RA INTERNATIONAL GROUP PLC

National Storage Mechanism | Additional information

RNS Number : 8987M

RA International Group PLC

26 May 2022

("RA International", "RA", the "Group" or the "Company")

Results for the year ended 31 December 2021

RA International Group plc (AIM: RAI) a specialist provider of complex and integrated remote site services to Humanitarian, Governmental and Commercial organisations globally, announces its full year results for the year ended 31 December 2021.

HIGHLIGHTS

· Revenue of USD 54.6m (2020: USD 64.4m) and underlying EBITDA of USD 6.7m (2020: USD 14.2m), in-line with the guidance provided in our pre-close trading statement.

· Statutory loss before tax of USD 32.2m including USD 31.5m in non-underlying charges relating to our Mozambique project of which USD 5.9m relates to cash costs and USD 23.4m is a provision to impair the carrying value of assets. We are pursuing opportunities to dispose of USD 7.2m of project related assets located in storage and remain confident that development works will restart in Mozambique, although timing is difficult to predict

· Resilience of IFM services continues to be a feature, with revenue for the year of USD 31.2m (2020: USD 31.3m); IFM represents 56% of contract order book value

· 2021 year-end order book of USD 100m, with USD 40m of new contracts, contract uplifts and extensions awarded during the year and adjusted for the removal of the USD 60m Mozambique contract

· Government and humanitarian clients represented 95% of 2021 revenue (2020: 92%), with government an increasing proportion of the mix (47% of 2021 revenue). These are stable, high-value clients that support our strategy to diversify geographically through customer-led growth

· In 2021 we established a US subsidiary, RA Federal Services, to target further growth with relevant US federal government departments, which we see as a significant growth opportunity

· Maturity of the USD 10m MTN debt programme has recently been extended to 2024 and additional working capital facilities are available as required to support implementing material new project awards

· Reflecting the Board's cautious view on the operating environment in the near-term, the Board is not recommending a dividend for the FY21 financial year


	2021	2020
	USD'm	USD'm

Revenue	54.6	64.4
Underlying EBITDA1	6.7	14.2
Underlying EBITDA margin	12.3%	22.0%
(Loss)/Profit before tax	(32.2)	6.6
EPS, basic (cents)	(18.7)	3.8
Underlying EPS, basic (cents) 2	0.1	5.6
Dividend per share	Nil	1.35
Net (debt)/cash (end of period) 3	(1.5)	11.2

Commenting on the 2021 results and outlook, Soraya Narfeldt, CEO of RA International, said:

"We responded with agility and resilience to the major external challenges we faced in 2021 and delivered on significant projects for our clients, building our reputation as a trusted partner. Looking ahead, it remains difficult to forecast with real authority how the current year will play out but we are continuing to stabilise the business post the pandemic and its effects, and see the scope for a return to accelerated contract awards as and when a more normalised operating environment returns. In the meantime, we take great confidence in the strength of our offering, which is differentiated by our technical capability, proven ability to innovate and continue to perform under extraordinarily challenging circumstances, and by our attractive pricing, particularly where we self-perform.

As we execute on our plans, our main priorities for this year are to grow the pipeline, particularly with US federal Government departments, build balance sheet liquidity, and drive value from recent investment in our business, systems and processes. We thank shareholders for their patience over what has been a challenging period and we look forward to realising the value from supporting our customers as they emerge from the residual challenges of the last two years."

Online Investor Presentation

RA International management will host an online investor presentation and Q&A session at 11am BST on Monday, 30 May 2022.

Anyone wishing to participate should register with PI World at:

https://bit.ly/RAI_FY21_results_webinar

A replay will be available subsequently on the Company website.

Notes to Highlights:

1 Underlying EBITDA is calculated by adding depreciation, non-underlying items and share based payment expense to operating profit.

2 Underlying EPS reflects underlying operating profit after deducting net finance costs and taxation, divided by the weighted average number of ordinary shares outstanding during the period.

3 Net cash represents cash less overdraft balances, term loans and notes outstanding. A negative net cash balance is referred to as net debt.

Enquiries:


RA International Group PLC Soraya Narfeldt, Chief Executive Officer Lars Narfeldt, Chief Operating Officer Andrew Bolter, Chief Financial Officer	Via Bamburgh Capital
Canaccord Genuity Limited (Nominated Adviser and Broker) Bobbie Hilliam Alex Aylen	+44 (0) 207 523 8000
Bamburgh Capital Limited (Investor Relations & Media) Murdo Montgomery	+44 (0) 131 376 0901 [email protected]

Background to the Company

RA International is a leading provider of services to remote locations. The Company offers its services through three channels: construction, integrated facilities management and supply chain, and services three main client groups: humanitarian and aid agencies, governments and commercial customers, predominantly in the oil and gas and mining sectors. It has a strong customer base, largely comprising UN agencies, western governments and global corporations.

The Company provides comprehensive, flexible, mission critical support to its clients enabling them to focus on the delivery of their respective businesses and services. Focusing on integrity and values alongside making on-going investment in its people, locations and operations has over time created a reliable and trusted brand within its sector.

CHAIR'S STATEMENT

2021 was a year where the employees of our Company had to respond to two major external challenges as they dealt with the effects of COVID-19 and the tragic events in Mozambique. On behalf of the Board, I would like to acknowledge the difficulties our people have experienced and to thank them for their sense of purpose, community, and commitment in dealing with these challenges.

It is clear that for our customers the effects of COVID-19 have been particularly pronounced. This has caused further delays to mobilising project activity across our business, stalling the momentum that was building in the third quarter of last year. We remain confident that we will re-establish this momentum but we are cautious on timings.

Against this backdrop, the Group still delivered USD 54.6m of revenue and underlying EBITDA of USD 6.7m. The loss before tax of USD 32.2m recorded for the year highlights impairment charges we have recorded in relation to our operations in Northern Mozambique, where there remains significant uncertainty. As we outline in this report, we are working hard to recover value from these assets.

The market opportunity remains attractive for RA and, as a Board, we have assessed how we align our strengths and resources with these market opportunities to best drive sustainable profitable growth. We came to market in 2018 looking to expand our customer base more broadly beyond our established humanitarian client base.

We have made great strides in developing the government side of our business, and Soraya provides the substance of this in her review. We believe our work with western Governments, particularly US and UK overseas departments, is likely to be a core part of our success going forward. As such, we are looking to reallocate greater investment to this side of the business, particularly in the US through developing RA Federal Services ("RAFS") - our US subsidiary. As we do this, we will still look to undertake projects with Commercial customers and build on our extensive relationships with the UN and other humanitarian organisations.

At the right time, we also see the opportunity for this organic investment to be complemented by bolt-on M&A strengthening our past performance in attractive undeserved markets.

In line with the Board's cautious approach to the prevailing environment, with suppressed levels of activity in terms of contract awards and project starts continuing to be a feature in 2022, the Board is not recommending the payment of a final dividend. The Board's intention is to reinstate the dividend as soon as is practicable, taking into consideration the financial strength of RA and its confidence in its future performance. More generally on cash and the balance sheet, the Board remains confident in our position to fund existing project activity, to mobilise on new projects, and to bid successfully for tenders.

Environmental, social, governance, and corporate culture

A great deal of work was done behind the scenes in 2021 to set the future direction for RA's sustainability activities and ensure progress continues to be made with regards to our environmental and social activities. This included a rigorous refresh of our materiality - looking at our own priorities and the expectations of our stakeholders and selecting areas of investment where we feel we can do more and have a greater impact. Through this we identified eight key focus areas where we will set specific targets and appoint dedicated managers to drive improvements.

In parallel, the Group reviewed and affirmed its purpose, mission, and values, providing a strong foundation for our corporate culture, the types of projects we want to take on, and the organisations we want to work with and for. We now include key sustainability indicators relating to shared values, social, environmental and governance alignment, and country related risks within our project selection process.

The Group also refreshed its system for identifying, monitoring, and managing risk, and established a Group Risk Assessment Committee ("GRAC") to support the EMT in managing the principal risks that are most likely to have the largest negative impact on the business.

More detail on RA's approach to doing business the right way is set out in our 2021 Sustainability Report.

A final note

The Board remains focused on delivering value for shareholders and believes the refreshed strategic focus outlined above supports this through targeting a high-quality customer base and international diversification supporting significant contract visibility, sustained earnings growth, and strong free cash generation.

On behalf of the Board, I would like to commend the leadership team and all our staff for their ability to respond to the challenges of the last two years. Adaptability and finding solutions in difficult

situations is embedded in RA's culture, and this was proven many times over in 2021.

Sangita Shah

Non-Executive Chair

26 May 2022

CHIEF EXECUTIVE OFFICER'S REVIEW

As we work through the residual challenges of the last two years, we should not lose sight of the strengths of the business. As we outlined in our pre-close trading statement, the second half of the year saw unprecedented operating constraints, causing inefficiencies and exceptional delays in executing projects, in tender issues, awards, and in project mobilisations. This impacted our profitability for the second half of 2021 and stalled our order book momentum.

Whilst we are not reporting the financial performance we would want to for this period, it is primarily a function of the broader environment and events which are out of our control. Revenue of USD 54.6m and underlying EBITDA of USD 6.7m are markedly lower than the prior year and reflect the full-year impact of the pandemic and the events in Mozambique. The Group reported a loss before tax of USD 32.2m, which included a USD 31.5m non-underlying expense relating to Mozambique. Investors will be aware that this area was subject to an insurgency attack in March 2021 and, as at the time of these results, the local situation had not yet stabilised sufficiently to see sizable commercial activity restarting. We are working hard to realise value from our investments made relating to this project, which will support our cash position.

To give further context to these headlines, 2021 was very disruptive from an operational perspective. Clearly, our customers' spending over the last two years has been focused on mitigating the impact of COVID-19 and less on project development. As a result, government and humanitarian agencies have suffered from staff shortages which impacted requests for proposals, bids, and project execution. In September 2021 we believed that these challenges were abating, however this view was superseded by a return to government-imposed lockdowns and restrictions which led to further delays and uncertainty.

Despite these ongoing challenges, we exited 2021 with an order book backlog of USD 100m, reflecting USD 40m of new contract awards, uplifts, and extensions, offset by the force majeure declaration relating to the Palma Project and the subsequent removal of that contract from the order book.

Contract order book:


		USD'm

Opening order book		187
New contracts, contract uplifts and extensions		40
Contracts suspended, cancelled etc. (includes Mozambique)		(72)
Contracted revenue delivered		(55)
		────────
Closing order book as at 31 December 2021		100
		════════

Our pipeline activity remains very solid but given the extended delays we continue to experience and the current run-rate of new business awards and project starts, we are adopting a very conservative position in terms of forecasting the extent to which new project activity lands in the current financial year. We are confident that as and when a more normal operating environment returns, we will re-establish significant order book growth but the timelines for this are beyond our control, meriting the cautious approach.

The fundamental strengths of the business remain. We are delivering on some 20 high-value IFM projects which represent 56% of the order book and provide long-term visibility typically at above Group average profit margins. We are delivering on multiple construction projects, with many expected to be the first phase of much larger contracts. This is augmented by our supply chain activities which represent around 10% of order book, and again include projects of significant value.

In terms of an update on our operational involvement in the Cabo Delgado province in Mozambique, we continue to believe that given the considerable multi-national commercial investment and the significance to both Mozambique and the international community, the project will come to fruition - although timing is difficult to predict. Given the prevailing uncertainty, the Board has taken the prudent approach of impairing the assets and associated costs related to the project. Whilst we have taken this impairment charge, we are working hard to realise value from these assets which would bolster our cash resources. We remain well-positioned to provide the originally planned services as and when they are required.

