TIDMDEV
RNS Number : 6907W
Dev Clever Holdings PLC
22 August 2022
22 August 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
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Dev Clever Holdings plc
("Dev Clever", the "Group" or the "Company")
Annual Financial Report for the year ended 31 October 2021 and
Notice of Annual General Meeting
Significant operational progress and strengthened balance
sheet.
Dev Clever (LSE: DEV), a leading developer of mobile and
immersive experiences, is pleased to announce its audited full year
results for the year ended 31 October 2021 (FY 2021).
Financial Highlights:
-- Total revenue up 486% to GBP7.36 million (2020: GBP1.25
million), reflecting revenue arising from the Aldebaron
agreement.
-- Adjusted EBITDA profit was GBP1.30 million (2020: loss GBP0.79m).
-- The loss before tax was GBP2.54 million (2020: GBP1.06 million).
-- Cash position of GBP7.51 million (2020: GBP1.03 million) at
period end, with external debt, excluding capitalised leases of
GBP0.4 million (2020: GBP0.3 million).
-- Loss per share for the period of 0.46 pence (2020: 0.22
pence); Adjusted(1) profit per share 0.09 pence (2020: loss 0.19
pence).
Operational Highlights:
-- Signing a five-year exclusive partnership agreement with
Veative Labs Private Limited ("VLPL") and the National Independent
Schools Alliance ("NISA"), India's largest governing body for
budget private educational institutions and which represents over
70,000 budget private schools. The agreement is for
Launchmycareer.com to be utilised as the platform-of-choice to
deliver a minimum standard of career guidance across NISA
affiliated schools, attended by c.13 million students.
-- Reaching an agreement with Veative Labs Pte Limited ("Veative") regarding the:
o Acquisition of intellectual property of a dynamic SaaS-based
learning management platform and immersive learning content
(including STEM content) to be utilised during the near-term
roll-out of the Company's existing partnership agreement with VLPL
and NISA.
o Acquisition of an exclusive one-year IP licencing agreement
for additional immersive learning content for the Indian market
with a call option to acquire both this IP and Veative's global
distributor agreements.
o Proposed acquisition of the entire share capital of VLPL,
Veative's Indian subsidiary and development centre, subject to the
publication of an FCA approved prospectus.
-- Completing the acquisition of The Inspirational Learning
Group ("TILG") to support the delivery of a new National Career
Challenge programme.
-- Incorporation of Launchmycareer Pvt Limited, a wholly-owned subsidiary of the Group, and:
o Successfully developing and deploying the Group's
direct-to-consumer offer into Launchmycareer.com, which is now live
across India, whilst joint marketing activities in collaboration
with NISA have begun.
o Winning a material first contract in India to implement the
Company's immersive careers guidance and STEM-based virtual reality
educational library at schools under central and state governments
in India.
o Beginning the first government funded pilot of the platform at
a state school, of which there are 1.1 million across India.
-- Agreeing the phase two roll-out of the Company's immersive
career guidance and learning platform with The Common Service
Centre ("CSC") in India, rolling it out to 2.6 million students
across 5,930 CSC Academy Centres.
Post Period End Highlights:
-- Entry into Chinese market through a material contract with
Question What's Real ("QWR"), an Asia-based VR hardware
manufacturer and distributor of the Chinese Academy of Sciences
("CAS"). The contract is for an initial 20,000 virtual reality
devices to be deployed to users in China, pre-installed with the
Group's immersive STEM learning library.
-- Exercise of call option to acquire the remaining Veative
STEM-based learning IP at a net cost of $6.5m.
-- Termination of partnership with Aldebaron (subject to
completion of all obligations under the initial proof of concept
phase), releasing Aldebaron from the balance of its revenue
obligations and returning the distribution rights for the Asian
territories to the Group. The Company has agreed to issue Aldebaron
or its nominees with 37,885,931 warrants exercisable at 1p per
share for a period of 18 months as compensation for returning the
distribution rights for the Asian territories.
-- Waiver by Chris Jeffries, Executive Chairman and joint CEO,
of his existing right to convert his outstanding loan notes into
37,885,931 shares at 1p per share, to ensure no additional dilution
to existing shareholders in the event that Aldebaron exercises its
warrants in full.
-- Completion of the acquisition of VLPL, the wholly owned
Indian subsidiary of Veative in exchange for 225 million new
ordinary shares in Dev Clever.
-- The appointment of Ankur Aggarwal to the Board following the
completion of the acquisition of VLPL and the resignation of David
Ivy as Non-Executive Director and Chair of the Audit Committee.
Footnotes
(1) Adjusted EDITDA and adjusted loss per share are stated after
adjusting for the impact of share-based payments and one-off
transaction costs.
Chris Jeffries, Joint Chief Executive Officer of Dev Clever,
said:
" FY 2021 has been another year of significant progress and,
with minimal debt in the business, the Group now has the
infrastructure, product offering and partnerships in place to drive
considerable further growth. The global pandemic has focused
attention on the education sector and the Group's innovative
SaaS-based platform has attracted increased interest from
educational institutions across public and private sectors."
"With material agreements now in place in India, China, the UK
and the US, attention has now turned to onboarding customers. The
Group's immediate focus remains on India and China, where contracts
are already in place to enable Dev Clever to engage with over 15
million students. To this end, I am delighted to welcome Ankur
Aggarwal to the Board to work alongside me as joint CEO. Ankur's
deep understanding and experience of the Indian, and broader
international EdTech market, will be key to delivering our growth
plans in these territories."
"Whilst the termination of the partnership with Aldebaron has
impacted upon our short term cashflows, this is outweighed by the
benefit of the distribution rights for the Asian territories being
returned to the Group."
"The Company remains absolutely focused on gaining market share
and making the most of the opportunities available to it. On behalf
of the Board, I would like to thank our customers, stakeholders and
all employees for their ongoing support and patience in the delays
in the publishing of these accounts and look forward to providing
an update on our continued progress in due course."
"I would also like to offer my and the Board's thanks to David
Ivy for his invaluable guidance and support since the IPO and wish
him well in all his future endeavours."
Publication of Annual Report and Notification of AGM
The Annual Report and Accounts for the year ended 31 October
2021 has today been sent to shareholders together with the Notice
of and Form of Proxy for its Annual General Meeting, which will be
held at 10:30 a.m. on Wednesday, 14 September 2022 at its offices
in Stafford Education and Enterprise Park, Weston Road, Stafford,
ST18 0BF.
In compliance with LR 9.6.1, the Company has submitted to the
Financial Conduct Authority each of the following documents:
-- 2021 Annual Report and Accounts
-- AGM Notice
These documents will shortly be available for inspection via the
National Storage Mechanism.
The Annual Report and the AGM Notice will also be available to
download from the Company's website: www.devcleverholdingsplc.com
and hard copies can also be requested from the registered office,
Ventura House, Ventura Park Road, Tamworth, Staffordshire, B78
3HL.
-ends-
For further information please contact:
Dev Clever Holdings plc +44 (0) 1827 930 408
Christopher Jeffries
Joint Chief Executive Officer and Executive
Chairman
Ankur Aggarwal
Joint Chief Executive Officer
Nicholas Ydlibi
Chief Financial Officer
Novum Securities Limited - Financial Adviser
and Joint Broker +44 (0) 20 7399 9400
David Coffman / Colin Rowbury
finnCap Limited - Joint Broker +44 (0) 20 7220 0500
Jonny Franklin-Adams / Abigail Kelly / George
Dollemore (Corporate Finance)
Richard Chambers / Harriet Ward (ECM)
Buchanan Communications +44 (0) 207 466 5000
Chris Lane / Kim van Beeck / Toto Berger
Notes to Editors:
About Dev Clever
Dev Clever Holdings plc, together with its wholly owned
subsidiaries, is a software and technology group based in Stafford,
United Kingdom, and Noida, India, specialising in the use of
lightweight integrations of cloud-based VR and gamification
technologies to deliver rich customer engagement experiences across
both the education and commercial sectors. In January 2019, Dev
Clever listed on the Standard List of the London Stock Exchange.
The Group's core focus is the development and commercialisation of
its core Educate platforms.
Dev Clever aims to reduce the global skills shortage by
delivering an enhanced careers guidance service via its online
platforms, Launchmycareer.com and Launchyourcareer.com, and virtual
reality software (Victar VR). The business has established a global
partnership with Lenovo to roll out its service worldwide, with
offerings already on the market in the UK, US, and Canada. Dev
Clever is also focused on the Indian market and has partnered with
its National Independent Schools Alliance (NISA) to provide a
comprehensive service offering within Indian budget private
schools. Through this, the business has been developing and has
launched a direct-to-consumer offering in India.
For further information, please visit
www.devcleverholdingsplc.com
Executive Chairman and Chief Executive Officer's Statement
I am pleased to report that Dev Clever continued to make
significant progress during the financial year ended 31 October
2021 ("FY 2021" or "the Period"). It was a busy and extremely
productive year for the Group, with the focus on growing and
expanding the Company's services within the education sector.
Revenues in FY 2021 were up 486% to GBP7.36 million (2020:
GBP1.25 million), generating a gross profit margin of 60.8% (2020:
43.9%) and a gross margin of GBP4.47 million (2020: GBP0.55
million). This revenue figure includes an initial recognised amount
of GBP3.6 million (US $5.0 million) from the Company's now
terminated collaboration with Aldebaron DMCC ("Aldebaron") - the
rationale for which is explained under "Post-period end
developments and outlook" below. The underlying profit for FY 2021,
being a non-IFRS reporting measure constituting the loss for the
year of GBP2.54 million less the share based payment expense of
GBP2.51 million and the one off fees associated with the
acquisition of Veative of GBP0.50 million, of GBP0.48 million
(2020: GBP0.80 million loss) reflects the significant contribution
made by the new commercial agreements entered into during the
Period as the Group focussed on the opportunities emerging from the
deployment of its proprietary platform, Launchmycareer.com.
Significant operational progress and strengthened balance
sheet
Since its admission to the Main Market of the London Stock
Exchange in January 2019, Dev Clever has continued to significantly
advance and grow its business and its proposition. Progress over
the course of FY 2021 has been excellent, including the expansion
of its core services, as well as launching and onboarding its
products in the Indian market.
This continued progress has been supported by the Company's
financing activities. In the first half of the year, Dev Clever
significantly strengthened its balance sheet through a series of
subscriptions that raised total gross proceeds of GBP18 million
(GBP16.9 million net) in new equity funding. This funding enabled
Dev Clever to accelerate and support the growth of its core Educate
business in the near term.
The Board will continue to pursue future growth and expansion
initiatives, targeting opportunities that deliver tangible
long-term shareholder value.
Educate - an expanded proposition already gaining traction with
various material agreements in place
Educate continues to be the Company's primary division and the
focus of management and capital resource.
The Group made significant progress in the Period,
including:
-- Reaching an agreement with Veative regarding the:
- Acquisition of intellectual property of a dynamic SaaS-based
learning management platform and immersive learning content
(including STEM content) to be utilised during the near-term
roll-out of the Company's existing partnership agreement with
Veative and the National Independent Schools Alliance ("NISA"),
India's largest governing body for budget private educational
institutions.
- Acquisition of an exclusive one-year IP licencing agreement
for additional immersive learning content for the Indian market
with a call option to acquire both this IP and Veative's global
distributor agreements.
- Proposed acquisition of the entire share capital of Veative's
Indian subsidiary and development centre.
-- Signing a five-year exclusive partnership agreement with
India's NISA, which represents over 70,000 budget private schools,
for Launchmycareer.com to be utilised as the platform-of-choice to
deliver a minimum standard of career guidance across NISA
affiliated schools, attended by c.13 million students.
-- Completing the acquisition of The Inspirational Learning
Group ("TILG") to support the delivery of a new National Career
Challenge programme.
-- Incorporating Launchmycareer Pvt Limited, a wholly-owned subsidiary of the Group, and:
- Successfully developing and deploying the Group's
direct-to-consumer offer into Launchmycareer.com, which is now live
across India, whilst joint marketing activities in collaboration
with NISA have begun.
- Winning a material first contract in India to implement the
Company's immersive careers guidance and STEM-based virtual reality
educational library at schools under central and state governments
in India.
- Beginning the first government funded pilot of the platform at
a state school, of which there are 1.1 million across India.
-- Delivering the first phase of the planned tactical
partnership with Aldebaron, following the successful implementation
of a material EdTech services contract earlier in the year. The
partnership, now terminated, delivered sales revenue of GBP3.6
million (US $5.0 million) in the period.
-- Agreeing the phase two roll-out of the Company's immersive
career guidance and learning platform with The Common Service
Centre ("CSC") in India, rolling it out to 2.6 million students
across 5,930 CSC Academy Centres in Q1 2022. This followed a
successful initial 45-day trial in 25 academy centres in early July
2021. The potential to extend the service offering to the broader
350,000+ Common Service Centres and their users remains.
The Group strengthened its core Educate product team through the
recruitment of Jim Cannon as Chief Product Officer. Jim joined the
Group following a long career as a Development Executive working
for major television broadcasters in the UK as well as for Fox in
the US. Jim's experience of originating and bringing to life new
formats and concepts for TV audiences is invaluable in leading the
development roadmap for, and gamification of, the Group's education
content and its adaptation for new territories.
Dev Clever's opportunity to help close the global skills gap
The market for EdTech remains robust and we believe there is a
global growing need and demand for more effective careers platforms
that can engage young people and connect them directly with their
future employers.
Dev Clever's ultimate ambition is to enable the youth of today
to develop the career skills that are in demand by future
employers, alongside their education, to bridge the critical,
growing global skills gap.
Closing the global skills gap could add US$11.5 trillion to
global GDP by 2028 (Accenture: It's learning, just not as we know
it). Education and training systems need to keep pace with the new
demands of labour markets that are continually challenged by
technological disruption, demographic change and the evolving
nature of work. Moreover, the COVID-19 pandemic has amplified the
skills gap and the need to close it more urgently (McKinsey: May
2020).
Dev Clever's pioneering platforms Launchmycareer.com and
Launchyourcareer.com engage young people and dynamically match and
connect them through their interests, skills, personality and
personal attributes, to future employers and incentivises them to
develop the skills which will ensure they can be employed in the
future.
Through the Company's exclusive strategic and tactical
partnerships with Lenovo and NISA, the funding secured through the
investments made by Intrinsic and Sitius and combined with the
enlarged capabilities of Veative Labs and TILG, Dev Clever is able
to go to market at scale and attract many millions of users to its
platform globally.
The Board believes that the creation of the National Careers
Challenge, as announced on 21 June 2021, driven by Dev Clever's
innovative approach to youth engagement and making careers
discovery fun and rewarding from Year 6 to Year 13, has the
potential to be unprecedented in its innovative ability to bridge
the skills gap. The physical National Careers Challenge, run
through TILG, enables pupils to engage in business related
challenges from employers including National Westminster Bank, Air
Products and Merlin Entertainments. 57,000 pupils from over 180
schools in the UK and 8 schools in China took part in these
challenges. The best teams from more than 80 of the participating
schools presented their proposals at the finals event at the ICC in
Birmingham on 7(th) July 2022, which included virtual presentations
from each of the Chinese schools. The National Careers Challenge is
intended to become the cornerstone of Dev Clever's inter-connected
careers guidance eco-system, enabling it to appeal to companies
from all over the world to showcase their businesses and sectors of
industry through the lens of a student, demystifying the world of
work and connecting students with employers via virtual encounters
and live webinars. This will be augmented by social network peer
support and powerful engagement tools to gamify the careers journey
with opportunities to explore curriculum-aligned learning in a
radically different approach to education, and to level-up
skillsets to prepare for, and become better-aligned to career
goals. This will all be recorded in a comprehensive skills and
career passport that reflects each student's development, growth
and motivation.
Virtual work experiences will be available where young people
can then demonstrate their developed skills and employability for
future employers to grant apprenticeship placements and provide
guaranteed jobs. Companies can, in turn, receive analytics that
will help them reach candidates that are the best fit for their
future opportunities.
Agency Services
The Group's Agency Services proposition now only services its
legacy contracts. It is the intention to incorporate the Engage
platform to support engagement with Launchmycareer.com as part of
Launchmycareer.com professional services.
