : The Audit Committee is responsible for ensuring the financial integrity of the Group through the regular review of financial processes and performance. It confirms to the Board that all material financial updates are fair, balanced and understandable and complies with all applicable UK legislation and regulation as appropriate. It is also responsible for oversight and the relationship with the external auditor, monitoring their performance and reviewing the scope and terms of their engagements. Annual report for the year ended 31 October 2023 24 Everest Global Plc Principle 7. (continued) Remuneration Committee: The Remuneration Committee is primarily responsible for determining and making recommendations to the Board on the policy for the remuneration and employment terms of the Executive Directors, Chair (or acting) and other senior executives, and for the effective implementation of that policy. Matters Reserved for the Board There is a formal schedule of Matters Reserved for the Board. The Board is responsible for overall group strategy and management, financial reporting and controls, group structure and capital, corporate governance and the role of a nomination committee. As part of its role of nomination committee it is primarily responsible for: leading the process and making recommendations to the Board for the appointment of new Directors; regularly reviewing the Board structure, size and composition (including the skills, knowledge, independence, experience and diversity), recommending any necessary changes and considering plans for orderly succession; making recommendations to the Board about suitable candidates for membership of the various committees. Principle 8. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement. The Company has an annual performance evaluation for the Board, its committees, the Chair (or acting) and individual Directors. The Board and its committees are satisfied that they are operating effectively. Performance evaluations are conducted annually and the method for such reviews continue to be reviewed by the Board to optimise the process. Principle 9. Establish a remuneration policy which is supportive of long- term value creation and the company's purpose, strategy and culture. It is the Board’s responsibility to establish an effective remuneration policy which is aligned with the Company’s purpose, strategy and culture, as well as its stage of development. The remuneration policy ensures that the Board and management’s remuneration is aligned to the strategic objectives of the business, both in short term and long term goals. Over and above pure financial goals Board and management are remunerated according to pre-agreed corporate cultures and behaviours. Remuneration goals are Specific, Measurable. Attainable, Realistic and Time Based. The Remuneration Committee is responsible for different remuneration structures in light with targets behaviour. Where not mandated to be put to a binding vote, remuneration policies should at least be put to an advisory vote. Annual report for the year ended 31 October 2023 25 Everest Global Plc Principle 10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other key stakeholders. The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, the AGM, and one-to- one meetings with large existing or potential new shareholders. A range of corporate information (including all Co mpany announcements and presentations) is also available to shareholders, investors and the public on the Company’s corporate website. Historical annual reports are available on request where there they are not available on the website. All governance related policies are on the website. As soon as practicable after the AGM has finished, the results of the meeting are released through a regulatory news service. The announcement also provides details of the total number of votes in favour of each resolution. Annual report for the year ended 31 October 2023 26 Everest Global Plc Board diversity The Company is dedicated to promoting equal opportunities for all employees and job applicants. We aim to create an environment that is free from discrimination and harassment, where cultural diversity and individual differences are positively valued and decisions are based on merit. We do not discriminate against employees on the basis of age, disability, gender reassignment, gender identity, marital or civil partner status, pregnancy or maternity, race, colour, nationality, ethnic or national origin, religion or belief, sex or sexual orientation. As at 31 October 2023, being the reporting date, the Company had only three Board members of which all were men and only one has an ethnic origin other than white British. As such the Company has not met the targets specified under the Listing Rules of having women make up 40 per cent of the Board or having a woman in at least one of the following senior positions on its Board: (A) the chair; (B) the Chief Executive; (C) the senior independent director; and (D) the chief financial officer. However the Company does have one Board member from an Asian background meaning that it does meet the target of having at least one Board member from a minority ethnic background. The Company has not met the diversity expectation of a standard listed company on the London Stock Exchange. This is because Board doesn't comprise of any women, however, our subsidiary company, DI, does have a female board member. The Board currently views its size as adequate for the needs of the Company. As the Company's needs grow the Board will also grow which will provide the ability to create a diverse team of Directors. As part of our starting form for staff there are a number of questions that perform dual purposes for both commercial needs as well as financial reporting needs. Of these questions we have been able to use: what sex do you identify as; and what ethnic background do you come from. Both of these questions are deemed to be self reporting as each member of staff undertakes the questions by themselves. Gender identity or sex Company as at 31 October 2023 Number of Board members % of the Board Number of senior positions Number of executive management % of executive management Men 3 100% - - 0% Women - 0% - - 0% 3 100% - - 0% Group as at 31 October 2023 Number of Board members % of the Board Number of senior positions Number of executive management % of executive management Men 5 83% - 2 67% Women 1 17% - 1 33% 6 100% - 3 100% Annual report for the year ended 31 October 2023 27 Everest Global Plc Ethnic background Company as at 31 October 2023 Number of Board members % of the Board Number of senior positions Number of executive management % of executive management White/British 2 67% - - 0% Asian 1 33% - - 0% 3 100% - - 0% Group as at 31 October 2023 Number of Board members % of the Board Number of senior positions Number of executive management % of executive management White/British 3 50% - 1 33% Mixed ethnic 1 17% - 1 33% Asian 1 17% - - 0% African 1 17% - 1 33% 6 100% - 3 100% Annual report for the year ended 31 October 2023 28 Everest Global Plc Task Force on Climate-related Financial Disclosures (TCFD) The Company operates in an environment that renders our exposure to climate-related risks minimal, therefore, the Company has not included in this annual report and financial statement the climate related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures. However, our commitment is unwavering towards comprehending our environmental footprint and crafting sustainability strategies over the future relative to our operational size. While limited in its environmental impact, our operational ethos is underscored by a proactive approach to environmental stewardship. We detail the eleven TCFD recommendation below. The Company intends to comply with the TCFD recommendations within the next 12-24 months. As part of this we will review our new investments and see how they can provide accurate information to the Company to enable this reporting. Governance Strategy Describe the climate- In the short term, the Company's operations present a low direct climate- related risks and related risks. Potential expansion may have an impact and as and when, opportunities the the Board will actively identify opportunities to minimise the carbon organisation has identified footprint and enhance its positive impact on environmental sustainability. over the short, medium, and long term. Describe the impact of The present operational model intrinsically curtails its environmental climate-related risks and impact however the subsidiary is actively endeavouring to reduce imports opportunities on the from other continents and this reduce transport environmental costs. organisation’s businesses, strategy, and financial planning. Annual report for the year ended 31 October 2023 29 Everest Global Plc Risk management Describe the organisation’s The Company has a careful risk management process. This involves a processes for identifying continuous process of identifying, assessing, responding to, and and assessing climate- monitoring risks, including those related to climate. While climate change related risks. is not a principal risk our comprehensive approach ensures that we remain vigilant to emerging climate trends and their potential implications. Describe the organisation’s Risks are identified and ranked considering both their likelihood and processes for managing potential impact. Risks that are above an expectable threshold are given climate-related risks. special attention. For such risks, mitigation strategies are developed, action plans are drawn up, and responsibilities are assigned for their implementation. Metrics & targets Disclose the metrics used Given our limited carbon intensive operational model, and our propensity by the organisation to to outsource many functions, our direct environmental impact is assess climate-related risks inherently limited. We monitor our operations to ensure alignment with and opportunities in line best practices in sustainability. with its strategy and risk management process. The Company is deeply committed to a sustainable future and will continuously assess its environmental impact and adopt strategies to minimise its carbon emissions. Annual report for the year ended 31 October 2023 30 Everest Global Plc Remuneration Committee report Remuneration Committee terms of reference The Remuneration Committee has responsibility, subject to any necessary Shareholder approval, for the determination of the terms and conditions of employment, remuneration and benefits of the Executive Directors and certain other senior executives, including pension rights and any compensation payments. It also recommends and monitors the level and structure of remuneration for senior management and the implementation of share option or other performance-related schemes. It is the aim of the committee to remunerate Executive Directors competitively and to reward performance. The Remuneration Committee determines the Company's policy for the remuneration of Executive Directors, having regard to the QCA Corporate Governance Code 2023. The Remuneration Committee meets at least twice a year. However, due to the structure of the business currently the meeting was combined into a board meeting as all the members are the same as the Board. The responsibilities of the committee covered in its terms of reference include determining and monitoring policy on and setting levels of remuneration, termination, performance-related pay, pension arrangements, reporting and disclosure, share incentive plans and the appointment of remuneration consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee to carry out its responsibilities. Directors’ remuneration, shareholding and options Remuneration The Directors’ remuneration for the year ended 31 October 2023 is set out in the table below. None of the Directors receive share options, long term incentives, bonus schemes or the like as part of their remuneration packages. Some Directors receive monthly fees as invoiced for consultancy work as agreed between the Directors and the Remuneration Committee. There are contracts for the Directors. Directors Fee and Consultancy Fee Group Company 2023 2022 2023 2022 £ £ £ £ Xin (Andy) Sui 39,000 - 39,000 - Robert Scott 34,000 12,000 34,000 12,000 Simon Grant-Rennick 50,260 - 50,260 - Andrew Monk * - 12,923 - 12,923 Matthew Bonner * - 11,000 - 11,000 Total 123,260 35,923 123,260 35,923 * These directors resigned during the year ended 31 October 2022 No pension contributions were made by the Company on behalf of its Directors other than for Andrew Monk. Andrew Monk’s pension contribution for 2023 Nil (2022: £330). At the year-end a total of £2,810 (2022: £33,587) was outstanding in respect of Directors’ emoluments. Annual report for the year ended 31 October 2023 31 Everest Global Plc Shareholding As at 31 October 2023, the Directors of the Company held the following shares: Shareholder Shareholding Percentage of company's Ordinary Share capital * Shareholding Percentage of company's Ordinary Share capital ** 2023 2022 Robert Scott *** 552,599 0.85% 552,599 1.20% * Total number of Ordinary Shares in issue on 31 October 2023 - 64,888,855 ** Total number of Ordinary Shares in issue on 31 October 2022 - 46,162,855 *** Shares are held Vidacos Nominees Ltd as nominee Xin (Andy) Sui and Simon Grant-Rennick do not have any shares in the Company. Options There is no Option Scheme in place at the Company and no options have been issued to any of the Directors. All options issued previously have expired. Warrants As at 31 October 2023 the warrants held by Directors were: Warrant holder 5p warrants 5p warrants 2023 2022 Robert Scott - 820,000 Andrew Monk * - 4,240,000 Matt Bonner * - 840,000 Total - 5,900,000 * These directors resigned during the year ended 31 October 2022 The warrants that were held by the Directors as at 31 October 2022 expired on 23 March 2023. Due to the warrants lapsing the Directors no longer hold any warrants within the company. Annual report for the year ended 31 October 2023 32 Everest Global Plc Audit Committee report Audit Committee terms of reference The Audit Committee comprises of all three members of the Board, with only one of those members being an independent Non-Executive Director. The committee encompasses the monitoring of risks posed to the Group on an ongoing basis, has responsibility for, among other things, the monitoring of the financial integrity of the Group’s financial statements and the involvement of its auditors in that process. It focuses in particular on compliance with accounting policies and ensuring that an effective system of internal financial controls is maintained. