TIDMSYME
RNS Number : 2373D
Supply @ME Capital PLC
28 June 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
28 June 2021
Supply@ME Capital plc
(The "Company" or "SYME")
Publication of Annual Report and Consolidated Financial
Statements
for the Year Ended 31 December 2020
Supply@ME Capital plc, the innovative fintech platform which
provides Inventory Monetisation(c) services to manufacturing and
trading companies, is pleased to announce the publication of its
Annual Report and Consolidated Financial Statements for the year
ended 31 December 2020.
A separate announcement providing details of the 2020 Annual
General Meeting will be made shortly.
Following publication of this Annual Report and Consolidated
Financial Statements, and before the issue of the 2021 interim
financial statements, the Company will issue a Half-Year Trading
Update to 30 June 2021 which will include trading information from
the TradeFlow business.
Notes
Supply@ME enables businesses to generate cashflow, without
incurring debt, by monetising their existing stock. Before a
business has found an end-customer for its inventory, the Supply@ME
platform enables them to sell ("monetise") their stock and receive
cash immediately to boost their working capital. The Supply@ME
service enables strong companies to improve their working capital
cycle. SYME does not monetise inventory for companies in financial
difficulty or with inventory that they are struggling to sell.
Contacts
Alessandro Zamboni, CEO, Supply@ME Capital plc,
investors@supplymecapital.com
Paul Vann, Walbrook PR Limited, +44 (0)20 7933 8780;
paul.vann@walbrookpr.com
Brian Norris, Cicero/AMO, +44 (0)20 7947 5317
Registration number: 03936915
Supply@ME Capital plc
Annual Report and Consolidated Financial Statements
for the Year Ended 31 December 2020
Chief Executive's Review and Chairman's Statement
We are pleased to report to you on the Group's activities in the
year to 31 December 2020, and subsequent developments to date.
These financial statements represent the Group's first period of
trading on the Main Market of the Stock Exchange since the
acquisition of Supply@ME S.r.l..
Business overview
Global landscape: a huge addressable target market
Inventory monetisation facilities can play a key role in
addressing the financing needs of the broadly defined global supply
chain market. According to "The 2020 McKinsey Global Payments
Report", insights into that market reveal:
-- $17 trillion, as potential market for supply-chain finance.
-- 80% of eligible assets that do not benefit from better
working capital financing. The remaining one-fifth of assets are
often inefficiently financed.
-- $14 trillion, managed directly (not financed).
-- $ 2.5 trillion, currently addressed by seller-side finance
solutions. In this regard, inventory financing represented, in the
past year, 10% of the Seller-side financial solutions, while the
receivables financing segment (including factoring, invoice
discounting and receivables finance in all its forms), remains the
largest segment with an estimated 65% market share.
-- $ 0.5 trillion, addressed through buyer-led solutions.
-- $1.5 trillion as the global gap in trade finance. In this
regard, the overall trade finance market can be roughly
differentiated into three segments, each with unique product
dynamics:
o Documentary business, which includes traditional
off-balance-sheet trade finance instruments, such as letters of
credit, international guarantees, and banks' payment obligations.
These instruments are typically used to cover the two corporate
parties against potential transaction risks (e.g., an exporter
protecting against country-related risks of its importer's domestic
market);
o Seller-side finance, including two main financial instruments:
factoring and invoice finance. These instruments address the
financing needs of corporate sellers by advancing liquidity related
to commercial transactions;
o Buyer-side finance, which is typically aimed at large buyers
and their suppliers. It covers the financing needs of suppliers
originated by large buyers, like reverse factoring, where suppliers
can access third-party financing for buyer-approved invoices, as
well as dynamic discounting, where buyers pay suppliers early in
exchange for discounts on the invoice. This has traditionally been
a smaller and more fragmented market (roughly $500 billion of
turnover financed), but is now growing at double-digit rates,
driven by increasing interest and new offerings by players.
Seeing the wider opportunities related to the untapped supply
chain finance market, the Company wants to play a key role in this
space, gaining traction from its inventory monetisation services to
provide a unique non-credit approach and covering both "in-transit"
and warehoused goods.
Delivering a unique alternative facility for SMEs and Large
Corporates - and a new asset class for investors
Supply@ME delivers an innovative platform ("Platform") for
inventory monetisation that enables a wide range of manufacturing
and trading customers to improve their working capital position by
releasing capital from their inventory stock. The Platform matches
the working capital needs of its customers, with capital invested
through the Platform by its inventory investors ("Inventory
Funders").
Investors in Supply@ME shares gain exposure to the fee income
generated by the Platform from inventory monetisation. Inventory
Funders subscribe financial instruments that are secured by
inventory portfolios.
The highlight event for Supply@ME Capital Plc (LON:SYME - the
Company or SYME) in the year to 31 December 2020 was the successful
acquisition, via a reverse takeover, of Supply@ME S.r.l. together
with a successful Placing and Main Market Listing on the London
Stock Exchange on 23 March 2020. These were both key milestones
that will enable the Group to develop and fulfil its ambition to
become a leading platform for inventory monetisation (Supply@ME
Capital plc changed its name from Abal Group plc on 30 March
2020).
The Company's purpose is to be the leading fintech inventory
monetisation business enabling companies to optimise their working
capital cycle through the release of capital from their inventory,
in a time and price efficient way.
Its immediate strategy of creating a highly scalable global
business is built on three key objectives:
-- delivering a unique facility, via a digitised route,
attracting and on-boarding its customers ("Client Companies"),
-- developing a cutting-edge technology Platform that
efficiently manages the Inventory Monetisation process, and
-- implementing a repeatable, multi-channel funding strategy to
diversify and scale-up its Inventory Funder investor base, allowing
the asset management industry to diversify its portfolio by virtue
of a real new asset class.