Post-period end developments and outlook
The progress made during the course of FY 2021 was significant,
and this has continued at pace during the current financial year
(FY 2022). Key developments include:
-- Entry into Chinese market: in December, the Company announced
a material contract with Question What's Real ("QWR"), an
Asia-based VR hardware manufacturer and distributor of the Chinese
Academy of Sciences ("CAS"). The contract is for an initial 20,000
virtual reality devices to be deployed to users in China,
pre-installed with the Group's immersive STEM learning library, and
distribution of the devices started in April. Dev Clever will
receive US$150 per device on an annual recurring SaaS
subscription-basis. Subject to the success of the initial roll-out,
there is an option to extend the partnership to include between
15,000 and 30,000 additional devices this year.
-- Incorporation in Dubai: on 4 February 2022, to facilitate the
growth of the Company's international operations, Dev Clever opened
an office in Dubai. With over 80% of Fortune 500 companies having
operations in the United Arab Emirates, this new location serves
Dev Clever as both its employer marketing and global distribution
hub. On 26 May 2022, Dev Clever showcased some of the initial user
propositions that have been developed and tested at an employer
event, The Future World of Work. The event, hosted by Lord Coe,
encouraged employers to join the platform and give young people
throughout the world insight into workforce requirements and the
jobs of the future.
-- Exercise of call option over the remaining Veative STEM-based
learning IP: Since the re-opening of schools across the Group's
global markets and the announcement of META (formerly Facebook)
actively prioritising the Metaverse, the Company has now seen a
significant increase in interest and demand for the Group's
immersive STEM based learning content. In order to facilitate this
increased global demand, as demonstrated by the securing of the CAS
contract in China, on 31 March 2022 the Company exercised its
option to acquire the remaining STEM based learning IP and
associated distribution agreements held by Veative Singapore at a
net cost of $6.5m. An initial payment of $1.15 million has been
made with the balance of the consideration, $5.35 million, to be
settled through the issuance of new Ordinary shares of the Company
at the average market price over five days from the Company's
Re-admission to the Main Market, and subject to Re-admission
occurring before the end of January 2023.
-- Launch of The Careers Curriculum: In June 2022 TILG launched
The Careers Curriculum - a 30-lesson curricular model linked to the
Gatsby Benchmarks to support Careers Leads with careers education
from Year 7 to Year 11. Alongside the National Careers Challenge,
this will allow the Group to be uniquely placed to deliver a
combination of digital and offline experiential learning.
-- Termination of tactical partnership with Aldebaron: On 21
June 2021, the Company announced that it had entered into a
tactical partnership agreement with Aldebaron DMCC ("Aldebaron") to
accelerate its rollout plan in Asian territories. The partnership
included an undertaking by Aldebaron to provide Dev Clever with
minimum revenue of US$50m over the four financial years ending 31
October 2024. This included initial revenue of US$5m for the year
ended 31 October 2021, following proof of concept. On 8 April 2022,
the Company confirmed that it was in negotiations with Aldebaron to
move the partnership agreement to a permanent Joint Venture ("JV").
As the JV talks progressed, it became clear that an alternative
strategy would be in the best interests of Dev Clever, as Aldebaron
required exclusive distribution rights to the Group's immersive
STEM-based learning library and the Launchmycareer.com platform to
other global territories, not just the Asian territories, as set
out within the original partnership agreement. Consequently, on 19
July 2022 it was announced that the partnership has been
terminated, subject to completion of all obligations under the
initial proof of concept phase. This releases Aldebaron from the
balance of its revenue obligations and returns the distribution
rights for the Asian territories to Dev Clever.
The Board believes that by retaining its rights on a global
basis, and therefore maintaining its ability to enter into
individual agreements with international partners, the Company will
be able to take advantage of opportunities faster and create more
value for its shareholders. Initial discussions have commenced with
a number of potential partners in international territories. The
Company agreed to issue Aldebaron or its nominees with 37,885,931
warrants exercisable at 1p per share for a period of 18 months as
compensation for returning the distribution rights for the Asian
territories. At the same time, I agreed to forfeit my existing
right to convert my outstanding loan notes into 37,885,931 shares
at 1p per share, meaning there will be no additional dilution to
existing shareholders in the event that Aldebaron exercises the
warrants in full. The other terms of the outstanding loan notes
remain unchanged, such that, unless previously repaid, the loan
notes will be redeemed at par by the Company on 20 January
2025.
-- Veative Labs acquisition: On 18 July 2022, the Company
completed the acquisition of Veative Labs Private Limited, the
wholly owned Indian subsidiary of Veative Labs Pte Ltd (Singapore)
("Veative") in exchange for 225 million new ordinary shares in Dev
Clever.
-- Board changes: On 17 May 2022, the Company announced the
resignation of David Ivy as Non-Executive Director and Chair of the
Audit Committee and its intention to appoint two internationally
experienced individuals with relevant global commercial and growth
company expertise, as Non-executive Chairman and Non-executive
Director respectively. The Company has commenced the process of
recruiting these new directors and will provide further updates
once appointments are confirmed. The Company also announced that
following the completion of the acquisition of Veative Labs Private
Limited on 18 July 2022, Ankur Aggarwal, the CEO of Veative, joined
the Board as joint CEO. The appointment reflects the Group's
increasing focus on international markets and particularly the
Indian market going forward.
-- Re-admission: With effect from 7.30am GMT on 24 December
2021, trading in the Company's shares was suspended until the FCA
approved the eligibility of the enlarged group in accordance with
Listing Rule 5.6.21. Subject to the FCA's approval, the Company's
existing listing will be cancelled and the shares will be
re-admitted to the London Stock Exchange ("Re-admission"). The
Company and its advisers continue to work on a prospectus to enable
Re-admission to take place, subject to FCA approval, as soon as
possible.
Summary and outlook
FY 2021 has been another year of significant progress and, with
minimal debt in the business, the Group now has the infrastructure,
product offering and partnerships in place to drive considerable
further growth. The global pandemic has focused attention on the
education sector and the Group's innovative SaaS-based platform has
attracted increased interest from educational institutions across
public and private sectors.
With material agreements now in place in India, China, the UK
and the US, attention has now turned to onboarding customers. The
Group's immediate focus remains on India and China, where contracts
are already in place to enable Dev Clever to engage with over 15
million students. To this end, I am delighted to welcome Ankur
Aggarwal to the Board to work alongside myself as joint CEO.
Ankur's deep understanding and experience of the Indian, and
broader international EdTech market, will be key to delivering
growth in these territories.
LaunchmyCareer.com is now live across India including the
platform's additional offerings for users to purchase at a premium
rate. In excess of 800,000 pupils have been activated through the
NISA partnership and the platform has attracted in excess of
360,000 direct consumer registrations in advance of any substantive
marketing. Following a market validation campaign the platform now
hosts over 120,000 active users, of which 3,500 have already
upgraded to the premium service. The Group has now onboarded over
200 career success counsellors with average user feedback ratings
of 4.7 out of 5, providing a pleasing validation of the
product.
As Dev Clever's customer base ramps up and its ecosystem grows,
the Company is engaging more and more with organisations and
corporations to support their requirements to fulfil future
recruitment needs. The base in the UAE has given Dev Clever
excellent proximity to numerous global corporates and the Board is
confident in the ability to monetise this opportunity in the short
term.
Whilst the loss of the revenues associated with the termination
of the tactical partnership with Aldebaron has impacted upon our
short term cashflows, the outstanding receivables were
substantively settled by 12 August 2022. The Board has a reasonable
expectation that the Group will be able to secure funds to provide
adequate resources and we remain confident in the strength and
positioning of our core platforms to generate revenues across
global markets.
The Company remains absolutely focused on gaining market share
and making the most of the opportunities available to it. On behalf
of the Board, I would like to thank our customers, stakeholders and
all employees for their ongoing support and patience in the delays
in the publishing of these accounts and look forward to providing
an update on our continued progress in due course.
I would also like to offer my and the Board's thanks to David
Ivy for his invaluable guidance and support since the IPO and wish
him well in all his future endeavours.
Chris Jeffries
Executive Chairman and Joint Chief Executive Officer
19 August 2022
Chief Financial Officer's Review
Dev Clever Holdings Plc comprises a holding company, Dev Clever
Holdings Plc, its trading subsidiaries, DevClever Limited, The
Inspirational Learning Group Limited, Launchmycareer Pvt Limited,
and its non-trading subsidiary, Phenix Digital Limited. The
Inspirational Learning Group Limited was acquired on 26 July 2021
and Launchmycareer Pvt Limited was acquired on 9 April 2021.
The Company and consolidated financial statements have been
prepared on the basis outlined in note 2 - basis of consolidation.
The operating expenses reported within the Group also reflect the
regulatory and compliance costs arising from the maintenance of the
listing, which are borne within the holding company. The Directors
believe that these increased costs will offset over time through
the accelerated growth that will arise from the capital accessed by
the Group through its listing.
Revenues are comprised of development and set-up fees, alongside
licence, subscription, hosting and support fees. Total revenue for
the year at GBP7.36 million (2020: GBP1.25 million) represents an
increase of 486% reflecting revenue recognised following agreement
and signing in September 2021 of the detailed documentation of the
first phase of the partnership with Aldebaron. In addition, the
Company has benefitted from both the establishment of a sales
channel for the Group's core Educate platform Launchyourcareer.com
and an uplift within broader educational sales supported by the
acquisition of TILG. Revenue growth continued to be adversely
impacted by the Covid-19 virus that caused significant disruption
to both the education and hospitality sectors.
Gross margin of GBP4.47 million [60.8%] (2020: GBP0.55 million
[43.9%]) reflects the increased weighting towards higher margin fee
income within Educate, including licence sales.
The Directors believe that EBITDA, defined as profit/loss from
operations adding-back both amortisation of intangible assets and
depreciation of tangible assets, is an Alternative Performance
Measure ("APM") for the Group (note 11 page 84). The overall EBITDA
loss was GBP1.71 million compared to a loss of GBP0.93 million in
the prior period. The Group incurred charges for share based
payments of GBP2.51 million (2020: GBP0.14 million) arising from
employee share options and share based compensation, and one-off
transaction expenses in respect of the pending Veative acquisition
of GBP0.50 million. Adjusted EBITDA allowing for the removal of
share based payments and one-off transaction expenses was a profit
of GBP1.30 million.
Costs associated with fund raising activities, totalling GBP1.38
million (2020: GBP0.13 million), have been offset within share
premium.
The loss before tax was GBP2.54 million compared to GBP1.06
million in the prior period. The loss reflects the impact of the
share based payment charge in the year of GBP2.51 million (2020:
GBP0.14 million) and the one off transaction fees of GBP0.50
million (2020: GBPnil) associated with the pending acquisition of
Veative. The underlying profit of GBP0.47 million in the period
reflects the significant contribution made by the new commercial
agreements entered into in the period as the business focussed on
the opportunities emerging from the deployment of its core Educate
platform, Launchmycareer.com.
Overall cash inflow in the year was GBP6.48 million (2020:
GBP0.54 million) and reflects net financing proceeds of GBP16.91
million (2020: GBP2.60 million). The Company has invested in the
acquisition of intellectual property and distribution rights of
GBP4.4 million (2020: GBPnil) and a further GBP2.64 million on the
further development of its core Educate platforms.
Operating cash flow, adjusting for the further capitalisation of
software development on the Group's core Educate platforms,
reported within investing activities above, was a net outflow of
GBP5.88 million (2020: GBP1.87 million), reflecting on-going
investment in the Group's core Educate platforms. These have been
extensively customised for the Indian market and the Group's new
business model. Net working capital has increased by GBP4.12
million (2020: GBP0.51 million), primarily reflecting the timing of
cash receipts following the delivery of performance obligations on
the Aldebaron contract (GBP3.6 million, US $5.0 million). These
monies, which were outstanding at the period end, were
substantively settled by 12 August 2022.
The Group had cash reserves of GBP7.51 million (2020: GBP1.03
million) at the period end with external debt, excluding
capitalised leases of only GBP0.4 million (2020: GBP0.3
million).
Nicholas Ydlibi
Chief Financial Officer
19 August 2022
Audit Report
The Group's auditor has reported on the accounts and its reports
are unqualified with a material uncertainty in respect of going
concern. The reason for the material uncertainty regarding going
concern is due to the requirement to raise further funds within 12
months of the sign off date. The Independent Auditor's Report on
the Group financial statements is set out in full on pages 46 to 52
of the 2021 Annual Report and Accounts.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with
International Financial Reporting Standards (IFRSs) in conformity
with the requirements of the Companies Act 2006. Under company law
the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit and loss of the
Group for that period. In preparing these financial statements,
International Accounting Standard 1 requires that the Directors are
required to:
- Properly select and apply suitable accounting policies;
- Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
- Provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
- Make an assessment of the Group and Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Group and Company's website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and
integrity of the Group and Company's website is the responsibility
of the Directors. The Directors' responsibility also extends to the
on-going integrity of the financial statements contained
therein.
Directors' responsibilities pursuant to DTR4 (Disclosure and
Transparency Rules)
The Directors confirm to the best of their knowledge:
- The Group and Company financial statements have been prepared
in accordance with IFRSs in conformity with the requirements of the
Companies Act 2006 and Article 4 of the IAS Regulation and give a
true and fair view of the assets, liabilities, financial position
and profit and loss of the Group and Company included in the
consolidation taken as a whole; and
- The annual report includes a fair review of the development
and performance of the business and financial position of the Group
and Company together with a description of the principal risks and
uncertainties.
Approved on behalf of the Board of Directors on 19 August
2022
NAR Ydlibi
Chief Financial Officer
Consolidated Statement of Comprehensive Income
Note Year ended Year ended
31 October 31 October
2021 2020
GBP GBP
Continuing operations
Revenue 4 7,355,451 1,254,734
Cost of sales 5 (2,883,652) (703,607)
Gross profit 4,471,799 551,127
Administrative expenses 5 (6,963,636) (1,637,728)
Loss from operations (2,491,837) (1,086,601)
Fair value gain on financial assets
at fair value through profit and
loss 14 - 77,518
Finance income 8 555 240
Finance costs 8 (44,758) (47,411)
Loss before tax (2,536,040) (1,056,254)
Tax credit 10 6,764 118,557
Loss for the period from continuing
operations (2,529,276) (937,697)
Other comprehensive income:
Items not reclassified to profit
or loss in subsequent periods:
Total other comprehensive income - -
for the period
Total comprehensive income for the
period attributable to shareholders (2,529,276) (937,697)
============ ============
Earnings per share
Basic (pence per share) 11 (0.46) (0.22)
Diluted (pence per share) 11 (0.46) (0.22)
Adjusted basic (pence per share) 11 0.09 (0.19)
Adjusted diluted (pence per share) 11 0.08 (0.19)
The notes to the consolidated financial statements form an
integral part of these financial statements.
Consolidated Statement of Financial Position
Note As at 31 As at 31
October 2021 October 2020
GBP GBP
Non-current assets:
Goodwill 12 2,562,930 240,145
Intangible assets 12 7,149,083 818,723
Property, plant & equipment 13 316,085 105,481
Financial assets at fair value through
profit and loss 14 138,653 138,653
-------------- --------------
10,166,751 1,303,002
Current assets:
Inventories 2,940 2,650
Trade and other receivables 16 6,338,506 1,132,018
Cash and cash equivalents 17 7,509,084 1,032,473
-------------- --------------
13,850,530 2,167,141
Total assets 24,017,281 3,470,143
Current liabilities:
Trade and other payables 18 (1,555,461) (345,071)
Deferred income 18 (297,835) (210,145)
Provisions for liabilities and charges (60,000) -
Loans and borrowings, amounts falling
due within one year 19 (95,916) (90,583)
-------------- --------------
(2,009,212) (645,799)
Non-current liabilities:
Loans and borrowings, amounts falling
due after more than one year 19 (530,548) (318,681)
Deferred tax 20 (15,819) (25,866)
-------------- --------------
(546,367) (344,547)
Total liabilities (2,555,579) (990,346)
Net assets 21,461,702 2,479,797
============== ==============
Share capital 22 6,041,143 4,712,197
Share premium reserve 22 19,651,893 1,977,447
Merger reserve 22 (2,499,900) (2,499,900)
Other Reserves 22 2,831,026 323,237
Retained earnings 22 (4,562,460) (2,033,184)
Total equity to shareholders 21,461,702 2,479,797
============== ==============
The notes to the consolidated financial statements form an
integral part of these financial statements.