Clearly Group profitability and cash have been impacted by the prevailing environment but as Andrew details in his review, we have taken the requisite steps to strengthen our liquidity position and have sufficient resources to fulfil our project deployments and bid for the types of projects we want.

Our refreshed strategy plays to our strengths across significant market opportunities

We continue to drive long-term value by executing on our customer-led growth strategy underpinned by a core principle of doing business the right way. Our focus on sustainability is a key differentiator for us as our customers become increasingly aware of the benefits of incorporating environmental and social considerations into their projects.

While our commercial projects remain in the pipeline, and we will continue to bid for new contracts which meet our risk adjusted return profile, we have reflected on our strong track record and competitive advantage in supporting blue-chip customers in the humanitarian and government sectors relative to the emerging opportunity we have in the commercial sector.

We are particularly encouraged about the success and opportunities we have with western Governments, and where we are building a specialist capability with respect to supporting US Government ("USG") activity overseas. In 2021, this was evidenced by key contracts signed with the US Navy, USAID, and Cherokee Nation Mechanical.

In addition, we are looking to prioritise work with UK Government departments including the Ministry of Defence, the Foreign, Commonwealth & Development Office, as well as other international government agencies.

The table below highlights this trajectory with a marked increase in Government revenues, particularly since 2020.


	2014	2015	2016	2017	2018	2019	2020	2021

Humanitarian	87%	81%	85%	74%	62%	55%	48%	48%
Government	6%	8%	9%	21%	31%	32%	44%	47%
Commercial	7%	11%	6%	4%	8%	12%	8%	5%

It is worth breaking this down further to illustrate the success we have established with US federal Government overseas budgets. This has been a strategic focus of the business over the last four to five years, has been a significant driver of our financial performance over the last couple of years, and is expected to contribute an increased proportion of Group revenue going forward.

Over the last two financial years, US Government related revenues have contributed approximately one-third of Group revenues. This figure was 25% in 2019 and below 10% prior to that. This growth reflects a targeted approach to business development, particularly with the US Department of Defense and the US Department of State, including USAID and the Bureau of Overseas Building Operations ("OBO") projects. These departments have contributed materially to the marked growth in Government revenues since 2020, including the following landmark projects:

- USD 5.7m contract to provide Training and Life Support Services in Central African Republic for the US Department of Defense,

- USD 15.1m Embassy Upgrade Project in East Africa for the US Department of State, and

- USD 21.5m contract to provide comprehensive life support and maintenance services at a joint USAID/ Embassy compound.

This success has been based on establishing partnerships with US companies to bid for and deliver US Government work, across a number of different contract frameworks:

- Indefinite Delivery/Indefinite Quantity ("IDIQ") Contract Vehicles, of which our seat on the USD 249m IDIQ for design and construction services supporting the island of Diego Garcia is a good example,

- Single Contracts, where we deliver life support and construction contracts for Embassies and are presently executing projects on three continents,

- Sole Source Teaming Agreements, where we have a successful partnership with Cherokee Nation Mechanical, and

- Broader partnerships and JVs, including with IAP, who awarded us a USD 24.1m contract to procure and deliver food to multiple locations across Africa.

In 2021, we established a wholly owned US based subsidiary, RAFS, to bid directly on USG projects and accelerate growth in this area. RAFS has an independent Board of Directors and we have reallocated resources and personnel from our support hubs in Dubai and Kenya to the US business. Overall, we are investing USD 1.5m to USD 2.0m through 2023 in building our US capability through RAFS as we look to build on our USG momentum.

Strategically, RAFS allows us to be more competitive in our tenders and complements our existing relationships with organisations such as Cherokee Nation Mechanical and Sincerus where a partnership arrangement makes sense. Establishing RAFS has already broadened discussions and the scope of opportunities available to us given the clear advantages our proposition offers:

- track record to self-perform large scale USG contracts across the range of our services including through our "one-supplier" model,

- our offering is particularly competitive where we self- perform as we combine technical capability through past performance and a clear cost advantage,

- we operate in markets which are underserved by existing providers, and/or where US organisations look to partner with local sub-contractors that do not have the capability to deliver to requisite international standards, and

- our ability to offer additional value through our industry leading ESG credentials, the breadth and depth of

- our experience, including our humanitarian work, our reputation as acknowledged specialists in our field.

Overall, we expect government clients to become an increasingly important part of our business, providing high-quality earnings, decreasing the risk profile of our clients, and diversifying geographically through customer-led growth.

We continue to explore broader opportunities that play to our core strengths. For example, we are in discussions with DFIs such as the Development Finance Corporation, with a view to establish relationships as a project manager for DFI funded works. RA adds value through its social and environmental impact and strong governance. DFIs fund large infrastructure projects across Africa and Asia which fall within operational geographies. We are also exploring ECA funded projects. UKEF, the export credit agency of the British Government, has more than tripled its investment in Africa to GBP2.3b.

Current trading and outlook

We responded with agility and resilience to the major external challenges we faced in 2021 and delivered on significant projects for our clients, building our reputation as a trusted partner. Looking ahead, it remains difficult to forecast with real authority how the current year will play out but we are continuing to stabilise the business post the pandemic and its effects, and see the scope for a return to accelerated contract awards as and when a more normalised operating environment returns. In the meantime, we take great confidence in the strength of our offering, which is differentiated by our technical capability, proven ability to innovate and continue to perform under extraordinarily challenging circumstances, and by our attractive pricing, particularly where we self-perform.

Soraya Narfeldt

Chief Executive Officer

26 May 2022

FINANCIAL REVIEW

Revenue of USD 54.6m and underlying EBITDA of USD 6.7m summarise our financial performance for the year. Results are in line with the guidance we provided in a trading update on 16 February 2022 and reflect a challenging operating environment and the result of events taking place in Cabo Delgado, Mozambique which, in addition to having a material impact on our revenue and profitability in 2021, has significantly altered the makeup of our balance sheet.

We have addressed these challenges and the impact of the Palma Project both strategically, as Soraya has touched upon, but also from a financial standpoint. In 2022 we completed a USD 12.0m debt raise through the issuance of loan notes maturing in November 2024. As part of this exercise, USD 8.4m of the USD 10.0m of notes outstanding at 31 December 2021, maturing in the second half of 2022, were cancelled. Additionally, we have put in place a long-term working capital facility to support the business, if required, in implementing material new project awards.

In September 2021 we highlighted the significant increase in inventory caused by the suspension of the Palma Project and the corresponding impact on cash. The unwinding of this balance continues to progress (decrease of USD 0.6m since the end of H1 21) and we expect this to accelerate in 2022.

Overall, despite the external difficulties faced by the business during 2021, the Company remains in a strong position to bid for and execute large projects and significant opportunities remain to increase liquidity in 2022.

Highlights:


	2021	2020
	USD'm	USD'm

Revenue	54.6	64.4

Gross profit	12.0	18.8
Gross profit margin	22.0%	29.2%

Underlying EBITDA	6.7	14.2
Underlying EBITDA margin	12.3%	22.0%

(Loss)/Profit before tax	(32.2)	6.6
(Loss)/Profit before tax margin	(59.0%)	10.3%

EPS, basic (cents)	(18.7)	3.8
Underlying EPS, basic (cents)	0.1	5.6

Net cash (end of period)	(1.5)	11.2

Revenue

Reported revenue for 2021 of USD 54.6m (2020: USD 64.4m) represents a USD 9.8m or 15% decrease year on year. This both contrasts the momentum the Company had entering 2020 with the challenging operating situation that has continued to develop since the onset of COVID-19 and highlights the financial impact of the events in Mozambique.

As was communicated to the market shortly after the event in March, this project was anticipated to generate USD 10.0m of revenue in 2021.

In September 2021 we advised that we were encouraged by a recent uptick in construction contracts being awarded, which although relatively small in terms of contract value were seen as an important indicator of returning to a more normal operating environment. This led to construction revenue increasing by 23% in the second half of 2021, albeit full year construction revenue decreased by 26% when compared with 2020.

IFM revenue continues to be resilient and broadly constant from period-to-period. Lower income from our hotel facility in Somalia was offset by revenue from new contracts awarded during the year. Consistent with prior year, approximately 75% of supply chain revenue was earned from long-term contracts, often three to five years in length.

Consistent with prior year, approximately 75% of supply chain revenue was earned from long-term contracts, often three to five years in length.


	H2 2021	H1 2021	H2 2020	H1 2020
	USD'm	USD'm	USD'm	USD'm

Integrated facilities management	15.8	15.4	15.3	15.9
Construction	8.0	6.2	8.4	10.7
Supply chain	4.6	4.6	5.3	8.8
	────────	────────	────────	────────
	28.4	26.2	29.1	35.4
	════════	════════	════════	════════

Profit margin

Gross margin in 2021 was 22.0% (2020: 29.2%), with a significant variance between H1 2021 and H2 2021 (29.2% and 15.5% respectively). Gross profit decreased by USD 6.8m when compared with 2020 and is reflective of:


			2021
			USD'm

Decrease in revenue			2.4
Increased direct cost depreciation			0.9
Credit provision			0.5
Decrease in project margins - Construction			0.6
Decrease in project margins - IFM			2.2
Decrease in project margins - Supply Chain			0.2
			───────
Total			6.8

Decreased margins from construction activities resulted from a number of near nil margin contracts being executed in H2 2021 which relate to the initial phase of what may become much larger projects. General inefficiencies were also encountered given the fitful nature of project execution during the period.

Approximately half of the decrease attributed to IFM services relates to lower occupancy in our Somalia hotel facility, with the remainder being the effect of general inefficiencies and inflationary pressures.

In H2 2021 inflationary pressure was primarily seen on food and beverage imports and logistics costs, however in some locations we are seeing significant wage inflation as well. We have recently been successful in agreeing price increases on some IFM contracts, however, we anticipate continued margin pressure in 2022. We continue to work with our long-term suppliers, and plan to leverage our existing inventory holdings to mitigate inflationary effects where possible.

Reconciliation of (loss)/profit to underlying EBITDA:


	2021	2020
	USD'm	USD'm

(Loss)/Profit	(32.1)	6.6
Tax expense (benefit)	(0.1)	0.1
	────────	────────
(Loss)/Profit before tax	(32.2)	6.6
Finance costs	1.3	1.0
Investment income	(0.1)	(0.3)
	────────	────────
Operating (loss)/profit	(30.9)	7.3
Non-underlying items	32.2	3.0
	────────	────────
Underlying operating profit	1.3	10.4
Share based payments	0.5	0.1
Depreciation	4.9	3.7
	────────	────────
Underlying EBITDA	6.7	14.2
	════════	════════

Underlying EBITDA margin was 12.3% in 2021 (2020: 22.0%), reflecting lower gross margin and a USD 2.3m increase in administrative expenses driven by centralisation efforts enacted in 2020 and investment made in establishing RAFS during 2021. Outside of a planned investment in RAFS of between USD 1.5m to USD 2.0m, we anticipate the strategic shift to de-emphasise commercial projects will lead to administrative cost savings in 2022.

During the year, the Company incurred non-underlying costs of USD 32.2m (2020: USD 3.0m).

Non-underlying items:


	2021	2020
	USD'm	USD'm

COVID-19 costs	0.8	1.4
Other share based payments	-	1.2
Restructuring costs	-	0.3
Acquisition costs	-	0.2
Palma Project, Mozambique	31.5	-
	────────	────────
	32.2	3.0
	════════	════════

COVID-19 costs of USD 0.8m are almost entirely incremental staff costs and PPE relating to the pandemic. Further detail on these costs can be found in note 9 of the consolidated financial statements.