Building the fundamentals: milestones 2020 achieved towards the
key objectives
2020 saw the groundwork laid for a number of business
initiatives which have either been implemented or are close to
fruition. The Company also strengthened its board and senior
management team with the appointment of a Chief Financial Officer
and several highly experienced individuals to key positions.
Looking at the business plan's strategic pillars, apart from the
delay in delivering the first inventory monetisation in 2020, most
of the other work streams planned are on-track or completed.
Specifically:
-- Client Company sourcing partnerships have been established in
Italy, the UK, MENA and the US with 14 partners to deliver an
ongoing stream of monetisation demand to the Platform;
-- the technology Platform has been further developed and is now
operational and ready to implement the first monetisation
transaction
-- the Company has in place a multi-channel global funding strategy:
o Middle East: Shariah structure approval
o Italy: strategic agreement with the institutional asset
manager Quadrivio Group (and its Industry 4.0 fund) who are working
on a European bank acquisition. In parallel, establishing a
Self-Funding model in order to allow other banks to promote the
inventory monetisation service to their customer base
o Italy and UK: progress with the Italian and UK securitisation
program managed by Storm Harbour
o USA: partnership with The Trade Advisory aimed at delivering
the inventory monetisation service gaining traction from Mr Anthony
Brown's ecosystem (Funders, Client companies, warehouse service
providers etc.).
Finally, talks began in 2020 with Tradeflow Capital Management
Pte Ltd ("TradeFlow"), a Singaporean complementary inventory
"in-transit" fintech business . In the first half of 2021, those
initial discussions developed into a concrete acquisition
transaction of their business, which was announced on 26 May
2021.
This acquisition will enable SYME's customers to monetise an
additional step of the inventory lifecycle (inventory in-transit)
through its Platform as well as provide access to TradeFlow's'
existing Inventory Funders. It will also potentially establish a
base for inventory monetisation activity in the Singapore region
covering the "East and Far-East": the final target geography of the
SYME global Platform.
Financial overview
In summary, from a financial viewpoint, the Group has
transformed successfully from a cash shell listed on AIM, to a
Group admitted to the Official List as a Main Market company,
standard segment, trading on the London Stock Exchange.
In the period to 31 December 2020 the Company raised
GBP2,234,000 gross (2019: GBPNil), GBP1,615,000 net from the issue
of new ordinary shares by way of a Placing.
Consolidated results
Revenues in the period* were GBP1,147,000 (2019: GBP4,000). The
loss before tax and the exceptional cost of listing (GBP1,376,000)
described below was GBP2,819,000 (2019: loss GBP687,000).
Total loss for the year was GBP2,962,000 (2019: loss GBP551,000)
and loss per share 0.01 pence (2019: 0.00)
At the year end, net liabilities were GBP452,000 (2019: net
liabilities GBP557,000) and cash balances were GBP552,000 (2019:
GBP143,000).
*Included within accruals and deferred income is GBP1,131,000
(2019: GBP634,000) relating to payments in advance made by client
companies for due diligence to pre-qualify them for access to the
inventory monetisation scheme. Under Italian GAAP, these amounts
are recognised in revenue in the year. Under IFRS, these amounts
will be recognised in future periods.
Further details are to be found in the financial review section
of the Strategic Report.
Change of accounting date / temporary suspension and subsequent
re-instatement of trading
The Company's shares were temporarily suspended from trading on
21 January 2021 due to a technical breach of DTR rule 2.0
(reporting timetable). This happened because SYME had, in
accordance with company law (and following a precedent set by Aston
Martin), proactively taken the decision to change its accounting
reporting date to 31 December to match that of its current
subsidiaries and likely future subsidiaries in the middle east and
USA. Countries have different standard reference accounting dates
but it had become clear that the typical reporting period across
the Group's target business geographies was the calendar year.
Therefore, on 19 January 2021, the Company changed its
Accounting Reference Date from 30 September to 31 December.
This change required the Company to produce two sets of historic
accounts:
- Audited accounts for the nine months to 31 December 2019,
which were published on 28 January 2021
- Unaudited Interim accounts for the six months to 30 June 2020, published on 29 January 2021
Although this created additional work in the short-term, it had
the immediate benefit of allowing us to produce 2020 accounts
completely segregated from the Abal business and it also became
clear that in the longer term, aligning all of the reporting dates
to the calendar year would significantly streamline the financial
reporting consolidation process.
Despite being compliant with company law timetables for
reporting when accounting reference dates are changed, the Company
was advised that it had triggered a technical stock exchange
reporting timeline breach and the Company therefore requested the
temporary suspension of its shares on 21 January 2021. The
subsequent restoration process was managed directly with the FCA
during February and trading in the Company's shares resumed on 9
March 2021.
Treatment of the Reverse Takeover (RTO)
Accounting for the RTO presented a very complex accounting
challenge, and a detailed analysis is to be found in Note 3 to the
Group's consolidated financial statements. Nevertheless, after a
great deal of input by technical teams, there was an underlying
principle to represent: Supply@ME S.r.l. - the Italian operating
company - reversed into the shell of Abal Group plc (which became
Supply Me Capital plc) in order to get a public company listing. It
was this action which needed to be costed; and that cost needed to
pass through the Income Statement. All other movements that had to
be accounted for went directly through specific balance sheet
reserves.