This report was approved and authorised for issue by the Board
of Directors on 19 August 2022 and were signed on their behalf
by:
CM Jeffries
Chairman and Joint Chief Executive Officer
Company Statement of Financial Position
Note As at 31 As at 31
October 2021 October 2020
GBP
Non-current assets:
Goodwill 12 183,928 183,928
Investments 15 4,698,549 2,500,000
-------------- --------------
4,882,477 2,683,928
Current assets:
Trade and other receivables 16 17,207,271 3,572,882
Cash and cash equivalents 17 6,259,767 938,806
-------------- --------------
23,467,038 4,511,688
Total assets 28,349,515 7,195,616
Current liabilities:
Trade and other payables 18 (217,016) (77,396)
-------------- --------------
(217,016) (77,396)
Non-Current Liabilities:
Loans and borrowings 19 (281,206) (250,882)
(281,206) (250,882)
Total liabilities (498,222) (328,278)
Net assets 27,851,293 6,867,338
-------------- --------------
Share capital 22 6,041,143 4,712,197
Share premium reserve 22 19,651,893 1,977,447
Other reserves 22 2,831,026 323,237
Retained earnings 22 (672,769) (145,543)
Total equity to shareholders 27,851,293 6,867,338
-------------- --------------
The Company has taken advantage of section 408 of the Companies
Act 2006 and consequently a profit and loss account has not been
presented for the Company. The Company's loss for the financial
period was GBP527,226 (2020: loss GBP162,585).
The notes to the Company financial statements form an integral
part of these financial statements.
This report was approved and authorised for issue by the Board
of Directors on 19 August 2022 and were signed on their behalf
by:
CM Jeffries
Chairman and Joint Chief Executive Officer
Company registration No: 11589976
Consolidated Statement of Changes in Equity
Share Share premium Merger Other Retained Total
capital reserve reserve reserves earnings
Note 22 Note 22 Note 22 Note 22 Note 22
GBP GBP GBP GBP GBP GBP
Balance at 01 November
2019 3,884,017 246,246 (2,499,900) 110,212 (1,170,672) 569,903
Adoption of IFRS 16
leases (3,598) (3,598)
Loss after taxation
for the period - - - - (937,697) (937,697)
---------- -------------- ------------ ---------- ------------ ------------
Total comprehensive
loss for the period - - - - (941,295) (941,295)
Transactions with owners
Issue of ordinary shares 828,180 1,866,663 - - - 2,694,843
Expenses incurred on
issue of ordinary shares - (135,462) - - - (135,462)
Share based payments - - - 140,177 - 140,177
Recycle of share-based
payments on exercise - - - (78,783) 78,783 -
Equity component of
compound financial instrument - - - 151,631 - 151,631
828,180 1,731,201 - 213,025 78,783 2,851,189
Balance at 31 October
2020 4,712,197 1,977,447 (2,499,900) 323,237 (2,033,184) 2,479,797
---------- -------------- ------------ ---------- ------------ ------------
Loss after taxation
for the period - - - - (2,529,276) (2,529,276)
---------- -------------- ------------ ---------- ------------ ------------
Total comprehensive
loss for the period - - - - (2,529,276) (2,529,276)
Transactions with owners
Issue of ordinary shares 1,328,946 19,056,601 - - - 20,385,547
Expenses incurred on
issue of ordinary shares - (1,382,155) - - - (1,382,155)
Share-based payments - - - 2,507,789 - 2,507,789
---------- -------------- ------------ ---------- ------------ ------------
1,328,946 17,674,446 - 2,507,789 - 21,511,181
Balance at 31 October
2021 6,041,143 19,651,893 (2,499,900) 2,831,026 (4,562,460) 21,461,702
---------- -------------- ------------ ---------- ------------ ------------
- Share capital is the amount subscribed for shares at nominal value
- The merger reserve relates to the adjustment required to
account for the acquisition of DevClever Limited as a reverse
acquisition
- Share premium reserve is the additional amount of funds
received in excess of the nominal value of the shares and recorded
net of associated transaction costs
- Other reserves comprise (i) share-based payments reserve in
respect of share-based payments arising on the grant of employee
share options and advisor warrants in accordance with IFRS 2 (ii)
the equity component of the director's loan, which has been treated
as a compound financial instrument
- Retained earnings represents the cumulative earnings of the
Group attributable to equity shareholders.
The notes to the consolidated financial statements form an
integral part of these financial statements.
Company Statement of Changes in Equity
Share Share Other Retained Total
capital premium reserves earnings
reserve
Note 22 Note 22 Note 22 Note 22
GBP GBP GBP GBP GBP
Balance at 1 November
2019 3,884,017 246,246 110,212 (61,741) 4,178,734
Loss after taxation
for the period - - - (162,585) (162,585)
---------- ------------ ---------- ---------- ------------
Total comprehensive
loss for the period - - - (162,585) (162,585)
Transactions with
owners
Issue of ordinary
shares 828,180 1,866,663 - - 2,694,843
Expenses incurred
on issue of ordinary
shares - (135,462) - - (135,462)
Share-based payments - - 140,177 - 140,177
Recycle of share-based
payments on exercise - - (78,783) 78,783 -
Equity component of
compound financial
instrument - - 151,631 - 151,631
828,180 1,731,201 213,025 78,783 2,851,189
Balance at 31 October
2020 4,712,197 1,977,447 323,237 (145,543) 6,867,338
---------- ------------ ---------- ---------- ------------
Loss after taxation
for the period - - - (527,226) (527,226)
---------- ------------ ---------- ---------- ------------
Total comprehensive
loss for the period - - - (527,226) (527,226)
Transactions with
owners
Issue of ordinary
shares 1,328,946 19,056,601 - - 20,385,547
Expenses incurred
on issue of ordinary
shares - (1,382,155) - - (1,382,155)
Share-based payments - - 2,507,789 - 2,507,789
1,328,946 17,674,446 2,507,789 - 21,511,181
Balance at 31 October
2021 6,041,143 19,651,893 2,831,026 (672,769) 27,851,293
========== ============ ========== ========== ============
- Share capital is the amount subscribed for shares at nominal value
- Share premium reserve is the additional amount of funds
received in excess of the nominal value of the shares and recorded
net of associated transaction costs
- Other reserves comprise (i) share-based payments reserve in
respect of share-based payments arising on the grant of employee
share options and advisor warrants in accordance with IFRS 2 (ii)
the equity component of the director's loan, which has been treated
as a compound financial instrument
- Retained earnings represents the cumulative earnings of the
Group attributable to equity shareholders.
The notes to the Company financial statements form an integral
part of these financial statements.
Consolidated Statement of Cash Flows
Year ended Year ended
31 October 31 October
2021 2020
GBP GBP
Cash flows from operating activities:
Loss before tax (2,536,040) (1,056,254)
Adjustments for:
Depreciation 78,951 55,808
Amortisation of intangibles 701,093 99,747
Impairment of intangibles 15,554 -
Fair value gain on financial assets
through profit and loss - (77,518)
Finance Income (555) (240)
Finance costs 44,758 47,411
Share-based payment expenses 2,507,789 140,177
(Increase) / decrease in inventories (290) 3,550
Increase in trade and other
receivables (5,109,957) (836,562)
Increase in trade and other payables 996,428 318,704
Income tax paid - (14,700)
Income tax received 68,447 -
------------ ------------
Net cash flows used in operating
activities (3,233,822) (1,319,877)
Cash flows from investing activities:
Payments to acquire property, plant
and equipment (44,400) (33,584)
Payments to develop and acquire
intangible assets (7,047,008) (686,138)
Payments to acquire investments - (60,010)
Acquisition of subsidiary undertaking 115,786 (100,000)
------------ ------------
Net cash flows used in investing
activities (6,975,621) (879,732)
Cash flows from financing activities:
Net proceeds from issue of equity 16,905,139 2,454,313
Proceeds from borrowings - 400,000
Repayment of borrowings (155,564) (68,592)
Finance lease payments on right
of use assets (49,642) (26,713)
Interest received 555 240
Interest paid (14,434) (23,873)
Net cash flows from financing activities 16,686,054 2,735,375
Net increase in cash and cash equivalents
in the year 6,476,611 535,766
Cash and cash equivalents at beginning
of period 1,032,473 496,707
------------ ------------
Cash and cash equivalents at end
of period 7,509,084 1,032,473
============ ============
Cash and cash equivalents 7,509,084 1,032,473
============ ============
Non-cash movements not disclosed within the consolidated statement
of cash flows:
Consideration shares issued on acquisition of The Inspirational
Learning Group Limited GBP2,098,253. Further details of the
total consideration paid for The Inspirational Learning Group
Limited is presented in note 27 Business combination.
Shared based compensation paid to Novum in respect of brokerage
services in relation to fund raising activities of GBP240,000,
which has been included within share premium. Further details
of the movement in share premium is included in note 22.
The notes to the consolidated financial statements form an
integral part of these financial statements.
Company Statement of Cash Flows
Year ended Year ended
31 October 31 October
2021 2020
GBP GBP
Cash flows from operating activities:
Loss before tax (527,226) (162,585)
Adjustments for:
Impairment of loan to subsidiary
undertaking - 80,111
Finance income (364,154) (91,704)
Finance costs 30,324 23,654
Share-based payment expenses 2,507,789 140,177
Increase in trade and other
receivables 451,816 (224,485)
Increase in trade and other payables 139,620 96,862
------------- ------------
Net cash flows generated from/(used
in) operating activities 2,238,169 (137,970)
Cash flows from investing activities:
Loans to subsidiary undertakings (13,722,051) (2,049,475)
Repayments of loan from subsidiary
undertaking - 46,435
Acquisition of subsidiary (100,296) (100,000)
------------- ------------
Net cash flows used in investing
activities (13,822,347) (2,103,040)
Cash flows from financing activities:
Net proceeds from issue of equity 16,905,139 2,454,313
Proceeds from borrowings - 400,000
Interest received - 129
------------- ------------
Net cash flows from financing activities 16,905,139 2,854,442
Net increase in cash and cash equivalents
in the year 5,320,961 613,432
Cash and cash equivalents at beginning
of period 938,806 325,374
------------- ------------
Cash and cash equivalents at end
of period 6,259,767 938,806
============= ============
Cash and cash equivalents 6,259,767 938,806
============= ============
Non-cash movements not disclosed within the consolidated statement
of cash flows:
Consideration shares issued on acquisition of The Inspirational
Learning Group Limited GBP2,098,253. Further details of the
total consideration paid for The Inspirational Learning Group
Limited is presented in note 27 Business combination.
Shared based compensation paid to Novum in respect of brokerage
services in relation to fund raising activities of GBP240,000,
which has been included within share premium. Further details
of the movement in share premium is included in note 22.
The notes to the Company financial statements form an integral
part of these financial statements.
Notes to the Financial Statements
1 General Information
Dev Clever Holdings Plc ("the Company") is publicly traded
on the Standard List of the London Stock Exchange. The Company
is incorporated and domiciled in England and Wales. Its registered
office is Ventura House, Ventura Park Road, Tamworth, Staffordshire,
B78 3HL and the registered number is 11589976.
The Company is the parent company of Dev Clever Limited ("DevClever"),
Phenix Digital Limited, The Inspirational Learning Group
Limited and Launchmycareer Pvt Limited. Dev Clever is incorporated
and domiciled in England and Wales with the same registered
office as the Company. Phenix Digital Limited is incorporated
and domiciled in England and Wales with the registered office
being Creative Industries Centre, Wolverhampton Science Park,
Wolverhampton, West Midlands, WV10 9TG. The Inspirational
Learning Group Limited is incorporated and domiciled in England
and Wales with the registered office being Stafford Education
& Enterprise Park, Weston Road, Stafford, Staffordshire,
ST18 0BF. Launchmycareer Pvt Limited is a private limited
company incorporated under the provisions of the Indian Companies
Act, 2013 and having its registered office at B-121 (Basement),
Sector-67 Noida, India.
The principal activity of the Group is the development of
software solutions that enable its clients to engage with
their customers. Its primary products are Launchmycareer.com
and Launchyourcareer.com careers platforms, supported by
the VICTAR VR virtual reality careers experience.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these consolidated financial statements are set out below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
Basis of preparation
These consolidated financial statements have been prepared
on a going concern basis under the historical cost convention,
as modified by the revaluation of certain financial assets
and liabilities at fair value through profit or loss, and
in accordance with International Financial Reporting Standards
("IFRS") in conformity with the requirements of the Companies
Act 2006.
The preparation of financial statements requires management
to exercise its judgement in the process of applying accounting
policies. The areas involving a higher degree of judgement,
or areas where assumptions and estimates are significant
to the financial information, are disclosed in note 3.
The presentational and functional currency of the Company
and Group is Sterling. Results in these financial statements
have been prepared to the nearest GBP1.
Initial business combination
IFRS 3 Business Combination requires that a transaction in
which a company with substantial operations ('operating company')
arranges to be acquired by a shell company should be analysed
to determine whether it is a business combination. The original
acquisition of DevClever Limited by Dev Clever Holdings in
a share for share exchange of the entire share capital of
both entities, was indicative of DevClever Limited being
the accounting acquiror. As Dev Clever Holdings had no other
assets or liabilities other than its holding in DevClever
Limited, it did not satisfy the definition of a business.
As a result, the acquisition did not meet the definition
of a business combination under IFRS 3 and fell outside the
scope of IFRS 3. The Directors considered the requirements
of IFRS 10 for the production of consolidated accounts through
the application of the reverse acquisition methodology but
without the need for recognising goodwill. As a result:
* the consolidated financial statements of the legal
parent, Dev Clever Holdings plc, have been prepared
as a continuation of the financial statements of the
operating company, DevClever Limited. The opening net
assets of Dev Clever Limited were recognised at book
value and a merger reserve has been established to
write down the nominal value of equity in Dev Clever
Holdings, at the time of the acquisition, to the
nominal value of the share capital in Dev Clever
Limited, at that time.
* the opening net assets of Dev Clever Limited have
been recognised at book value.
* a merger reserve has been established to write down
the nominal value of equity in Dev Clever Holdings,
at the time of the acquisition, to the nominal value
of the share capital in Dev Clever Limited, at that
time. The merger reserve of GBP2,499,900 represents
the difference between the nominal value of equity in
Dev Clever Holdings of GBP2,500,000 and the nominal
value of equity in Dev Clever Limited of GBP100.
Basis of consolidation
Subsequent to the initial establishment of the Group the
acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group.
Subsidiaries are entities over which the Group has the power
to govern the financial and operating policies so as to obtain
benefits from its activities, generally accompanied by a
shareholding giving rise to the majority of voting rights.
The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the
date on which control ceases. The Group re-assesses whether
or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the elements
of control.
The cost of an acquisition is measured as the fair value
of the assets given, equity instruments issued, liabilities
incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired,
and liabilities and contingent liabilities assumed, in a
business combination are measured initially at their fair
values at the acquisition date, irrespective of the extent
of any non-controlling interest. The excess of the cost of
acquisition over the fair value of the Group's share of the
identifiable net assets acquired is recorded as goodwill.
The consolidated financial statements incorporate those of
Dev Clever Holdings plc and its subsidiaries DevClever Limited,
Phenix Digital Limited, The Inspirational Learning Group
Limited and Launchmycareer Pvt Limited. All financial statements
are made up to 31 October 2021. Where necessary, adjustments
have been made to the financial statements of subsidiaries
to bring the accounting policies used into line with those
used by other parts of the Group.
In the parent company financial statements, investments in
subsidiaries are accounted for at cost less impairment. Where
the trade and assets of a subsidiary have been transferred
to another subsidiary within the Group, the investment held
by the parent company is re-categorised as goodwill.
The Dev Clever Holdings plc, DevClever Limited, Phenix Digital
Limited, The Inspirational Learning Group Limited and Launchmycareer
Pvt Limited accounts have been prepared for the period ended
31 October 2021.
All intra-group transactions, balances and unrealised gains
on transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
asset transferred.
Adoption of new and revised standards
The Company has adopted all recognition, measurement and
disclosure requirements of IFRS in conformity with the requirements
of the Companies Act 2006 including any new and revised standards
and Interpretations of IFRS in effect for financial periods
commencing on or after 1 January 20. No new standards or
amendments have been adopted for the first time in these
financial statements.
Standards which are in issue but not yet effective
New and amended standards and interpretations issued but not yet
effective or not yet endorsed for the financial year beginning 1
November 20 and not yet early adopted.