Non-underlying costs related to the Palma Project can broadly be classified into two categories, the impairment of assets related to the project, and incremental costs

incurred by the Company as a direct result of the attack and subsequent project suspension.

Asset impairment

The full carrying value of Palma Project assets, totalling USD 25.6m has been impaired, however it is important to note that of this balance, we consider only USD 2.1m to be a realised loss while the remainder, USD 23.4m, has been impaired through the establishment of a provision. These assets will be assessed to establish if there is a basis for reversal of the impairment provision at each reporting date or when an event transpires which may indicate a material change in the value of these assets.

Of the USD 23.4m in assets where a provision has been established, USD 7.2m relates to equipment and material located within various secure storage locations in Africa and the Middle East ("Offsite Assets"). These assets were either on-route to Palma at the time of the March attack and diverted to or held at safe storage facilities, or assets which we were able to relocate from our Mozambique camp during the second half of 2021. Given the uncertainty as to when development activities will recommence in Northern Mozambique and the cost of storage, we believe it to be in the best interest of stakeholders that the Group sell these assets in the short term, both so as to recover maximum value and cease incurring storage costs. These assets may also be utilised in new projects during 2022.

The USD 2.1m that is considered permanently impaired is primarily made up of assets which have been damaged, stolen, or otherwise deemed unusable in the future. We have lodged an insurance claim relating to a significant portion of this balance and are currently in discussions with our insurers.

Incremental costs

In 2021, the Group incurred USD 4.5m in incremental costs directly related to the Mozambique attack and resulting contract suspension. These costs are primarily made up of logistics and storage charges relating to the Offsite Assets referenced above, but also include evacuation costs and mental health counselling provided to staff post incident.

The Group has also recorded a provision of USD 1.4m for unavoidable costs associated with the Offsite Assets. This provision will be reassessed as at the date of our 2022 interim reporting or as the Offsite Assets are disposed.

As with those assets identified as permanently impaired, we have lodged an insurance claim relating to a significant portion of incremental costs and are currently in discussions with our insurers.

Further details of these balances and the process we followed when assessing the level of impairment to be recorded can be found in note 9.

A breakup of the USD 31.5m non-underlying expense related to Mozambique is below:


	2021	2020
	USD'm	USD'm
Provision for asset impairment	23.4	-
Permanent asset impairment	2.1	-
Incremental costs incurred but unpaid	1.1	-
Provision for unavoidable costs	1.4	-
	────────	────────
	28.0	-
Incremental costs incurred and paid	3.4	-
	────────	────────
Total	31.5	-
	════════	════════

Finance Costs net of Investment Revenue increased to USD 1.3m (2020: USD 0.7m) as the Company incurred a full year of interest expense related to loan notes issued in 2020 and 2021 and realised USD 0.2m less in foreign exchange gains. The average loan balance outstanding in 2021 was USD 7.1m compared with USD 2.1m in 2020.

Earnings per share

Basic loss per share was 18.7 cents in the current period (2020: 3.8 cents). Adjusting for non-underlying items, underlying earnings per share was 0.1 cents (2020: 5.6 cents).

Cash flow

Our cash balance decreased by USD 9.1m during the year (2020: decrease of USD 3.8m), primarily resulting from asset purchases and costs incurred relating to Mozambique.

Summary cash flows:


	2021	2020
	USD'm	USD'm

Operating Profit	(30.9)	7.3
Asset impairment	28.0	-
Depreciation	4.9	3.7
Other items pre-working capital adjustments	1.0	1.7
	────────	────────
	3.0	12.7
Working capital adjustments	(7.8)	8.7
Tax & end of service benefits paid	(0.2)	(0.2)
	────────	────────
Net cash flows from operating activities	(5.1)	21.1

Investing activities (excluding Capital Expenditure)	0.9	0.3
Capital Expenditure	(3.5)	(24.5)
	────────	────────
Net cash flows used in investing activities	(2.6)	(24.1)

Financing activities (excluding borrowings)	(5.2)	(6.8)
Proceeds from borrowing	3.9	6.1
	────────	────────
Net cash flows used in financing activities	(1.3)	(0.7)

Net change in cash during the period	(9.1)	(3.8)

Cash outflows from operations were USD 4.8m in the year (2020: inflows of USD 21.3m) reflecting lower profitability and a variance of USD 16.5m in working capital adjustments (negative USD 7.8m in 2021 and positive USD 8.7m in 2020).

At the end of 2021, USD 3.4m of the USD 9.4m carrying value of inventory related to prefabricated camp assets purchased in 2020 and partially used in the Palma Project. The Company will utilise these assets on certain projects if they commence in 2022 but is also pursuing a sale which may lead to a significant cash benefit being realised. USD 3.2m of inventory which has been provided for, relates to Offsite Assets, which if sold, may also lead to a significant cash uplift.


	2021	2020
	USD'm	USD'm

Gross inventory	12.7	9.1
Provision for asset impairment	(3.3)	-
	────────	────────
Carrying value of inventory	9.4	9.1
Prefabricated camp assets	(3.4)	(2.1)
	────────	────────
Normalised inventory balance	6.0	7.0
	════════	════════

Trade receivables and accrued revenue increased by USD 4.5m as at the end of 2021 when compared with prior period. This variance is primarily due to timing with regards to invoicing and collection but does reflect a USD 2.1m build-up of accrued revenue relating to one UN construction project. The full balance has been invoiced in 2022.

We entered 2021 anticipating capital expenditure of between USD 7.0m and USD 10.0m, with the majority of spend relating to finalising the construction of our camp facility near Palma, Mozambique. Instead, as a result of the attack and contract suspension, capital expenditure for 2021 totalled USD 3.5m. Our underlying business is not particularly capital intensive; unless linked to a significant new project award, we anticipate 2022 capital expenditure to be between USD 1.0m and USD 2.0m.

Balance sheet and liquidity

Net assets at 31 December 2021 were USD 37.3m (2020: USD 72.1m). Our balance sheet has been reshaped by the events in Mozambique and related impairment charge and whilst we cannot impact the timing of recommencement of oil and gas development activities which may trigger a recovery of asset impairment, with considerable work already undertaken we are confident that significant opportunities exist to improve our liquidity profile in the short term. These primarily relate to the sale of the Offsite Assets and USD 3.4m prefabricated camp.

Breakdown of net assets:


	2021	2020
	USD'm	USD'm

Cash and cash equivalents	8.5	17.6
Loan notes	(10.0)	(6.5)
	────────	────────
Net cash	(1.5)	11.2
Net working capital	13.8	14.4
Non-current assets	30.9	51.0
Tangible owned assets	25.5	47.3
Right-to-use assets	5.4	3.5
Goodwill	-	0.1
Lease liabilities and end of service benefit	(5.9)	(4.5)
	────────	────────
Net assets	37.3	72.1
	════════	════════

During the second half of 2021, we raised USD 3.5m of debt under the Medium-Term Note ("MTN") programme launched in 2020. This debt was raised to ensure the Company maintained adequate available cash to execute certain large projects in the pipeline. In May 2022, we completed a refinancing and fundraising exercise to synchronise and extend the maturity of the loan notes issued under the MTN programme.

USD 12.0m of loan notes were issued, of which USD 8.4m relates to a refinancing of notes outstanding at 31 December 2021 and USD 3.6m relates to new investment. Notes issued in 2022 mature in November 2024.

Notes outstanding at 31 December 2021 which were not refinanced will be repaid in the second half of 2022 as per the original maturity date. Further details of the MTN programme and refinancing can be found in note 24 and 34 of the consolidated financial statements.

In addition to refinancing the MTNs, we have also established a GBP 10m long-term debt facility. This facility, while not expected to be utilised, provide us with increased "available cash". Liquidity and available cash are often assessed by potential customers during the contract adjudication process. Given the above actions taken and possible cash benefits from the sale of fixed assets and inventory we remain satisfied, despite the financial impacts of Mozambique, that both our cash position and liquidity profile as a whole are sufficient so that we can continue to bid for larger projects and have the financial capacity to mobilise multiple large projects simultaneously.

Dividend

The Board is not recommending the payment of a final dividend in line with its cautious approach to the prevailing environment. The Board's intention is to reinstate the dividend as soon as is practicable, taking into consideration the financial strength of RA and its confidence in its future performance.

Andrew Bolter

Chief Financial Officer

26 May 2022

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2021


Notes		2021 USD'000	2020 USD'000
Revenue	7	54,595	64,441
Cost of sales	9	(42,050)	(45,647)
Credit provision	20	(505)	-
Gross profit		12,040	18,794
Administrative expenses 9		(10,719)	(8,429)
Underlying operating profit		1,321	10,365
Non-underlying items 9		(32,222)	(3,046)
Operating (loss)/profit		(30,901)	7,319
Investment revenue		55	278
Finance costs		(1,314)	(970)
(Loss)/Profit before tax		(32,160)	6,627
Tax benefit/(expense) 11		80	(61)
(Loss)/Profit and total comprehensive income for the year		(32,080)	6,566
Basic earnings per share (cents)	12	(18.7)	3.8
Diluted earnings per share (cents)	12	(18.5)	3.8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2021


Notes	2021 USD'000	2020 USD'000
Assets Non-current assets Property, plant, and equipment 16 Right-of-use assets 17 Goodwill 18	25,512 5,374 -	47,358 3,528 138
	30,886	51,024
Current assets
Inventories 19	9,397	9,142
Trade and other receivables 20	16,522	12,666
Cash and cash equivalents 21	8,532	17,632
	34,451	39,440
Total assets	65,337	90,464
Equity and liabilities
Equity
Share capital 22	24,300	24,300
Share premium	18,254	18,254
Merger reserve	(17,803)	(17,803)
Treasury shares 23	(1,199)	(1,363)
Share based payment reserve	534	177
Retained earnings	13,223	48,509
Total equity	37,309	72,074
Non-current liabilities
Loan notes 24	-	6,471
Lease liabilities 25	5,206	3,720
Employees' end of service benefits 26	731	517
	5,937	10,708
Current liabilities
Loan notes 24	10,000	-
Lease liabilities 25	834	318
Trade and other payables 27	9,835	7,364
Provisions 28	1,422	-
	22,091	7,682
Total liabilities	28,028	18,390
Total equity and liabilities	65,337	90,464

CONSOLIDATED STATEMENT IN CHANGES IN EQUITY

For the year ended 31 December 2021


		Share capital	Share premium		Merger reserve		Treasury shares		Share based payment reserve		Retained earnings		Total
USD'000	USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
As at 1 January 2020		24,300	18,254		(17,803)		-		47		44,685		69,483
Total comprehensive income for the period		-	-		-		-		-		6,566		6,566
Share based payments (note 13)		-	-		-		-		130		-		130
Dividends declared and paid (note 14)		-	-		-		-		-		(2,674)		(2,674)
Purchase of treasury shares (note 23)		-	-		-		(2,600)		-		-		(2,600)
Issuance of treasury shares (note 23)		-	-		-		1,237		-		(68)		1,169
As at 31 December 2020		24,300	18,254		(17,803)		(1,363)		177		48,509		72,074
Total comprehensive	-			-		-		-		-		(32,080)		(32,080)
income for the period
Share based payments	-			-		-		-		487		-		487
(note 13)
Dividends declared and	-			-		-		-		-		(3,206)		(3,206)
paid (note 14)
Issuance of treasury	-			-		-		164		(130)		-		34
shares (note 23)
As at 31 December 2021	24,300			18,254		(17,803)		(1,199)		534		13,223		37,309