Therefore Supply@ME S.r.l. became the "deemed acquirer" of Abal
Group plc. The logic that was applied to the calculation of the
deemed cost of listing was relatively straightforward, once this
distinction was made: the cost was effectively that of buying a
controlling interest in the shares of Abal Group plc at the time of
the transaction, adjusted by the working capital. It was made up of
the following components:
Abal Group plc share price (last price before RTO suspension) GBP0.0085
Shares required for acquisition of controlling
interest 101,094,220
------------------------------------------------ -----------------------
GBP'000
Cost of shares 859
Working capital adjustment:
Deduct
Cash and cash equivalents (93)
Receivables (50)
Add:
Payables 660
------------------------------------------------ -----------------------
Deemed cost of listing 1,376
------------------------------------------------ -----------------------
Reporting of the Company results under FRS 102
The Company results, presented in the Company financial
statements have been reported in accordance with FRS 102 (UK GAAP).
Under this reporting standard (the "FRS 102"), the results come
under the relevant sections of the Companies Act 2006 and in
particular as they relate to merger relief (sections 610, 612 and
615 of the Companies Act 2006) for corporate investments where more
than 90% of the acquired entity is represented by a share for share
exchange, as occurred with the acquisition of Supply@ME S.r.l.. FRS
102 allows the investment to be carried in the Company's balance
sheet at the nominal value of the shares issued.
Future plans and expectations
The completion of the two key initiatives - the Captive Bank
(and accordingly the first Italian monetisation transaction)
combined with the TradeFlow Capital acquisition - will allow the
Company to declare a real, "up and running" Platform, representing
the 3-years of positive track record of TradeFlow and nearly 7
years of investment developing the inventory monetisation
business.
In addition, the work streams on UK inventory monetisation and
the promotion of the Shariah version of the Platform will boost the
placing of SYME's inventory monetisation asset class with the
global asset management industry.
The Company also expects to develop a revenue stream by
"white-labelling" its Platform; effectively already conceived via
the "self-funding" route and by virtue of the opportunity for
institutions to use TradeFlow's proprietary technology for
dedicated trade financing.
In parallel the Company has to work to scale up its operations
and leverage its international footprint, which now covers all the
target geographies: UK, Europe, MENA, US and Far-East and in which
its technology and personnel will play a key role in this
"revenue-generation" phase of SYME.
In terms of strategic positioning and global investor
relationships, following the first monetisation, the Company
expects to see a "snowball" effect of penetration into a growth
phase of both the demand side and the supply side of this novel
financing concept that SYME's Platform facilitates - and from which
SYME intends to maximise shareholder value. It will seek to
increase its investor base, both geographically and with new
institutions and is already evaluating opportunities to create a
more global visibility of its unique initiative through new trading
venues.
Dominic White Alessandro Zamboni
Non-Executive Chairman CEO
25 June 2021
*************************
Strategic report
Introduction
The Strategic Report should be read in conjunction with the
Chief Executive's Statement and Directors' Report which are
included in these financial statements.
In January 2019, there was a change in strategy and the Group
announced its intention to sell all its business and assets, and
this sale was completed in February 2019. From the date of the sale
of the business the Group became a cash shell that was seeking new
investment opportunities.
These endeavours culminated successfully after the 2019 year end
and on 23 March 2020 Abal Group plc successfully raised funds
through a placing, issued consideration shares to secure the
acquisition of Supply@ME S.r.l. via a reverse takeover and gained
admission to the Official List as a Main Market company, standard
segment, trading on the London Stock Exchange.
Supply@ME Capital plc changed its name from Abal Group plc on 30
March 2020.
The comparative figures, and any results prior to 23 March 2020
of Supply@ME Capital plc (the sole company) have not been presented
and only the assets and liabilities of Supply@ME S.r.l, as the
effective acquirer, have been recorded in the consolidated
financial statements at their pre-combination amounts. This is
further explained below.
2020 was a difficult year globally for business given the
COVID-19 pandemic. However, it is the Company's view that demand
for SYME's inventory monetisation service has and will continue to
grow. This view is supported by the initial phases of Client
company origination, which have been positive.
Since the impact of COVID-19 started to be felt, and global
supply chains were dramatically affected, the "Just In Time" (JIT)
inventory standard for manufacturing and trading businesses has
been reassessed and in many cases forced to change. Many businesses
are now increasingly preferring to, or having to, build inventory
levels to avoid supply chain shortages and subsequent loss of
trade.
Reducing risks in the supply chain by manufacturing locally
rather than thousands of miles away, and, increasing inventory held
may become the new norm.
This new landscape, and required growth in global inventories
post pandemic, reinforces the Company's belief in the large and
growing addressable international market for inventory monetisation
services.
Business Model
Supply@ME (LON:SYME) is an innovative Platform for inventory
monetisation that enables a wide range of manufacturing and trading
customers to improve their working capital position by releasing
capital from their inventory stock. For this purpose, SYME matches
the working capital needs of its customers with capital invested by
its inventory funders.
How an inventory monetisation process works
There are 5 steps to an inventory monetisation:
1. Client company sourcing.
2. Due diligence phase: each Client company is pre-qualified by SYME's analyst team for:
a. satisfactory credit and insurability status;
b. appropriate inventory characteristics;
c. internal organisation and internal controls.
3. Inventory digitalisation and monetisation: including
recording every inventory movement (in/ out) into a blockchain to
prevent any data-tampering by either the Platform or third parties,
and thereby improving:
a. the transparency and consistency of reporting; and
b. the enforceability of the contracts.
4. Monitoring: once the Client company sells the inventory to
the Platform and continues to manage the stock on its premises in
order to sell to the end customer, the Platform manages several
processes aimed at monitoring:
a. adherence to the KPIs (sales performance indicators) of the agreement;
b. the physical status of the inventory via site visits;
c. sales to end customers through the Platform;
d. replenishing of inventory levels in parallel with rolling
over of the financing facility during the life of the contract.