At the date of authorisation of these financial statements, the
Group and Company have not applied the following new and revised
IFRSs that have been issued but are not yet effective and (in some
cases) have not yet been endorsed. The Group and Company intend to
adopt these standards, if applicable, when they become
effective.
Standard Description Effective date
for annual periods
beginning on or
after
IAS 1 Amendments - Classification 01-Jan-23
of Liabilities as Current
or Non-current
--------- ----------------------------- --------------------
IAS 16 Amendments - Property, Plant 01-Jan-22
and Equipment
--------- ----------------------------- --------------------
IAS 8 Amendments - Definition of 01-Jan-23
Accounting Estimates
--------- ----------------------------- --------------------
IAS 1 Amendments - Disclosure of 01-Jan-23
Accounting Policies
--------- ----------------------------- --------------------
IFRS Annual Improvements to IFRS 01-Jan-22
Standards 2018-2020
--------- ----------------------------- --------------------
The Group has not early adopted any of the above standards.
Going concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on Risk Management and Internal
Control and Related Financial and Business Reporting".
The Directors have carried out a detailed assessment of going
concern as part of the financial reporting process, taking
into consideration a number of matters including forecast
cash flows for a period of at least 12 months from the date
of approval of the Financial Statements, medium and long
term business plans and expectations.
At 31 October 2021 the Group had GBP7.5 million of cash and
net assets of GBP21.5 million. The Group made a loss in the
year of GBP2.6million (2020: GBP0.9 million loss) and had
net current assets at the year end of GBP11.8 million (2020:
GBP1.5 million). The Directors, having given due and careful
consideration to growing revenue opportunities within the
EdTech markets in which the Group operates alongside the
opportunity, if necessary, to reduce ongoing investment in
the Group's core platforms and operating expenses, are of
the opinion that although the Group will need to raise further
funds over the 12 months following approval of the financial
statements in order to execute its strategy and for working
capital, it has the ability to access additional financing,
if required, over the next 12 months. The Directors, therefore,
have made an informed judgement, at the time of approving
the financial statements, that there is a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. As a result, the Directors
have adopted the going concern basis of accounting in the
preparation of the annual financial statements.
The going concern basis of accounting has been applied based
on management's consideration of financial projections and
business plans for the business, which include a number of
forward looking assumptions about the future growth in the
customer base and conversions on the Launchmycareer.com platform
as well as sales of STEM based learning solutions and associated
hardware. As such management consider the going concern basis
to be appropriate.
The auditors have made reference to going concern by way
of a material uncertainty within their audit report.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sales of goods or services in the ordinary
course of the Company's activities. Revenue is measured as
the fair value of the consideration received or receivable
and is shown net of value added taxes, rebates and discounts.
Under IFRS 15 - Revenue from Contracts with Customers, five
stages of revenue recognition have been applied to the Group's
revenue:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation
Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the Group and that the
revenue can be reliably measured and specific criteria have
been met for each of the Group's activities as described
below. The Company bases its estimates on historical results
taking into consideration the type of customer, the type
of transaction and the specifics of each arrangement.
Commercial development projects, customisation of software
and set up fees
Client-driven development entails direct co-operation between
the development team and the client towards a client-defined
goal. Such agreements are individually evaluated to determine
if revenue is recognised at a point in time or over time
based on the delivery of contractual milestones that are
aligned to the satisfaction of performance obligations within
the underlying contract / project brief.
Software subscription fees
Software is licenced to customers via subscription on fixed
term agreements. Where the client has obtained control of
the licence and the ability to use and obtain substantially
all the benefits from it, revenue is recognised. The client
obtains control when a contract is agreed, the licence delivered,
and the client has the right to use it.
Where a client subscribes to a software licence but the Company
continues to maintain control of the on-going hosting, support,
maintenance and upgrade activity, revenue is recognised on
time elapsed and thus rateably over the term of the agreement.
These customers simultaneously receive and consume the benefit
of their software licence as we perform.
Support, maintenance and hosting contracts
Revenue is recognised in accordance with the performance
obligations contained with the associated support, maintenance
and hosting agreement. Revenue is typically recognised based
on time elapsed and thus rateably over the term of the agreement.
Under our standardised support agreement, our performance
obligation is to stand ready to provide technical product
support and unspecified updates, upgrades and enhancements
on a when-and-if-available basis. Our customers simultaneously
receive and consume the benefit of these support services
as we perform.
Operating profit
Operating profit comprises the Company's revenue for the
provision of services, less the costs of providing those
services and administrative overheads, including depreciation
and amortisation of the Company's non-current assets.
Segmental reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-maker
(CODM). The CODM, who is responsible for allocating resources
and assessing performance of the operating segments, has
been identified as the Board of Directors that makes strategic
decisions.
A business segment is a group of assets and operations, engaged
in providing products or services that are subject to risks
and returns that are different from those of other operating
segments.
The Board of Directors assess the performance of the operating
segments based on the measures of revenue, gross profit,
operating profit and assets employed.
Finance costs
Finance costs represent the cost of borrowings and are accounted
for on an amortised cost basis in the income statement using
the effective interest rate.
Dividends
Dividends to the Company's shareholders are recognised when
the dividends are approved for payment.
Earnings per share
Earnings per share represents the portion of the Company's
profit / (loss) from continuing operations attributable to
each outstanding share of the Company's ordinary share capital.
Diluted earnings per share represents the portion of the
Company's profit / (loss) from continuing operations attributable
to each outstanding share of the Company's ordinary share
capital after taking into consideration the conversion of
all outstanding employee share options and advisor warrants.
Adjusted earnings per share is a non-IFRS measure but is
deemed an APM by the Board of Directors, and is an internal
management measure of earnings per share in which the profit
/ (loss) from continuing operations has been adjusted to
remove the effect of certain non-operating income and expenses.
Management believes that this measure more accurately reflects
the underlying operational performance of the business and
its associated cash flow.
In determining the adjusted earnings per share, management
has removed the costs associated with the Company's costs
incurred to-date on the acquisition of Veative Labs Pvt Limited
of GBP510,000 (2020: GBPnil) and the share-based payments
expense incurred in the period of GBP2,507,789 (2020: GBP140,177).
Property, plant and equipment
Purchased property, plant and equipment is stated at cost
less accumulated depreciation and any provision for impairment
losses. Cost includes the original purchase price of the
asset and the costs attributable to bringing the asset to
its working condition for its intended use. Depreciation
is charged so as to write off the costs of assets over their
estimated useful lives, on the following bases:
Right of use assets Life of lease Straight line
Computer equipment 1 to 3 years Straight line
Fixtures and fittings 3 to 10 years Straight line
Motor vehicles 25% Reducing balance
The asset's residual values and useful economic lives are reviewed by the Directors and adjusted,
if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately
to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable
value.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount
and are recognised within other (losses) or gains in the income statement. When revalued assets
are sold, the amounts included in other reserves are transferred to retained earnings.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is determined as the difference
between the fair value of the assets, including any intangible assets arising on acquisition,
and liabilities acquired, and the fair value of consideration paid. Goodwill, which is classified
as an intangible asset with an indefinite life, is subject to an annual impairment review.
Further detail of the goodwill arising on the acquisition of Phenix Digital Limited can be
found in note 12 Intangible assets.
Goodwill arising on the transfer of trade between subsidiaries
A transfer of trade between subsidiaries is defined as a type of restructure in which the
trade and operations, including the transfer of staff and novation of sales contracts, of
one subsidiary is transferred to another subsidiary in the Group. The transfer of trade and
assets is accounted for within the parent company through the re-categorisation of the investment
in the transferor as goodwill.
Further detail of the goodwill arising in the Company's statement of financial position and
the re-categorisation of its investment in Phenix Digital as goodwill can be found in note
12 Intangible assets - Company and note 15 Investments
Intangible assets: Customer Relationships
Customer relationship assets reflect the recognition of future contractual revenue streams
arising on acquisition. The assets are valued at the net present value of the future contracted
revenue stream, discounted at the Group's cost of capital.
Customer relationship assets are amortised, to cost of sales, over the remaining life of the
contract. Existing customer contracts had a life of up to 3 years.
Intangible assets: Internal Use Software - Software Development
An internally generated development intangible asset arising from the Company's product development
is recognised if, and only if, the Company can demonstrate all of the following:
* the technical feasibility of completing the
intangible asset so that it will be available for use
or sale
* its intention to complete the intangible asset and
use or sell it
* its ability to use or sell the intangible asset
* how the intangible asset will generate probable
future economic benefits
* the availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset
* its ability to measure reliably the expenditure
attributable to the intangible asset during its
development
Internally generated development intangible assets are amortised, as a cost of sale, on a
straight-line basis over their useful lives of up to three years. Amortisation is charged
to the income statement from when the asset becomes available to use.
Where no internally generated intangible asset can be recognised, development expenditure
is recognised as an expense in the period in which it is incurred.
Intangible assets: Content IP and Licences
Purchased intellectual property and distribution agreements are recognised as intangible assets
and are valued at their purchase price and amortised over the remaining useful life of the
asset.
Content IP developed in-house - The asset is recognised if, and only if, the Company can demonstrate
all of the following :
* the technical feasibility of completing the
intangible asset so that it will be available for use
or sale
* its intention to complete the intangible asset and
use or sell it
* its ability to use or sell the intangible asset
* how the intangible asset will generate probable
future economic benefits
* the availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset
* its ability to measure reliably the expenditure
attributable to the intangible asset during its
development
The Company assesses the expected longevity of the content assets acquired, to establish the
useful economic life of the asset. The expected longevity takes into consideration the rate
of change in the underlying curricula to which the content relates. This is amortised, as
a cost of sale, on a straight-line basis over their useful lives of up to ten years. Amortisation
is charged to the income statement from when the asset becomes available to use.
At each balance sheet date, the Company reviews the carrying amounts of its assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any).
Impairment of property, plant and equipment, and intangible assets
At each balance sheet date, the Company reviews the carrying amounts of its assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Company estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell, and value in use. 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 for which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than
its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced
to its recoverable amount. In the case of a cash-generating unit, any impairment loss is charged
first to any goodwill in the cash-generating unit and then pro rata to the other assets of
the cash- generating unit.
Financial assets at fair value through profit or loss
The Group may undertake bespoke development activity for customers within Agency Services
for which it receives equity shares as part consideration for the services it has provided.
These assets are treated as financial assets at fair value through profit or loss, being financial
assets held for trading that include investments in unlisted securities.
The Group recognises these assets at fair value, which it determines based on the degree to
which fair value is observable:
* Level 1 fair value measurements being those derived
from inputs other than quoted prices that are
observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived
from prices)
* Level 2 fair value measurements being those derived
from valuation techniques that includes inputs for
the asset or liability that are not based on
observable market data (unobservable inputs).
* Level 3 assets whose fair value cannot be determined
by using observable inputs or measures, such as
market prices or models. Level 3 assets are typically
very illiquid, and fair values can only be calculated
using estimates or risk-adjusted value ranges.
Details of these assets and their valuation are included in note 14 Assets Held at Fair Value
to these financial statements.
Investments
Investments in subsidiaries are carried at cost less accumulated impairment losses, in the
Company's balance sheet. On disposal, the difference between disposal proceeds and the carrying
amounts of the investments are recognised in profit or loss.
Financial instruments
Financial assets and financial liabilities are recognised in the consolidated statement of
financial position when the Company becomes party to the contractual provisions of the instrument.
Financial assets are de-recognised when the contracted rights to the cash flows from the financial
asset expire or when the contracted rights to those assets are transferred. Financial liabilities
are de-recognised when the obligation specified in the contract is discharged, cancelled or
expired. Financial assets and financial liabilities are initially measured at their fair value.
Transaction costs attributable to the acquisition of a financial asset or financial liability
are added or deducted from the fair value of the financial asset or financial liability.
At each reporting date, financial assets are reviewed to assess whether there is objective
evidence of impairment. If any such evidence exists, impairment loss is determined and recognised
based on the classification of the financial asset.
Loans and receivables (including trade receivables, prepayments, deposits and other receivables,
cash and bank balances) are non-derivative financial assets with fixed or determinable payments
that are not quoted on an active market. At each reporting date subsequent to initial recognition,
loans and receivables are carried at amortised cost using the effective interest method, unless
there is objective evidence that the asset is impaired. Impairment is measured as the difference
between the asset's carrying amount and the present value of estimated future cash flows discounted
at the original effective interest rate. Impairment losses are reversed in subsequent periods
when an increase in the asset's recoverable amount can be related objectively to an event
occurring after the impairment is recognised, subject to a restriction that the carrying amount
of the asset at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.
(a) Trade and other receivables
Trade and other receivables are recognised at their fair value. Appropriate provisions for
estimated irrecoverable amounts are recognised in the statement of comprehensive income when
there is objective evidence that the assets are impaired. Trade and other receivables are
shown in note 21 as "loans and receivables".
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits held on call with banks.
Cash and cash equivalents are shown in note 21 as "loans and receivables".
Financial liabilities and equity
(c) Trade and other payables
Trade payables are recognised at their fair value. Trade and other payables are shown in note
21 as "other financial liabilities".
(d) Deferred income
Where the Group invoices a customer for revenues, or receives payment for those revenues,
in advance of the satisfaction of the associated performance obligation, those revenues are
deferred and are disclosed as deferred income on the Statement of Financial Position. The
revenue is recognised in the Statement of Comprehensive Income once the associated performance
obligation is satisfied.
(e) Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate method. Gains and losses are recognised
in the income statement when the liabilities are derecognised as well as through the effective
interest rate method (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 in finance costs in the income statement.
(f) Convertible loan note
The convertible loan note agreement, entered into by the Company on 20 January 2020, has been
classified as a compound financial instrument under IAS 32. The fair value of the liability
component is valued at the net present value of the contracted future cash flows, discounted
at the Company's cost of borrowing, and is reported within "Loans and borrowings: amounts
falling due in more than one year". Interest imputed on the liability component is amortised
to the statement of comprehensive income on a straight-line basis over the life of the instrument.
The equity component represents the residual amount after deducting the amount for the liability
from the value of the funds received and is reported within "Other reserves". Further details
of the loan note can be found in note 19.
(g) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments issued by the Company are
recorded at the proceeds received, net of issue costs.
Employee benefits
The Company operates a defined contribution auto-enrolment pension scheme for employees of
the Company. The assets of the scheme are held separately from those of the Company in an
independently administered fund. The pension costs charged in the income statement are the
contributions payable to the scheme in respect of the accounting period.
Current tax
The tax currently payable is based on taxable profit or loss for the year. Taxable profit
or loss differs from the profit or loss for the financial year as reported in the statement
of total comprehensive income because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible.
The Company's liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the reporting date.
Where tax credits are received in respect of allowable research and development expenditure,
these are recognised in the statement of comprehensive income.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that future taxable profits
will be available against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from the initial recognition
of other assets and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when
the liability is settled, or the asset is realised based on tax laws and rates that have been
enacted or substantively enacted at the reporting date. Deferred tax is charged or credited
in the income statement, except when it relates to items charged or credited in other comprehensive
income, in which case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Company intends to settle its current
tax assets and liabilities on a net basis.
Share based payments
The costs of equity settled transactions are measured at their fair value at the date at which
they are granted. The cost of advisor warrants is recognised at the grant date as they are
issued in respect of services already received. The cost of equity settled transactions with
employees is charged to the income statement as an expense over the vesting period, on a straight-line
basis, which ends on the date on which the relevant employees become fully entitled to the
award. Non-market vesting conditions are taken into consideration by adjusting the numbers
of options expected to vest, at each statement of financial position date, such that the cumulative
charge recognised over the vesting period is based on the number of options that eventually
vest. Market vesting conditions are factored into the fair value of the options granted. The
cumulative expense is not adjusted for failure to achieve a market vesting condition. The
movement in cumulative expense since the previous reporting date is recognised in the statement
of comprehensive income within administration expenses with a corresponding entry in the statement
of financial position in the relevant share-based payment reserve.
Fair value is determined using the Black-Scholes model, details of which are given in note
9 Share based payments.
Share warrants that are not granted in exchange for the provision of goods or services are
accounted for in accordance with IAS 32 Financial Instruments. Where the number of shares
under warrant and the associated consideration are both fixed, the warrants are accounted
for as equity instruments, with any consideration received for the instruments being credited
to equity.