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2021


Notes		2021 USD'000	2020 USD'000
Operating activities
Operating (loss)/profit		(30,901)	7,319
Adjustments for non-cash and other items:
Depreciation on property, plant, and equipment 16, 17		4,855	3,731
(Profit)/Loss on disposal of property, plant, and equipment 16		(16)	93
Unrealised differences on translation of foreign balances		133	5
Provision for employees' end of service benefits 26		433	209
Share based payments 13		487	1,299
Non-underlying items - Palma Project, Mozambique 9		28,035	-
		3,026	12,656
Working capital adjustments:
Inventories		(5,071)	(2,964)
Trade and other receivables		(4,284)	12,240
Trade and other payables		1,513	(616)
Cash flows (used in)/generated from operations		(4,816)	21,316
Tax paid	11	(20)	(117)
Employees' end of service benefits paid	26	(219)	(83)
Net cash flows (used in)/from operating activities		(5,055)	21,116
Investing activities
Investment revenue received		55	278
Purchase of property, plant, and equipment	16	(3,478)	(24,450)
Proceeds from disposal of property, plant, and equipment	16	823	24
Net cash flows used in investing activities		(2,600)	(24,148)
Financing activities
Proceeds from borrowings	24	3,916	6,084
Repayment of lease liabilities	25	(742)	(564)
Finance costs paid		(1,314)	(970)
Dividends paid	14	(3,206)	(2,674)
Purchase of treasury shares	23	-	(2,600)
Proceeds from share options exercised	23	34	-
Net cash flows used in financing activities		(1,312)	(724)
Net decrease in cash and cash equivalents		(8,967)	(3,756)
Cash and cash equivalents as at start of the period	21	17,632	21,393
Effect of foreign exchange on cash and cash equivalents		(133)	(5)
Cash and cash equivalents as at end of the period	21	8,532	17,632

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

1 CORPORATE INFORMATION

The principal activity of RA International Group plc ("RAI" or the "Company") and its subsidiaries (together the "Group") is providing services in demanding and remote areas. These services include construction, integrated facilities management, and supply chain services.

RAI was incorporated on 13 March 2018 as a public company in England and Wales under registration number 11252957. The address of its registered office is One Fleet Place, London, EC4M 7WS.

2 BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with UK adopted international accounting standards. They have been prepared under the historical cost basis and have been presented in United States Dollars ("USD"). All values are rounded to the nearest thousand (USD'000), except where otherwise indicated.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2021 or 2020 but is derived from those accounts. Statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of companies and those for 2021 will be delivered in due course. The auditor has reported on both sets of accounts; its reports were unqualified, did not contain an emphasis of matter reference and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

Going concern

In assessing the basis of preparation of the financial statements the Board has undertaken a rigorous assessment of going concern, considering financial forecasts covering a period to 30 June 2023 and utilising scenario analysis to test the adequacy of the Group's liquidity. The primary uncertainties facing the business at present are related to the timing and success of contract awards, as well as the time frame and value at which unutilised fixed assets and inventory can be used or sold.

In addition to a Base Case scenario, additional scenarios were prepared which reflect the primary uncertainties facing the business. One forecasts a worst-case trading environment whereby the Group is not awarded any new contracts in the future. Another assumes that the Group is unable to sell or dispose of a significant value of currently unutilised assets and as a result continues to incur the related storage costs throughout the going concern period, additionally all working

capital assumptions were assumed to deteriorate to levels unseen previously. Under all scenarios, the Group has concluded that it has sufficient cash reserves and facilities to fund trading, capital investment, and principal and interest repayments associated with loan notes maturing during the period.

During May 2022, the Group refinanced its debt so as to extend and synchronise the maturity date. Of the USD 10m loan notes outstanding at 31 December 2021, USD 1.6m were not refinanced and will be repaid utilising the USD 3.6m of new funding raised through this new programme. The loan notes now mature in November of 2024. The Group also has access to a GBP 10m long-term debt facility which is not expected to be utilised at any point throughout the going concern period.

Under all scenarios reviewed by the Board the Group continues to have sufficient cash reserves to operate for the foreseeable future. Any scenario whereby trading performance is worse than those modelled is considered to be remote given the level of committed contracted work in place. On that basis, the Board is therefore satisfied that it is appropriate to adopt the going concern basis of accounting in preparing the financial statements.

Climate change

In preparing the financial statements, the management has considered the impact of the physical and transition risks of climate change and identified this as an emerging risk but have concluded that it does not have a material impact on the recognition and measurement of the assets and liabilities in these financial statements as at 31 December 2021.

3 BASIS OF CONSOLIDATION

The financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

· power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee),

· exposure, or rights, to variable returns from its involvement with the investee, and

· the ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

· the contractual arrangement with the other vote holders of the investee,

· rights arising from other contractual arrangements, and

· the Group's voting rights and potential voting rights.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Company loses control over the subsidiary. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed of during the year are included in the financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

When necessary, adjustments are made to the financial statements of a subsidiary to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

If the Company loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest, and other components of equity while any resultant gain or loss is recognised in the profit or loss. Any investment retained is recognised at fair value.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at the fair value on the acquisition date. The net identifiable assets acquired, and liabilities assumed are recorded at their respective fair values on the acquisition date. Acquisition- related costs are expensed as incurred and included in acquisition costs.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions as at the acquisition date.

4 SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has concluded that it is acting as a principal in all its revenue arrangements.

Sale of goods (supply chain)

Revenue from the sale of goods and the related logistics services is recognised when control of ownership of the goods have passed to the buyer, usually on delivery of the goods.

Construction

Typically, revenue from construction contracts is recognised at a point in time when performance obligations have been met. Generally, this is the same time at which client acceptance has been received. Dependent on the nature of the contracts, in some cases revenue is recognised over time using the percentage of completion method on the basis that the performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed to date. Contract revenue corresponds to the initial amount of revenue agreed in the contract and any variations in contract work, claims, and incentive payments are recognised only to the extent that it is highly probable that they will result in revenue, and they are capable of being reliably measured.

Services (integrated facilities management)

Revenue from providing services is recognised over time, applying the time elapsed method for accommodation and similar services to measure progress towards complete satisfaction of the service, as the customers simultaneously receive and consume the benefits provided by the Group.

Cost of sales

Cost of sales represent costs directly incurred or related to the revenue generating activities of the Group, including staff costs, materials, and depreciation.

Contract balances

Trade receivables

A receivable represents the Group's right to an amount of consideration that is unconditional, meaning only the passage of time is required before payment of the consideration is due.

Accrued revenue

Accrued revenue represents the right to consideration in exchange for goods or services transferred to a customer in connection with fulfilling contractual performance obligations. If the Group performs by transferring goods or services to a customer before invoicing, accrued revenue is recognised in an amount equal to the earned consideration that is conditional on invoicing. Once an invoice has been accepted by the customer accrued revenue is reclassified as a trade receivable.

Customer advances

If a customer pays consideration before the Group transfers goods or services to the customer, a customer advance is recognised when the payment is received by the Group. Customer advances are recognised as revenue when the Group meets its obligations to the customer.

Borrowing costs

Borrowing costs directly attributable to the construction of an asset are capitalised as part of the cost of the asset. Capitalisation commences when the Group incurs costs for the asset, incurs borrowing costs and undertakes activities that are necessary to prepare the asset for its intended use or sale. Capitalisation ceases when the asset is ready for use or sale. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that are incurred in connection with the borrowing of funds.

Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted

at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Property, plant, and equipment

Property, plant, and equipment are stated at cost less accumulated depreciation and any impairment in value. Capital work-in-progress is not depreciated until the asset is ready for use. Depreciation is calculated on a straight line basis over the estimated useful lives. At the end of the useful life, assets are deemed to have no residual value. Contract specific assets are depreciated over the lesser of the length of the project, or the useful life of the asset. The useful life of general property, plant, and equipment is as follows:

Buildings Lesser of 5 to 20 years and term of land lease

Machinery, motor vehicles, furniture and equipment 2 to 10 years

Leasehold improvements Lesser of 10 years, or term of lease

The carrying values of property, plant, and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down, with the write down recorded in profit or loss to their recoverable amount, being the greater of their fair value less costs to sell and their value in use.

Expenditure incurred to replace a component of an item of property, plant, and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant, and equipment. All other expenditure is recognised in profit or loss as the expense is incurred.

An item of property, plant, and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.

Assets' residual values, useful lives, and methods of depreciation are reviewed at each financial year end, and adjusted prospectively, if appropriate.

Goodwill

Goodwill is stated as cost less accumulated impairment losses. Cost is calculated as the total consideration transferred less net assets acquired.

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs include those expenses incurred in bringing each product to its present location and condition. Cost is calculated using the weighted average method. Net realisable value is based on estimated selling price less any further costs expected to be incurred in disposal.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and balances with banks, which are readily convertible to known amounts of cash and have a maturity of three months or less from the date of acquisition. This definition is also used for the consolidated cash flow statement.

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's ("CGU") fair value less costs to sell and its value in use. An asset's recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used, maximising the use of observable inputs. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded entities or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecasts generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or loss.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Financial instruments

i) Financial assets

Initial recognition and measurement

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15.

Subsequent measurement

Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified, or impaired.

Other receivables are subsequently measured at amortised cost.

Derecognition of financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset has expired.

Impairment of financial assets

The Group recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next twelve months (a twelve-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. When arriving at the ECL we consider historical credit loss experience including any adjustments for forward-looking factors specific to the debtors and the economic environment.

A financial asset is deemed to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Income from financial assets

Investment revenue relates to interest income accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are initially recognised at fair value and subsequently classified at fair value through profit or loss, loans and borrowings, or payables. Loans and borrowings and payables are recognised net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables and loan notes.

Subsequent measurement

The measurement of financial liabilities depends on their classification as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as held at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Loans and payables

This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit or loss.

Leases

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liability. The cost of right-of-use assets includes the amount of lease liabilities recognised and initial direct costs incurred. Right-of-use assets are depreciated on a straight line basis over the shorter of the lease term and the estimated useful lives of the assets.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payment made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the lease payments.

Short-term leases and leases on low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of twelve months or less from the commencement date). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight line basis over the lease term.

Employees' end of service benefits

The Group provides end of service benefits to its employees in accordance with local labour laws. The entitlement to these benefits is based upon the employee's final salary and length of service, subject to the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment. The Group accounts for these benefits as a defined contribution plan under IAS 19.

Treasury shares

Treasury shares are held as a deduction from equity and are held at cost price.

Share based payments

Employees (including senior executives) of the Group receive remuneration in the form of share based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are provided in note 13.

That cost is recognised in employee benefits expense, included in administrative expenses, together with a corresponding increase in equity (share based payment reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

Contingencies

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.

Foreign currencies

The Group's financial statements are presented in USD, which is the functional currency of all Group companies. Items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange prevailing at the reporting date. All differences are taken to profit or loss.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Foreign currency share capital (including any related share premium or additional paid-in capital) is translated using the exchange rates as at the dates of the initial transaction. The value is not remeasured.

5 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

New and amended standards and interpretations

Amendments and interpretations that apply for the first time in 2021 do not have a significant impact on the financial statements of the Group. The Group has not early adopted any standards, interpretations, or amendments that have been issued but are not yet effective.

Presentation of Consolidated Statement of Financial Position

Property, plant, and equipment ("PPE") as presented in the prior period on the face of the balance sheet includes a USD 3,528,000 reclassification to Right-of-Use Assets ("ROU") as a result of a presentational change where ROU is now separately disclosed. PPE as at 1 January 2020 would have been USD 26,081,000 on a similar basis. A third balance sheet for the beginning of the preceding period (1 January 2020) has not been presented on the basis that the information does not have a material effect on the information already presented for the Group.