5. Winding down of the agreement, alternatively:
a. taking action to resell inventory where commercial defaults occur;
b. when final inventory is sold, to pay down the capital
outstanding and no new inventory is required to be monetised.
To provide capital for the monetisation of inventories, the
Platform uses segregated (off-balance sheet) special purpose
companies ("Stock Companies") to issue financial instruments (such
as secured notes) that will be subscribed for by institutional
investors.
Group corporate structure
For each geography, SYME will establish a subsidiary to include
personnel aimed at managing the five steps described above. As at
the date of this report, the Company has its main subsidiary in
Italy; it has formed a subsidiary in the UK and is processing an
application to open a new subsidiary in the UAE.
The TradeFlow Capital Management Pte Ltd. ("TradeFlow")
acquisition will allow SYME to expand its operations also in
Singapore, covering the East and Far-East region.
Innovation & IP rights
The Platform's innovation is a combination of technology
(software, cloud components, blockchain infrastructure) as well as
the following components:
-- innovative legal & accounting framework (which allows the
Client companies to recognise revenues in relation to the inventory
monetisation transaction);
-- proprietary methodologies aimed at analysing the inventory risk around each transaction;
-- a new asset class (a financial instrument in the perspective
of the Inventory Funders) with underlying marketability of the
inventory monetised.
Principal activities
The Company manages its principal activities through the
following main work streams:
1. Inventory funding programmes;
2. Client company originations;
3. Platform (product) development.
1. Inventory funding programme overview
The Company is developing the following routes to funding its
monetisation service.
i) Open-Funding
Open-Funding is gathering financing for Inventory Monetisation
through securitisation vehicles or other third-party financing
facilities.
Client Companies are sourced by Supply@ME via its commercial
partners.
In 2020 two Open-Funding structures were being marketed. One
focused on an Italian portfolio and the other on a more diversified
international inventory portfolio.
The first Open-Funding structure is an inventory-backed
securitisation note programme , arranged and distributed by
StormHarbour Securities LLP ("SH"). In this regard, on 30 October
2020, Supply@ME announced its decision to collaborate with a single
Inventory Funder ("Investor") for the first securitisation
issuance. As announced, this investor has expressed the preference
to invest in a more diversified portfolio by country. SYME's UK
team is therefore working with the Investor to complete legal
requirements and agree terms reflecting a wider global portfolio
(in particular in the UK and UAE which both operate under English
common law, a preferred jurisdiction of this Inventory Funder).
Following this revised funding strategy and taking into account
the growth of the portfolio shown below, SH is continuing to roll
out its securitisation placing programme as per the RNS of 20 April
2020.
The second Open-Funding structure is a Shariah compliant
investment product . This widens the potential investor base for
the inventory monetisation platform to include the Islamic Finance
Industry. Since its launch, the Shariah-compliant version of the
Platform has seen strong levels of interest. SYME continues to work
with the Shariah Funding Specialist towards a Shariah compliant
capital market placement.
The latest - new - Open-Funding structure is related to the two
TradeFlow Capital Funds of which Tradeflow Capital Management Pte
Ltd. is also the investment advisory company.
Specifically, TradeFlow's non-credit approach to enabling
physical commodity import/ export transactions, which is unique in
the trade finance hedge fund world, swaps pure credit risk faced by
investors in other trade finance funds for real-world insurable
physical risks. The Funds do this by simultaneously entering into a
purchase contract for the commodity from the supplier at a fixed
price (on behalf of the end buyer) and an onward sales contract to
the end buyer at a fixed price, the Funds are not exposed to price
risk per se. Only if the end buyer were to default by not paying
the full value of the cargo upon delivery could the Funds be
potentially exposed to the commodity asset price falling. This
statistically low risk event is mitigated by the risk management
methodology employed by the Funds, which looks very similar to the
approach used by modern day financial market clearing houses.
Looking at the track record of the funds, in May 2018 the first
Trade Flow fund went live (the CEMP - USD Capital Trade Flow fund
SP) a fund which gives investors all the benefits and
diversification of Trade Finance Asset Class combined with further
diversification away from private credit. The strategy offers a
superior Raroc return with a "principal" ownership and control
model of the underlying physical asset. This offers investors a low
risk profile, fixed income style return, with equivalent risk of
loss quantified at "AA" S&P equivalent by an independent study
done in September 2018. In February 2020, TradeFlow launched a EURO
version of the USD Trade Flow Fund. The flagship USD fund has an
over 3 year track record of consistent returns, returning +6.01%
net in 2019 and +5.93% net in 2020, consistently delivering net
Average monthly returns of +50bps to investors with a Volatility of
returns below 0.75%.
At the date of this report the two Funds:
-- managed over USD 500mm of trades;
-- processes over 700 transactions, concerning 25 commodity types from over 15 countries;
-- scored 0 defaults since inception;
-- doubled the Assets Under Management during the Pandemic;
-- manages a fully supply-chain digitised system for scalability.
ii) Captive-Funding
The Captive-Funding strategy is the gathering of financing
through a strategic "captive" relationship with a bank.
In this funding channel, Client Companies are sourced by
Supply@ME, via its commercial agreements, the target Bank and
potentially the wider network of Quadrivio Group and its
partners.
As stated above, the original single Inventory Funder, that had
initially proposed to fund a wholly Italian portfolio, has
expressed a preference to invest in a more diversified inventory
portfolio across several countries rather than in a single country.