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board. The Audit Committee meets no less than twice a year at the appropriate times in the reporting and audit cycle. It also meets on an ‘as necessary’ basis. The responsibilities of the committee covered in its terms of reference include external audit, internal audit, financial reporting and internal controls. Audit Committee report I am pleased to present the 2023 audit report. As part of the process of preparing a prospectus the Board conducted a review of the Company’s risk management. As the Company pivoted its business model to a broader food and beverage business we believed it was vital for us to conduct a new and thorough understanding of how uncertainty affects our business objectives. While we had a good understanding of these effects before, we now have a significantly improved focus and comprehension of the risks and this understanding enhances the Board's strategic thinking and decision-making process. The new auditors settled in very well and we have built up a level of trust with them. I believe their continued input will be very helpful to the Company in reducing risk and enhancing internal controls. Next year, we are looking to continue our work on risk management, particularly focusing on identifying, assessing, and mitigating potential risks that could impact our strategic objectives. I am proud of the progress we have made over the past year and we as a Company remain committed to maintaining the highest standards of corporate governance. Chair of the Audit Committee Date: 26 February 2024 ............................. Simon Grant-Rennick Annual report for the year ended 31 October 2023 33 Everest Global Plc Directors' report The Directors have the pleasure of submitting their report and the audited financial statements for the year ended 31 October 2023. To make our annual report and financial statements more accessible, a number of the sections traditionally found in this report can be found in other sections of this annual report, where it is deemed that the information is presented in a more connected and accurate way. Principal Group activities, business review and results The principal activity of the Group in the reporting year was investing and trading in the agriculture and ancillary sectors in Africa. The business review and results can be found on page 9 of the annual report. Statement of disclosure to auditors Each person who is a Director at the date of approval of this Annual Report confirms that: • so far as the Directors are aware, there is no relevant audit information of which the Group and Parent Company's auditors are unaware; • the Directors have taken all the steps they ought to have taken as Directors, in order to make themselves aware of any relevant audit information and to establish that the Group and Parent Company's auditors are aware of that information, and • each Director is aware of and concurs with the information included in the management report. Statement of Directors' responsibilities The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the Company and the Group and of the profit or loss of the Company and the Group for that year. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • state whether the Group and Parent Company financial statements have ben prepared in accordance with IFRS as adopted by the United Kingdom, subject to any material departures disclosed and explained in the Financial Statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are enough to show and explain the Group and Parent Company's transactions, disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. Annual report for the year ended 31 October 2023 34 Everest Global Plc The Directors are responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Annual general meeting ('AGM') Information about the AGM can be found on page 103. Auditors RPGCC, has expressed its willingness to continue in office and a resolution to reappoint following the 2023 annual report being signed will be proposed at the next annual general meeting. Branches outside the UK Details of all branches outside the UK can be found on page 100. Corporate governance code (the 'Code') Information on how the Company applied the Principles and complied with the provisions of the Code may be found on page 20. Dividends No dividends will be distributed for the current year (2022 - nil). Diversity The Group's diversity statistics are available on page 26. Events after the reporting period Further information on events after the reporting date are set out in note 32. Employees The average number of employees and their remuneration are detailed in note 7. Internal control and risk management The Group's has detailed out its internal controls and risk management on page 15. Additionally its principle risks are on page 11. Annual report for the year ended 31 October 2023 35 Everest Global Plc Investing policy The Company was established to invest in or acquire companies engaged in the agriculture and ancillary sectors in Africa. The Directors intend to use their collective experience to identify appropriate investment opportunities in the production, transportation and trading of food and beverage products and ancillary industries. Indemnity and insurance Details of Directors’ indemnity and insurance is located on page 103. Political donations The Group made no political donations during the current year and previous financial period. Nor has it made any contributions to any non-UK political party during the current year or previous financial period. Supplier Payment Policy It is the Group's payment policy to pay its suppliers in conformance with industry norms. Trade payables are paid in a timely manner within contractual terms, which is generally 30 to 45 days from the date an invoice is received. Substantial shareholders The Group has been informed of the shareholdings that represent 3% or more issued Ordinary Shares of the Company as at 31 October 2023. A full list of these positions can be found on page 101. Stakeholder engagement Details regarding the engagement with suppliers, customers and others in business relationships with the Company may be found on page 4. Non-financial reporting Non-financial measures are an important part of our business and we have consistently recognised the importance of non-financial information in our annual report. The Board is committed to acting responsibility and working with our stakeholders to manage the social and ethical impact of our activities. We aim to treat all our stakeholders fairly and with integrity, as we explain in our climate related financial disclosures. On behalf of the board Date: 26 February 2024 ............................. Xin (Andy) Sui Annual report for the year ended 31 October 2023 36 Everest Global Plc Financial statements 37 Independent auditor's report 42 Statement of comprehensive income 43 Statement of financial position 44 Consolidated statement of changes in equity 45 Company statement of changes in equity 46 Statement of cash flows 47 Notes to the financial statements Annual report for the year ended 31 October 2023 37 Everest Global Plc Independent auditor's report To the members of Everest Global Plc Opinion We have audited the financial statements of Everest Global Plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended 31 October 2023 which comprise the Group and Company statements of comprehensive income, statements of changes in equity, statements of financial position, statements of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted in the United Kingdom (IFRS). In our opinion, the financial statements: • give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 October 2023 and of the Group’s loss for the year then ended; • have been properly prepared in accordance with IFRS; and • have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Material uncertainty relating to going concern We draw attention to note 2a in the financial statements, which indicates events or conditions identified that may cast significant doubt over the Company’s ability to continue as a going concern. As stated in note 2a, these events or conditions, along with other matters set forth in note 2a, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included: • review budgets and cash flows projections up to 31 October 2025; • comparison of budget to past performance; • sensitise cash flows for variations in trading performance and working capital requirements; • consider if there is any other information brought to light during the audit that would impact on the going concern assessment; Annual report for the year ended 31 October 2023 38 Everest Global Plc • review of working capital facilities and assess headroom available in the projections; and • review of adequacy and completeness of disclosures in the financial statements in respect of the going concern assumption. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. Our approach to the audit In planning our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant accounting estimates. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud. We tailored the scope of our audit to ensure that we performed sufficient work to be able to issue an opinion on the financial statements as a whole, taking into account the structure of the Group and the parent Company, the accounting processes and controls, and the industry in which they operate. We performed the audit of the Company and reviewed the work performed by the component auditor in addition to performing our own tests on the Company’s subsidiary. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement we identified (whether or not due to fraud), including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. The matters identified were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The use of the Going Concern basis of accounting was assessed as a key audit matter and has already been covered in the previous section of this report. The other key audit matter identified is described below. Key audit matter Revenue recognition Revenue recognition is a presumed risk of fraud under International Auditing Standards. Given the subjectivity of estimates How our work addressed this matter Our work included: • Reviewing accounting policies adopted and ensuring these are in accordance with IFRS; • Confirming revenue has been recognised in accordance with the accounting policies; • Reconciling expected income for a sample of contracts to involved, we consider the carrying value amounts reported in the accounts. of property to be a key audit matter. • Reviewing settlement of contract values after the period end; and • Where no post year end settlement has occurred, for amounts agreed in the period consider the accuracy of past estimates. Annual report for the year ended 31 October 2023 39 Everest Global Plc Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. We consider gross assets to be the most significant determinant of the Group’s financial performance used by the users of the financial statements. We have based materiality on 2% of gross assets for each of the operating components. Overall materiality for the Group was therefore set at £33,000. For each component, the materiality set was lower than the overall group materiality. We agreed with the Audit Committee that we would report on all differences in excess of 5% of materiality relating to the Group financial statements. We also report to the Audit Committee on financial statement disclosure matters identified when assessing the overall consistency and presentation of the consolidated financial statements. Other information The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: • the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. Annual report for the year ended 31 October 2023 40 Everest Global Plc Matters on which we are required to report by exception In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent Company financial statements are not in agreement with the accounting records and returns; • certain disclosures of Directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the Directors’ responsibilities statement set out on page 5 the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with IASs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: • We obtained an understanding of the legal and regulatory frameworks within which the Group operates focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Annual report for the year ended 31 October 2023 41 Everest Global Plc • We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non- compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report. Other matters that we are required to address We were appointed on 12 April 2023 and this is the second year of our engagement as auditors for the Group. We confirm that we are independent of the Group and have not provided any prohibited non-audit services, as defined by the Ethical Standard issued by the Financial Reporting Council. Our audit report is consistent with our additional report to the Audit Committee explaining the results of our audit. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Paul Randall FCA (Senior Statutory Auditor) Chartered Accountants For and on behalf of RPG Crouch Chapman LLP Registered Auditor 40 Gracechurch Street 26 February 2024 London EC3V 0BT Annual report for the year ended 31 October 2023 42 Everest Global Plc Statement of comprehensive income Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 Notes £ £ £ £ Revenue 5 2,791, 695 1,698, 839 - - Cost of sales (2,104, 060) (1,278, 471) - - Gross profit 687,63 5 420,36 8 - - Other income 6 22,57 3 1,264 9,231 - Administrative expenses 9 (1,432, 110) (1,573, 802) (820,114) 21,587 Impairments 10 - - - (227,939) Operating loss (721,9 02) (1, 152, 170) (810,883) (206,352) Finance costs 11 (189,68 1) (3,418, 549) (75,975) (135,775) Finance income 12 24,54 5 157 6,959 20,439 Loss before tax from continuing operations (887,0 38) (4, 570, 562) (879,899) (321,688) Tax on loss on ordinary activities 13 - - - - Loss for the year from continuing operations (887,0 38) (4, 570, 562) (879,899) (321,688) Other comprehensive income - - - - Total comprehensive loss for the year from continuing operations (887,0 38) (4, 570, 562) (879,899) (321,688) Loss attributable to ordinary (862,34 0) (4,571, 084) - - shareholders Loss attributable to non- controlling interests (24 ,698) 522 - - Total comprehensive loss (887,0 38) (4, 570, 562) - - attributable to ordinary Total comprehensive loss - - - - attributable to non-controlling Basic and diluted earning per share 14 (1.71) (17.79) - in pence Annual report for the year ended 31 October 2023 43 Everest Global Plc Statement of financial position As at 31 October 2023 Group Company 2023 2022 2023 2022 Notes £ £ £ £ Assets Non-current assets Investment in subsidiaries 15 - - - - Property, plant & equipment 16 25,77 1 13,88 4 - - Right of use asset 27 156,1 29 250,4 46 - - Total non-current assets 181,90 0 264,33 0 - - Current assets Investment in associate 15 - 6,154 - 6,154 Inventories 17 329,4 08 175,8 75 - - Trade & other receivables 18 573,3 86 282,5 29 258,319 11,219 Cash & cash equivalents 19 858,0 24 925,8 14 765,814 922,613 Total current assets 1,760,81 8 1,390,37 2 1,024,133 939,986 Total assets 1,942,71 8 1,654,70 2 1,024,133 939,986 Equity & liabilities Share capital 21 1,297, 778 923,2 58 1,297,778 923,258 Share premium 21 3,502, 967 3,040, 115 3,502,967 3,040,115 Share based payment reserve 22 464,7 34 302,1 76 464,734 302,176 Equity portion of convertible loan 24 37,71 3 42,53 9 37,713 42,539 notes Retained earnings (7,544, 046) (6,681, 706) (5,118,860) (4,238,961) Total owner's equity (2, 240, 854) (2, 373, 618) 184,332 69,127 Non-controlling interest 23 (2,330, 081) (2,305, 