6 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates, and assumptions that may affect the reported amount of assets and liabilities, revenue, expenses, disclosure of contingent liabilities, and the resultant provisions and fair values. Such estimates are necessarily based on assumptions about several factors and actual results may differ from reported amounts.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

a) Judgements

Use of Alternative Performance Measures

IAS 1 requires material items to be disclosed separately in a way that enables users to assess the quality of a company's profitability. In practice, these are commonly referred to as "exceptional" items, but this is not a concept defined by IFRS and therefore there is a level of judgement involved in arriving at an Alternative Performance Measure ("APM") which excludes such exceptional items. The Group refers to these as non-underlying items and considers items suitable for separate presentation that are outside normal operations and are material to the results of the Group either by virtue of size or nature. See note 9 for further details on specific balances which are classified as non-underlying items.

b) Estimates and assumptions

Percentage of completion

The Group primarily uses the output percentage-of-completion method when accounting for contract revenue on its long- term construction contracts. Use of the percentage-of-completion method requires the Group to estimate the progress of contracts based on surveys of work performed. The Group has determined this basis of revenue recognition is the best available measure on such contracts and where possible seeks customer verification of percentage-of-completion calculations as at financial reporting dates.

The accuracy of percentage-of-completion estimates has a material impact on the amount of revenue and related profit recognised. As at 31 December 2021, USD 3,837,000 of accrued revenue had been calculated using the percentage-of-completion method (2020: USD 1,083,000), of which USD 845,000 is supported by customer verifications (2020: USD 398,000).

Revisions to profit or loss arising from changes in estimates are accounted for in the period when the changes occur.

IFRS 16 - interest rate

In some jurisdictions where the Group holds long-term leases, the incremental borrowing rate is not readily determinable. As a result, the incremental borrowing rate is estimated with reference to risk adjusted rates in other jurisdictions where a market rate is determinable, and the Group's cost of funding.

Provision for asset impairment

In March 2021, insurgents attacked the town of Palma, Mozambique. This led to Total Energies ("Total") suspending their development works in the region and declaring force majeure. As a result, the Group's contract to build and operate a 1,800-person camp was suspended (the Palma Project). At the time of the attack, RA had purchased substantially all of the assets required to complete the project and was approximately two weeks from commencing revenue generating activities.

As a result of this catastrophic event and the lack of evidence of this time to conclude on the fair value of these assets, the Group has impaired the full carrying value of assets which are associated with the Palma Project. Further details of this impairment charge can be found in note 9.

Provision for unavoidable costs

Following the March 2021 attack on Palma, Mozambique the Group began incurring unavoidable costs relating to the Offsite Assets. It is estimated that these assets will be fully disposed of by December 2022.

7 SEGMENTAL INFORMATION

For management purposes, the Group is organised into one segment based on its products and services, which is the provision of services in demanding and remote areas. Accordingly, the Group only has one reportable segment. The Group's Chief Operating Decision Maker ("CODM") monitors the operating results of the business as a single unit for the purpose of making decisions about resource allocation and assessing performance. The CODM is considered to be the Board of Directors.

Operating segments

Revenue, operating results, assets, and liabilities presented in the financial statements relate to the provision of services in demanding and remote areas.

Revenue by service channel:


	2021	2020
	USD'000	USD'000

Integrated facilities management	31,162	31,265
Construction	14,221	19,085
Supply chain services	9,212	14,091
	────────	────────
	54,595	64,441
	════════	════════

Revenue by recognition timing:


	2021	2020
	USD'000	USD'000

Revenue recognised over time	41,320	40,118
Revenue recognised at a point in time	13,275	24,323
	────────	────────
	54,595	64,441
	════════	════════

Geographic segment

The Group primarily operates in Africa and as such the CODM considers Africa and Other locations to be the only geographic segments of the Group. The below geography split is based on the location of project implementation.

Revenue by geographic area of project implementation:


	2021	2020
	USD'000	USD'000

Africa	52,357	61,161
Other	2,238	3,280
	────────	────────
	54,595	64,441
	════════	════════

Non-current assets by geographic area:


	2021	2020
	USD'000	USD'000

Africa	28,448	47,687
Other	2,438	3,337
	────────	────────
	30,886	51,024
	════════	════════

Revenue split by customer:


	2021	2020
	%	%

Customer A	25	24
Customer E	14	10
Customer F	11	10
Customer D	10	9
Customer G	9	9
Customer B	6	7
Customer H	4	-
Customer C	1	4
Other	20	27
	────────	────────
	100	100
	════════	════════

8 GROUP INFORMATION

The Company operates through its subsidiaries, listed below, which are legally or beneficially, directly or indirectly owned and controlled by the Company.

The extent of the Company's beneficial ownership and the principal activities of the subsidiaries are as follows:


Name of the entity	Country of incorporation	Beneficial ownership		Registered address


RA Africa Holdings Limited	British Virgin Islands	100%		3rd floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands (British) VG110

RA International Commercial Services Limited	British Virgin Islands	100%		3th floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands (British) VG110

RASB Holdings Limited	British Virgin Islands	100%		3th floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands (British) VG110

RA International Limited	Cameroon	100%		537 Rue Njo-Njo, Bonaprisi, PO Box 1245, Douala, Cameroon
RA International RCA	Central African Republic	100%	Avenue des Martyrs, Bangui, Central African Republic

RA International Chad	Chad	100%	N'djamena, Chad

RA International DRC SARL	Democratic Republic of Congo	100%	Kinshasa, Sis No106, Boulvevard Du 30 Juin, Dans La Commune De La Gombe EN RD, Congo

RA Property ApS	Denmark	100%	Tuborg Boulevard 12, 4 DK-2900 Helerup, Denmark

RA International Guyana Inc.	Guyana	100%	210 New Market Street, Geoegetown, Guyana

Raints Kenya Limited	Kenya	100%	770 Faith Ave, Runda Estate, Nairobi City (North), Nairobi, Kenya

RA International SARL	Lebanon	100%	Beirut Souks, Souk El Dahab, section no 1144, plot no 1479, Beirut, Lebanon

RA International Limited	Malawi	100%	Hanover House, Hanover Avenue, Independence Drive, Blantyre, Malawi

Raints Mali	Mali	100%	Bamako-Niarela Immeuble Sodies Appartement C/7, Mali

RA International Limitada	Mozambique	100%	Distrito KAMPFUMO, Bairro Sommarchield, Rua. Jose Graverinha, no 198, R/C, Maputo, Mozambique

Royal Food Solutions S.A	Mozambique	100%	Distrito Urbano 1, Bairro Central, Rua do Sol, 23 Maputo, Mozambique

RA International Niger	Niger	100%	Niamey, Quartier Cite Piudriere, Avenue du Damergou, CI-48, Niger

RA Contracting and Facility Management LLC	Qatar	100%	63 Aniza, Doustor St. 905, Salam International, Qatar

RA International*	Somalia	100%	Mogadishu, Somalia

RA International FZCO	South Sudan	100%	Plot no. 705, Block 3-K South, , Airport Road, Hai Matar South Sudan

Reconstruction and Assistance Company Ltd	Sudan	100%	115 First Quarter Graif west-Khartoum, Kharthoum, Republic of Sudan

RA International Limited	Tanzania	100%	369 Toure Drive, Oysterbay, PO Box 62, Dar Es Salaam, Tanzania

RA International FZCO	UAE	100%	Office Number S101221O39, Jebel Ali Free Zone, Dubai, United Arab Emirates

RA International General Trading LLC	UAE	100%	Building 41, 3B Street, Al Quoz Industrial Area 1, PO Box 115774, Dubai, United Arab Emirates

RA SB Ltd.	UAE	100%	RAK International Corporate Centre, Ras Al Khaimah, United Arab Emirates

RA International Global Operations Limited	UK	100%	1 Fleet Place, London, EC4M 7WS, United Kingdom

RA International Limited	Uganda	100%	4th Floor, Acacia Mall, Plot 14-18, Cooper Road, Kololo, Kampala, Uganda

REMSCO Uganda (SMC) Limited	Uganda	100%	4th Floor, Acacia Mall, Plot 14-18, Cooper Road, Kololo, Kampala, Uganda

RA Federal Services LLC	United States of America	100%	3411 Silverside Road, Tatnall Building #104, Wilmington, DE 19810

RA-RME LLC	United States of America	67%	3411 Silverside Road, Tatnall Building #104, Wilmington, DE 19810

Berkshire General Insurance Limited	United States of America	100%	1 Church Street, 5th Floor, Burlington, Chittenden, Vermont, 05401, United States of America

* RA International in Somalia is not an incorporated legal entity

9 PROFIT FOR THE PERIOD

Loss/profit for the period is stated after charging:


	2021	2020
	USD'000	USD'000

Staff costs	22,088	19,845
Materials	12,887	17,571
Depreciation	4,855	3,731
	════════	════════

Staff costs relate to wages and salaries plus directly attributable expenses.

Non-underlying items


	2021	2020
	USD'000	USD'000

Acquisition costs	-	175
COVID-19 costs	765	1,433
Restructuring costs	-	269
Other share based payments (note 13)	-	1,169
Palma Project, Mozambique	31,457	-
	────────	────────
Total non-underlying items	32,222	3,046
	════════	════════

Acquisition costs

Costs incurred by the Group related to corporate acquisitions are expensed as incurred. Acquisition costs mainly comprise professional fees and travel costs. The acquisition of new companies is not considered to be part of the Group's normal operations, and therefore management has chosen to disclose these costs separately on the basis as that outlined above. Acquisition costs in 2020 relate to potential corporate acquisitions which were being explored in the first half of the 2020. These transactions were halted for various reasons including the incremental level of uncertainty COVID-19 added to target operating forecasts.

COVID-19 costs

These costs were incurred due to the COVID-19 pandemic and primarily comprise of incremental staff costs and PPE. These incremental staff costs relate to staff salaries paid to employees unable to work due to local lockdowns or international travel restrictions preventing their access to worksites (2021: USD 374,000; 2020: USD 853,000) and discretionary payments made to employees working throughout the pandemic (2021: nil; 2020: USD 388,000). All payments made were non-contracted and at the discretion of executive management. Incremental project costs associated with PPE consumption and COVID-19 testing are also included in this balance (2021: USD 391,000; 2020: USD 192,000). General inefficiencies experienced as a result of COVID-19 have not been included given the high level of judgement inherent in undertaking this exercise and as a result, continue to be included within cost of sales.

Restructuring costs

In 2020, the Group closed two offices in the United Arab Emirates and consolidated all country staff into a larger corporate office ("Head Office"). In addition, the Group relocated staff from other geographical locations to Head Office. This restructuring exercise was completed in 2020.

Palma Project, Mozambique

In March 2021, insurgents attacked the town of Palma, Mozambique. This led to Total suspending their development works in the region and declaring force majeure. As a result, the Group's contract to build and operate a 1800-person camp was suspended (the Palma Project). At the time of the attack, RA had purchased substantially all of the assets required to complete the project and was approximately two weeks from commencing revenue generating activities.


	2021 USD'000	2020 USD'000
Provision for asset impairment	23,410	-
Permanent asset impairment	2,145	-
Incremental costs incurred but unpaid	1,058	-
Provision for unavoidable costs	1,422	-
Total of non-cash charges	28,035	-
Incremental costs incurred and paid	3,422	-
	31,457	-

As a result of this catastrophic event, the Group has incurred significant incremental costs and impaired assets which are associated with the Palma Project.

Provision for asset impairment

As at the date of these accounts, the force majeure is still in place and development work has not recommenced. While the security situation has improved, and commercial activity is returning to the Palma area, Total has recently indicated that while they are committed to restarting works in the region, they are not undertaking any works at present, and they will re‑evaluate the situation so as to assess if there are conditions to return. These conditions include a sustained level of security in the region, and the return of the local population to normal living conditions.