SYME has therefore agreed with its partners that, subject to the
successful completion of the Captive Bank transaction, this
Captive-funding route will be used to begin the monetisation of its
Italian portfolio of Client companies. The first group of Italian
Client companies that are expected to be monetised have been
informed of this solution.
iii) Self-Funding
Self-Funding is gathering financing through banks and other
institutions ("Self-Funders") that also offer the Inventory
Monetisation service directly to their customers, such that the
banks and their client base can benefit from the systems,
assessment, and monitoring processes of Supply@ME's Platform.
Client companies are sourced by the Self-Funders.
The Company is continuing to work with several Banks across the
jurisdictions now ready to be activated (Italy, UK, UAE) in order
to design an integrated service model, whilst taking into account
the upcoming key role of the Captive Bank as the "cornerstone"
Inventory funder.
This funding route is, as well, enhanced by TradeFlow's
business. In this regard, on the 30th March 2021, the ICC Secretary
General John W.H. Denton AO announced an ambitious partnership with
TradeFlow Capital Management during the World Trade Organization's
2021 Global Trade & Blockchain Forum, as part of ICC's growing
effort to enable SME access to short-term liquidity to survive the
ongoing economic crisis and thrive in the post-pandemic future.
Leveraging TradeFlow Capital Management's innovative non-lending
and non-credit based instruments and ICC's global network of over
45 million chambers of commerce and businesses, the partnership
will enable the creation of an ICC SME Fund to provide small
businesses with the right level of financial support to execute
import/export trades in bulk commodities. By leveraging the
combined strengths of ICC and TradeFlow, ICC TradeFlow Capital has
the potential to enable many billions of dollars of SME commodity
transactions each year.
2. Client Company origination
Overview
The portfolio of Client Companies continues to grow. Gross
origination of Client companies (the KPI that tracks demand for
inventory monetisation) increased 15.6% between December 2020 and
the end of April 2021 to GBP2.116 bn (EUR2.461bn @
GBP1=EUR1.1628)
Value (GBP) 31.3.20 30.6.20 30.9.20 31.12.20 30.4.21
Gross origination ([1]) 1.05bn 1.23bn 1.41bn 1.83bn 2.116bn
-------- -------- -------- --------- --------
Number of client companies 82 97 142 165 194
-------- -------- -------- --------- --------
According to the Global Industry Classification Standards (GICS)
classification adopted by the Company, the key Portfolio core
sectors are currently Materials, Capital Goods, Retailing &
Food and Beverage & Tobacco. Below is a breakdown of the Client
company origination with reference to the geographical region
served.
Client company Geographical breakdown 30.4.21
A geographical breakdown of SYME's client company portfolio is
given below.
Value (GBP) UK MENA Europe (Italy) Other geographies Totals
Gross origination 260.5m 175.2m 1.551bn 129m GBP 2.116bn
------- ------- --------------- ------------------ ------------
Number of client companies 23 12 158 1 194
------- ------- --------------- ------------------ ------------
Within the US region, the acquisition of Tradeflow will give the
Company the opportunity to deliver an innovative "inventory in
transit" monetisation model for US importers, whilst also gaining
traction from The Trade Advisory network.
Client company net originations 30.4.21
The following table shows net originations, classified by the
different phases of the commercial and due diligence process of the
Platform.
In total, 72 Client companies were lost, either before or after
signing the term-sheet. Of those, 20 (28%) either failed to meet
creditworthiness criteria or had other negative due diligence
results that rendered them ineligible. A further 20 (28%) who
dropped out because of the delays in obtaining securitisation
funding are expected to come back on board once the first
securitisation has been completed.
Net Retention
Net origination retention totals GBP1.555 bn (EUR 1.809bn @
GBP1= EUR1.1628), split as follows:
Value (GBP) UK MENA Europe (Italy) Other geographies Totals
Pre-analysis/ NDA 260.5m 175.2m 838.3m 129m GBP1.4bn
----------------- ------- --------------- ------------------ ----------
Number of Companies 23 12 72 1 108
----------------- ------- --------------- ------------------ ----------
Term sheet signed - - 152.3m - GBP152.3m
----------------- ------- --------------- ------------------ ----------
Number of Companies - - 14 - 14
----------------- ------- --------------- ------------------ ----------
Lost customers: 72 Expect to return 20
Lost before term sheet signed - - 336.1m - GBP336.1m
----------------- ------- --------------- ------------------ ----------
Number of Companies - - 51 - 51
----------------- ------- --------------- ------------------ ----------
Lost after the term sheet signed - - 225m - GBP225m
----------------- ------- --------------- ------------------ ----------
Number of Companies - - 21 - 21
----------------- ------- --------------- ------------------ ----------
In terms of originations lost:
-- 24% of the Client companies lost before signing a term sheet (12) were deemed "not-eligible";
-- 38% of the Client companies lost after signing a term sheet (8) were deemed "not-eligible";
-- the Company expects to regain 28% of the initiatives lost
(20) after the completion of the first inventory monetisation
transaction.
3. Platform (product) development
Production management
The system architecture of the Platform is made of several
components, mostly of them managed in partnership with SIA:
-- software modules focussed on the management of inventory trading and monitoring activities;
-- productivity tools aimed at sharing information (data and documents) via cloud technology;
-- database infrastructure aimed at storing data, incorporating
the use of blockchain technology.
The Company considers its partnership with SIA
(https://www.sia.eu/en) as a strategic asset, particularly
considering the recent merger between SIA and NEXI that will create
a EUR15 billion payment giant and the largest blockchain service
provider in Europe (source: fintechfutures.com).
In addition, by virtue of the acquisition of TradeFlow, SYME
will update the general system architecture of the Platform to be
able to map potential (existing and near term) synergies between
the mutual systems.