383) - - Total equity (4, 570, 935) (4, 679, 001) 184,332 69,127 Non-current liabilities Non-current lease liabilities 27 78,72 2 166,0 70 - - Borrowings 26 4,713, 566 4,732, 492 - - Convertible loan notes 25 491,0 71 710,2 74 491,071 710,274 Total non-current liabilities 5,283,35 9 5,608,83 6 491,071 710,274 Current liabilities Current lease liabilities 27 108,2 66 100, 485 - - Trade and other payables 20 1,122, 028 624,3 82 348,730 160,585 Total current liabilities 1,230,29 4 724,86 7 348,730 160,585 Total equity and liabilities 1,942,71 8 1,654,70 2 1,024,133 939,986 The notes on pages 47 to 97 form part of these financial statements The financial statements were approved and authorised for issue on 26 February 2024 by the board of directors and were signed on its behalf by: Company Registration No. 07913053 ............................. Xin (Andy) Sui Director Annual report for the year ended 31 October 2023 44 Everest Global Plc Group statement of changes in equity For the year ended 31 October 2023 Share Equity based portion of Total Non- Share Share payment convertible Retained owner's controlling Total capital Premium reserve loan notes earnings equity interest equity £ £ £ £ £ £ £ £ Balance at 31 October 2021 439,32 2 2,571,24 7 83,377 74,935 (4, 416, 527) (1, 247, 646) - (1, 247, 646) Shares issued 260,0 00 390,0 00 - - - 650,00 0 - 650,00 0 Shares issued on conversion of convertible 147,4 63 221,1 94 - - - 368,65 7 - 368,65 7 loan notes Settlement of debt by the issue of shares 76,47 3 76,47 3 - - - 152,94 6 - 152,94 6 Extension date of conversion of the convertible loan notes - - - (32,39 6) - (32,39 6) - (32,39 6) Warrants issued during the year - (218,79 9) 218,7 99 - - - - - Loss attributable to non-controlling interest - - - - 2,305, 905 2,305,90 5 (2,305, 905) - on disposal of 49% of subsidiary Loss for the year - - - - (4,571,0 84) (4, 571,084) 522 (4, 570,562) Balance at 31 October 2022 923,25 8 3,040,11 5 302,17 6 42,539 (6, 681, 706) (2, 373, 618) (2, 305, 383) (4, 679, 001) Shares issued 254,5 20 445,4 10 - - - 699,93 0 - 699,93 0 Shares issued on conversion of convertible 120,0 00 180,0 00 - - - 300,00 0 - 300,00 0 loan notes Extension date of conversion of the convertible loan notes - - - (4,826) - (4,826) - (4,826) Warrants issued during the year - (162,55 8) 162,5 58 - - - - - Loss for the year - - - - (862,34 0) (862,3 40) (24 ,698) (887,0 38) Balance at 31 October 2023 1,297,77 8 3,502,96 7 464,73 4 37,713 (7, 544,046) (2, 240,854) (2, 330,081) (4, 570,935) Annual report for the year ended 31 October 2023 45 Everest Global Plc Company statement of changes in equity For the year ended 31 October 2023 Share Share Share based payment Equity portion of convertible Retained Total capital Premium reserve loan notes earnings equity £ £ £ £ £ £ Balance at 31 October 2021 439,322 2,571,247 83,377 74,935 (3,917,273) (748,392) Shares issued 260,000 390,000 - - - 650,000 Shares issued on conversion of convertible loan notes 147,463 221,194 - - - 368,657 Settlement of debt by the issue of shares 76,473 76,473 - - - 152,946 Extension date of conversion of the convertible loan notes - - - (32,396) - (32,396) Warrants issued during the year - (218,799) 218,799 - - - Loss for the year - - - - (321,688) (321,688) Balance at 31 October 2022 923,258 3,040,115 302,176 42,539 (4,238,961) 69,127 Shares issued 254,520 445,410 - - - 699,930 Shares issued on conversion of convertible loan notes 120,000 180,000 - - - 300,000 Extension date of conversion of the convertible loan notes - - - (4,826) - (4,826) Warrants issued during the year - (162,558) 162,558 - - - Loss for the year - - - - (879,899) (879,899) Balance at 31 October 2023 1,297,778 3,502,967 464,734 37,713 (5,118,860) 184,332 Annual report for the year ended 31 October 2023 46 Everest Global Plc Statement of cash flows For the year ended 31 October 2023 Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 Notes £ £ £ £ Cashflows from operating activities Operating loss (721,90 2) (1,152,1 70) (810,883) (206,352) Adjusted for: Depreciation 16 & 27 93,699 84,960 - - Impairment of investment 10 - - - 227,939 Profit/loss on disposal of PPE 6 (10 ,130) - - - Foreign exchange loss 45,494 (41,293) - - Finance costs 11 (95 ,771) (124,88 9) - - Interest received 12 17,58 6 157 - - Profit on disposal of investment 6 (9,231) - (9,231) - Profit on disposal of loans - 1 - 1 Changes in working capital (Increase)/decrease in inventories 17 (153,53 3) (133,19 3) - - Decrease/(increase) in receivables 18 (73 ,125) 15,271 (40,141) 17,518 (Decrease)/increase in payables 20 497,6 46 (538,03 8) 188,141 (647,030) Net cashflow from operating activities (409,26 7) (1,889,1 94) (672,114) (607,924) Investing activities Acquisition of PPE 16 (41 ,461) (5,541) - - Foreign exchange movements 16 (21 ,397) (7) - - Profit on sale of associate 9,231 - 9,231 - Sale of associate 6,154 - 6,154 - Increase in intercompany loans - - - (227,939) Loans receivable 18 (210,77 3) - (200,000) - Net cashflow from investing activities (258,24 6) (5,548) (184,615) (227,939) Financing activities Net proceeds from issue of shares 21 699,9 30 650,000 699,930 650,000 Convertible loan notes issued - - - - Increase/(decrease) in borrowings 26 (18 ,926) 1,134, 015 - - Foreign exchange movements - - - - Capital repayments of lease liability 27 (89 ,704) (73,233) - - Net cashflow from financing activities 591,300 1,710,78 2 699,930 650,000 Net cashflow for the year (76,213) (183,96 0) (156,799) (185,863) Opening cash and cash equivalents 19 925,8 14 1,109,77 4 922,613 1,108,476 Foreign exchange movements 28 8,423 - - - Closing cash and cash equivalents 19 858,0 24 925,814 765,814 922,613 Annual report for the year ended 31 October 2023 47 Everest Global Plc Notes to the group annual financial statements For the year ended 31 October 2023 1. General information Everest Global Plc is a company incorporated in the United Kingdom. Details of the registered office, the officers and advisers to the Company are presented on the directors and professional advisers page at the back of this report (page 99). The Company is admitted to the Official List (by way of a Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's Main Market for listed securities. The information within these financial statements and accompanying notes has been prepared for the year ended 31 October 2023 with comparatives for the year ended 31 October 2022. 2. Basis of preparation and significant accounting policies The consolidated financial statements of Everest Global Plc have been prepared in accordance with International Financial Reporting Standards as adopted by the United Kingdom (IFRS as adopted by the UK), IFRS Interpretations Committee and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention in the Group's reporting currency of Pound Sterling. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3. The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are based on management's experience and knowledge of current events and actions, actual results may ultimately differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years. a. Going concern These consolidated financial statements are prepared on the going concern basis. The going concern basis assumes that the Group will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities and commitments in the normal course of business. The Group has incurred significant operating losses and negative cash flows from operations as the Group pivoted to new opportunities during the year under review. There remains an active and liquid market for the Group's shares. As at 31 October 2023 the Group held £858,024 (2022: £925,814) in cash and cash equivalents. Annual report for the year ended 31 October 2023 48 Everest Global Plc As disclosed in note 32, the Group has acquired PL and disposed of DI since the year-end. Furthermore, the Group continues to seek further investment opportunities to develop its European-focused food and beverage operations. It will be necessary to raise further funding to achieve these objectives. At the time of approving this report, negotiations are in progress to raise further capital in the form of CLNs. The Directors have prepared cash flow forecasts. These forecasts consider operating cash flows and capital expenditure requirements for the Company and PL, available working capital and forecast expenditure, including overheads and other costs. The Directors are of the opinion that the Group has sufficient working capital and that no additional funding is required. However, funding is being raised to provide adequate cash flow to cover the business for unforeseen costs that might occur. After careful consideration of the matters set out above, the Directors are of the opinion that the Group will be able to undertake its planned activities for the period to 28 February 2025 from current cash and debtor positions and have prepared the consolidated financial statements on the going concern basis. Nevertheless, due to the uncertainties inherent in meeting its forecasts and obtaining additional fund raising there can be no certainty in these respects. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern. For this reason, the Directors believe that there is a material uncertainty relating to the Group’s going concern. b. New and amended standards adopted by the Company The Group has implemented IFRS as adopted by the UK. At the point of transition from IFRS as adopted by the EU the underlying requirements were identical. The following standards, amendments and interpretations are new and effective for the year ended 31 October 2023 and have been adopted. None of the IFRS standards below had a material impact on the financial statements. Reference Title Summary Application date IFRS 3 Business Updating a reference in IFRS 3 to the 1 January 2022 combinations Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. IAS 16 Property, Plant and Prohibits a company from deducting from 1 January 2022 Equipment the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related costs in profit or loss. IAS 37 Provisions, Specifies which costs a company 1 January 2022 contingent includes when assessing whether a liabilities and contract will be loss-making. The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 November 2022 and have not been early adopted: Annual report for the year ended 31 October 2023 49 Everest Global Plc IAS 1 Presentation of Clarifies that liabilities are classified as 1 January 2023 Financial either current or non-current, depending Statements on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (for example, the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the 'settlement' of a liability. IAS 1 & IAS 8 Presentation of Amendments to improve accounting 1 January 2023 Financial policy disclosures and to help users of the Statements' and financial statements to distinguish 'Accounting between changes in accounting policies, changes in estimates and changes in accounting accounting policies. estimates and errors' IAS 12 Deferred taxation These amendments require companies 1 January 2023 to recognise deferred tax on transactions that, on initial recognition give to rise equal amounts of taxable and deductible temporary differences. IFRS 17 Insurance This standard replaces 4, IFRS which 1 January 2023 contracts currently permits wide a of variety practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features. The Directors anticipate that the adoption of these standards and the interpretations in future periods will not have a material impact on the financial statements of the Group. c. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 October each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Annual report for the year ended 31 October 2023 50 Everest Global Plc Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non- controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non- controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Where certain assets of the subsidiary are measured at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the related assets (i.e. reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 "Financial Instruments: Recognition and Measurement" or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity. Business combinations Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition- date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair value at the acquisition date, except that: • deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively; • liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement of an acquiree's share-based payment transactions with share-based payment transactions of the Group are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and • assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that standard. Annual report for the year ended 31 October 2023 51 Everest Global Plc Goodwill Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non- controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after assessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non- controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Associates The Company's interest in an associate is carried in the statement of financial position at its share in the net assets of the associate together with goodwill paid on acquisition, less any impairment loss. When the share in the losses exceeds the carrying amount of an equity-accounted Company, the carrying amount is written down to nil and recognition of further losses is discontinued. d. Property, plant & equipment Property, plant and equipment are stated at historical cost less subsequent accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial year in which they are incurred. Depreciation on property, plant and equipment is calculated using the straight-line method to write of their cost over their estimated useful lives at the following annual rates: Leasehold improvements 33.33% Furniture, fixtures & equipment 17.00% Plant & machinery 20.00% & 33.33% Useful lives and depreciation method are reviewed and adjusted if appropriate, at the end of each reporting year. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the relevant asset and is recognised in profit or loss in the year in which the asset is derecognised. e. Leased assets The Group leases various offices and equipment. Rental contracts are typically made for fixed periods of 3 years but may have extension options for an additional 2 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term as per the table below: Annual report for the year ended 31 October 2023 52 Everest Global Plc First year of the lease 15.00% Second year of the lease 17.00% Third year of the lease 20.00% Fourth year of the lease 22.00% Fifth year of the lease 26.00% Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received any initial direct costs, and • restoration costs. Payments associated with short term leases and leases of low-value assets are recognised on a straight- line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise moving equipment rented on a day to day basis. f. Investments in subsidiaries Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment. g. Inventories Inventories are carried at the lower of cost and net realisable value. Cost is determined using specific identification and in the case of work in progress and finished goods, comprises the cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and applicable selling expenses. When the inventories are sold, the carrying amount of those inventories is recognised as an expense in the year in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the year in which the write- down or loss occurs. The amount of any reversal of any write-down of inventories is recognised as an expense in the year in which the reversal occurs. Annual report for the year ended 31 October 2023 53 Everest Global Plc h. Impairment Non-derivative financial assets Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at Fair Value through Other Comprehensive Income ('FVTOCI') are credit-impaired. A financial asset is "credit-impaired" when one or more events that have a detrimental impact on the estimated future cash flows of the financial assets have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: • significant financial difficulty of the borrower or issuer; • a breach of contract such as a default or being more than 90 days past due; • the restructuring of a loan or advance by the Group on terms that the Group would not consider • it is probable that the borrower will enter bankruptcy or other financial reorganisation; or • the disappearance of an active market for a security because of financial difficulties. A 12 month approach is followed in determining the Expected Credit Loss ('ECL'). Presentation of allowance for ECL in the statement of financial position Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. For debt securities at FVTOCI, the loss allowance is charged to profit or loss and is recognised in Other Comprehensive Income ('OCI'). Write-off The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures of recovery of the amounts due. i. Financial instruments The Group classifies non-derivative financial assets into the following categories: loans and receivables and Fair Value through Profit and Loss ('FVTPL') and Fair Value through OCI ('FVTOCI') financial assets. The Group classifies non-derivative financial liabilities into the following category: other financial liabilities. i. Non-derivative financial assets and financial liabilities - recognition and derecognition The Group initially recognises loans and receivables on the date when they are originated. All other financial assets and financial liabilities are initially recognised on the trade date when the entity becomes a party to the contractual provisions of the instrument. Annual report for the year ended 31 October 2023 54 Everest Global Plc The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when it's contractual obligations are discharged or cancelled or expire. Gains or losses on derecognition of financial liabilities are recognised in profit or loss as a finance charge. Financial assets and financial liabilities are offset, and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. ii. Loans and receivables - measurement These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. iii. Assets at FVTOCI - measurement These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised in OCI and accumulated in the revaluation reserve. When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profit or loss. iv. Non-derivative financial liabilities - measurement Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. v. Convertible loan notes and derivative financial instruments The presentation and measurement of loan notes for accounting purposes is governed by IAS 32 and IFRS 9. These standards require the loan notes to be separated into two components: • a derivative liability; and • a debt host liability. This is because the loan notes are convertible into an unknown number of shares, therefore failing the 'fixed-for- fixed' criterion under IAS 32. This requires the 'underlying option component' of the loan note to be valued first (as an embedded derivative), with the residual of the face value being allocated to the debt host liability (refer financial liabilities policy above). Compound financial instruments issued by the Group comprise convertible notes denominated in British pounds that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value. Annual report for the year ended 31 October 2023 55 Everest Global Plc The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised. The Group's financial liabilities include amounts due to a director, trade payables and accrued liabilities. These financial liabilities are classified as FVTPL are stated at fair value with any gains or losses arising on re-measurement recognised in profit or loss. Other financial liabilities, including borrowings are initially measured at fair value, net of transaction costs. j. Borrowings Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the reporting period, in which case they are presented as non- current liabilities. Borrowings are initially recorded at fair value, net of transaction costs and subsequently carried for at amortised costs using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the year of the borrowings using the effective interest method. Borrowings which are due to be settled within twelve months after the reporting period are included in current borrowings in the statement of financial position even though the original term was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue. k. Revenue recognition Performance obligations and service recognition policies Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over of goods or services to a customer. The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies. Annual report for the year ended 31 October 2023 56 Everest Global Plc Nature and timing of satisfaction of Type of product/ performance obligations, including service significant payment terms Revenue recognition under IFRS 15 Sale of goods Customers obtain control of the goods Revenue is recognised when the goods when the goods have been delivered to are delivered and have been accepted them and have been accepted at their by the customers at their premises or premises or the agreed point of delivery. the agreed point of delivery. Invoices are generated at that point in time net of rebates discounts. and Invoices are generally payable within 30 days. No settlement discounts are provided for. The sale of the goods are not subject to a return policy. Interest revenue Interest income recognised in is the Once a financial asset has been written income statement for all interest-bearing down to its estimated recoverable instruments (whether classified as held- amount, interest income is thereafter to-maturity, derivatives FVTOCI, FVTPL, recognised based on the effective or other assets) on an accrual basis using interest rate that was used to discount the interest effective method the future cash flows for the purpose of based on actual the purchase price measuring the recoverable amount. including direct transaction costs. l. Cost of sales Cost of sales consists of all costs of purchase and other directly incurred costs. Cost of purchase comprises the purchase price, import duties and other taxes (other than those subsequently recoverable by the Group from the taxing authorities), if any, and transport, handling and other costs directly attributable to the acquisition of goods. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase. Cost of conversion primarily consists of hiring charges of subcontractors incurred during conversion. m. Finance income and finance costs The Group's finance income and finance costs include: • interest income; • interest expense; and • dividend income. Interest income and expense is recognised using the effective interest method. Dividend income is recognised in profit or loss on the date on which the Group's right to receive payment is established. The "effective interest rate" is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to: • the gross carrying amount of the financial asset; or • the amortised cost of the financial liability. Annual report for the year ended 31 October 2023 57 Everest Global Plc In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset, if the asset is no-longer credit-impaired, then the calculation of interest income reverts to the gross basis. n. Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years, and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting year. Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset realised. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting year, to recover or settle the carrying amount of its assets and liabilities. Current or deferred tax for the year is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. Annual report for the year ended 31 October 2023 58 Everest Global Plc o. Cash & cash equivalents Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows. p. Provisions and contingencies Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the statement of financial position date and are discounted to present value where the effect is material. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. When the effect of discounting is material, the amount recognised for a provision is the present value at the reporting date of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the statement of comprehensive income. Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but disclosed when an inflow of economic benefits is probable. q. Share capital Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital and share premium. r. Foreign currencies In preparing the financial statements of each individual Group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At the end of the reporting year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency are not retranslated. Annual report for the year ended 31 October 2023 59 Everest Global Plc Exchange differences arising on the settlement of monetary items, and on translation of monetary items, are recognised in profit or loss in the year in which they arise. Exchange differences arising on the retranslation of non- monetary items carried at fair value are included in profit or loss for the year except for differences arising on the retranslation of non-monetary items in respect of which gains, and losses are recognised directly in other comprehensive income, in which cases, the exchange differences are also recognised directly in other comprehensive income. For the purposes of presenting the consolidated financial statements, assets and liabilities of the Group's foreign operations are translated from South African Rand into the presentation currency of the Group of Pound Sterling at the rate of exchange prevailing at the end of the reporting year, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during that year, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity. The principal exchange rates during the year are set out in the table below: Rate compared to £ (GBP) For the year For the year ending 31 ending 31 Foreign October October currency 2023 2022 South African Rand 22.6757 21.0410 US Dollar 1.2154 1.1469 s. Employee benefits Salaries, annual bonuses, paid annual leave and the cost to the Group of non-monetary benefits are accrued in the year in which employees of the Group render the associated services. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. t. Segmental reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Director who makes strategic decisions. 3. Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the application of the Group's accounting policies, which are described above, management is required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions that had a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below. Annual report for the year ended 31 October 2023 60 Everest Global Plc a. Inventory valuation Inventory is valued at the lower of cost and net realisable value. Net realisable value of inventories is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These estimates are based on the current market conditions and the historical experience of selling products of a similar nature. It could change significantly as a result of competitors' actions in response to severe industry cycles. The Group reviews its inventories in order to identify slow-moving merchandise and uses markdowns to clear merchandise. Inventory value is reduced when the decision to markdown below cost is made. b. Impairment of long term inter-company receivables The Group's management reviews long-term inter-company receivables on a regular basis to determine if any provision for impairment is necessary. The policy for the impairment of long-term inter-company receivables of the Group is based on, where appropriate, the evaluation of collectability, the trading performance of the relevant subsidiary and on management's judgement. A considerable amount of judgement is required in assessing the ultimate realisation of these outstanding amounts, including the current and estimated future trading performance of the relevant subsidiary. If the financial conditions of inter-company debtors of the Group were to deteriorate, resulting in an impairment of their ability to make payments, a provision for impairment may be required. c. Impairment of receivables The Group's management reviews receivables on a regular basis to determine if any provision for impairment is necessary. The policy for the impairment of receivables of the Group is based on, where appropriate, the evaluation of collectability and ageing analysis of the receivables and on managements' judgement. A considerable amount of judgement is required in assessing the ultimate realisation of these outstanding amounts, including the current creditworthiness and the past collection history of each debtor. If the financial conditions of debtors of the Group were to deteriorate, resulting in an impairment of their ability to make payments, provision for impairment may be required. d. Incremental borrowing cost of right of use assets and lease liabilities In assessing the Group's right of use assets and lease liabilities, the Group has to assess its incremental borrowing costs. As an approximation of the Group's incremental long term borrowing costs, the Group estimated the borrowing costs associated with similar long term, asset based financing arrangements. The Group based the implied incremental borrowing costs on the South African prime lending rate applicable at the date of commencement of the agreement and added an appropriate lending premium that would be typically applied by lenders. At the year end the estimated incremental borrowing costs used amounted to 8.5% (2022: 8.5%). e. Income taxes The Group is subject to income taxes in South Africa and the UK. The South African income taxes are administered by South African accountants. Significant judgement is required in determining the provision for income taxes and the timing of payment of the related tax. There are certain transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax provision in the year in which such determination is made. Annual report for the year ended 31 October 2023 61 Everest Global Plc f. Share based payments The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes model, which considers conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted; based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management's best estimate of future share price behaviour based on past experience, future expectations and benchmarked against peer companies in the industry. g. Equity portion of convertible loan notes The Group provides for the equity portion of convertible loan notes by applying an estimated interest rate in determining the present values of the convertible loan notes and the interest payable thereon over the life of the convertible loan notes. h. Depreciation and amortisation The Group depreciates property, plant and equipment and amortises the leasehold buildings and land use rights on a straight-line method over the estimated useful lives. The estimated useful lives reflect the Directors' estimate of the years that the Group intends to derive future economic benefits from the use of the Groups' property, plant and equipment. 