Following a number of conversations with a wide range of third parties directly or indirectly involved in returning security to the Cabo Delgado region, the CODM is hopeful that the conditions for Total's return will be met and development works will recommence. However, there remains significant uncertainty as to when the force majeure will be lifted and what RA's role will be in the recommenced development works. The Group stands well placed to benefit from the restart of activities in the region given the investment made in the area, but at this stage, given the variables indicated above, the CODM cannot reasonably attribute a fair value to these assets.

Given this uncertainty, and in accordance with IAS 36, after a significant amount of deliberation both as a board and with third‑party advisers, the CODM has decided to recognise a provision to impair the full value of assets relating to the Palma Project.

The CODM will undertake regular assessments to establish if there is a basis for reversal of the impairment provision (recovery). These assessments will be made at least every six months or when an event transpires which may indicate a material change in the value of the Palma Project assets.

The Palma Project assets can be divided into three separate groups:

1. Palma Assets

The Palma Assets relate to the land, infrastructure, and other assets located within the RA Camp facility near the town of Palma, Mozambique. As at the time these accounts were published, the security situation in Cabo Delgado province remains volatile and significant security measures must be taken to access the camp facility. Given the assets are not currently generating a commercial return, the uncertainty regarding the future commercial returns from these assets, and the lack of a ready market for the Palma Assets, an impairment provision has been established equal to their carrying value.

2. Offsite Assets

These consist of equipment and material located within various secure storage locations in Africa and the Middle East. Although the best use of the Offsite Assets is on the Palma Project, given the uncertainty as to when Total will recommence development activities, the CODM believe it to be in the best interest of stakeholders that the Group dispose of these assets in the short term so as to cease incurring unavoidable costs.

Given the nature, location and customs status of the Offsite Assets, a limited market exists for these items. As a result, an impairment provision has been established for the full carrying value of the assets.

3. Other Assets

These consist of non‑tangible assets such as tax and receivable balances. The Group has recorded an impairment provision in relation to the full value of tax assets and other balances that have been deemed unrecoverable as a result of the March 2021 attack.

The below table provides a breakup of these balances by asset class:


	Fixed Assets	Inventory	Other Assets	Total
	USD'000	USD'000	USD'000	USD'000
Palma Assets	15,257	137	-	15,394
Offsite Assets	4,050	3,177	-	7,227
Other Assets	-	-	789	789
	19,307	3,314	789	23,410

Permanent asset impairment

While the Group's camp facility near Palma Mozambique was not directly attacked, at the time of the attack the Group incurred impairment losses resulting from the theft or vandalism of its assets. The Group has also incurred losses when disposing of assets which were originally purchased for use on the Palma Project. These losses, incurred during 2021, are permanent and as a result, there is no need to reassess the value of these assets in the future. Permanent impairment losses relating to the Palma Project totalled USD 2,145,000 as at 31 December 2021. Included in this balance is USD 138,000 relating to the impairment of goodwill.

Incremental costs

As at 31 December 2021, the Group had incurred USD 4,480,000 in incremental costs directly related to the March 2021 attack on Palma, Mozambique and the resulting suspension of development activities by Total. These expenses primarily relate to logistics, storage, and security costs, but also include costs such as staff evacuation and mental health counselling provided to staff. At the time of the attack, a significant value of assets were on-route to Palma and post attack, it was no longer possible to safely offload goods in the Palma area. As a result, goods had to be stored in their current locations in Europe, the Middle East, and East Africa, or where possible, shipped to more economical storage locations. Of these incremental costs USD 3,422,000 were paid for during 2021 and USD 1,058,000 were accrued but unpaid as at 31 December 2021.

Provision for unavoidable costs

The Group has recorded a provision of USD 1,422,000 relating to unavoidable costs associated with the Offsite Assets. Management anticipates that the Offsite Assets will be fully disposed of by December 2022.

Auditor Compensation

Amounts paid or payable by the Group in respect of audit and non-audit services to the Auditor are shown below.


	2021	2020
	USD'000	USD'000

Fees for the audit of the Company annual accounts	164	138
Fees for the audit of the subsidiary annual accounts	74	72
Additional fee for the prior year audit of the Group annual accounts	-	45
	───────	───────
Total audit fees	238	255
	═══════	═══════
Non-audit related services	-	-
	───────	───────

10 EMPLOYEE EXPENSES

The average number of employees (including directors) employed during the period was:


	2021	2020

Directors	7	7
Executive management	5	6
Staff	1,157	1,645
	────────	────────
	1,169	1,658
	════════	════════

The aggregate remuneration of the above employees was:


	2021	2020
	USD'000	USD'000

Wages and salaries	17,804	18,200
Social security costs	153	95
Share based payments	487	1,299
	───────	───────
	18,444	19,594
	════════	════════

The remuneration of the Directors and other key management personnel of the Group are detailed in note 31.

11 TAX

The tax charge on the profit for the year is as follows:


	2021	2020
	USD'000	USD'000
Current tax:
UK corporation tax on profit for the year	-	-
Non-UK corporation tax	80	61
Adjustment for prior years	(160)	-
	───────	───────
Tax charge for the year	(80)	61
	═══════	═══════

Factors affecting the tax charge

The tax assessed for the year varies from the standard rate of corporation tax in the UK. The difference is explained below:


	2021	2020
	USD'000	USD'000

Loss (profit) before tax	(32,160)	6,627
	───────	───────
Expected tax charge based on the standard average rate of corporation tax in the UK of 19% (2020: 19%)	(6,110)	1,259
Effects of:
Deferred tax asset not recognised	105	102
Exemptions and foreign tax rate difference	6,085	(1,300)
Adjustment for prior years	(160)	-
	───────	───────
Tax charge for the year	(80)	61
	═══════	═══════

The Group benefits from tax exemptions granted to its customers who are predominantly governments and large intragovernmental organisations, as well as zero corporate tax rates in certain countries of operation. The CODM is not aware of any factors that indicate the tax rates in these countries will materially change in future periods or that tax exemptions granted will no longer be available to the Group.

The main rate of UK corporation tax is 19% and will increase to 25% on 1 April 2023. The expected impact as a result of this change is not considered material for the Group.

12 EARNINGS PER SHARE

The Group presents basic earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.


	2021	2020

Profit for the period (USD'000)	(32,080)	6,566

Basic weighted average number of ordinary shares	171,660,947	172,451,137
Effect of employee share options	1,447,842	1,407,232
	───────	───────
Diluted weighted average number of shares	173,108,789	173,858,369


Basic earnings per share (cents)	(18.7)	3.8
Diluted earnings per share (cents)	(18.5)	3.8
	═══════	═══════

13 SHARE BASED PAYMENT EXPENSE

The Group recognised the following expenses related to equity-settled payment transactions:


	2021	2020
	USD'000	USD'000

Performance share plan	16	31
Employee retention share plan	471	99
Other share based payments	-	1,169
	───────	───────
	487	1,299
	═══════	═══════

Performance Share Plan

On Admission, the Company introduced a Performance Share Plan ("PSP") whereby options may be granted to eligible employees. Awards vest after a performance period of 3 years subject to continuous employment and the achievement of a hurdle total shareholder return ("TSR") as at the end of the performance period.

Employee Retention Share Plan

In October 2020, the Company introduced an Employee Retention Share Plan ("ERSP") and granted share options to a number of senior employees. Awards vest annually subject to continuous employment. There are no TSR linked vesting conditions associated with these options.

At 31 December, the following unexercised share options to acquire ordinary shares under the PSP and ERSP were outstanding:


Year of Grant	Share Plan	Vesting Date	Exercise	Number of	Number of
			price	options	options
			GBP	2021	2020

2018	PSP	29 June 2022	0.10	2,065,216	2,065,216

2020	ERSP	1 May 2021	0.10	31,280	291,054
	ERSP	1 May 2022	0.10	549,869	582,108
	ERSP	1 May 2023	0.10	824,800	873,162
2021	ERSP	1 May 2021	0.10	17,212	-
	ERSP	1 May 2022	0.10	84,520	-
	ERSP	1 May 2023	0.10	151,830	-
	ERSP	1 May 2024	0.10	150,292	-
				3,875,019	3,811,540
				════════	════════


		Weighted		Weighted
		average		average
	Number of	exercise	Number of	exercise
	options	price	options	price
	2021	2021	2020	2020
		GBP		GBP

Outstanding at 1 January	3,811,540	0.10	2,826,085	0.10
Granted during the year	458,348	0.10	1,843,047	0.10
Exercised during the year	(243,653)	0.10	-	0.10
Forfeited during the year	(151,216)	0.10	(857,592)	0.10
Outstanding at 31 December	3,875,019	0.10	3,811,540	0.10
	════════	════════	════════	════════

Options issued under the PSP were valued using the Monte Carlo Simulation model using the following inputs:


Weighted average share price			56p (USD 0.74)

Expected volatility			10.10%

Risk free rate			1.24%

This method is considered to be the most appropriate for valuing options granted under schemes where there are changes in performance conditions by which the options are measured, such as for TSR based awards. The fair value of the options at the grant date was USD 96,000 and a charge of USD 16,000 (2020: USD 31,000) was recognised in administrative expenses for the fiscal year ended 2021.

Options issued under the ERSP were valued using the Black Scholes model using the following inputs:


	average share price	Expected volatility	Risk free rate
2020	49p (USD 0.64)	49.70%	0.00%
2021	49p (USD 0.68)	48.60%	0.00%

The total fair value of the options at the grant date was USD 919,000. A charge of USD 117,000 (2020: USD 35,000) was recognised in cost of sales and USD 354,000 (2020: USD 64,000) was recognised in administrative expenses for the fiscal year ended 2021. The expected volatility input utilised represents the historic volatility of the share price of the Company since Admission.

Other Share Based Payments

On 19 October 2020, the Company agreed to issue a total of 1,840,449 restricted ordinary shares (the "Restricted Shares") to senior members of staff, including certain persons discharging managerial responsibilities. The Restricted Shares are subject to a six-month lock-in from the date of issue, during which they cannot be sold or transferred. Ordinary shares issued pursuant to the award of the Restricted Shares were satisfied from the pool of ordinary shares held in Treasury. The fair value of the shares on the grant date was GBP 0.49 (USD 0.64) per share. A charge of USD 1,169,000 was recognised as a non-underlying item given the non-reoccurring nature of this transaction and since the discretionary awards are not part of the formal share based payment performance plan of the Company.

Warrants

On Admission, in exchange for brokerage services provided to the Company during its IPO, the Company issued a warrant instrument granting its primary broker the right to subscribe for 671,514 ordinary shares of the Company. The warrants are exercisable for five years from the date of Admission at a subscription price of GBP 0.728 (USD 0.923) per ordinary share. They are non-transferrable and are subject to typical anti-dilution rights to adjust on a proportional basis for share consolidations, share splits, and stock dividends. The Company used the Black Scholes model to value the warrants at the grant date. The fair value of the warrants is nil.

14 DIVIDENDS

During the period, a dividend of 1.35p (USD 0.02) per share (171,662,973 shares) totalling GBP 2,317,000 (USD 3,206,000) was declared and paid (2020: 1.25p (USD 0.02) per share (173,575,741 shares) totalling GBP 2,170,000 (USD 2,674,000)).

15 ALTERNATIVE PERFORMANCE MEASURES

APMs used by the Group are defined below along with a reconciliation from each APM to its IFRS equivalent, and an explanation of the purpose and usefulness of each APM. APMs are non-IFRS measures.

In general, APMs are presented externally to meet investors' requirements for further clarity and transparency of the Group's financial performance. APMs are also used internally by management to evaluate business performance and for budgeting and forecasting purposes.