Intellectual Property
The Company continues to evaluate further forms of intellectual
property protection, in particular relating to its innovative
true-sales model and related legal contract framework.
Internet-of-things
The Company, as outlined in its business plan, is exploring
potential joint business alliances with Internet-of-things vendors
such that it can begin to develop a unique "Internet of Inventory"
tracking and monitoring product to enhance its offer. In this
regard, the acquisition of TradeFlow could boost this work
stream.
Major events during the period
Prior to the reverse acquisition and Main Market Listing, the
Company (formerly Abal Group Plc) traded on London's Alternative
Investment Market (AIM). Pursuant to AIM Rule 15, the Company
became a cash shell on 5 February 2019 following the completion of
the disposal of its core operating business (known as Imaginatik),
and trading in the Company's shares was subsequently suspended on 6
August 2019.
On 27 September 2019 the Company announced that it had entered
into a conditional sale and purchase agreement to acquire the
entire issued share capital of Supply@ME S.r.l. Cancellation of the
admission to trading of the Company's ordinary shares on AIM took
effect on 7 February 2020, in accordance with AIM Rule 41.
On 23 March 2020, Abal Group plc completed the following
transactions:
-- reverse acquisition of Supply@M E S.r.l., a company registered in Italy;
-- placing of 331,604,094 shares raising gross proceeds of GBP2,240,317; and
-- admission to the Official List and trading on the London Stock Exchange's Main Market.
The transaction was effected by way of the issue of
32,322,246,220 consideration shares to the shareholders of
Supply@ME S.r.l. The market capitalisation of the Company on
Admission at the Issue Price per share under the Listing Prospectus
was GBP227,482,090.
Following the reverse takeover and the commencement of dealings
on 23 March 2020, the Company achieved these important milestones
during the period:
-- 10 August 2020: UAE business expansion - MOU signed with
Imass Investments, a leading Middle East Investment Company, for
the first Supply@ME pilot in the region. This represents the start
of a planned rollout of the Inventory Monetisation platform in the
Middle East;
-- 4 September 2020: business alliance signed with EPIC SIM (now
Azimut Direct), a leading SME Italian fintech marketplace. The
alliance between Supply@ME and Epic creates a new sales channel for
the Company, including client company origination, sourced as
companies come to the Epic fintech platform, and inventory
funding;
-- 21 September 2020: strategic agreement signed with Quadrivio
Group (a leading European private equity fund) and the 1AF2 S.r.l.
(now the AvantGarde Group SpA - major shareholder of the Company)
in order to develop a funding agreement between SYME and a target
European bank ("Captive Bank") which Quadrivio Group and the
AvantGarde Group committed to purchase. This strategic agreement
allows the Company to deploy a new funding route ("Captive
Funding");
-- 22 October 2020: Strategic agreement signed with Mr. Anthony
Brown and The Trade Advisory to launch the Supply@ME's platform in
the USA. The Trade Advisory specialises in US international trade
and finance, introducing global and local lenders and investment
funds to businesses looking to expand their cross-border
activities. It has helped its clients to launch new trade finance
products generating significant additional trade finance
revenues;
-- 30 October 2020: exclusivity basis agreement decided in order
to complete the placing process (managed by StormHarbour Securities
LLP) of the first securitisation issuance. The Company announced on
10 September 2020 that it was analysing whether to syndicate its
first securitisation note across a number of investors, or work on
an exclusive basis with one investment fund. Following detailed
evaluation, SYME confirmed that it has agreed to partner on an
exclusive basis with a global investment fund (the "Investor")
whose intention is to subscribe for the whole of the first issuance
and become a long-term strategic partner of the Company. Whilst
this decision had put back slightly the date of completion of the
first issuance, the opportunity to form a strategic partnership
with the Investor would provide invaluable benefits to SYME, both
short and long-term.
Financial review
We report here the results of the SYME Group, which incorporate
the consolidated activities and financial position of Supply@ME
S.r.l. for the full year, and those of Supply@ME Capital Plc from
the date of the reverse takeover (RTO); that is to say, 23 March
2020. The comparatives for the prior year (2019) refer exclusively
to the results of Supply@ME S.r.l.
Revenues in the year were GBP1.15 million (2019: GBP0.00
million) and were predominantly earned by charges for due diligence
conducted on potential clients. Gross profits after direct costs of
sales were GBP0.41 million (2019: gross loss GBP0.76 million).
Other administrative costs were GBP1.90 million (2019: GBP0.10
million). Not included in revenues in the period under IFRS
accounting are GBP1.13 million (2019: GBP0.63 million) of advanced
payments by customers that will be recognised as revenue in future
periods.
The consolidated loss before taxes and exceptional costs
associated with the RTO was GBP1.44 million (2019: loss GBP0.69
million). The exceptional cost, the "deemed cost of listing",
explained in the Chief Executive's Review and Chairman's Statement
above and in Note 3 to the Group consolidated financial statements
below, was GBP1.38 million (2019: nil). The total loss after tax
for the year was GBP2.96 million (2019: loss GBP0.55 million) and
the loss per share was 0.01 pence (2019: 0.00).
Total assets of GBP3.33 million (2019: GBP1.45 million) include
Intangible Assets, being the capitalised development costs of the
Platform, net of amortisation, of GBP1.24 million (2019: GBP0.39
million), and cash balances of GBP0.55 million (2019: GBP0.14
million). Net liabilities were GBP0.45 million (2019: GBP0.56
million).
At the period end, two warrants were outstanding and have been
included in the Balance Sheet liabilities at a combined valuation
of GBP24,000 (2019: n/a).