4. Segmental reporting In the opinion of the Directors, the Group, during the reporting period has one class of business, being the trading of agricultural materials. The Group's primary reporting format is determined by the geographical segment according to the location of its establishments. There is currently only one geographic reporting segment, which is South Africa . All revenues and costs are derived from the single segment. Annual report for the year ended 31 October 2023 62 Everest Global Plc 5. Revenue Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Major product/service lines Sale of agricultural 2,791,695 1,698,839 - - materials Primary geographic markets South Africa 2,791,695 1,698,839 - - Timing of revenue recognition Products transferred at a point in time 2,791,695 1,698,839 - - 6. Other income Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Bad debts recovered 3,212 - - - Profit on disposal of property plant and equipment 10,130 - - - Profit on disposal of investment 9,231 1,264 9,231 - 22,573 1,264 9,231 - 7. Personnel expenses and staff numbers Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 The average number of employees in the year were: Directors 6 5 3 3 Management 3 1 - - Accounts & 3 2 - - administrative Sales 1 1 - - Manufacturing/ 11 8 - - warehouse Total 24 17 3 3 Annual report for the year ended 31 October 2023 63 Everest Global Plc 8. Directors' remuneration Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 Salaries and fees £ £ £ £ Xin (Andy) Sui 39,000 - 39,000 - Robert Scott 34,000 12,000 34,000 12,000 Simon Grant-Rennick 50,260 - 50,260 - Andrew Monk * # - 12,923 - 12,923 Matthew Bonner * - 11,000 - 11,000 Total 123,260 35,923 123,260 35,923 * These directors resigned during the year ended 31 October 2022 # included in Andrew Monk's remuneration is £1,923 for National Insurance contributions No pension contributions were made by the Company on behalf of its directors in the current year. Included in Andrew Monk's 2022 remuneration are pension contributions amounting to £330. At the year-end a total of £2,810 (2022: £33,587) was outstanding in respect of directors' emoluments. Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ The aggregate payroll costs for these persons were: 332,440 232,273 123,260 59,032 Average ratio of executive pay 3.54 0.85 verses average employee pay: Average directors 41,087 11,974 Average of all employees 13,852 13,663 Average of non-director 11,621 14,025 employees Annual report for the year ended 31 October 2023 64 Everest Global Plc 9. Expenses - analysis by nature Admission costs included £100,000 payable to RPGCC with respect to their engagement as reporting accountant. 10. Impairments In previous financial years, the recoverability of the investment was evaluated and in management's estimation, it was considered necessary to impair the goodwill on consolidation, the investment in the subsidiary and the intercompany loans receivable. They are held at nil value in the financial statements. Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Impairment of intercompany - - - 227,939 loans receivable - - - 227,939 Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Auditors remuneration for audit 55,000 45,000 55,000 45,000 service: parent Auditors remuneration for audit - - - - service: related services Under-provision of prior year 5,000 11,530 5,000 11,530 audit fee Auditors remuneration for audit 6,539 17,308 6,539 - service: subsidiary Brokership fees 17,527 15,000 17,527 15,000 Legal & professional fees 182,124 (269,522) 249,317 (269,522) Registrar fees 3,850 3,034 3,850 3,034 Depreciation on property, plant 7,804 5,419 - - & equipment (note 16) Depreciation on IFRS 16 right of use asset (note 27) 85,895 79,541 - - Gain/loss on exchange 88,870 1,061,452 478 305 Personnel expenses (note 7) 332,440 232,273 48,068 59,032 Other administrative expenses 282,493 372,767 69,767 114,034 Subtotal 1,067,542 1,573,802 455,546 (21,587) Admission costs 364,568 - 364,568 - Total administrative expenses 1,432,110 1,573,802 820,114 (21,587) Annual report for the year ended 31 October 2023 65 Everest Global Plc 11. Finance costs Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Interest paid on borrowings 95,771 124,889 - - Interest accrued on convertible 75,975 135,775 75,975 135,775 loan notes Lease liability 17,935 25,995 - - Finance charges associated with loan to K2 (note 1) disposal of intercompany - 3,131,890 - - 189,681 3,418,549 75,975 135,775 Finance costs represent interest and charges in respect of the discounting of invoices, the interest accrual for the Convertible Loan Notes issued and the interest charged on capitalised right-of use lease liability. Note 1: These finance charges relate to the disposal of an inter-company loan to K2. 12. Finance income Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Interest earned on loan 6,959 - 6,959 - receivable Interest earned on intercompany loan receivable - - - 20,439 Interest earned on favourable 17,586 157 - - bank balances 24,545 157 6,959 20,439 Annual report for the year ended 31 October 2023 66 Everest Global Plc 13. Taxation The charge for the year can be reconciled to the profit before taxation per the consolidated statement of comprehensive income as follows: Group Company For the year For the year For the year For the year ending 31 ending 31 ending 31 ending 31 October October October October 2023 2022 2023 2022 £ £ £ £ Tax charge - - - - Factors affecting the tax charge Loss on ordinary (887,038) (4,570,562) (879,899) (321,688) activities before taxation Loss on ordinary activities before taxation multiplied by standard rate of UK corporation tax (168,537) (868,407) (167,181) (61,121) of 19% (2022: 19%) Tax effect of expenses not deductible for tax 2,852 597,067 14,751 - Overseas tax rate difference from UK rate - 27% (2022: 28%) 13,255 21,707 - - Tax effect of utilisation of tax losses 152,430 249,633 152,430 61,121 Tax charge for the year - - - - The Company has excess management expenses of £1,585,329 (2022: £1,432,899 )available for carry forward against future trading profits. The deferred tax asset in these tax losses at 19.0% has not ben recognised due to the uncertainty of recovery. The UK government changed the corporate tax with effect from 1 April 2023. This change meant there was a sliding scale between 19% and 25%, depending on your profits. Given the Company isn't profitable we have applied the rate of 19%, which is applicable for business with profits less than £50,000. Annual report for the year ended 31 October 2023 67 Everest Global Plc 14. Loss per share Loss per share data is based on the Group result for the year and the weighted average number of shares in issue. Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year: Year ended Year ended 31 October 31 October 2023 2022 £ £ Loss after tax (862,340) (4,571,084) Weighted average number of shares in issue 50,488,839 25,690,228 Basic and diluted loss per share (0.0171) (0.1779) Basic and diluted loss per share are the same, since where a loss is incurred the effect of outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. As at 31 October 2023 there were 50,488,839 (2022: 46,162,855) shares in issue, 63,089,171 (2022: 38,363,171) outstanding share warrants and nil (2022: nil) outstanding options, both are potentially dilutive. 15. Investments Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Investment in subsidiary - cost of investment - - 297,915 297,915 - impairment of investment - - (297,915) (297,915) Carrying value - - - - 15.1 Investment in associate Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Investment in Dynamic - 6,154 - 6,154 Intertrade Agri (Pty) Ltd ('DIA') Carrying value - 6,154 - 6,154 Annual report for the year ended 31 October 2023 68 Everest Global Plc During the year, DIA, was sold to the proposed purchaser as disclosed last year. It had been anticipated that the sale be concluded within the last two financial year, however COVID-19 delayed the process. The Company received £15,385 for its investment within DIA. This was greater than the Directors had estimated while preparing the financial statements to 31 October 2022. As at 31 October 2023, the Company directly and indirectly held the following investments: Country of incorporation Proportion of Proportion of Principal and place of equity interest equity interest Name of company activities business 2023 2022 Trading in Dynamic Intertrade agricultural (Pty) Limited products South Africa 51% 51% 15.2 Investment in subsidiary Information about the Group's shareholding in DI at the end of the reporting period is as follows: Dynamic Intertrade (Pty) Ltd 2023 2022 Percentage held as at 1 November 51% 100% Percentage disposed of in subsidiary due - (49%) to issuance of shares on 3 October 2022 Percentage held at 31 October 51% 51% The Group acquired 100% of DI in 2012 from Corestar Holdings Ltd. On 3 October 2022, DI issued shares to VSA NEX Investments Limited ('VSA NEX') (now known as K2) such that the Company retained 51% interest in DI and K2 held 49% of DI. Dynamic Intertrade (Pty) Ltd 2023 2022 Proportion of ownership interests and voting rights held by non- 49% 49% controlling interests at 31 October 2023 2022 £ £ Profit/(loss) allocation to non-controlling interests for the year (24,698) 522 Non-controlling interests (2,330,081) (2,305,383) The reconciliation of non-controlling interests in note 23 includes an analysis of the profit or loss allocated to non-controlling interests of each subsidiary where the non-controlling interest is material. There are no significant restrictions on the ability of the Group to access or use assets and settle liabilities. Subsequent to the year end the Company has disposed of its remaining holding of 51% of DI to K2. Annual report for the year ended 31 October 2023 69 Everest Global Plc 16. Property, plant & equipment Furniture, Leasehold fixtures and Plant & improvements fittings machinery Total Group £ £ £ £ Cost As at 31 October 2021 19,746 4,356 279,382 303,484 Additions - - 5,541 5,541 Exchange difference (194) (56) (29,986) (30,236) As at 31 October 2022 19,552 4,300 254,937 278,789 Additions - 984 40,477 41,461 Disposals - - (25,058) (25,058) Exchange difference (1,410) (299) (18,278) (19,987) As at 31 October 2023 18,142 4,985 252,078 275,205 Accumulated depreciation As at 31 October 2021 19,720 4,060 265,935 289,715 Charge in the year 24 173 5,222 5,419 Exchange difference (194) (40) (29,995) (30,229) As at 31 October 2022 19,550 4,193 241,162 264,905 Charge in the year - 138 7,666 7,804 Released on disposal - - (24,685) (24,685) Exchange difference (1,410) (308) 3,128 1,410 As at 31 October 2023 18,140 4,023 227,271 249,434 Net book value As at 31 October 2022 2 107 13,775 13,884 As at 31 October 2023 2 962 24,807 25,771 The Company held no tangible fixed assets at 31 October 2023 or 31 October 2022. 17. Inventories Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Raw materials 329,408 175,875 - - Carrying value 329,408 175,875 - - The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then repaid by DI to purchase stock from suppliers where deposits are required. This funding was secured by a lien over the inventory and a cession of the debtors balances. Annual report for the year ended 31 October 2023 70 Everest Global Plc 18. Trade and other receivables Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Financial instruments Trade receivables 282,671 256,824 - - Deposits - 14,360 - - Loans receivable 210,773 - 200,000 - Other receivables 42,726 11,219 42,726 11,219 Non-financial instruments Accrued income 6,959 - 6,959 - Prepayments 30,257 126 8,634 - Carrying value 573,386 282,529 258,319 11,219 Current 573,386 282,529 258,319 11,219 Non-current - - - - 573,386 282,529 258,319 11,219 The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then repaid by DI to purchase stock from suppliers where deposits are required. This funding was secured by a lien over the inventory and a cession of the debtors balances. The receivables are considered to be held within a held-to-collect business model consistent with the Group's continuing recognition of the receivables. As at 31 October 2023 the Group does not have any contract assets nor any contract liabilities arising out of contracts with customers relating to the Group's right to receive consideration for agricultural products sold but not billed. Group trade receivables represent amounts receivable on the sale of agricultural products and are included after provisions for doubtful debts. Credit and market risks, and impairment loses The Group did not impair any of its trade receivables as at 31 October 2023, as all trade receivables generated during the financial year, and outstanding at 31 October 2023 are considered to be recoverable during the ordinary course of business. Information about the Group's exposure to credit and market risks and impairment losses for trade receivables is included in Note 29. The Directors consider that the carrying amount of trade receivables and other receivables approximates their fair value. Annual report for the year ended 31 October 2023 71 Everest Global Plc 19. Cash and cash equivalents Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Cash on hand 858,024 925,814 765,814 922,613 858,024 925,814 765,814 922,613 20. Trade and other payables Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Trade payables 478,862 582,180 92,135 160,585 Other payables 643,166 - 256,595 - Related party payables - 42,202 - - 1,122,028 624,382 348,730 160,585 Trade payables represent amounts due for the purchase of agricultural materials and administrative expenses. The Directors consider that the carrying amount of trade payables approximates to their fair value. The related party financial liabilities comprise: Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Matthew Bonner - 25,357 - - Robert Scott - 16,845 - - - 42,202 - - Terms: Matthew Bonner & Robert Scott: The loan bears interest at the South African prime overdraft rate. The interest is calculated and paid quarterly. The loan is repayable as decided upon from time to time. The loans were repaid in the year Annual report for the year ended 31 October 2023 72 Everest Global Plc 21. Share capital and share premium Share capital