3 Critical accounting estimates and judgements
The preparation of these consolidated financial statements requires the Directors to make
judgements and estimates that affect the reported amounts of assets and liabilities at each
reporting date and the reported amounts of revenue during the reporting periods. Estimates
and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under
the circumstances. Actual results could differ from these estimates. Information about such
judgements and estimations are contained in individual accounting policies. The key judgements
and sources of estimation uncertainty that could cause an adjustment to be required to the
carrying amount of assets or liabilities within the next accounting period are outlined below:
Capitalisation of development costs
The Group recognises costs incurred on development projects as an intangible asset which satisfies
the requirements of IAS 38. The calculation of the costs incurred includes the time spent
by certain employees on the development project, as recorded through their timesheets and
the invoiced costs of third-party contractor resource. The decision whether to capitalise
and how to determine the period of economic benefit of a development project requires judgement
over the commercial viability of the project and the prospect of selling the related software
to new or existing customers.
The Group capitalised GBP2,633,899 of internal development costs in the year (2020: GBP686,138).
Details of the development costs capitalised in the year are shown in note 12 Intangibles.
Impairment of internally generated intangible assets
An impairment review of the Company's development costs is undertaken at least annually. This
review involves the use of judgement to consider the future projected income streams that
will result from the aforementioned costs. The expected future cash flows are modelled and
discounted over the expected life of the assets in order to test for impairment using the
Group's cost of capital of 9.4% as the discount rate.
No impairment charge was made in the year (2020: GBPnil). Details of the impairment of internally
generated intangible assets are shown in note 12 Intangibles.
Provision for bad and doubtful debt
A comprehensive review of the outstanding debts as at 31 October has been undertaken to assess
the recoverability of the debt and any provisions that may be required however judgement is
needed in making these assessments. In performing this review, the Directors have taken into
account the following matters when performing this estimate:
* Payment history and any cash receipts from customers
post year end
* Age of debt
* Segmentation of the customer base between public and
private sector organisations to assess recoverability
and payment trends on the two segments
* Further considerations to assess underlying reasons
for non-payment, contact with customers and any
specific payment terms agreed with the customer
Taking into account the above factors, the impairment provisions made cover balances more
than 90 days overdue (after adjusting for recoverable VAT and known recoverable amounts).
The estimates and assumptions used to determine the level of provision will continue to be
reviewed periodically and could lead to changes in the impairment provision methodology which
would impact the income statement in future years. Details of the provision for bad and doubtful
debt are provided in note 16.
Impairment of goodwill
The Group tests goodwill annually for impairment, or more frequently if there are indications
that goodwill might be impaired. The recoverable amount of a Cash Generating Unit (CGU) is
determined from value in use calculations. The key assumptions for these calculations are
externally derived long-term growth rates, discount rates and cash flow forecasts derived
from the most recent financial budgets and forecasts approved by management covering a three-year
period. Rates applied are:
* Long term growth rate 2.0%
* Discount rate / cost of capital 9.4%
Budgets and forecasts are based on expectations of future outcomes taking into account past
experience adjusted for revenue growth from both new business and like for like growth and
taking into consideration external economic factors. Cash flows beyond the three-year period
are extrapolated using estimated growth rates based on local expected economic conditions
and do not exceed the long-term average growth rate for that country. The discount rates are
based on the Group's weighted average cost of capital. Further details on impairment testing
are provided in note 12 - Intangibles.
Fair valuation of assets and liabilities arising on the acquisition of The Inspirational Learning
Group Limited
On 26 July 2021, the Group acquired the entire share capital of The Inspirational Learning
Group Limited in exchange for consideration comprising a combination of new Ordinary 1p shares
in Dev Clever Holdings Plc and cash. In establishing the fair value of assets acquired, the
directors have exercised their judgement in establishing the existence of any intangible assets
acquired, their associated fair values and their expected lifespan. It was determined that
there were no intangible assets acquired. Further details of the fair valuation of assets
and liabilities arising on the acquisition of The Inspirational Learning Group Limited are
provided in note 27 - Business combination.
Treatment of Veative IP deposit
On 12 April 2021, the Group announced a comprehensive agreement with Veative Labs Pte Limited
(Singapore), including the acquisition of an exclusive one-year license for the use of certain
parts of Veative's intellectual property and immersive learning assets at a cost of $2.6 million
(GBP1.9 million). At the same time, the Company also obtained a call option, exercisable over
a period of one year, to acquire the full rights to this IP and associative immersive learning
materials.
The Directors considered the accounting treatment of the one-year licence and concluded that
in light of the Company's intention to exercise its call option over the acquisition of the
full rights and associated materials, that the licence represented a deposit payment towards
the full acquisition. As such, the Directors have capitalised the licence payment within intangible
assets, under intellectual property ("IP"). The license is being amortised over the residual
life of the underlying assets, deemed to be eight years. This has resulted in a charge in
the year of GBP0.12 million. Further details on IP are provided in note 12 - Intangibles.
4 Revenue 2021 2020
GBP GBP
Development and set up fees 7,096,492 1,070,474
Subscription, hosting and support
fees 258,959 184,260
---------- ----------
7,355,451 1,254,734
---------- ----------
In the year to 31 October 2021, revenue from 2 of the Company's
major customers represented more than 10% of the Company's
revenue. Revenue related to those customers was GBP3,614,873
and GBP1,500,000 respectively.
In the year to 31 October 2020, revenue from 3 of the Company's
major customers accounted for more than 10% of the Company's
revenue. Revenue relating to those customers was GBP450,679,
GBP300,510 and GBP101,770 respectively. The major customers
were different year on year.
All revenues are from external customers and can be attributed
to the following geographical locations, based on the customers'
location as follows:
2021 2020
GBP GBP
United Kingdom 1,204,298 790,886
Rest of Europe 1,500,000 -
Middle East & Africa 3,614,873 -
Asia Pacific 953,667 450,679
USA 82,613 13,169
---------- ----------
7,355,451 1,254,734
---------- ----------
5 Expenses by nature 2021 2020
GBP GBP
Cost of sales
Salary and other employee costs 939,217 563,064
Third party contractors 626,054 403,663
Less: software development costs capitalised (488,075) (387,038)
Amortisation of software 716,648 99,747
Direct materials and charges 1,089,808 24,171
Total cost of sales 2,883,652 703,607
---------- ----------
Administration expenses
Salary and other employee costs 1,960,335 936,331
Third party contractors 450,571 20,596
Sales commissions, including share 2,037,324 -
based payment charge
Depreciation 86,024 55,808
Legal, professional and regulatory
fees 1,230,843 270,007
Information technology and telecommunications 264,885 159,031
Advertising and promotion 624,282 88,707
Travel expenses 103,573 48,329
Premises 68,794 45,278
Other administration expenses 137,005 13,641
Total administration expenses 6,963,636 1,637,728
---------- ----------
Legal, professional and regulatory fees include GBP504,211
(2020: GBPnil) of fees in connection with the Veative acquisition
Auditors remuneration 2021 2020
GBP GBP
Fees payable to the Company's auditor
and associates
For the audit of the Group and Company
financial statements 83,580 37,328
Corporate Transaction Services in
relation to work as reporting accountant
for the prospectuses in FY2021 and
FY2020 82,500 16,000
Other assurance services - 1,680
--------- --------
166,080 55,008
--------- --------
6 Segmental analysis
The chief operating decision maker considers the Group's segments
to be by geographical location and by revenue type. Educate
is the Company's primary division and the focus of management
and capital resource . Therefore, the chief operating decision
maker believes there is no ongoing requirement for an analysis
between Educate and Agency.
Year ended 31 October 2021
Educate Total
GBP GBP
Revenue by geographical
location
United Kingdom 1,204,298 1,204,298
Rest of Europe 1,500,000 1,500,000
Middle East & Africa 3,614,873 3,614,873
Asia Pacific 953,667 953,667
USA 82,613 82,613
------------- -------------
7,355,451 7,355,451
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Revenue by geographical
location
United Kingdom 111,327 679,559 790,886
Asia Pacific 450,679 - 450,679
USA 3,294 9,875 13,169
------------- ---------- -------------
565,300 689,434 1,254,734,
Segmental analysis
Year ended 31 October 2021
Educate Total
GBP GBP
Revenue by type
Development and set up
fees 7,088,253 7,088,253
Subscription, hosting and
support fees 267,198 267,198
------------ ------------
7,355,451 7,355,451
Cost of sales (2,883,652) (2,883,652)
Gross profit 4,471,799 4,471,799
Operating profit 15,952 15,952
Costs not allocated by
segment:
Share based payment expenses (2,507,789)
Fair value gain on financial -
assets at fair value
Finance income 555
Finance costs (44,758)
Tax credit 6,764
Total comprehensive income
for the period attributable
to shareholders (2,529,276)
------------
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Revenue by type
Development and set up
fees 476,332 594,142 1,070,474
Subscription, hosting and
support fees 88,968 95,292 184,260
------------ ---------- ------------
565,300 689,434 1,254,734
Cost of sales (183,774) (519,833) (703,607)
Gross profit by segment 381,526 169,601 551,127
Operating loss by segment (438,005) (508,419) (946,424)
Costs not allocated by
segment:
Share based payment expenses (140,177)
Fair value gain on financial
assets at fair value 77,518
Finance income 240
Finance costs (47,411)
Tax credit 118,557
Total comprehensive income
for the period attributable
to shareholders (937,697)
------------
The segmental analysis above reflects the parameters applied
by the Board when considering the Group's monthly management
accounts. Costs not allocated by segment are a combination
of non-operating income and expenditure, and share based
payments.
Year ended 31 October 2021
Educate Total
GBP GBP
Financial position
Net current assets 11,841,314 11,841,314
----------- -----------
Net assets 21,461,702 21,461,702
----------- -----------
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Financial position
Net current assets 944,352 439,811 1,384,163
----------- -------- -----------
Net assets 1,718,534 624,083 2,342,617
----------- -------- -----------
7 Particulars of staff
The average number of persons employed by the Group, including
Directors, during the year was:
2021 2020
No. No.
Product development 25 18
Sales and administration 23 9
---------- ----------
48 27
---------- ----------
The aggregate payroll costs of these persons were:
2021 2020
GBP GBP
Wages and salaries 2,237,628 1,223,798
Social security costs 246,528 130,522
Pension costs - defined contribution
plan 33,500 21,185
Share based payments - employee option
expense 381,896 123,890
---------- ----------
2,899,552 1,499,395
Being:
Salary and other employee costs reported
within cost of sales 939,217 563,064
Salary and other employee costs reported
within administration expenses 1,960,335 936,331
---------- ----------
2,899,552 1,499,395
Less: wages and salaries capitalised
within software development costs (440,001) (331,227)
---------- ----------
2,459,551 1,168,168
---------- ----------
The Company employed two Non-Executive Directors, at a total
cost of GBP43,080 (2020: GBP42,644).
Key management remuneration
Remuneration of the key management team, including Directors,
during the year was as follows
2021 2020
GBP GBP
Aggregate emoluments including short-term
employee benefits 882,789 460,102
Social security costs 111,033 56,890
Pension costs - defined contribution
plan 7,711 5,028
Consultancy fees 8,000 -
Share based payments - employee option
expense 352,264 87,373
---------- ----------
1,361,797 609,393
Key management personnel include the Directors, Richard Lee,
the Global Sales Director (Educate), Keith Hayes, the Head
of Governance and Risk, Jim Cannon, Group Product Director,
and Ankur Aggarwal, Managing Director of Launchmycareer Pvt
Limited.
Directors' remuneration is detailed within the Remuneration
Report. Details of key manager remuneration are outlined
below (FY 2020: GBP108,603).
Management personnel
Salary Taxable Pension Social Share based 2021
and fees benefits related security payments Total
benefits costs - employee
option expense
GBP GBP GBP GBP GBP GBP
Richard Lee 86,843 7,800 1,800 11,844 140,524 248,811
Keith Hayes 82,846 7,180 - 11,308 74,603 175,937
Jim Cannon 82,846 7,180 879 11,308 74,603 176,816
Julian Carter 52,666 3,460 - 4,482 (3,230) 57,378
Ankur Aggarwal 26,168 - - - - 26,168
---------- ---------- ---------- ---------- ---------------- --------
Total 331,369 25,620 2,679 38,942 286,500 685,110
---------- ---------- ---------- ---------- ---------------- --------
Remuneration for Jim Cannon relates to the period following
his appointment on 30 November 2020.
Keith Hayes was employed by the Group on a full-time basis
on 30 November 2020. Prior to that date he provided services
to the Group as a self-employed contractor on a part-time
basis.
Remuneration for Julian Carter relates to the period up to
the cessation of his employment on 9 April 2021.
The Group paid consultancy fees of GBP26,168 to Veative Labs
Pvt Limited In respect of the services provided by Ankur
Aggarwal.
Directors' remuneration
Remuneration of the Directors during the period
was as follows:
2021 2020
GBP GBP
Aggregate emoluments including short-term
employee benefits 525,800 352,856
Pension costs - defined contribution
plan 5,032 3,671
--------- ---------
Directors' remuneration 530,832 356,527
Social security costs 72,091 43,074
Consultancy fees 8,000 -
Share based payments - employee option
expense 65,764 54,006
--------- ---------
676,687 453,607
--------- ---------
Chris Jeffries, the Executive Chairman and CEO, was the highest
paid director. Details of his remuneration are detailed in
the Remuneration Report.
8 Finance income and expense
2021 2020
GBP GBP
Interest receivable on bank deposits 555 240
Finance income and expense (continued)
2021 2020
GBP GBP
Interest expense on financial liabilities
measured at amortised cost 44,758 47,411
Interest expense includes interest payable in respect of
finance leases of, GBP4,370 (2020: GBP6,787) following the
adoption of IFRS 16, imputed interest of GBP30,324 (2020:
GBP23,654) on the liability element of the convertible loan
notes, interest on bank borrowings of GBP8,403 (2020: GBP16,970)
and interest on hire purchase agreements of GBP1,657 (2020:
GBPnil).
9 Share-based payments
Share-based payment schemes with employees
During the year ended 31 October 2021, Dev Clever Holdings
plc granted the following new awards under its EMI share
option plan:.
On 30 November 2020, Dev Clever Holdings plc granted options
to purchase 2m ordinary shares to Jim Cannon on his appointment
as Chief Product Officer. The options vest in equal annual
instalments, subject to continued service, over a period
of 3 years and are exercisable at a price of GBP0.10. The
options were valued under the Black Scholes Model with an
expense recognised in the income statement during the period
of GBP74,603.
On 30 November 2020, Dev Clever Holdings plc granted options
to purchase 2m ordinary shares to Keith Hayes on his appointment
as Head of Governance and Risk. The options vest in equal
annual instalments, subject to continued service, over a
period of 3 years and are exercisable at a price of GBP0.10.
The options were valued under the Black Scholes Model with
an expense recognised in the income statement during the
period of GBP74,603.
Advisor Options
On 1 September 2021, in accordance with the terms of the
services agreement secured with Aldebaron, the Company granted
options to purchase 7,000,000 shares to Aldebaron in consideration
of services provided in securing the contract. These options
were granted at an exercise price of GBP0.01 per share, and
vested immediately. The options expire on 28 February 2022.
The options were valued under the Black-Scholes Model. The
expense recognised in the income statement during the period
was GBP2,030,240.
On 11 February 2021, as part of the consideration in respect
of the successful completion of the Veative acquisition,
the Company granted options to purchase 1,000,000 shares
to Scott Ashby, at an exercise price of GBP0.15 per share,
which vest immediately on completion of the acquisition The
options expire 4 months post-completion. The options were
valued under the Black-Scholes Model. The expense recognised
in the income statement during the period was GBP95,653.
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were
issued during the period and the principal assumptions used
in the valuation.
During the period the Group and Company recognised a total
expense of GBP2,507,789 (2020: GBP140,177) in the income
statement in respect to share options and warrants in issue
or committed to issuing at the end of the reporting period.
The table below represents the weighted average exercise
price (WAEP) of and the movements in share options and warrants
during the period:
31 October WAEP 31 October WAEP
2021 2020
No. options No. options
and warrants and warrants
Outstanding at beginning
of period 29,392,266 1.17 29,782,065 1.00
Issued in period 162,000,000 42.67 13,620,637 5.55
Lapsed during period (2,220,995) 9.10 (662,983) 1.00
Exercised during the
period (3,535,908) 1.34 (13,347,453) 1.14
Outstanding at the end
of the period 185,635,363 37.58 29,392,266 1.17
Exercisable at the end
of the period 101,630,937 32.23 5,011,784 3.05
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options that were issued during
the period and the principal assumptions used in the valuation.