	2021	2020
	USD'000	USD'000

(Loss)/Profit	(32,080)	6,566
Tax benefit/(expense)	(80)	61
	───────	───────
(Loss)/Profit before tax	(32,160)	6,627
Finance costs	1,314	970
Investment income	(55)	(278)
	───────	───────
Operating (loss)/profit	(30,901)	7,319
Non-underlying items	32,222	3,046
	───────	───────
Underlying operating profit	1,321	10,365
Share based payment expense	487	130
Depreciation	4,855	3,731
	───────	───────
Underlying EBITDA	6,663	14,226
	═══════	═══════

Underlying Operating Profit ("UOP")

The Group uses UOP as an alternative measure to Operating Profit to allow comparison of the profitability of its operations across financial periods. UOP is calculated as Operating Profit adjusted for costs which are considered to be unrelated to the Group's underlying trading performance.

Underlying Operating Margin is calculated as UOP divided by revenue.

Underlying EBITDA

Management defines Underlying EBITDA as Operating Profit adjusted for depreciation, share based payments, and costs which are considered to be unrelated to the Group's underlying trading performance. Underlying EBITDA facilitates comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures, tax positions, and the age and booked depreciation on assets.

Underlying EPS

Underlying EPS reflects underlying operating profit after deducting net finance costs and taxation, divided by the weighted average number of ordinary shares outstanding during the period. This alternative measure of EPS enables shareholder return from the underlying business operations to be better evaluated across periods.


	2021	2020
	cents	cents

Reported EPS, basic	(18.7)	3.8
Impact of non-underlying items	18.8	1.8
Underlying EPS, basic	0.1	5.6
	═══════	═══════

Reported EPS, diluted	(18.5)	3.8
Impact of non-underlying items	18.6	1.7
Underlying EPS, diluted	0.1	5.5
	═══════	═══════

Net Cash

Net cash represents cash less overdraft balances, term loans, and notes outstanding. This is a commonly used metric, helpful to stakeholders when analysing the business. Negative net cash is referred to a net debt position.

16 PROPERTY, PLANT, AND EQUIPMENT


		Machinery,
		motor
		vehicles,
	Land and	furniture and	Leasehold
	buildings	equipment	improvements	Total
	USD'000	USD'000	USD'000	USD'000

Cost:
At 1 January 2021	38,973	15,497	1,192	55,662
Additions	2,526	774	178	3,478
Disposals	(1,580)	(2,156)	-	(3,736)
	────────	────────	────────	────────
At 31 December 2021	39,919	14,115	1,370	55,404
	────────	────────	────────	────────

Depreciation:
At 1 January 2021	2,432	5,754	118	8,304
Charge for the year	1,416	2,294	247	3,957
Relating to disposals	(125)	(1,747)	-	(1,872)
Provision for impairment	17,715	1,788	-	19,503
	────────	────────	────────	────────
At 31 December 2021	21,438	8,089	365	29,892
	────────	────────	────────	────────

Net carrying amount:
At 31 December 2021	18,481	6,026	1,005	25,512
	════════	════════	════════	════════


		Machinery,
		motor
		vehicles,
	Land and	furniture and	Leasehold
	buildings	equipment	improvements	Total
	USD'000	USD'000	USD'000	USD'000

Cost:
At 1 January 2020	16,605	14,892	471	31,968
Additions	22,372	1,206	872	24,450
Disposals	(4)	(601)	(151)	(756)
	────────	────────	────────	────────
At 31 December 2020	38,973	15,497	1,192	55,662
	────────	────────	────────	────────

Depreciation:
At 1 January 2020	1,475	4,290	122	5,887
Charge for the year	961	2,030	65	3,056
Relating to disposals	(4)	(566)	(69)	(639)
	────────	────────	────────	────────
At 31 December 2020	2,432	5,754	118	8,304
	────────	────────	────────	────────

Net carrying amount:
At 31 December 2020	36,541	9,743	1,074	47,358
	════════	════════	════════	═══════

During the year, capitalised interest of USD 114,000 was included in Land and Buildings (2020: USD 136,000), representing 22% of borrowing costs (2020: 100%). From 1 April 2021, upon the suspension of construction activities in Palma, Mozambique, the Group ceased capitalising interest relating to the Palma Camp development.

17 RIGHT-OF-USE ASSETS


	2021	2020
	USD'000	USD'000

Cost:
At 1 January	5,143	3,375
Additions	2,744	1,768
Disposals	-	-
	────────	────────
At 31 December	7,887	5,143
	────────	────────

Depreciation:
At 1 January	1,615	940
Charge for the year	898	675
Relating to disposals	-	-
	────────	────────
At 31 December	2,513	1,615
	────────	────────

Net carrying amount:
At 31 December	5,374	3,528
	════════	═══════

Information related to lease liabilities is available in note 25.

The table below indicates the rents resulting from lease contracts which are not capitalised and are therefore expensed in the year.


	2021	2020
	USD'000	USD'000

Short-term leases	1,308	1,112
	════════	════════

Short-term leases include amounts paid for vehicles and heavy equipment rental, as well as short-term property leases.

18 GOODWILL


	2021	2020
	USD'000	USD'000

As at 1 January	138	138
Acquisitions	(138)	-
	───────	───────
As at 31 December	-	138
	═══════	═══════

19 INVENTORIES


	2021	2020
	USD'000	USD'000

Materials and consumables	8,123	8,166
Goods-in-transit	1,274	976
	───────	───────
	9,397	9,142
	═══════	═══════

A provision of USD 3,314,000 has been recognised in 2021 reflecting the cost of inventory relating to Palma, Mozambique (2020: nil). See note 9.

20 TRADE AND OTHER RECEIVABLES


	2021	2020
	USD'000	USD'000

Trade receivables	8,942	7,319
Accrued revenue	5,281	2,410
Deposits	112	116
Prepayments	1,039	1,021
Other receivables	1,148	1,800
	───────	───────
	16,522	12,666
	═══════	═══════

Invoices are generally raised on a monthly basis, upon completion, or part completion of performance obligations as agreed with the customer on a contract by contract basis.

During the year 100% of accrued revenue was subsequently billed and transferred to trade receivables from the opening unbilled balance in the period (2020: 100%).

As at 31 December the transaction price allocated to remaining performance obligations was USD 100,000,000 (2020: USD 187,000,000). This represents revenue expected to be recognised in subsequent periods arising on existing contractual arrangements. The Group has not taken the practical expedient in IFRS 15.121 not to disclose information about performance obligations that have original expected durations of one year or less and therefore no consideration from contracts with customers is excluded from these amounts. All revenue is expected to be recognised within the next five years.

As at 31 December the ageing of trade receivables was as follows:


	2021	2020
	USD'000	USD'000

Not past due	5,855	5,184
Overdue by less than 30 days	1,509	938
Overdue by between 30 and 60 days	294	653
Overdue by more than 60 days	1,284	544
	───────	───────
	8,942	7,319
	═══════	═══════

Trade receivables are non-interest bearing and generally have payment terms of 30 days. An ECL of USD 505,000 was recorded as at 31 December 2021 (2020: nil). All other receivables are expected, on the basis of past experience, to be fully recoverable.

21 CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the consolidated statement of financial position comprised of cash at bank of USD 8,532,000 (2020: USD 17,632,000).

22 SHARE CAPITAL


	2021	2020
	USD'000	USD'000

Authorised, issued and fully paid
173,575,741 shares (2020: 173,575,741 shares) of GBP 0.10 (2020: GBP 0.10) each	24,300	24,300
	═══════	═══════

23 TREASURY SHARES


	2021	2021	2020	2020
	Number	USD'000	Number	USD'000

As at 1 January	2,027,551	1,363	-	-
Acquired in the period	--	-	3,868,000	2,600
Issued in the period (note 13)	(243,653)	(164)	(1,840,449)	(1,237)
	───────	───────	───────	───────
As at 31 December	1,783,898	1,199	2,027,551	1,363
	═══════	═══════	═══════	═══════

24 LOAN NOTES

The table below summarises the loan notes:


	2021	2020
	USD'000	USD'000

As at 1 January	6,471	-
Additions	3,529	6,471
	───────	───────
As at 31 December	10,000	6,471
	═══════	═══════

Current	10,000	-
Non-current	-	6,471

During the year loan notes were issued to retail investors. These notes carry an annual fixed interest rate of 7.00% (2020: 7.00%) for GBP denominated notes and 7.50% (2020: 7.50%) for USD denominated notes. The term of the note issuance is up to 24 months with principal to be repaid as a bullet payment upon maturity. Interest is paid on a quarterly basis, semi-annual basis, or at maturity, at the option of the investor. At 31 December 2020, USD 387,000 was included in Other Receivables relating to loan notes committed but where cash was not yet received. This cash was received shortly after year end and is included in 2021 proceeds from borrowings in the statement of cash flows.

25 LEASE LIABILITIES

Movements in the provision recognised in the consolidated statement of financial position are as follows:


	2021	2020
	USD'000	USD'000

As at 1 January	4,038	2,834
Additions	2,744	1,768
Interest	527	533
Payments	(1,269)	(1,097)
	───────	───────
As at 31 December	6,040	4,038
	═══════	═══════

Current	834	318
Non-current	5,206	3,720

Interest of USD 527,000 (2020: USD 533,000) relating to the above lease liabilities has been included in Finance Costs for the year.

As at 31 December the maturity profile of lease liabilities was as follows:


	2021	2020
	USD'000	USD'000

3 months or less	102	92
3 to 12 months	732	226
1 to 5 years	2,125	2,000
Over 5 years	3,081	1,720
	───────	───────
	6,040	4,038
	═══════	═══════

The Group had total cash outflows relating to leases of USD 2,577,000 in 2021 (2020: USD 2,209,000). This is the total of short-term lease payments from note 17 and payments from note 25.

26 EMPLOYEES' END OF SERVICE BENEFITS

Movements in the provision recognised in the consolidated statement of financial position are as follows:


	2021	2020
	USD'000	USD'000

As at 1 January	517	391
Provided during the year	433	209
End of service benefits paid	(219)	(83)
	───────	───────

As at 31 December	731	517
	═══════	═══════

27 TRADE AND OTHER PAYABLES


	2021	2020
	USD'000	USD'000

Accounts payable	6,478	5,163
Accrued expenses	2,702	1,931
Accrued tax expense	161	182
Customer advances	494	88
	───────	───────
	9,835	7,364
	═══════	═══════

All customer advances recorded at 31 December 2020 were subsequently recognised as revenue in 2021 and all customer advances held at 31 December 2021 were subsequently recognised as revenue in 2022.

28 PROVISIONS


	2021		2020
	USD'000		USD'000

As at 1 January	-	-
Provided during the year	1,422	-
	───────	───────
As at 31 December	1,422	-
	═══════	═══════

A USD 1,422,000 provision relating to these costs was recorded in 2021, with the full charge being reflected in the consolidated statement of comprehensive income.

29 CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES


	1 January				31 December
	2021	Cash flows	New leases	Other	2021
	USD'000	USD'000	USD'000	USD'000	USD'000

Non-current liabilities
Loan notes	6,471	3,529	-	(10,000)	-
Lease liabilities	3,720	-	2,184	(698)	5,206

Current liabilities
Loan notes	-	-	-	10,000	10,000
Lease liabilities	318	(1,269)	560	1,225	834
	────────	────────	────────	────────	────────
	10,509	2,260	2,744	527	16,040
	════════	════════	════════	════════	════════


	1 January				31 December
	2020	Cash flows	New leases	Other	2020
	USD'000	USD'000	USD'000	USD'000	USD'000

Non-current liabilities
Loan notes	-	6,084	-	387	6,471
Lease liabilities	2,397	-	1,642	(319)	3,720

Current liabilities
Loan notes	-	-	-	-	-
Lease liabilities	437	(1,097)	126	852	318
	────────	────────	────────	────────	────────
	2,834	4,987	1,768	920	10,509
	════════	════════	════════	════════	════════

The 'Other' column includes the effect of reclassification of non-current portion of leases to current due to the passage of time, the effect of contracted loan note amounts not yet received, and the effect of accrued interest not yet paid.