Key Performance Indicators:
As stated in the Prospectus, the Directors and the Proposed
Directors have set a business strategy to achieve the following
goals.
The tables below track the progress made for each strategic
action as 30 April 2021.
#1 Aiming to be the best fintech inventory data monitoring
business
ID Strategic actions KPIs used for Milestone KPIs results
measurement
1.1 Banking account Delivery completed Q1 2021 Delayed
integrated compliant to software
quality standards Captive Bank funding
agreement will
allow to complete
the stream creating
a strong monitoring
process
---------------------------- ------------------------ ---------- ---------------------------
1.2 Due diligence/onboarding External providers Q2 2021 On track
digitization (trusted, partnership signed
online simulators, SIA partnership
external partnership Proprietary model allows SYME to
signed rating integration) re unsold risk develop an end
to end information
Delivery completed system with distributed
compliant to software ledger technology
quality standards Preliminary agreement
with inventory
specialists (Gordon
Brothers and SIA
Group) in order
to support the
due diligence and
monitoring phases
Further project
on track with a
Big4 firm in order
to develop an inventory
unsold value at
risk (statistical
proprietary model)
---------------------------- ------------------------ ---------- ---------------------------
1.3 ERP fully integrated ERP vendors partnership Q2 2021 On track
(firstly SAP, IBM, signed (SAP)
Oracle Q2 2021 Numbers of ERP Q2 2022 APIs/ Data factory
(SAP) ERP vendors integrated (other framework is under
and Microsoft) Delivery completed ERP) design in order
compliant to software to allow each Client
quality standards company to automated
the upload processes
into the Platform
---------------------------- ------------------------ ---------- ---------------------------
1.4 Internet of Things IoT vendors partnership Q4 2021 On track
(smart cameras, signed
RFID) integration Identified potential
for inventory off-site Delivery completed US partners
monitoring compliant to software
quality standards
---------------------------- ------------------------ ---------- ---------------------------
1.5 Remarketing digital Remarketing partnership Q1 2022 On track
workplace (e-marketplace signed
where remarketer Preliminary agreement
can monitor and Delivery completed with inventory
place signed Inventory compliant to software specialists (Gordon
purchase offers) quality standards Brothers and SIA
Group) in order
to support the
inventory liquidation
phase
Further discussions
in place with specialised
Auctions
---------------------------- ------------------------ ---------- ---------------------------
#2 Developing a multi-channel funding strategy
ID Strategic actions KPIs used for Milestone KPIs results
measurement
2.1 Companies - omni-customer Number of new Q2 2021 Over-achieved
strategy (edu-marketing Client companies
initiatives, ERP's originated yearly
vendors partnership,
social activities,
web/online simulators
development)
(101 companies
by the
end March
21)
194 new Client
companies originated
by virtue of the
following origination
agreements:
1. Italy market
(EPIC SIM - now
Azimut Direct,
over 10 local intermediaries)
2. UK Market (Parzival
Partners, Altimapa)
3. MENA: iMASS
Investments
4. US: the TradeAdvisory
----------------------------- -------------------- ---------------- --------------------------------
2.2 Funders - diversifying Number of new Q3 2021 Delayed
the sources (securitisation sources of funding
notes continuous originated ITALY
road shows, commercial Captive Bank and
banks of funding Amount of funding 3 potential inventory
originated partnerships, originated per funders
partnership with new source UK & UK common
digital platforms law
(e.g. CrossLend) 3 potential inventory
funders
UAE
1 potential inventory
funder (Shariah
funding specialist)
US
2 potential inventory
funders
----------------------------- -------------------- ---------------- --------------------------------
#3 Creating a highly scalable global business
ID Strategic actions KPIs used for Milestone KPIs results
measurement
3.1 Operations: enhancement State of work Q1 2020 Completed
of new level of (% of progress)
"Group" internal re yearly recruiting Appointments of:
governance functions plan Head of Risk Management
directly into PLC Head of Business
(e.g. ICT Compliance, Operations
Risk Management).
-------------------------- --------------------------- ------------ -------------------------
3.2 Legal framework: Number of new Q3 2020 Over-achieved
roll out of the subsidiaries incorporated (first
current legal framework (and effective) geography) Business opened
(ready for Italian compared to business over the following
market) in order projections regions
to serve new geographies MENA, UK, US
-------------------------- --------------------------- ------------ -------------------------
Principal Risks and uncertainties
The following risks are considered by the Board to be the most
significant risks to the business:
Funding Risk
The Company is not currently sustainably profitable. Despite
strong confidence in its business plan and forecasts, the Directors
recognise there is a risk that it may require more funding but not
be able to find agreement with a funding partner. The Directors
have sought to mitigate this risk by identifying a number of
options for funding, including both equity and debt and, as stated
recently, the TradeFlow' acquisition.
Employee Risk
Failure to retain key executives could adversely affect the
Group's operating and financial performance. Retaining and
motivating key executives is a critical component of the future
success of the business. The loss of the services of any of the key
management personnel will adversely affect the Group's ability to
maintain or improve its operating and financial performance and as
a result, the Group is actively recruiting further key personnel in
other geographies to make it more robust.
Strategic risk (competition)
The Company's business model is that of an innovative Platform
for inventory monetisation, aiming to capitalise upon market
developments where supply chains may be placed under pressure,
leading suppliers to hold increased amounts of inventory in order
to supply both on and offline retailers, with a resultant
restriction on available working capital.
The Directors are unaware of other entities offering a similar
Platform, but are aware that future competitors could offer
superior scale and put pressure on prices which could affect the
Group's forecast revenues and profit margins.
Global Economic risk
The Company's business is substantially becoming global.