Type Employee Advisor
Grant Date 30 November Various
2020
Number of options/warrants 4,000,000 8,000,000
Share price at grant GBP0.0755 GBP0.23 to
date GBP0.33
Exercise price at grant GBP0.10 GBP0.01 to
date GBP0.15
Risk free rate 0.84% 0.70%
Option life 10 years 4 months
to 6 months
Expected volatility 101.72% 63.48% to
83.51%
Expected dividend yield 0% 0%
Expected redemption 100% 100%
Fair value per option GBP0.067 GBP0.10 to
/ warrant at grant date GBP0.29
10 Taxation
2021 2020
GBP GBP
Current tax
Current corporation tax (charge) /credit (4,384) 62,376
Adjustments in respect of prior years 1,101 52,036
------------- ------------
(3,283) 114,412
Deferred tax
Credit in respect of current year 10,047 4,145
10,047 4,145
Tax on loss on ordinary activities 6,764 118,557
------------- ------------
Tax reconciliation
Loss before taxation (2,536,040) (1,056,254)
Tax using weighted average corporation
tax rate of 20.11% (2020: 19%) 509,933 200,688
Non-deductible expenses (672,908) (39,916)
Other tax adjustments 817 50,047
Incremental tax relief re research
and development expenditure - 45,387
Restriction of relief on settlement
of research and development tax credits - (19,009)
Incremental deductions for share-based
payment at intrinsic value 158,970 204,853
Utilised tax losses 255,540 -
Unutilised tax losses carried forward (246,689) (375,529)
Adjustment to current tax in respect
of prior years (1) 1,101 52,036
------------- ------------
6,764 118,557
------------- ------------
Expected tax rate of 20.11% is the combined weighted average
Group rate, allowing for 19% for UK-based entities and 25.6%
for India-based entities. In the prior year, all entities
were UK-based.
(1) 2020 adjustment to current tax in respect of prior year's
relates to the finalisation and submission of research and
development tax credit
The Group has accumulated tax losses of approximately GBP3,100,508
(2020: GBP3,018,974) that are available, under current legislation,
to be carried forward against future profits.
No deferred tax asset has been recognised in respect of these
losses due to the uncertainty of future trading profits.
11 Earnings per share
The basic earnings per share is calculated by dividing the
profit attributable to equity shareholders by the weighted
average number of shares in issue.
The Group has in issue 185,635,363 warrants and options at
31 October 2021 (2020: 29,392,266). The loss attributable
to equity holders and the weighted average number of ordinary
shares for the purposes of calculating diluted earnings per
ordinary share are identical to those used for the basic
earnings per ordinary share. This is because the exercise
of warrants and options would have the effect of reducing
the loss per ordinary share and is therefore anti-dilutive.
Adjusted profit/(loss) is a non-IFRS measure but is deemed
an APM by the Board of Directors. As the Group made an adjusted
profit in the period, both a basic and a diluted adjusted
earnings per ordinary share for the period are presented
below.
2021 2020
GBP GBP
Loss attributable to equity holders
of the Group:
Continuing Operations (2,529,276) (937,697)
Weighted average number of shares
for Basic and diluted EPS 551,494,774 430,264,573
Basic and diluted earnings per share
from continuing operations (pence) (0.46) (0.22)
Adjusted profit/(loss) attributable
to equity holders of the Group:
Continuing Operations 482,824 (797,520)
Weighted average number of shares
for Basic EPS 551,494,774 430,264,573
Weighted average number of shares
for diluted EPS 623,472,118 430,264,573
Basic earnings per share from continuing
operations (pence) 0.09 (0.19)
Diluted earnings per share from continuing
operations (pence) 0.08 (0.19)
The adjusted profit/(loss) is calculated after adjusting
for non-recurring one-off expenditure associated with the
placing, fees in connection with the Veative acquisition
and the costs of the warrants and options granted in the
period.
2021 2020
GBP GBP
Loss attributable to equity holders
of the Group (2,529,276) (937,697)
Fees in connection with the Veative 504,311 -
acquisition
Share-based payment - share options 2,507,789 123,889
Share-based payments - share warrants - 16,288
Adjusted profit/(loss) attributable
to equity holders of the Group 482,824 (797,520)
------------ ----------
12 Intangible assets - Group
Goodwill Intangible assets
Trademark Customer Externally Internal Intellectual Total
Relationships purchased use Property
software software
GBP GBP GBP GBP GBP GBP GBP
Cost
At 31 October 2019 - 3,682 - 7,430 331,853 - 342,965
Acquired on
acquisition
of subsidiary 240,145 74,659 - - 74,659
Additions - - - - 686,138 686,138
---------- ---------- -------------- ----------- ----------- ------------- ------------
At 31 October 2020 240,145 3,682 74,659 7,430 1,017,991 - 1,103,762
Acquired on 2,322,785 - - - - - -
acquisition
of subsidiary
Additions - - - 6,500 2,633,899 4,406,608 7,047,007
---------- ---------- -------------- ----------- ----------- ------------- ------------
At 31 October 2021 2,562,930 3,682 74,659 13,930 3,651,890 4,406,608 8,150,769
---------- ---------- -------------- ----------- ----------- ------------- ------------
Amortisation
At 31 October 2019 - - - (828) (184,464) (185,292)
Charge for the
year - - (21,776) (2,483) (75,488) (99,747)
Impairment - - - - - -
---------- ---------- -------------- ----------- ----------- ------------- ------------
At 31 October 2020 - - (21,776) (3,311) (259,952) - (285,039)
Charge for the
year - - (37,329) (2,455) (383,632) (277,677) (701,093)
Impairment - - (15,554) - - - (15,554)
---------- ---------- -------------- ----------- ----------- ------------- ------------
At 31 October 2021 - - (74,659) (5,766) (643,584) (277,677) (1,001,686)
---------- ---------- -------------- ----------- ----------- ------------- ------------
Net book
value
At 31 October 2021 2,562,930 3,682 - 8,164 3,008,306 4,128,931 7,149,083
At 31 October 2020 240,145 3,682 52,883 4,119 758,039 - 818,723
Goodwill arose during the year on the acquisitions of The
Inspirational Learning Group Limited and Launchmycareer
Pvt Limited. The net book value of the previously acquired
customer relationship asset has been fully written down
during the year, as the hosting of school websites has been
passed-off to a third party.
The Company's internally developed software primarily relates
to its Launchmycareer.com and Launchyourcareer.com careers
education platforms, which incorporate VICTAR VR.
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might
be impaired. The recoverable amount of a Cash Generating
Unit (CGU) is determined from value in use calculations.
The key assumptions for these calculations are externally
derived long-term growth rates, discount rates and cash
flow forecasts derived from the most recent financial budgets
and forecasts approved by management covering a three-year
period. Rates applied are:
* Long term growth rate 2.0%
* Discount rate / cost of capital 9.4%
Budgets and forecasts are based on expectations of future
outcomes taking into account past experience adjusted for
revenue growth from both new business and like for like
growth and taking into consideration external economic factors.
Cash flows beyond the three-year period are extrapolated
using estimated growth rates, based on local expected economic
conditions and do not exceed the long-term average growth
rate for that country. The discount rates are based on the
Group's weighted average cost of capital.
No issues were identified that required an impairment.
Intangible assets - Company
Goodwill
Cost GBP
At 1 November 2020 183,928
At 31 October 2021 183,928
----------
Net Book Value 183,928
----------
The goodwill reflects the retention of the economic value accruing
to the Company from its acquisition of Phenix Digital Limited
following the decision to transfer its trade and operations of
to DevClever Limited post acquisition.
The Company tests goodwill annually for impairment, or more frequently
if there are indications that goodwill might be impaired. The
recoverable amount of a Cash Generating Unit (CGU) is determined
from value in use calculations. The key assumptions for these
calculations are externally derived long-term growth rates, discount
rates and cash flow forecasts derived from the most recent financial
budgets and forecasts approved by management covering a three-year
period.
Budgets and forecasts are based on expectations of future outcomes
taking into account past experience adjusted for revenue growth
from both new business and like for like growth and taking into
consideration external economic factors. Cash flows beyond the
three-year period are extrapolated using an estimated growth
rates of 2.0%, based on local expected economic conditions and
do not exceed the long-term average growth rate for that country.
The discount rates are based on the Group's weighted average
cost of capital of 9.4%.
No issues were identified that required an impairment.
13 Property, plant and equipment
Right Fixtures Computer Total
of use and fittings equipment
assets (incl.
motor vehicles)
GBP GBP GBP GBP
Cost
At 31 October 2019 - 18,695 63,891 82,586
Initial adoption of IFRS
16 84,249 - - 84,249
Acquired on acquisition
of subsidiary - - 1,750 1,750
Additions - - 33,584 33,584
---------- ------------------ ----------- ----------
At 31 October 2020 84,249 18,695 99,225 202,169
Acquired on acquisition
of subsidiary 6,785 14,827 3,311 24,923
Additions 220,232 2,745 41,655 264,632
---------- ------------------ ----------- ----------
At 31 October 2021 311,266 36,267 144,191 491,724
---------- ------------------ ----------- ----------
Depreciation
At 31 October 2019 - (4,663) (36,217) (40,880)
Charge for the year (26,605) (6,053) (23,150) (55,808)
---------- ------------------ ----------- ----------
At 31 October 2020 (26,605) (10,716) (59,367) (96,688)
Charge for the year (26,604) (6,719) (21,950) (55,273)
Impairment (23,678) - - (23,678)
---------- ------------------ ----------- ----------
At 31 October 2021 (76,887) (17,435) (81,317) (175,639)
---------- ------------------ ----------- ----------
Net book value
At 31 October 2021 234,379 18,832 62,874 316,085
At 31 October 2020 57,644 7,979 39,858 105,481
The right of use asset as at the prior year end relates to the
property lease for the Group's premises at Unit 1, Ninian Way,
Tamworth, which has been recognised on adoption of IRFS 16 Leases.
The associated IFRS 16 lease liability is included within other
loans and borrowings (see note 19).
On 27 July 2021, the Group acquired the entire share capital
of The Inspirational learning Group Limited. The Group has recognised
a right of use asset in respect of its office premises at Stafford
Education and Enterprise Park, Weston Road, Stafford. The lease
expires on 1 January 2022.
In September 2021, the Group entered into a property lease in
respect of its office premises at The New Beacon Building, Stafford
Enterprise Park, Weston Road, Stafford, effective 1 November
2021, and consequently recognised a right of use asset in respect
of this lease, which expires on 31 October 2027.
An assessment was undertaken for indicators of impairment at
the balance sheet- date. No issues were identified that required
an impairment review to be conducted.
14 Financial assets at fair value through
profit or loss - Group
2021 2020
GBP GBP
Equity investments 138,653 138,653
----------- ----------
The Group's financial assets valued at fair value through
profit or loss represent its ownership interest in Audoo
Limited, a private limited company.
The fair value of the financial assets is measured by reference
to the degree to which fair value is observable:
* Level 1 fair value measurements being those derived
from inputs other than quoted prices that are
observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived
from prices)
* Level 2 fair value measurements being those derived
from valuation techniques that includes inputs for
the asset or liability that are not based on
observable market data (unobservable inputs).
* Level 3 assets whose fair value cannot be determined
by using observable inputs or measures, such as
market prices or models. Level 3 assets are typically
very illiquid, and fair values can only be calculated
using estimates or risk-adjusted value ranges.
The fair value has been established by reference the issue
price of shares in Audoo at its latest funding round of GBP48.06
per Ordinary Share. As a private limited company, Audoo's
share price is not observable market data and therefore represents
a level 2 fair value measurement as defined in the fair value
hierarchy above .
Name of undertaking Country of Ownership Voting power Nature of
incorporation interest held business
Audoo Limited UK 0.99% 0.99% Audio devices
The Company holds 2,885 Ordinary A shares (2020: 2,885) in
Audoo Limited, a developer of audio meters to support performance
rights organisations track played music. The shares were
acquired as part consideration for services provided as follows:
No. Cost Fair value Fair value
gain / (loss)
10 May 2019 750 1,125 36,045 34,920
2 March 2020 1,250 30,000 60,075 30,075
22 May 2020 885 30,010 42,533 12,523
------ ------- ----------- ---------------
2,885 61,135 138,653 77,518
------ ------- ----------- ---------------
15
Investments - Company
Shares in
subsidiaries
Cost and carrying value GBP
As at 31 October 2019 2,500,000
Additions 183,928
Re-categorised as goodwill on transfer
of trade and operations (183,928)
---------------
As at 31 October 2020 2,500,000
---------------
Additions 2,198,549
---------------
As at 31 October 2021 4,698,549
---------------
Details of the Company's subsidiaries at 31 October 2021
are as follows:
Name of undertaking Country of Ownership Voting power Nature of
incorporation interest held business
DevClever
Limited UK 100% 100% Digital media
Phenix Digital
Limited UK 100% 100% Digital media
The Inspirational
Learning Group
Limited UK 100% 100% Digital media
Launchmycareer
Pvt Limited India 100% 100% Digital media
The Company's interest in Dev Clever Limited was acquired
on 2nd October 2018. The registered office of Dev Clever
Limited is Ventura House, Ventura Park Road, Tamworth, B78
3HL.
The Company's interest in Phenix Digital Limited was acquired
on 13(th) March 2020. The registered office of Phenix Digital
Limited is Creative Industries Centre, Wolverhampton Science
Park, Wolverhampton, West Midlands, WV10 9TG.
The Company's interest in The Inspirational Learning Group
Limited was acquired on 27 July 2021. The registered office
of The Inspirational Learning Group Limited is Stafford Education
& Enterprise Park, Weston Road, Stafford, Staffordshire,
ST18 0BF.
The Company acquired Launchmycareer Pvt Limited on 12 April
2021. Launchmycareer Pvt Limited is a private limited company
incorporated under the provisions of the Indian Companies
Act, 2013 and having its registered office at B-121 (Basement),
Sector-67 Noida, India.
16 Trade and other receivables - Group
2021 2020
GBP GBP
Trade receivables 4,562,827 703,544
Less: Provision for impairment of
trade receivables (11,520) (2,369)
------------- -----------
4,551,307 701,175
Prepayments 1,628,592 295,437
Income taxes 68,052 135,406
Taxation and social security 86,414 -
Other receivables 4,141 -
------------- -----------
6,338,506 1,132,018
------------- -----------
The increase in trade receivables reflects the completion
of the first phase of the Aldebaron agreement at the end
of the financial period at a value of GBP3.6 million. In
addition, the Company advanced GBP1.2 million to finance
the conversion of its Launchmyacareer.com platform and associated
STEM based learning modules into additional languages in
support of its obligations to Aldebaron under the second
phase of the agreement.
The ageing of trade receivables that
were not impaired at 31 October was:
2021 2020
GBP GBP
Not past due 3,658,208 576,134
Up to three months past due 891,425 123,473
More than three months past due 1,674 1,568
------------- -----------
4,551,307 701,175
------------- -----------
Other receivables are not past due (2020: not past due).
The Company trades only with recognised, credit-worthy third
parties. Receivable balances are monitored on an ongoing
basis with the aim of minimising the Company's exposure to
bad debts. The Company has reviewed in detail all items comprising
the above not past due and overdue but not impaired trade
receivables to ensure that no impairment exists. As at 31
October 2021, trade receivables of GBP11,520 (2020: GBP2,369)
were impaired and provided for. The amount of the provision
was GBP11,520 at 31 October 2021 (2020: GBP2,369). Movements
on the provision for impairment of trade receivables are
as follows:
2021 2020
GBP GBP
At 1 November (2,369) (11,765)
On acquisition of Phenix Digital Limited - (2,369)
Provision for expected credit losses (9,601) -
released / (charged)
Receivables written off during the
year 450 11,765
------------- -----------
At 31 October (11,520) (2,369)
------------- -----------
The Directors review trade receivable balances on an individual
basis each month to assess whether there is evidence of circumstances
that will lead to the provision of expected credit losses.