30 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group was not exposed to any significant interest rate risk on its interest-bearing liabilities.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities when revenue or expenses are denominated in a different currency from the Group's functional currency, as well as cash and cash equivalents held in foreign currency accounts.

At 31 December 2021, the Group held foreign cash and cash equivalents of GBP 1,067,000 (USD 1,441,000). Additionally, the Group held GBP denominated loans of GBP 1,354,000 (USD 1,787,000). UK pound sterling is primarily held by the Group to settle payment obligations denominated in GBP. As at 31 December 2020, the Group held GBP 2,270,000 (USD 3,099,000) and GBP denominated loans of GBP 982,000 (USD 1,341,000).

The Group's exposure to foreign currency variances for all other currencies is not material.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group is exposed to credit risk on its bank balances and receivables.

The Group seeks to limit its credit risk with respect to banks by only dealing with reputable banks as determined by the CODM and with respect to customers by only dealing with creditworthy customers and continuously monitoring outstanding receivables. The Company's 5 largest customers account for 63% of outstanding accounts receivable at 31 December 2021 (2020: 54%).

Receivables split by customer


	2021	2020
	%	%

Customer D	21	16
Customer B	17	14
Customer E	14	15
Customer C	8	3
Customer F	6	12
Customer A	5	7
Other	29	33
	───────	───────
	100	100
	═══════	═══════

No material credit risk is deemed to exist due to the nature of the Group's customers, who are predominantly governments and large intragovernmental organisations.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group limits its liquidity risk by ensuring bank facilities are available.

The Group's terms of sale generally require amounts to be paid within 30 days of the date of sale. Trade payables are settled depending on the supplier credit terms, which are generally 30 days from the date of delivery of goods or services.

As at 31 December the maturity profile of trade payables and loan notes was as follows:


As at 31 December 2021
	Less than	3 to 12	3 to 12	12 to 24
	3 months	Months	Months	Months	Total
	USD'000	USD'000	USD'000	USD'000	USD'000

Loan notes	-	-	10,000	-	10,000
Trade payable	6,478	-	-	-	6,478
	────────	────────	────────	────────	────────
	6,478	-	10,000	-	16,478
	════════	════════	════════	════════	════════


As at 31 December 2020
	Less than	3 to 12	3 to 12	12 to 24
	3 months	Months	Months	Months	Total
	USD'000	USD'000	USD'000	USD'000	USD'000

Loan notes	-	-	-	6,471	6,471
Trade payable	5,163	-	-	-	5,163
	────────	────────	────────	────────	────────
	5,163	-	-	6,471	11,634
	════════	════════	════════	════════	════════

Liabilities falling due within twelve months are recognised as current on the consolidated statement of financial position. Liabilities falling due after twelve months are recognised as non-current.

The unutilised bank overdraft facilities at 31 December 2021 amounted to USD 10,000,000 (2020: USD 2,000,000) and carry interest of 1m LIBOR +3.50% per annum (2020: 1m LIBOR +3.50%).

The Group manages its liquidity risk by maintaining significant cash reserves.

The Group's cash and cash equivalents balance is substantially all held in institutions holding a Moody's long-term deposit rating of Aa3 or above.

Capital management

The primary objective of the Group's capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it in light of changes in business conditions.

No changes were made in the objectives, policies, or processes during the year ended 31 December 2021.

Capital comprises share capital, share premium, merger reserve, treasury shares, share based payment reserve, and retained earnings and is measured at USD 37,309,000 as at 31 December 2021 (2020: USD 72,074,000).

31 RELATED PARTY DISCLOSURES

Related parties represent shareholders, directors and key management personnel of the Group, and entities controlled, jointly controlled, or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group's management.

There were no transactions with related parties during the year (2020: nil). No outstanding balances with related parties are included in the consolidated statement of financial position at 31 December 2021 (2020: nil).

32 COMPENSATION

Compensation of key management personnel

The remuneration of key management during the year was as follows:


	2021	2020
	USD'000	USD'000

Short-term benefits	1,874	1,734
Stock based compensation	16	1,200
	────────	────────
	1,890	2,934
	════════	════════

The key management personnel comprise of 5 (2020: 6) individuals. Included in key management personnel are 3 (2020: 3) Directors.

Compensation of directors

The remuneration of directors during the year was as follows:


	2021	2020
	USD'000	USD'000

Short-term benefits	1,611	1,312
Stock based compensation	9	340
	───────	───────
	1,620	1,652
	═══════	═══════

Highest paid director

The remuneration of the highest paid director during the year was as follows:


	2021	2020
	USD'000	USD'000

Short-term benefits	490	276
Stock based compensation	-	340
	───────	───────
	490	616
	═══════	═══════

The amount disclosed in the tables is the amount recognised as an expense during the reporting year related to key management personnel and Directors of the Group.

33 STANDARDS ISSUED BUT NOT YET EFFECTIVE

No other standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are expected to have a material impact on the Group.

34 SUBSEQUENT EVENTS

During May 2022, the Group completed a refinancing and fundraising exercise. The purpose of the exercise was to synchronise and extend the maturity of the USD 10m of loan notes issued by the Group during 2020 and 2021, which were due to mature in the second half of 2022.

A total of USD 12.0m in loan notes were issued to retail investors. These notes carry an annual fixed interest rate of 7.50% for GBP denominated notes and 8.00% for USD denominated notes.

The term of the note issuance is 30 months with principal to be repaid as a bullet payment upon maturity in November 2024. Interest is paid on a quarterly basis.

Of the USD 12.0m notes issued, USD 8.4m relates to a refinancing of notes outstanding at 31 December 2021 and USD 3.6m relates to new investment.

Notes outstanding at 31 December 2021 which were not refinanced as part of the May 2022 issuance will be repaid in the second half of 2022 as per the original maturity date

COMPANY STATEMENT OF FINANCIAL POSITION


		2021	2020
	Notes	USD'000	USD'000

Assets
Non-current assets
Investments		50,047	50,047
		───────	───────

Current assets
Trade and other receivables	4	5,754	8,009
Cash and cash equivalents		113	933
		───────	───────
		5,867	8,942
		───────	───────
Total assets		55,914	58,989
		═══════	═══════

Equity and liabilities
Equity
Share capital	5	24,300	24,300
Share premium		18,254	18,254
Merger reserve		9,897	9,897
Treasury shares	6	(1,199)	(1,363)
Share based payment reserve		534	177
Retained earnings		3,819	7,578
		───────	───────
Total equity		55,605	58,843
		───────	───────

Current liabilities
Trade and other payables	7	309	146
		───────	───────
Total equity and liabilities		55,914	58,989
		═══════	═══════

As at 31 December 2021

The Company has taken the exemption conferred by Section 408 of the Companies Act 2006 not to publish the profit and loss of the parent company within these accounts. The result for the Company for the year was a loss of USD 553,000 (2020: USD 536,000).

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2021


					Share
					Based
	Share	Share	Merger	Treasury	Payment	Retained
	Capital	Premium	Reserve	Shares	Reserve	Earnings	Total
	USD'000	USD'000	USD'000	USD'000	USD'000	USD'000	USD'000

As at 1 January 2020	24,300	18,254	9,897	-	47	10,788	63,286

Total comprehensive income for the period	-	-	-	-	-	(536)	(536)

Share based payments	-	-	-	-	130	-	130

Dividends declared and paid	-	-	-	-	-	(2,674)	(2,674)

Purchase of treasury shares (note 6)	-	-	-	(2,600)	-	-	(2,600)

Issuance of treasury shares (note 6)	-	-	-	1,237	-	-	1,237
	───────	───────	───────	───────	───────	───────	───────
As at 31 December 2020	24,300	18,254	9,897	(1,363)	177	7,578	58,843
	═══════	═══════	═══════	═══════	═══════	═══════	═══════



Total comprehensive income for the period	-	-	-	-	-	(553)	(553)

Share based payments					487		487

Dividends declared and paid	-	-	-	-	-	(3,206)	(3,206)

Issuance of treasury shares (note 6)	-	-	-	164	(130)	-	34
	───────	───────	───────	───────	───────	───────	───────
As at 31 December 2021	24,300	18,254	9,897	(1,199)	534	3,819	55,605
	═══════	═══════	═══════	═══════	═══════	═══════	═══════

The attached notes 1 to 8 form part of the Financial Statements.

NOTES TO THE COMPANY FINANCIAL STATEMENTS

For the year ended 31 December 2021

1 BASIS OF PREPARATION

The financial statements have been prepared in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards and the Companies Act 2006), including

Financial Reporting Standard 101 "Reduced Disclosure Framework" ("FRS 101") under the historical cost

basis and have been presented in USD, being the functional currency of the Company.

The Company has applied a number of exemptions available under FRS 101. Specifically, the requirement(s) of:

(a) paragraphs 91-99 of IFRS 13 "Fair Value Measurement",

(b) paragraph 38 of IAS 1 "Presentation of Financial Statements" to present comparative information in respect of paragraph 79(a)(iv) of IAS 1,

(d) IAS 7 "Statement of Cash Flows",

(e) 30 and 31 of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors",

(f) 17 of IAS 24 "Related Party Disclosures" and IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member, and

(g) paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 "Impairment of Assets".

2 SIGNIFICANT ACCOUNTING POLICIES

Except noted below, all accounting policies applied to the Company are consistent with that of the Group.

Investments

Investments held by the company are stated at cost less provision for diminution in value.

3 EMPLOYEE EXPENSES

The average number of employees employed during the period was:


	2021	2020

Directors	7	7
	════════	════════

The aggregate remuneration of the above employees was:


	2021	2020
	USD'000	USD'000

Wages and salaries	469	410
Social security costs	53	46
	───────	───────
	522	456
	═══════	═══════

4 TRADE AND OTHER RECEIVABLES


	2021	2020
	USD'000	USD'000

Prepayments	18	83
Due from subsidiary	5,703	7,878
VAT recoverable	33	48
	───────	───────
	5,754	8,009
	═══════	═══════

Amounts due from subsidiary represent amounts due from RA International FZCO, an immediate subsidiary, and are non-interest bearing and payable on demand.

5 SHARE CAPITAL


	2021	2021	2020	2020
	Number	USD'000	Number	USD'000
Authorised, issued, and fully paid:
Ordinary shares of GBP 0.10 each	173,575,741	24,300	173,575,741	24,300
	════════	════════	════════	════════

6 TREASURY SHARES


	2021	2021	2020	2020
	Number	USD'000	Number	USD'000

As at 1 January	2,027,501	1,363	-	-
Acquired in the period	-	-	3,868,000	2,600
Issued in the period	(243,653)	(164)	(1,840,499)	(1,237)
	────────	────────	────────	────────
As at 31 December	1,783,898	1,199	2,027,551	1,363
	═══════	═══════	═══════	═══════

7 TRADE AND OTHER PAYABLES


	2021	2020
	USD'000	USD'000

Trade payables	146	44
Accruals	163	102
	───────	───────
	309	146
	═══════	═══════

8 RELATED PARTY TRANSACTIONS

The Directors have taken advantage of the exemption under paragraph 8(j) and 8(k) of FRS 101 and have not disclosed transactions with other wholly owned Group undertakings. There are no other related party transactions.

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