is the amount subscribed for shares at nominal value. During the 2019 financial year the Company consolidated all existing and issued shares and share options on the basis of 20 existing shares/options for 1 new share/option. Retained losses represent the cumulative loss of the Group attributable to equity shareholders. Share-based payments reserve relate to the charge for share-based payments in accordance with IFRS 2. Number of shares Nominal value Share premium Total £ £ £ Balance at 31 October 2021 21,966,087 439,322 2,571,247 3,010,569 Share issue on settlement of 3,823,627 76,473 76,473 152,946 debt 29 April 2022 Share issue on conversion of 7,373,141 147,463 221,194 368,657 CLNs 3 October 2022 Share issue 3 October 2022 13,000,000 260,000 390,000 650,000 Warrants issued during the year - - (218,799) (218,799) Balance at 31 October 2022 46,162,855 923,258 3,040,115 3,963,373 Share issue 24 January 2023 12,726,000 254,520 445,410 699,930 Share issue on conversion of 6,000,000 120,000 180,000 300,000 CLNs 25 January 2023 Warrants issued during the year - - (162,558) (162,558) Balance at 31 October 2023 64,888,855 1,297,778 3,502,967 4,800,745 Annual report for the year ended 31 October 2023 73 Everest Global Plc 22. Share based payments reserve The Company does not have a share-ownership compensation scheme for senior executives of the Company. However senior executives may be granted options to purchase Ordinary Shares in the Company. Warrants During the 2019 financial year the Company consolidated all existing and issued shares and share options on the basis of 20 existing shares/options for 1 new share/option. There are 63,089,171 warrants to subscribe for Ordinary Shares at 31 October 2023 (2022: 38,363,171). Expired/ As at 1 exercised/ As at 31 Date of November vested/ October Exercise Exercise/ vesting date grant 2022 issued 2023 price From To 27-Nov-18 8,050,000 - 8,050,000 20p 27-Nov-18 01-Feb-24 17-Aug-20 2,566,889 - 2,566,889 5p 23-Mar-21 01-Feb-24 03-Oct-22 13,000,000 - 13,000,000 5p 03-Oct-22 31-Dec-24 03-Oct-22 7,373,141 - 7,373,141 5p 03-Oct-22 31-Dec-24 03-Oct-22 7,373,141 - 7,373,141 10p 03-Oct-22 31-Dec-24 23-Jan-23 - 12,726,000 12,726,000 5.5p 23-Jan-23 31-Dec-24 24-Jan-23 - 6,000,000 6,000,000 5p 24-Jan-23 31-Dec-24 24-Jan-23 - 6,000,000 6,000,000 10p 24-Jan-23 31-Dec-24 38,363,171 24,726,000 63,089,171 Warrants were attached to the CLNs issued on 23 March 2021, with an exercise price of 5.0p per Ordinary Share. The redemption date for these CLNs is 31 March 2025.. These warrants will only be issued once the CLNs are converted into shares. Warrants were attached to the subscription shares issued on 24 July 2020 a 1-for-1 basis, with an exercise price of 5.0p per ordinary share and expire 12 months from allotment of the subscription shares. Further warrants were attached to any new ordinary shares that are issued as a result of conversion of any loan notes, on a 1- for-1 basis on the same terms as the subscription warrants. Warrants were attached to the subscription shares issued on 14 September 2018 a 1-for-1 basis, with an exercise price of 20.0p per ordinary share and expire 12 months from allotment of the subscription shares. Further warrants were attached to any new ordinary shares that are issued as a result of conversion of any loan notes, on a 1-for-1 basis on the same terms as the subscription warrants. A maximum of 20,450,222 new ordinary shares could potentially be issued in the event that all subscription warrants and loan note warrants are exercised. On 3 October 2022 an investor subscribed for 13,000,000 new ordinary shares in the Company at a price of 5p per share, representing a capital injection of £650,000 (gross and net) into the Company. The new ordinary shares were accompanied by 1 for 1 warrants at 5p in the Company's ordinary shares, equating to 13,000,000 warrants exercisable at any time before 31 December 2024. On 3 October 2022 the Company agreed with 35% of the CLN holders to accelerate the conversion of 5,971,000 CLNs and accrued but unpaid interest into 7,373,141 New Ordinary Shares in the Company at a conversion price of 5p. As such, the conversion of 5,971,000 CLNs plus accrued but unpaid interest resulted in the issue of 7,373,141 5p Warrants and 7,373,141 10p Warrants, all of which will expire on 31 December 2024. Annual report for the year ended 31 October 2023 74 Everest Global Plc On 19 January 2023 investors subscribed for 12,726,000 new ordinary shares in the Company at a price of 5.5p per share, representing a capital injection of £699,930 (gross and net) into the Company. The new ordinary shares were accompanied by 1 for 1 warrants at 5.5p in the Company's ordinary shares, equating to 12,726,000 warrants exercisable at any time before 31 December 2024. The conversion of £300,000 of CLNs on 24 January 2023 has created 6,000,000 new shares in the Company. As per the terms of the CLNs on conversion each share also gets both a 5p and a 10p warrant. Therefore on conversion 6,000,000 5p warrants and 6,000,000 10p warrants were issued and are exercisable up until 31 December 2024. The estimated fair value of the options in issue was calculated by applying the Black-Scholes option pricing model. The assumptions used in the calculation were as follows: Share price at date of grant 0.03 Exercise price Being the exercise price as stated above Expected volatility 69% Expected dividend 0% Contractual life (in years) 1.92 Risk free rate (based on 10 year UK Government Gilts) 3.28% Estimated fair value of each option 0.004796 - 0.011232 Options At 31 October 2023 there were nil share options issued to the Directors and past Directors of the Company. During the current year nil share options were granted (2022: nil). 23. Non-controlling interests Summarised financial information in respect of each of the Group's subsidiaries that has material non- controlling interests is set out below. The summarised financial information below represents amounts before intragroup eliminations. 2023 2022 Dynamic Intertrade (Pty) Ltd £ £ Current assets 736,685 451,450 Non-current assets 181,900 264,330 Current liabilities (1,259,338) (522,082) Non-current liabilities (4,414,514) (4,898,562) (4,755,267) (4,704,864) Equity attributable to the owners of the Company (2,425,186) (2,399,481) Non-controlling interests (2,330,081) (2,305,383) (4,755,267) (4,704,864) Annual report for the year ended 31 October 2023 75 Everest Global Plc 2023 2022 Dynamic Intertrade (Pty) Ltd £ £ Revenue 2,791,695 1,698,839 Expenses (3,138,683) (2,615,612) Loss for the year (346,988) (916,773) Loss attributable to the owners of the Company (346,988) (916,773) Loss attributable to the non-controlling interests - - Loss for the year (346,988) (916,773) Other comprehensive income attributable to owners of the Company - - Other comprehensive income attributable to the non-controlling interests - - Other comprehensive income for the year - - Total comprehensive income attributable to owners of the Company (346,988) (916,773) Total comprehensive income attributable to the non-controlling interests - - Total comprehensive income for the year (346,988) (916,773) Net cash outflows from operating activities (314,591) (786,055) Net cash outflows from investing activities (22,290) (4,415) Net cash outflows from financing activities 429,724 792,436 Net cash inflow / (outflow) 92,843 1,966 2023 2022 Non-controlling interest £ £ Balance at 1 November (2,305,383) - Equity attributable to non-controlling interest on disposal of 49% interest - (2,305,905) Share of profits for the year (24,698) 522 Balance at 31 October (2,330,081) (2,305,383) On 16 January 2024 K2 exercised the put and call option agreement which was detailed in the Annual Financial Statements for the year ending October 2022. This resulted in the Company selling its remaining 51% of DI. Full details of this transaction can be found in the subsequent events, at note 32. Annual report for the year ended 31 October 2023 76 Everest Global Plc 24. Equity portion of convertible loan notes During the 2021 financial year, on 23 March 2021, the Company converted £383,000 owed to the Directors and a Company owned by a director for 7,660,000 CLNs and, simultaneously, issued 4,400,000 CLNs to the value of £220,000 for cash. During the current financial year the Company extended the conversion date of the CLNs to 31 December 2024. The equity portion of the CLNs is presented below. Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ Equity portion of convertible loan notes issued 37,713 42,539 37,713 42,539 during the year Carrying value 37,713 42,539 37,713 42,539 25. Convertible loan notes Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Convertible loan notes 491,071 710,274 491,071 710,274 Carrying value 491,071 710,274 491,071 710,274 The loan notes holder will be paid an interest rate of 12 per cent, accrued on a monthly basis. The loan notes will not be admitted to trading on any exchange. On 31 March 2021, the Company issued 12,060,000 2021 Loan Notes in the sum of £603,000 (by the conversion of existing sums due to creditors and by way of subscription from private investors). On 3 October 2022, Golden Nice acquired £162,000 of the 2018 Loan Notes and £391,950 of the 2021 Loan Notes from various holders, being 65 per cent. of the Convertible Loan Notes outstanding at that time, at a 15 per cent. discount to their face value together with accrued but unpaid interest. The Company also agreed with the remaining holders of Convertible Loan Notes to accelerate the conversion of the balance of £87,500 2018 Loan Notes and £211,050 2021 Loan Notes and accrued but unpaid interest into, in aggregate, 7,373,141 2022 Conversion Shares in the Company at a conversion price of 5p. In accordance with their terms, the Company granted each holder one warrant to subscribe for a new Ordinary Share at an exercise price of £0.05 per Ordinary Share for every 2022 Conversion Share issued. Additionally, the Company also agreed to grant each holder one warrant to subscribe for a new Ordinary Share at an exercise price of £0.10 per Ordinary Share for every 2022 Conversion Share issued. Accordingly, the conversion of £87,500 2018 Loan Notes and £211,050 2021 Loan Notes plus accrued but unpaid interest resulted in the granting of 7,373,141 5p 2022 CLN Warrants and 7,373,141 10p 2022 CLN Warrants. £ Annual report for the year ended 31 October 2023 77 Everest Global Plc On or around 24 January 2023, the Company received a conversion notice from Golden Nice, pursuant to which Golden Nice notified the Company of the conversion of the 2021 Loan Notes in the aggregate sum of £300,000 into 6,000,000 Ordinary Shares at a price of 5 pence per share, being a premium of 25 per cent to the closing price of 3.75 pence on 23 January 2023, being the business day prior to agreement of the conversion. As part of the 2023 Conversion, Golden Nice received a 5p 2023 CLN Warrant and a 10p 2023 CLN Warrant for every Ordinary Share issued in connection with the 2023 Conversion. A maximum of 32,510,222 New Ordinary Shares could potentially be issued in the event that all New Ordinary Shares Warrants and Loan Conversion Warrants are exercised. The fair value of the liability component, included in non-current liabilities, is calculated using a market interest rate for an equivalent non-convertible loan note at the date of issue. The residual amount, representing the value of the equity conversion component, is included in shareholder's equity in Equity portion of convertible loan notes (Note 25). The carrying amounts of the liability component of the CLNs at the balance sheet date are derived as follows: Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Liability component at the beginning of the 710,274 910,759 710,274 910,759 financial year Conversion of CLNs to shares on 24 January 2023 (300,000) - (300,000) - Conversion of CLNs to shares on 3 October 2022 - (368,656) - (368,656) Equity portion on extension of conversion date 4,826 32,396 4,826 32,396 Accumulated amortisation of interest expense 75,971 135,775 75,971 135,775 Accumulated payments of interest - - - - Liability component at the end of the financial 491,071 710,274 491,071 710,274 year Current portion included in current liabilities - - - - Long term portion included in long term liabilities 491,071 710,274 491,071 710,274 Liability component at the end of the financial 491,071 710,274 491,071 710,274 year As part of the of 3 October 2022 investment agreement, the Company agreed with the CLN holders to accelerate the conversion of 5,971,000 CLNs and accrued but unpaid interest into 7,373,141 new Ordinary Shares in the Company at a conversion price of 5p. Annual report for the year ended 31 October 2023 78 Everest Global Plc 26. Borrowings Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Euro 2 Afrisko Ltd - inventory financing 291,744 417,891 - - Working Capital Partners Pty Ltd - accounts 71,267 140,063 - - receivable financing Loan from K2 Spice Ltd 4,355,369 4,174,538 - - Carrying value 4,718,380 4,732,492 - - The Group's subsidiary DI entered into a funding agreement with Euro 2 Afrisko Ltd whereby Euro 2 Afrisko Ltd pays the suppliers directly and this is then repaid by DI to purchase stock from suppliers where deposits are required. This funding was then repaid and secured by a lien over the inventory and accession of the debtors. The borrowings were secured by a security agreement from the Company. The loans bear interest at 14% per annum. 