This is feasible due to the relatively low number of individual
trade receivable accounts. Write-offs occur when there is
no reasonable expectation of recovery and would typically
be considered once debts become more than six months overdue,
on approval by the Chief Financial Officer.
The other classes within trade and other receivables do not
contain impaired assets. The maximum exposure to credit risk
for trade and other receivables at the reporting date is
the carrying value of each class of receivable disclosed
above.
The carrying amounts of all the Group's, trade and other
receivables are denominated in the following currencies.
2021 2020
GBP GBP
Sterling 687,346 681,340
INR 636,102 -
US $ 5,015,058 450,678
------------- -----------
6,338,506 1,132,018
------------- -----------
The trade receivables denominated in foreign currency relate
to trade debtors for Launchmycareer Pvt Limited in India
and amounts receivable under the Aldebaron agreement, that
are denominated in US $. These are included in the not past
due debt at the period end.
Trade and other receivables - Company
2021 2020
GBP GBP
Amounts owed by Group undertakings 17,223,646 3,137,441
Less: Provision for impairment amounts
owed by Group undertakings (80,111) (80,111)
------------- -----------
17,143,535 3,057,330
Prepayments 26,822 160,130
Taxation and social security 36,914 -
Other receivables - 355,422
------------- -----------
17,207,271 3,572,882
------------- -----------
Other receivables are GBPnil (2020: not past due).
On 21 January 2019, the Company provided an intra-group loan
facility to its subsidiary, Dev Clever Ltd for GBP1,233,000,
following its admission to the Standard List of the London
Stock Exchange and the receipt of the placing proceeds. During
the course of 2021, the Company approved increases to this
loan facility to GBP17,333,000 to support the development
and commercialisation of its proprietary software platforms.
The loan, which is unsecured and
repayable on demand, bears interest at 4.75% above the Bank
of England Base Rate. Dev Clever Limited had drawn down GBP13,306,027
(2020: GBP3,057,330) as at 31 October 2021.
On 1 April 2020, the Group provided an intra-group loan facility
to its newly acquired subsidiary, Phenix Digital Limited,
for GBP100,000 to support the on-going working capital requirements
of the business whilst its trade is transferred to Dev Clever
Limited. Phenix Digital Limited had drawn down GBP80,111
as at 31 October 2021. As a result of the transfer of trade
to DevClever Limited, Phenix Digital is no longer in a position
to repay the Group loan facility and an impairment of GBP80,111
has been recognised.
On 14 July 2021, the Group provided an intra-group loan facility
to its newly acquired subsidiary, Launchmycareer Pvt Limited,
for GBP875,000 to support the development and commercialisation
of its proprietary software platforms. The loan, which is
unsecured and
repayable on 3 months' notice, bears interest at 4.5% above
the 6 Months LIBOR Rate. Launchmycareer Pvt Limited had drawn
down GBP875,000 as at 31 October 2021.
In addition to the loan principal advanced to subsidiary
undertakings, the total amounts owed by Group undertakings
also include GBP364,153 of accrued interest charges and GBP2,598,355
of accrued management recharges raised at the year end.
The other classes within trade and other receivables do not
contain impaired assets. The maximum exposure to credit risk
for trade and other receivables at the reporting date is
the carrying value of each class of receivable disclosed
above.
The carrying amounts of all the Company's trade and other
receivables are denominated in GBP Sterling.
17 Cash and cash equivalents - Group 2021 2020
GBP GBP
DBS Bank India Limited (INR) 320,090 -
ICICI Bank (INR) 26,082 -
Bank of Baroda (INR) 2 -
Cash in hand (INR) 48 -
Online balances 3,680 -
Bank current accounts (Barclays) 284,994 -
Bank current accounts (Santander) 6,874,188 1,032,473
------------- -------------
7,509,084 1,032,473
Santander has a credit rating of A1
(Moody's)
Cash and cash equivalents - Company 2021 2020
GBP GBP
Bank current accounts (Santander) 6,259,767 938,806
------------- -------------
Santander has a credit rating of A1
(Moody's)
18 Trade and other payables - Group
2021 2020
GBP GBP
Current
Trade payables (887,200) (22,710)
Accruals (458,153) (184,895)
Deferred income (297,835) (210,145)
Income taxes (30,575) -
Other taxation and social security (174,046) (108,497)
Other payables (5,487) (28,969)
------------- -------------
(1,853,296) (555,216)
------------- -------------
The carrying amounts of all the Group's, trade and other
payables are denominated in the following currencies.
2021 2020
GBP GBP
Sterling (1,409,721) (555,216)
INR (499,815) -
US $ (3,760) -
(1,913,296) (555,216)
Trade and other payables - Company
2021 2020
GBP GBP
Trade payables (7,200) (19,128)
Accruals (209,816) (55,704)
Other taxation and social security - (2,564)
Other payables - -
------------ ----------
(217,016) (77,396)
------------ ----------
The carrying amounts of all the Company's trade and other
payables are denominated in GBP Sterling.
19 Loans and Borrowings - Group
The Directors believe the book value of loans and borrowings
approximates fair values. Book values are:
2021 2020
Current GBP GBP
Unsecured loans
IFRS 16 liability (51,916) (29,205)
Other (44,000) (61,378)
---------------- ---------------
(95,916) (90,583)
Non-current
Unsecured loans
IFRS 16 Liability (184,622) (31,930)
Other (345,926) (286,751)
---------------- ---------------
(530,548) (318,681)
Total loans and borrowings (626,464) (409,264)
All the Group's loans and borrowings are denominated in GBP
Sterling. The Group has no committed borrowing facilities.
Date Term Current Non-current
Funding Circle 3 Oct 2017 5 years 12,189 -
Crowd2Fund 9 Apr 2018 4 years 23,805 -
Convertible Loan
Note 20 Jan 2020 5 years - 281,206
Bounceback Loan 8 Sep 2020 6 years - 50,000
Car lease 8,006 14,720
-------- ------------
Other Loans and borrowings 44,000 345,926
-------- ------------
IFRS 16 Ninian Way 1 Nov 2019 2 years 31,929 -
IFRS 16 Stafford 27 Jul 2021 1 year 360 -
(TILG)
IFRS 16 Stafford
(DevClever Ltd) 12 Aug 2021 6 years 19,627 184,622
-------- ------------
IFRS 16 51,916 184,622
-------- ------------
In September 2021, the Group entered into a property lease
in respect of its office premises at The New Beacon Building,
Stafford Enterprise Park, Weston Road, Stafford, effective
1 November 2021, and consequently recognised a property lease
creditor of GBP204,249 in line with the adoption of IFRS
16 Leases. The outstanding liability at 31 October 2021 was
GBP204,249, of which GBP19,627 is payable within one year
(2020: GBPnil) and GBP184,622 is repayable in greater than
one year (2020: GBPnil). The lease expires on 31 October
2027.
Loans and Borrowings - Company
The Directors believe the book value of loans and borrowings
approximates fair values. Book values are:
2021 2020
GBP GBP
Non-current
Unsecured loans
- Other (281,206) (250,882)
---------------- ---------------
(281,206) (250,882)
---------------- ---------------
All the Company's loans and borrowings are denominated in
GBP Sterling. The Company has no committed borrowing facilities.
On 20 January 2020, the Chairman and CEO, Christopher Jeffries
and the Company entered into a convertible loan note agreement
amounting to GBP400,000. The loan notes are convertible into
ordinary shares of 1p each at Christopher Jeffries' option
at any time subject to, among other things, the Company not
being required to publish a prospectus in connection with
the issue of shares on conversion of the notes and no obligations
under Rule 9 of the City Code on Takeovers and Mergers being
triggered by such an issue of shares. Unless previously repaid
or converted, the loan notes will be redeemed at par by the
Company of their fifth anniversary. The Notes bear a zero
coupon.
The loan notes constitute a compound financial instrument
under IAS 32. The liability component, representing the net
present value of future contractual cash flows, was initially
valued at GBP248,369. The equity component of GBP151,631,
representing the residual amount after deducting the amount
for the liability from the value of the funds received, is
reported within "Other reserves".
On 3 August 2020 Christopher Jeffries converted GBP21,141
of the loan note for 2,114,069 new 1p ordinary shares. The
loan notes attracted an imputed interest charge of GBP30,324
(2020: GBP23,654) that was accrued at the year end. The remaining
liability, including the imputed interest, was GBP281,206
(2020: GBP250,882) at the year end and is reported within
amounts falling due in more than one year.
Impairment of loan
20 Deferred tax - Group
The elements of deferred taxation are
as follows:
2021 2020
GBP GBP
Accelerated capital allowances and intellectual
property (15,819) (15,826)
Revaluation of intangible assets arising
on acquisition - (10,040)
---------------- ---------
(15,819) (25,866)
---------------- ---------
Movement in deferred tax: Accelerated Revaluation Total
capital allowances of intangible
and intellectual assets arising
property on acquisition
GBP
At 31 October 2019 (16,464) - (16,464)
Deferred tax balances arising
on acquisition 638 (14,185) (13,547)
Credited to income statement - 4,145 4,145
At 31 October 2020 (15,826) (10,040) (25,866)
Credited to income statement 7 10,040 10,047
-------------------- ---------------- ---------
At 31 October 2021 (15,819) - (15,819)
-------------------- ---------------- ---------
The deferred tax liability arising on the revaluation of intangible
assets on acquisition relates to customer relationship asset
in respect of Phenix Digital.
21 Financial instruments and financial
risk management - Group
The Group is exposed to a variety of financial risks that
arise from its use of financial instruments: credit risk,
liquidity risk, foreign exchange risk and capital risk.
Principal financial instruments
The principal financial instruments used by the Group from
which financial instrument risk arises are as follows:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Debt finance
These instruments are all disclosed at amortised cost.
2021 2020
GBP GBP
Financial assets
Loans and receivables
Trade and other receivables 6,270,454 996,612
Cash and cash equivalents 7,509,084 1,032,473
--------------- --------------
Financial liabilities
Other financial liabilities
Trade and other payables (1,913,296) (555,216)
Loans and borrowings (626,464) (409,264)
--------------- --------------
(2,539,760) (964,480)
--------------- --------------
Disclosures in respect of the Company's financial risks are
set out below:
Financial risk management
The Company's activities expose it to credit, liquidity and
foreign exchange risks. The Company's overall risk management
programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Company's
financial performance.
Credit risk
Credit risk is the risk of financial loss to the Company
if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally
from trade receivables from customers and cash deposits with
financial institutions. The Company's exposure to credit
risk is influenced mainly by the individual characteristics
of each customer. Credit checks are performed on new and
potential customers and receivable balances are monitored
individually, on an ongoing basis, with the aim of minimising
the Company's exposure to the risk of default. The Directors
consider the above measures to be sufficient to control the
credit risk exposure.
The methodology adopted for determining the bad debt provision
is detailed in Note 3 to the financial statements.
The Group gives careful consideration to which organisations
it uses for its banking services in order to minimise credit
risk. At the reporting date, the Group's cash held on short-term
deposit with Santander Bank plc in the United Kingdom was
GBP6,874,188 (2020: GBP1,032,473). This represents 92% of
the Group's total cash and cash equivalents.
The carrying amount of financial assets recorded in the consolidated
financial statements represents the Company's maximum exposure
to credit risk without taking into account the value of any
collateral obtained. In the Directors' opinion there have
been no impairments of
financial assets in the period, other than in relation to
trade receivables written off GBP450 (2020: GBP11,765) as
disclosed in note 16.
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
manages its cash flows to ensure that it will always have
sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring
unacceptable losses or damage to the Group's reputation.
During the course of the year, the Group has raised additional
equity finance and loan finance to support the on-going development
and commoditisation of its software portfolio. The Group
has raised additional equity finance of GBP16.91m (2020:
GBP2.57m) and loan finance of GBPnil (2020: GBP400,000).
Details of the finance raised in the period are detailed
below:
On 25 January 2021 the Group raised gross proceeds of GBP2.0
million, net GBP1.9 million, through the issuance of 20 million
new ordinary shares of 1p to Intrinsic Capital (Jersey) Limited
at a subscription price of 10p per share. The subscription
forms the second tranche of the subscription agreement entered
into by the Company with Intrinsic on 13 May 2020.
On 2 February 2021 the Group announced an equity subscription
agreement with One Nine Two Pte Limited. The agreement provided
for an initial subscription of 20 million new ordinary shares
in Dev Clever at a subscription price of 20p per share to
raise gross proceeds of GBP4.0 million, net GBP3.8 million,
conditional upon approval at a general meeting of the Company
to an increase in the authority granted to the Directors
to allot shares and disapply pre-emption rights. The agreement
provided for a further subscription of 20 million ordinary
shares at an exercise price of 30 pence per share to raise
gross proceeds of GBP6.0 million, net GBP5.6 million, to
be completed automatically once the share price of the Group
closed at or above 34p per share for a period of 5 consecutive
days. The further subscription is valid for a period of nine
months from the date of completion of the first subscription.
The Company also granted One Nine Two Pte Limited a warrant
over 40 million new ordinary shares at an exercise price
of 50p per share, subject to completion of the further subscription.
The warrant is exercisable in whole or in part at any time
until the second anniversary of the completion of the first
subscription.
Following the passing of the relevant resolution at the general
meeting, the Group received the proceeds of the initial subscription
on 22 February.
On 25 February, the Company announced the novation of the
subscription agreement with One Nine Two Pte Limited in favour
of Sitius Limited, an investment vehicle wholly owned by
Dr David von Rosen. On the same date, Intrinsic Capital (Jersey)
Limited entered into an agreement with Sitius to assign 30
million of its remaining subscription rights to 60 million
new ordinary shares in the Company at an exercise price of
10p per share.
ICJL and Sitius Limited completed their subscriptions to
these shares, following the publication of the Company's
Prospectus on 17 March, raising gross proceeds of GBP6.0
million, net GBP5.6 million.
The Group raised GBP47,294 of further equity through the
exercise of employee share options. The employee options
had exercise prices of between 1p and 2.35p per share.
The Directors manage liquidity risk by regularly reviewing
the Group's cash requirements by reference to short-term
cash flow forecasts and medium-term working capital projections
prepared by management.
Maturity of financial assets and liabilities
Financial liabilities include 4 loans with outstanding balances
of GBP12,189 (2020: GBP23,168), GBP23,805 (2020: GBP66,825),
GBP281,200 (2020: GBP250,882) and GBP50,000 (2020: GBPnil)
and a finance lease creditor of GBP236,537 (2020: GBP61,135).
The total amount payable in more than one year from the reporting
date is GBP530,548 (2020: GBP318,681) analysed as follows:
2021 2020
GBP GBP
Amounts repayable within 1 year 95,916 90,583
Amounts repayable within 1 to 2 years 64,720 67,799
Amounts repayable within 2 to 5 years 465,828 250,882
--------------- --------------
Total 626,464 409,264
--------------- --------------
The Company's other financial assets and liabilities at each
reporting date are either receivable or payable within one
year.
Future rental obligations are disclosed at their net present
cost within the finance lease creditor under IFRS 16 and
operating lease commitments are no longer applicable.
Foreign exchange risk
The Group's revenues and costs are currently denominated
in a combination of Sterling (the Group's functional currency),
US$ with respect to overseas sales, and INR in respect to
its newly-established operations in India. The US$ closing
rate of 1.369 compares to an average rate of 1.383 representing
a non-material variance of 1%. The INR closing rate of 102.5
compares to an average rate in the period of 103.3 representing
a non-material variance of 0.7%. Activities in currencies
other than Sterling are funded as much as possible through
operating cash flows, mitigating foreign exchange risk.
The Company has the following cash and cash equivalent deposits:
2021 2020
GBP GBP
DBS Bank India Limited (INR) 320,090 -
ICICI Bank (INR) 26,082 -
Bank of Baroda (INR) 2 -
Cash in hand (INR) 48 -
Online balances 3,680 -
Bank current accounts (Barclays) 284,994 -
Bank current accounts (Santander) 6,874,188 1,032,473
--------------- --------------
7,509,084 1,032,473
The gross value of receivables and payables by currency is
disclosed in notes 16 and 18 respectively. The Group has
the following net other financial instruments:
2021 2020
GBP GBP
6,882,620 623,209
--------------- --------------
Capital management
The Company's capital structure is comprised of a combination
of shareholders' equity and external loan finance. The objective
of the Company when managing capital is to maintain adequate
financial flexibility to preserve its ability to meet financial
obligations, both current
and long term. The capital structure is managed and adjusted
to reflect changes in economic conditions. The Company funds
its expenditures on commitments from existing cash and cash
equivalent balances, primarily received from operating cash
flows and from a combination of both equity and loan finance.