27. Leases Right of use asset and lease liability Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Operating lease commitments disclosed as at 31 266,555 347,102 - - October Interest payments 17,935 - - - Lease payments (89,704) (73,234) - - Exchange difference (7,798) (7,313) - - Lease liability recognised in the statement of financial position 186,988 266,555 - - Of which: Current lease liabilities 108,266 100,485 - - Non-current lease liabilities 78,722 166,070 - - 186,988 266,555 - - Right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position as at 31 October 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application. The recognised right of-use assets relate to the following types of assets: Annual report for the year ended 31 October 2023 79 Everest Global Plc Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Properties 156,129 250,446 - - 156,129 250,446 - - On 3 March 2020 a new lease was signed for the Group's main trading address, 104 Bofors Circle, Epping Industrial 2, Cape Town, South Africa with commencement date of 1 July 2020. On the commencement date, the Group recognised a lease liability and right-of-use asset of £430,973. Impact on earnings per share Depreciation on the right-of-use asset amounting to £103,842 (2022: £73,234) and interest on the right-of-use lease liability of £17,935 (2022: £25,995) were charged to the statement of profit and loss for the current year. As a result, the earnings per share decreased by 0.002p. 28. Notes to the statement of cash flows Group Company Year ended Year ended Year ended Year ended 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Cash and cash equivalents 858,024 925,814 765,814 922,613 Borrowings (4,350,555) (4,732,492) - - Convertible loan notes (491,071) (710,274) (491,071) (710,274) Right of use lease liability (186,988) (266,555) - - Net debt (4,170,590) (4,783,507) 274,743 212,339 Cash and liquid investments 858,024 925,814 765,814 922,613 Fixed rate instruments (5,028,614) (5,709,321) (491,071) (710,274) Net debt (4,170,590) (4,783,507) 274,743 212,339 Annual report for the year ended 31 October 2023 80 Everest Global Plc Net debt reconciliation for the group Net debt reconciliation for the company Cash and Right of use cash Convertible lease equivalents Borrowings loan notes liability Total debt Net debt £ £ £ £ £ £ As at 31 October 1,109,774 (466,064) (910,759) (347,102) (1,723,925) (614,151) 2021 Cashflows (183,960) (1,134,538) - 73,234 (1,061,304) (1,245,264) Non-cash - (3,131,890) 200,485 - (2,931,405) (2,931,405) transactions Foreign exchange - - - 7,313 7,313 7,313 adjustments As at 31 October 925,814 (4,732,492) (710,274) (266,555) (5,709,321) (4,783,507) 2022 Cashflows (67,790) 381,937 219,203 85,907 687,047 619,257 Foreign exchange - - - 8,423 8,423 8,423 adjustments As at 31 October 858,024 (4,350,555) (491,071) (172,225) (5,013,851) (4,155,827) 2023 Cash and Right of use cash Convertible lease equivalents Borrowings loan notes liability Total debt Net debt £ £ £ £ £ £ As at 31 October 1,108,476 - (910,759) - (910,759) 197,717 2021 Cashflows (185,863) - - - - (185,863) Non-cash - - 200,485 - 200,485 200,485 transactions As at 31 October 922,613 - (710,274) - (710,274) 212,339 2022 Cashflows (156,799) - 219,203 - 219,203 62,404 As at 31 October 765,814 - (491,071) - (491,071) 274,743 2023 Annual report for the year ended 31 October 2023 81 Everest Global Plc 29. Financial instruments - fair values and risk management The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Trade and other receivables and trade and other payables classified as held-for-sale are not included in the table below. The Group has not disclosed the fair values of financial instruments such as short-term trade receivables and payables, because their carrying amounts are a reasonable approximation of their fair value. Annual report for the year ended 31 October 2023 82 Everest Global Plc Group as at 31 October 2023 Carrying value Fair value Financial FVTOCI - assets at Other equity amortised financial instruments cost liabilities Total Level 1 Level 2 Level 3 Total £ £ £ £ £ £ £ £ Financial assets not measured at fair value Loan receivable - 200,000 - 200,000 Cash and cash equivalents - 858,024 - 858,024 - 1,058,024 - 1,058,024 Financial liabilities not measured at fair value Lease liability - - (186,988) (186,988) Unsecured borrowings - - (4,350,555) (4,350,555) Convertible loan notes - - (491,071) (491,071) Trade and other payables - - (363,011) (363,011) - - (5,391,625) (5,391,625) Annual report for the year ended 31 October 2023 83 Everest Global Plc Group as at 31 October 2022 Carrying value Fair value Financial FVTOCI - assets at Other equity amortised financial instruments cost liabilities Total Level 1 Level 2 Level 3 Total £ £ £ £ £ £ £ £ Financial assets measured at fair value Investment in associate 6,154 - - 6,154 - - 6,154 6,154 6,154 - - 6,154 Financial assets not measured at fair value Trade and other receivables - 271,184 - 271,184 Cash and cash equivalents - 925,814 - 925,814 - 1,196,998 - 1,196,998 Financial liabilities not measured at fair value Lease liability - - (266,555) (266,555) Unsecured borrowings - - (4,732,492) (4,732,492) Convertible loan notes - - (710,274) (710,274) Trade and other payables - - (624,382) (624,382) - - (6,333,703) (6,333,703) Annual report for the year ended 31 October 2023 84 Everest Global Plc Company as at 31 October 2023 Carrying value Fair value Financial FVTOCI - assets at Other equity amortised financial instruments cost liabilities Total Level 1 Level 2 Level 3 Total £ £ £ £ £ £ £ £ Financial assets not measured at fair value Loan receivable - 200,000 - 200,000 Cash and cash equivalents - 765,814 - 765,814 - 965,814 - 965,814 Financial liabilities not measured at fair value Convertible loan notes - - (491,071) (491,071) - - (491,071) (491,071) Annual report for the year ended 31 October 2023 85 Everest Global Plc Company as at 31 October 2022 Carrying value Fair value Financial FVTOCI - assets at Other equity amortised financial instruments cost liabilities Total Level 1 Level 2 Level 3 Total £ £ £ £ £ £ £ £ Financial assets measured at fair value Investment in associate 6,154 - - 6,154 - - 6,154 6,154 6,154 - - 6,154 Financial assets not measured at fair value Cash and cash equivalents - 922,613 - 922,613 - 922,613 - 922,613 Financial liabilities measured at fair value Loans payable to K2 - - (4,174,538) (4,174,538) - - - - - - (4,174,538) (4,174,538) Financial liabilities not measured at fair value Unsecured borrowings - - (557,954) (557,954) Convertible loan notes - - (710,274) (710,274) Trade and other payables - - (160,585) (160,585) - - (1,428,813) (1,428,813) Annual report for the year ended 31 October 2023 86 Everest Global Plc B. Measurement of fair values i. Valuation techniques and significant unobservable inputs The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments measured at fair value in the statement of financial position, as well as the significant unobservable inputs used. Related valuation processes are described in Note 3. Financial instruments measured at fair value Inter-relationship between significant unobservable inputs Significant and fair value Type Valuation technique unobservable inputs measurement Investment in associate The value of the None None investment is adjusted annually based upon the group's share of the associate profit or loss. ii. Transfers between Levels 1 & 2 There were no transfers between levels 1 & 2 in either the current financial year or in the prior financial year. C. Financial risk management The Group has exposure to the following risks arising from financial instruments: • credit risk; • liquidity and cash flow risk; and • market risk. Risk management framework The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group's Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group's Audit Committee undertakes ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. Annual report for the year ended 31 October 2023 87 Everest Global Plc Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers and investments in debt securities. The carrying amounts of financial assets represent the maximum credit exposure. There was no impairment loss in the current year nor in the prior year. Trade receivables The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which its customers operate. Details of concentration of revenue are included in Note 6. The Group has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment terms and conditions are offered. The Group's review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and are reviewed regularly. The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one month. The Group does not require collateral in respect of trade and other receivables. The Group does not have trade receivables for which a no allowance is recognised because of collateral. Group Company 2023 2022 2023 2022 £ £ £ £ As at 31 October the exposure to credit risk for trade receivables by geographic region was as follows: South Africa 282,671 256,824 - - Other - - - - 282,671 256,824 - - As at 31 October the exposure to credit risk for trade receivables by credit rating was as follows: External credit ratings - - - - Other 282,671 256,824 - - Net debt 282,671 256,824 - - Annual report for the year ended 31 October 2023 88 Everest Global Plc Expected credit loss assessment for corporate customers as at 31 October 2023 and 31 October 2022 The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default. Movements in the allowance for impairment in respect of trade receivables The movement in the allowance for impairment in respect of trade receivables during the year amounted to nil. Cash and cash equivalents As at 31 October 2023, the Group held £858,024 in cash and cash equivalents (2022: £925,814) and had a bank overdraft of £nil. The cash and cash equivalents are held with bank and financial institution counterparties which are rated Baa3 to A1+ by Moody's. Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties. On the implementation of IFRS 9 the Group did not impair any of its cash and cash equivalents. Liquidity and cash flow risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Exposure to liquidity and cash flow risk The following tables present the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and include contractual interest payments and exclude the impact of netting agreements. Annual report for the year ended 31 O ctober 2023 89 Everest Global Plc Group as at 31 October 2023 Group as at 31 October 2022 Contractual cash flows Carrying 2 months 2 to 12 1 to 2 2 to 5 More than value Total or less months years years 5 years £ £ £ £ ££ £ Non-derivative financial liabilities Unsecured shareholders (4,174,538) (4,174,538) - - - - (4,174,538) loans Convertible (710,274) (710,274) - - (710,274) - - loan notes Secured (557,954) (557,954) - (557,954) - - - loans Right of use (266,555) (307,998) (17,634) (89,933) (112,945) (87,486) - finance lease Trade (582,180) (582,180) (582,180) - - - - payables Other payables - - - - - - - Related party (42,202) (42,202) - (42,202) - - - payables (6,333,703) (6,375,146) (599,814) (690,089) (823,219) (87,486) (4,174,538) Contractual cash flows Carrying 2 months 2 to 12 1 to 2 2 to 5 More than value Total or less months years years 5 years £ £ £ £ ££ £ Non-derivative financial liabilities Unsecured shareholders (4,355,369) (4,355,369) - - - - (4,355,369) loans Convertible (491,071) (491,071) - - (491,071) - - loan notes Secured (363,011) (363,011) - (363,011) - - - loans Right of use (186,988) (186,988) (31,158) (83,010) (72,820) - - finance lease Trade (478,862) (478,862) (478,862) - - - - payables Other payables (643,166) (643,166) (643,166) - - - - Related party - - - - - - - payables (6,518,467) (6,518,467) (1,153,186) (446,021) (563,891) - (4,355,369) Annual report for the year ended 31 O ctober 2023 90 Everest Global Plc Company as at 31 October 2023 Company as at 31 October 2022 Contractual cash flows Carrying 2 months 2 to 12 1 to 2 2 to 5 More than value Total or less months years years 5 years £ £ £ £ ££ £ Non-derivative financial liabilities Unsecured shareholders - - - - - - - loans Convertible (710,274) (710,274) - - (710,274) - - loan notes Secured - - - - - - - loans Right of use - - - - - - - finance lease Trade (160,585) (160,585) (160,585) - - - - payables Other payables - - - - - - - Related party - - - - - - - payables (870,859) (870,859) (160,585) - (710,274) - - Contractual cash flows Carrying 2 months 2 to 12 1 to 2 2 to 5 More than value Total or less months years years 5 years £ £ £ £ ££ £ Non-derivative financial liabilities Unsecured shareholders - - - - - - - loans Convertible (491,071) (491,071) - - (491,071) - - loan notes Secured - - - - - - - loans Right of use - - - - - - - finance lease Trade (92,135) (92,135) (92,135) - - - - payables Other (256,595) (256,595) (256,595) - - - - payables Related party - - - - - - - payables (839,801) (839,801) (348,730) - (491,071) - - Annual report for the year ended 31 October 2023 91 Everest Global Plc The interest payments on the financial liabilities represent the fixed interest rates as per the respective contracts. The Group aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities other than trade payables. The Group also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables. Market risk Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Foreign currency risk The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows: Annual report for the year ended 31 October 2023 92 Everest Global Plc Group foreign exchange risk 31 October 2023 31 October 2022 £ (GBP) R (ZAR) £ (GBP) R (ZAR) Trade and other receivables 258,319 7,144,365 - 5,708,637 Cash and cash equivalents 765,814 2,090,921 922,613 67,345 Unsecured shareholders' loans - (98,761,043) - (87,836,461) Secured loans - (8,231,521) - (11,739,909) Convertible loan notes (491,071) - (710,274) - Right of use finance lease - (3,905,322) - (5,608,577) Trade payables (348,730) (17,535,102) (160,585) (9,758,757) Net statement of financial exposure 184,332 (119,197,702) 51,754 (109,167,722) Next 6 months actual sales - - 1,434,073 30,816,695 Next 6 months actual forecast - - (1,231,550) (26,464,641) Net statement of financial exposure - - 202,523 4,352,054 Net exposure 184,332 (119,197,702) 254,277 (104,815,668) Company foreign exchange risk 31 October 2023 31 October 2022 £ (GBP) R (ZAR) £ (GBP) R (ZAR) Trade and other receivables 258,319 - - - Cash and cash equivalents 765,814 - 922,613 - Convertible loan notes (491,071) - (710,274) - Trade payables (348,730) - (160,585) - Net statement of financial exposure 184,332 - 51,754 - Next 6 months sales forecast - - - - Next 6 months purchases forecast - - (1,231,550) - Net statement of financial exposure - - (1,231,550) - Net exposure 184,332 - (1,179,796) - As previously disclosed Dynamic was sold post year end in January 2024. It is the opinion of the Directors that the only foreign exchange risk that the Group faced were the outstanding debtor and creditor balances at the 31 October 2023 as documented on the statement of financial position. It is believed that the trading in November and December, wouldn't have created foreign exchange risk as cash wouldn't have been received nor paid prior to the sale of the subsidiary. The following significant exchange rates in relation to the reporting currency are applicable: Average for the year Year end spot rate 2023 2022 2023 2022 United States Dollar ($) 1.2477 1.2610 1.2154 1.1469 South African Rand (ZAR) 21.7957 20.5000 22.6757 21.0410 The presentation currency of the Group is British Pound Sterling. Annual report for the year ended 31 October 2023 93 Everest Global Plc The Group is exposed primarily to movements in USD and ZAR, the currency in which the Group receives most of its funding, against other currencies in which the Group incurs liabilities and expenditure. Sensitivity analysis Financial instruments affected by foreign currency risk include cash and cash equivalents, trade other receivables and trade and other payables. The following analysis, required by IFRS 7 Financial Instruments: Disclosures, is intended to illustrate the sensitivity of the Group's financial instruments (at year end) to changes in market variables, being exchange rates. The following assumptions were made in calculating the sensitivity analysis: • all income statement sensitivities also impact equity; and • translation of foreign subsidiaries and operations into the Group's presentation currency have been excluded from this sensitivity as they have no monetary effect on the results. Income statement / equity 2023 2023 2022 2022 +10% - 10% +10% - 10% United States Dollar ($) 0.1215 (0.1215) 0.1147 (0.1147) South African Rand (ZAR) 2.2676 (2.2676) 2.1041 (2.1041) The above sensitivities are calculated with reference to a single moment in time and will change due to a number of factors including: • fluctuating other receivable and trade payable balances; • fluctuating cash balances; and • changes in currency mix. Interest rate risk The Group has entered into fixed rate agreements for its finance leases and shareholders loans. The Group does not hedge its interest rate exposure by entering into variable interest rate swaps. Exposure to interest rate risk The interest rate profile of the Group's interest-bearing financial instruments management of the Group is as per the table below. as reported to the Group Company 2023 2022 2023 2022 £ £ £ £ Financial assets - - - - Financial liabilities (5,033,428) (5,709,321) (491,071) (710,274) Annual report for the year ended 31 October 2023 94 Everest Global Plc Fair value sensitivity analysis for fixed-rate instruments The Group does not account for any fixed-rate financial assets of financial liabilities at FVTPL. Therefore, a change in interest rates at the reporting date would not affect profit or loss. Other market price risk The Group is exposed to equity price risk, which arises from equity securities at FVTOCI are held as a long- term investment. The Groups' investments in equity securities comprise small shareholdings in unlisted companies. The shares are not readily tradable and any monetisation of the shares is dependent on finding a willing buyer. Valuation techniques and assumptions applied for the purpose of measuring fair value The fair value of cash and receivables and liabilities approximates the carrying values disclosed in the financial statements. Capital management The Group manages its capital resources to ensure that entities in the Group will be able to continue as a going concern, while maximising shareholder return. The capital structure of the Group consists of equity attributable to shareholders, comprising issued share capital and reserves. The availability of new capital will depend on many factors including a positive operating environment, positive stock market conditions, the Group's track record, and the experience of management. There are no externally imposed capital requirements. The Directors are confident that adequate cash resources exist or will be made available to finance operations but controls over expenditure are carefully managed. 