There are no externally imposed capital requirements. Financing
decisions are made by the Directors based on forecasts of
the expected timing and level of capital and operating expenditure
required to meet the Company's commitments and development
plans.
22 Share capital and reserves
Share Capital and Share Premium account- Group
and Company
Reconciliation of movement during
the year:
Shares Share Share
capital premium
No. GBP GBP
As at 1 November 2019 388,401,736 3,884,017 246,246
Ordinary shares of GBP0.01 issued
at GBP0.01 on 22 January 2020 for
cash 43,785,107 437,851 -
Ordinary shares of GBP0.01 issued
at GBP0.0235 on 13 March 2020 for
cash 3,571,429 35,714 48,214
Ordinary shares of GBP0.01 issued
at GBP0.01 on 27 May 2020 for cash 752,485 7,524 -
Ordinary shares of GBP0.01 issued
at GBP0.01 and GBP0.10 on 3 August
2020 for cash and on conversion
of loan 4,614,069 46,141 225,000
Ordinary shares of GBP0.01 issued
at GBP0.01 and GBP0.10 on 10 September
2020 for cash 29,326,264 293,263 1,575,000
Ordinary shares of GBP0.01 issued
at GBP0.034 on 17 September 2020
for cash 768,704 7,687 18,449
Share issue expenses (135,462)
As at 1 November 2020 471,219,794 4,712,197 1,977,447
Ordinary shares of GBP0.01 issued
at GBP0.10 on 25 January 2021 20,000,000 200,000 1,800,000
Ordinary shares of GBP0.01 issued
at GBP0.1015 on 25 January 2021
for cash 591,099 5,911 54,089
Ordinary shares of GBP0.01 issued
at GBP0.20 on 22 February 2021 for
cash 20,000,000 200,000 3,800,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 23 March 2021 for
cash 60,000,000 600,000 5,400,000
Ordinary shares of GBP0.01 issued
at GBP0.1015 on 23 March 2021 for
cash 1,773,296 17,733 162,267
Ordinary shares of GBP0.01 issued
at GBP0.30 on 22 April 2021 for
cash 20,000,000 200,000 5,800,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 12 May 2021 for cash
in respect of employee options exercised 2,651,931 26,520 -
Ordinary shares of GBP0.01 issued
at GBP0.0235 on 12 May 2021 for
cash in respect of employee options
exercised 883,977 8,840 11,934
Ordinary shares of GBP0.01 issued
at GBP0.30 on 26 July 2021 for consideration
in respect of TILG acquisition 6,994,177 69,942 2,028,311
Share issue expenses (1,382,155)
As at 31 October 2021 604,114,274 6,041,143 19,651,893
Number of Share capital
shares issued
and fully
paid
No. GBP
Ordinary share capital
Issued and fully paid Ordinary shares
of GBP0.01 each 604,114,274 6,041,143
--------------- --------------
Merger reserve - Group
2021 2020
GBP GBP
At the beginning of year (2,499,900) (2,499,900)
Transfer to merger reserve arising - -
from accounting treatment of acquisition
of subsidiary
--------------- --------------
(2,499,900) (2,499,900)
--------------- --------------
Other reserves - Group and Company
2021 2020
GBP GBP
At the beginning of year 323,237 110,212
Compensation expense recognised in 123,889
period arising on issue of share options 2,507,789 -
Fair value of advisor warrants issued
in period - 16,288
Recycled share-based payments - (78,783)
Equity component of compound financial
instrument - 151,631
--------------- --------------
2,831,026 323,237
--------------- --------------
Retained earnings - Group
2021 2020
GBP GBP
At the beginning of period (2,033,184) (1,170,672)
Restatement on adoption of IFRS 16 - (3,598)
Loss for the year (2,529,276) (937,697)
Recycled share-based payments - 78,783
Dividends paid - -
--------------- --------------
(4,562,460) (2,033,184)
--------------- --------------
Retained earnings - Company
2021 2020
GBP GBP
At the beginning of period (145,543) (61,741)
Loss for the year (527,226) (162,585)
Recycled share-based payments - 78,783
--------------- --------------
(672,769) (145,543)
--------------- --------------
23 Capital commitments - Group and Company
As at 31 October 2021 and 31 October 2020 there were no capital
commitments.
24 Related party transactions - Group
31 October 2021 31 October 2020
Income Amounts Income Amounts
/ Expense Outstanding / Expense Outstanding
in year in year
Revenue
Audoo Limited 36,017 - 360,612 -
Aggregate emoluments
CM Jeffries 207,316 72,000 153,314 24,000 Director
NAR Ydlibi 120,316 24,000 92,314 8,000 Director
T Heaton 163,200 - 70,899 - Director
T Heaton - - 92,301 - Key management
CB Forrest 20,000 - 20,000 - Director
DR Ivy 20,000 - 20,000 - Director
J Carter 56,126 - 3,262 - Key management
J Cannon 90,905 - - - Key management
K Hayes 90,026 - - - Key management
A Aggarwal 26,168 - - - Key management
R Lee 96,443 - 13,040 - Key management
----------- ------------- ------------ -------------
890,500 96,000 465,130 32,000
----------- ------------- ------------ -------------
Payments to contractors
Ohanna Security
Services Limited
(K Hayes) 16,400 - 40,000 - Key management
Drive Digital 8,000 - - - Director
Limited (DR Ivy)
Veative Labs Pvt
Limited (A Aggarwal) 2,004,499 344,167 - - Key management
Veative Labs Pvt 9,593 - - - Key management
Limited Singapore
Veative Labs Pvt - (1,400,188) - - Key management
Limited Singapore
- prepayments
(see note 16)
Veative Inc. (A 129,590 - - - Key management
Aggarwal)
Mehak Aggarwal
(A Aggarwal) 4,910 2,196 - - Key management
Share option
expense
NAR Ydlibi 11,181 - 19,714 - Director
T Heatoneaton 54,583 - 34,292 - Director
T Heaton - - 10,674 - Key management
J Carter (3,230) - 3,230 - Key management
J Cannon 74,603 - - - Key management
K Hayes 74,603 - - - Key management
R Lee 140,524 - 19,463 - Key management
----------- ------------- ------------ -------------
352,264 - 87,373 -
----------- ------------- ------------ -------------
Loans
CM Jeffries 281,206 - 250,882 - Director
----------- ------------- ------------ -------------
281,206 - 250,882 -
----------- ------------- ------------ -------------
CM Jeffries, Director and shareholder in Dev Clever Holdings
plc is also a Director of DevClever Limited, Dev Clever Consortium,
Phenix Digital Limited, The Inspirational Learning Group Limited
(appointed 30 July 2021), Launchmycareer Pvt Limited (appointed
24 May 2021) and Forever Worldwide Limited.
NAR Ydlibi, Director and shareholder in Dev Clever Holdings plc
is also a director of DevClever Limited, Phenix Digital Limited,
The Inspirational Learning Group Limited (appointed 30 July 2021)
and a trustee of L.E.A.D Academy Trust.
Ankur Aggarwal, Veative Labs Pvt Limited (India) and Veative
Labs Pte Ltd (Singapore) are classed as related parties as A
Aggarwal is classed as a PDMR following his appointment as a
Director of Launchymycareer Pvt Limited on 12 April 2021.
Save as disclosed above, none of the key management personnel
of the Company owe any amounts to the Company (2020: GBPnil),
nor are any amounts due from the Company to any of the key management
personnel (2020: GBPnil).
Related party transactions - Company
31 October 2021 31 October 2020
Income Amounts Income Amounts
/ Expense Outstanding / Expense Outstanding
in year in year
Aggregate emoluments
CB Forrest 20,000 20,000 - Director
DR Ivy 20,000 20,000 - Director
----------- ------------- ----------- -------------
40,000 40,000 -
----------- ------------- ----------- -------------
Intra-Group transactions
Dev Clever Limited
- Parent company
loan 10,248,697 13,306,027 1,936,340 2,808,758 Group Company
- Accrued interest 350,009 350,009 81,575 91,575 Group Company
- Management services 2,556,537 2,556,537 241,708 241,708 Group Company
----------- ------------- ----------- -------------
13,155,243 16,212,573 2,259,623 3,142,041
----------- ------------- ----------- -------------
Phenix Digital
Limited
- Parent company
loan - 80,111 80,111 80,111 Group Company
Impairment of
loan - (80,111) (80,111) (80,111) Group Company
----------- ------------- ----------- -------------
- - - -
The Inspirational Learning Group
Limited
- Management services 22,361 22,361 - - Group Company
----------- ------------- ----------- -------------
22,361 22,361 - - Group Company
Launchmycareer Pvt Limited
- Parent company
loan 875,000 875,000 - - Group Company
- Accrued interest 14,145 14,145 - - Group Company
- Management services 19,457 19,457 - - Group Company
908,602 908,602 - -
25 Ultimate controlling party - Group
and Company
There is no ultimate controlling party.
26 Events after the Reporting Period - Group and Company
Incorporation in Dubai: On 4 February 2022, the Group's newly formed subsidiary,
Launchmycareer
Global DMCC, was registered in Dubai. The subsidiary has been established to
facilitate the
growth of the Company's international operations and roll-out into emerging
markets. With
over 80% of Fortune 500 companies having operations in the United Arab Emirates,
this new
location serves Dev Clever as both its employer marketing and global distribution
hub.
Exercise of call option to acquire IP: On 31 March 2022, the Group exercised its
call option
to acquire the remaining STEM based learning IP and associated distribution
agreements held
by Veative Singapore at a net cost of $6.5m. This represented the final purchase
consideration
of $9.1 million less the $2.6 million licence fee paid in April 2021 that was to
be offset
against the final purchase price on the exercise of the call option. An initial
payment of
$1.15 million has been made with the balance of the consideration, $5.35 million,
to be settled
through the issuance of new Ordinary shares of the Company at the average market
price over
five days from Re-admission, and subject to Re-admission occurring before the end
of January
2023.
Termination of tactical partnership with Aldebaron: On 21 June 2021, the Company
announced
that it had entered into a tactical partnership agreement with Aldebaron DMCC
("Aldebaron")
to accelerate its rollout plan in Asian territories. The partnership included an
undertaking
by Aldebaron to provide Dev Clever with minimum revenue of US$50m over the four
financial
years ending 31 October 2024. This included initial revenue of US$5m for the year
ended 31
October 2021, following proof of concept. On 8 April 2022, the Company confirmed
that it was
in negotiations with Aldebaron to move the partnership agreement to a permanent
Joint Venture
("JV"). As the JV talks progressed, it became clear that an alternative strategy
would be
in the best interests of the Group, as Aldebaron required exclusive distribution
rights to
the Group's immersive STEM-based learning library and the Launchmycareer.com
platform to other
global territories, not just the Asian territories, as set out within the original
partnership
agreement. Consequently, it has been mutually agreed that the agreement will be
terminated,
subject to completion of all obligations under the initial proof of concept phase.
This releases
Aldebaron from the balance of its revenue obligations and returns the distribution
rights
for the Asian territories to the Group.
The Company has agreed to issue Aldebaron or its nominees with 37,885,931 warrants
exercisable
at 1p per share for a period of 18 months as compensation for returning the
distribution rights
for the Asian territories. At the same time, Chris Jeffries, Executive Chairman
and joint
CEO, has agreed to forfeit his existing right to convert his outstanding loan
notes into 37,885,931
shares at 1p per share, meaning there will be no additional dilution to existing
shareholders
in the event that Aldebaron exercises the warrants in full. The other terms of the
outstanding
loan notes remain unchanged, such that, unless previously repaid, the loan notes
will be redeemed
at par by the Company on 20 January 2025.
On 18 July 2022, the Group completed the acquisition of Veative
Labs Private Limited, a private company incorporated under
the provisions of the Indian Companies Act, 2013 (identification
number U74990DL2016PTC298204) and having its registered office
at 407 Part B, World Trade Centre, Barakhamba Lane, New Delhi
110001 from its parent company, Veative Labs Pte Ltd. Under
the terms of the share purchase agreement, the Group acquired
the entire share capital of Veative Labs Private Limited
in exchange for 225,000,000 new ordinary GBP0.01 shares of
Dev Clever.
Shares Fair value
of consideration
No. GBP
Consideration shares 225,000,000 33,750,000
------------------
The valuation ascribed to the share consideration has been
based on a valuation of GBP0.15 per share based on the market
value of Dev Clever at the time commercial negotiations
commenced with Veative and which were based on the legacy
Dev Clever and Veative businesses having comparable values.
The provisional assets and liabilities recognised on acquisition
are as follows:
Fair value
GBP
Non-current assets
Property, plant & equipment 746,382
Right of use assets 572,484
Intangible assets 1,215
Financial assets: loans receivable
in more than one year 52,528
Deferred tax asset 3,455
------------------
1,376,064
Current assets
Inventories 3,800
Trade & other receivables 211,304
Cash and cash equivalents 535,614
Financial assets: loans receivable
in less than one year 192,057
Other current assets 326,690
------------------
1,269,465
Total assets 2,645,529
Current Liabilities
Trade & other payables 1,075,624
Loans and borrowings: amounts
falling due within one year 41,378
Provisions: amounts falling
due within one year 20,522
------------------
1,137,534
Non-current liabilities
Loans and borrowings: amounts
falling due after more than
one year 564,131
Provisions: amounts falling
due after more than one year 79,622
------------------
643,753
Total liabilities 1,781,287
Net identifiable liabilities
acquired 864,242
Add: Intangible assets arising
on acquisition 32,885,758
------------------
33,750,000
------------------
The classification of intangible assets arising on acquisition
has still to be finalised.
27 Business combination
On 26 July 2021, the Group acquired the entire share capital
of The Inspirational learning Group Limited ("TILG"), a UK-based
education business, which owns and operates programmes designed
to engage, inspire and motivate young people, including The
National Enterprise Challenge, ("TILG") for a mixture of
cash consideration of GBP99,200 and the issue of 6,994,177
new ordinary shares of 1p each in the capital of Dev Clever
Holdings. The acquisition is expected to complement the Group's
existing career guidance and development platforms and enhance
the Company's content offering. Total acquisition-related
costs totalled GBP37,062, of which GBP37,062 was charged
to administrative expenses within the Statement of Comprehensive
income in the current financial year (2020: GBPnil).
The revenue and associated loss of TILG arising since the
acquisition date and incorporated into the consolidated statement
of comprehensive income were GBP417,394 and GBP53,590 respectively.
Details of the purchase consideration, the net assets acquired,
and goodwill are as follows:
Shares Fair value
of consideration
Total consideration No. GBP
Cash 99,200
Consideration shares 6,994,177 2,098,253
2,197,453
The market value of Dev Clever Holdings shares at the time
of acquisition was 30p.
The assets and liabilities recognised on acquisition are
as follows:
Fair value
GBP
Non-current assets
Property, plant & equipment 24,924
24,924
Current assets
Trade & other receivables 163,881
Cash 215,368
379,249
Current Liabilities
Trade & other payables (356,930)
Loans and borrowings: amounts
falling due within one year (54,813)
(411,743)
Non-current liabilities
Loans and borrowings: amounts
falling due after more than one
year (117,041)
(117,041)
Net identifiable liabilities
acquired (124,611)
Add: Goodwill 2,322,064
2,197,453
The acquisition of TILG was centred on the acquisition of
the know-how of the senior management team with over 10 years
of experience in working with schools, further education
and higher education establishments and employers, engaging
students with their future world of work. As know-how relates
to human capital and cannot be separately valued, the excess
of the purchase consideration over the fair value of the
net identifiable liabilities acquired has been classified
as goodwill.
On 12 April 2021, the Group acquired the entire share capital
of Launchmycareer Pvt Limited, an Indian-based business ("LMC")
for cash consideration of GBP1,092. The acquisition will
allow the Group to execute its' strategy in respect of Launchmycareer.com
in India. Total acquisition-related costs totalled GBP112,847,
of which GBP112,847 was charged to administrative expenses
within the Statement of Comprehensive income in the current
financial year (2020: GBPnil).
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END
FR SEEESSEESEDA
(END) Dow Jones Newswires
August 22, 2022 02:00 ET (06:00 GMT)
Dev Clever (LSE:DEV)
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