30. Related party transactions Directors' fees During the year ended 31 October 2023 £123,260 was paid to Directors of the Company (2022: £35,923 ). At the year- end a total of £2,810 (2022: £33,587) was outstanding in respect of Directors' emoluments. Annual report for the year ended 31 October 2023 95 Everest Global Plc Other related party transactions Included in trade and other payables are the following related party financial liabilities: Group Company As at As at As at As at 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Matthew Bonner - 25,357 - - Robert Scott - 16,845 - - - 42,202 - - Terms: Matthew Bonner and Robert Scott: The loan bears interest at the South African prime overdraft rate. The interest will be calculated and paid when the loan is repaid. The loan is repayable as decided upon from time to time. Outstanding Director's salaries and related party transactions Included in trade and other payables are the following outstanding Directors' salaries and fees payable to related parties for other services: Group Company As at As at As at As at 31 October 31 October 31 October 31 October 2023 2022 2023 2022 £ £ £ £ Robert Scott - 16,845 - - - 16,845 - - Directors' salaries outstanding Xin (Andy) Sui 2,250 - 2,250 - Robert Scott - 12,000 - 12,000 Simon Grant-Rennick 560 - 560 - Andrew Monk * - 10,587 - 10,587 Matthew Bonner * - 11,000 - 11,000 2,810 33,587 2,810 33,587 * These directors resigned during the year ended 31 October 2022 Annual report for the year ended 31 October 2023 96 Everest Global Plc The following information relates to the comparative period when Andrew Monk was a director of both the Company and K2. Arrangements with K2 During the period under review the Company and K2 entered into certain related party arrangements in relation to DI as outlined below. K2 is a 10% subsidiary of VSA Capital. At the time the arrangements were entered into Andrew Monk was a director of the Company, VSA Capital and K2 and is deemed to have significant influence over VSA Capital and K2. Disposal of 49% equity interest in DI to K2 K2 subscribed for such number of new shares in the capital of DI resulting in K2 holding 49% of the enlarged issued share capital of DI for a consideration of ZAR10,982 and therefore became a significant shareholder in DI representing the non-controlling interest disclosed in the group financial statements. Put and call option for K2 to acquire remaining 51% of DI At the same time a put and call option agreement was entered into with the Company granting to K2 the option to acquire 11,430 shares in DI, which represents the remaining 51% equity interest currently owned by the Company. This is subject to the satisfaction of certain conditions and a time restrictions of 31 December 2023 for a consideration of £1. Disposal of group loans in DI from the Company to K2 and entry into a loan subordination agreement Simultaneously with the above subscription and to allow the equity in DI to be issued to K2, the Company agreed to assign certain debts owing by DI, amounting to £4.2 million which had been fully impaired in prior years, to the Company and certain other parties to K2 in consideration for K2 paying to the Company £100,001 and agreeing to fund DI so as to enable DI to carry on its business in the ordinary course until such time as the Company ceases to hold any further shares in DI. This assignment agreement resulted in K2 having a non-controlling interest in DI, full details of K2's non-controlling interest are at note 23. Additionally, the assignment of the loans resulted in the Group incurring a finance charge on consolidation of £3.1 million. K2 has signed a subordination agreement in relation to the loans due by DI to K2 with an expiry date of 31 October 2023. Should K2 choose to request the repayment of the loans due by DI this will severely impact the Company's ability to continue as a going concern. 31. Controlling Party Note There is no single controlling party. Significant shareholders are listed on page 101. Annual report for the year ended 31 October 2023 97 Everest Global Plc 32. Subsequent events Subsequent to year end the following occurred: 1. The Company acquired from PI Distribution Investment Ltd the entire issued share capital of Precious Link (UK) Limited ('PL'). PL is a wine retailer incorporated and registered in England and Wales which consists of 2 retail liquor outlets in the Southeast of England. For the year ended 30 September 2022, PL made a loss before tax of £35,057 on turnover of £692,985. For the same period net liabilities amounted to £533,631. Under the terms of the SPA the Company will issue 12,500,000 new ordinary shares of £0.02 each in the issued share capital of the Company ('Ordinary Shares') at a value of 4 pence per Ordinary Share, valuing the transaction at £500,000. At the date of signing the accounts these shares had not yet been issued. This is due to complexities with the vendors and the British Virgin Islands company that we purchased PL from. The £200,000 loan between PL and the Company will remain in force and the director of PL has assigned his loan of circa £0.5m, due to him from PL, to the Company, as a condition of the SPA. Following the issue of the 12,500,000 new Ordinary Shares to PI Distribution Investment Ltd, the total number of Ordinary Shares in issue with voting rights in the Company will be 77,388,855 ('Total Voting Rights'). On 10 January 2024 the Company announced that it had acquired PL and issued 12,500,000 new Ordinary Shares as consideration for the acquisition. In fact these shares have not yet been issued due to complexities with the vendors and the British Virgin Islands company from which PL was acquired. The total number of shares currently in issue therefore is 64,888,855 and this represents the total number of voting rights in the Company. The Company will make a further announcement updating the market as soon as it issues the new Ordinary Shares in respect of PL. 2. The Company and K2 exercised the put and call option agreement ('Option Agreement'), that was detailed in the Annual Financial Statements for the year ending October 2022 and announced on 27 July 2023 and the option was exercised by K2 on 16 January 2024. In October 2022, K2 subscribed for such number of new shares in the capital of DI resulting in K2 holding 49% of the enlarged issued share capital of DI for a consideration of ZAR10,982, with the Company retaining the remaining 51%. The Company also agreed to assign certain debts owing by DI, amounting to £4.2 million which had been fully impaired in prior years, to the Company and certain other parties to K2 in consideration for K2 paying to the Company £100,001 and agreeing to fund DI so as to enable DI to carry on its business in the ordinary course until such time as the Company ceased to hold any further shares in DI. This assignment agreement resulted in K2 having a non-controlling interest in DI and DI was consolidated as such. At the same time, the Company and K2 also entered into the Option Agreement which was extended by mutual agreement and exercised on 16 January 2024. Under the Option Agreement the Company granted to K2 the option to acquire 11,430 shares in DI, being the remaining 51% of DI held by the Company, subject to the satisfaction of certain conditions and subject to certain time restrictions, for £1. At 31 October 2023 DI was still controlled by Everest Global and is consolidated in the Group financial statements for this year. Annual report for the year ended 31 October 2023 98 Everest Global Plc Additional information 99 Directors & Professional Advisers 100 Overseas subsidiary operations 101 Substantial shareholdings 102 Glossary of terms and abbreviations 103 General meeting 103 Annual general meeting 103 Auditor 103 Directors’ & officers’ insurance Annual report for the year ended 31 October 2023 99 Everest Global Plc Directors and professional advisers Robert Scott 1st Floor Simon Grant-Rennick 48 Chancery Lane Xin (Andy) Sui London WC2A 1JF Stephen Clow 07913053 National Westminster Bank Plc RPG Crouch Chapman LLP 250 Bishopsgate 40 Gracechurch Street London London EC2M 4AA EC3V 0BT Cairn Financial Advisers LLP Hill Dickinson LLP 9th Floor The Broadgate Tower 107 Cheapside 20 Primrose Street London London EC2V 6DN EC2A 2EW Neville Registrars Limited Neville House 18 Laurel Lane Halesowen West Midlands B63 3DA Directors Registered office Company secretary Company number Bankers Auditors Financial adviser & broker Solicitors to the company Registrars Annual report for the year ended 31 October 2023 100 Everest Global Plc Overseas subsidiary operations Details of all subsidiaries and their locations are detailed in note 15. Dynamic Intertrade (Pty) Ltd, a trading subsidiary, continued its operations throughout the year and is registered in South Africa. Annual report for the year ended 31 October 2023 101 Everest Global Plc Substantial shareholders 17 February 2024 Percentage of Shareholder Shareholding Company's Issued Ordinary Share Capital Golden Nice International Ltd 19,000,000 29.28% Mr An Xiangyu 6,363,000 9.81% Ms Chen Fangling 6,363,000 9.81% Lynchwood Nominees Ltd 5,448,013 8.40% HSBC Global Custody Nominee (UK) Ltd 3,945,860 6.08% Lynchwood Nominees Ltd 3,623,542 5.58% Interactive Investor Services Nominees Ltd 3,165,783 4.88% Total shares 64,888,855 31 October 2023 Percentage of Shareholder Shareholding Company's Issued Ordinary Share Capital Golden Nice International Ltd 19,000,000 29.28% Mr An Xiangyu 6,363,000 9.81% Ms Chen Fangling 6,363,000 9.81% Lynchwood Nominees Ltd 5,448,013 8.40% HSBC Global Custody Nominee (UK) Ltd 3,945,860 6.08% Lynchwood Nominees Ltd 3,623,542 5.58% Interactive Investor Services Nominees Ltd 3,003,866 4.63% Total shares 64,888,855 31 October 2022 Percentage of Shareholder Shareholding Company's Issued Ordinary Share Capital Golden Nice International Ltd 13,000,000 28.16% Lynchwood Nominees Ltd 8,773,542 19.01% HSBC Global Custody Nominee (UK) Ltd 5,315,474 11.51% Interactive Investor Services Nominees Ltd 3,311,851 7.17% Vidacos Nominees Ltd 1,950,918 4.23% VSA Capital Ltd 1,754,779 3.80% JIM Nominees Ltd 1,597,718 3.46% Pershing Nominees Ltd 1,526,172 3.31% Total shares 46,164,773 12,500,000 new ordinary shares are due to be issued in relation to the purchase of PL on 9 January 2024. As at the date of signing the accounts, these had not yet been issued but the issue would increase the total number of voting rights in the Company to 77,388,855. Annual report for the year ended 31 October 2023 102 Everest Global Plc Glossary of terms and abbreviations the Company and its subsidiaries from time to time. At 31 October 2023 the only subsidiary held was DI Subsidiary held until 16 January 2024 Subsidiary purchased post year end The purchaser of DI post year end. K2 was previously known as VSA NEX Investments Ltd Associate shareholding, that was sold in the year The Company's auditors 39,099,141 Ordinary Shares, being the Subscription Shares and the Conversion Shares The Golden Nice Subscription and the 2023 Subscription The 2022 Conversion and the 2023 Conversion The 2018 Loan Notes and 2021 Loan Notes As defined in the Disclosure Guidance and Transparency Rules of the FCA The put and call option agreement, pursuant to which the Company granted to K2 an option to purchase, and K2 granted the Company an option to require K2 to purchase 11,430 shares in DI, being the remaining 51 per cent of DI held by the Company, subject to the satisfaction of certain conditions and subject to certain time restrictions, for £1. K2 - K2 Spice Limited DIA - Dynamic Intertrade Agri (PTY) Ltd RPGCC - RPG Crouch Chapman LLP PIE - Public Interest Entity Allotted Shares Subscriptions Conversions CLNs - Convertible Loan Notes Reverse Takeover Option Agreement KPI - Key performance indicator The Company - Everest Global Plc The Group - the Company & subsidiary DI - Dynamic Intertrade (PTY) Ltd PL - Precious Link (UK) Ltd FCA - Financial Conduct Authority VSA NEX - VSA NEX Investments Ltd AGM - Annual general meeting GM - General meeting Annual report for the year ended 31 October 2023 103 Everest Global Plc General meeting The Company will be holding a general meeting ('GM') at the offices of Keystone Law, 1st Floor, 48 Chancery Lane, London, WC2A 1JF on 28 February 2024 at 11am. The notice convening the GM was issued on 12 February 2024. Annual general meeting The Company has not yet scheduled an annual general meeting ('AGM') at the time of signing the accounts. All details of the future AGM will be provided to shareholders and notice convening the meeting will be released on the London Stock Exchange as well as on the Company's website. Auditor The Board recommend that RPG Chapman Crouch LLP be reappointed as auditor, a resolution will be tabled at the GM on 28 February 2024 for their re-appointment following the 31 October 2022 audit being signed off. Directors' and officers' insurance The Group maintains insurance cover for all Directors and officers of Group companies against liabilities which may be incurred by them while acting as Directors and officers.