Accordingly, the Company is exposed to the general economic impacts
of COVID-19, and would also expect to be so in 2021, albeit the
current concern about supply chains having become too long and
uncertain does provide an opportunity for the company. Further,
with the United Kingdom having left the European Union in January
2020, and with the end of the subsequent transition period set out
in the UK-EU Withdrawal Agreement, the general weakness of both
economies may negatively affect the financial conditions of the
Group. The Directors recognise the risk and are working to analysis
the outlook of each market which the Platform is operating.
Financial Risk Management
The Board monitors the internal risk management function across
the Group and advises on all relevant risk issues. There is regular
communication with internal departments, external advisors and
regulators. The Group's policies on financial instruments and the
risks pertaining to those instruments are set out in the accounting
policies in notes 1 and 22 of the Group consolidated financial
statements.
Future development and strategy
As stated recently by the Company, the additional time invested
in addressing the request of the single Inventory Funder to invest
in a more diversified portfolio (by country) of inventory assets
and the subsequent refocus of the Captive-funding route on wholly
Italian portfolios, inspired SYME to study a more efficient funding
structure, also leveraging TradeFlow's experience in structuring
and advising hedge funds. The objective is to use the new funding
structure for the first monetisation transactions.
The new funding structure will envisage a global umbrella fund
which establishes special purpose vehicles ("stock companies") in
each operating geography. This investment structure:
-- may integrate also the existing TradeFlow Funds;
-- allows SYME to promote two investment opportunities to the
market (an equity stake at the level of the umbrella fund and debt
notes at the level of each stock company), expecting an increase of
the funding capacity of the Platform.
As well as completing the first inventory monetisation
transactions, the Group expects to resume the Self-Funding route in
partnership with the Captive Bank, after the completion of the
authorisation process.
The international addressable market for inventory funding has
been confirmed as very large, and will be further boosted by the
trade finance market opportunities in which the Company will
compete using the unique non-credit approach of TradeFlow.
Once the first inventory monetisation is launched, SYME and its
Inventory ("on premises" & "in transit") Monetisation Platform
will be instantly established as the leading fintech operator in
the sector.
Going concern
The board's assessment of going concern and the key
considerations thereto are set out in the Directors' Report in the
financial statements.
Capital structure
Details of the ordinary shares of the Company are shown in note
15 to the Group consolidated financial statements.
The Company has a class of ordinary shares of GBP0.00002 per
share and two classes of deferred shares of GBP0.04 per share and
GBP0.01 per share respectively, both of which carry no fixed
income.
Neither class of deferred shares is admitted to the Official
List on either the London Stock Exchange or any other exchange.
At the year end, certain warrants to acquire shares issued to
Eight Capital Partners Plc were still outstanding, as described in
note 16 to the Group consolidated financial statements.
Each holder of ordinary shares is entitled to receive the
Group's Annual Report and audited financial statements, to attend
and speak or appoint proxies and to exercise voting rights at the
general meetings of the Company. The Company's Articles of
Association (the 'Articles') do not have any specific restrictions
on the transfer of shares, restrictions on voting rights nor are
there limitations on the holding of such shares. The Board are not
aware of any agreement between holders of the Company's shares that
may result in restrictions on the transfer of securities or on
voting rights. No person has any special rights of control over the
Company's share capital and all issued shares are fully paid. The
appointment and replacement of directors and the powers of the
directors are governed by the Articles, the Companies Act 2006 and
related legislation. The powers of the directors are described in
the Corporate Governance Report of the Accounts.
Corporate responsibility
The Company is committed to conducting itself in a responsible
manner, whether in relations with its employees or its external
counterparts.
The Company aims for an internal culture of respect and
collaboration, to both support and challenge employee growth
potential. The Company promotes a culture whereby employees are
encouraged to propose ideas, considered in a respectful and
constructive manner. All employees are provided with structured
training to reinforce the highest values of ethical and moral
behaviour. In relation to dealings with external counterparts, the
Company seeks to maintain respectful and productive engagements
with each counterpart, regardless of size and nature of the
business.
Thus the Directors believe that the Company conducts itself in
adherence with the pillars of Corporate Social Responsibility, such
culture allowing it to operate ethically and within legal
obligations so as to support financial growth.
Greenhouse Gas Emissions and Streamlined Energy and Carbon
Reporting (SECR)
The Companies Act 2006 (Strategic Report and Directors' Report)
Regulations 2013 require quoted companies to report their annual
emissions and an intensity ratio in their Directors' Report. There
is a de minimis exception for organisations consuming less than
40MW of energy per year in the UK.
The Directors have reviewed the energy consumption used by the
Group and consider the Group to be exempt from reporting under the
regulations as the Group is a low energy user.
As a consequence, the Directors have taken advantage of this
exemption and have not therefore included an energy and carbon
report.
As far as the Directors are aware the Group's current business
activities (an innovative technology platform for inventory
monetisation) do not cause more than a negligible amount of
emissions.
Environmental issues
As far as the directors are aware the Group's business
activities do not cause a direct and disproportionate adverse
effect on the environment. On the contrary, one of the perceived
side-effects of its activities is to shorten its Clients' supply
chains, which should in principle reduce transportation within the
supply chain equation and bring a positive effect to the
environment.
The Board commits to keeping this under review as the Group's
business model establishes itself. Any change in such assessment
will be presented to the Directors for consideration as
appropriate.
Employee matters
The Group's policy is to attract staff and motivate employees by
offering competitive terms of employment. The Group provides equal
opportunities to all employees and prospective employees including
those who are disabled and operates in compliance with all relevant
national legislation.
The current business model is dependent on the current
employees' skills and the Directors will use all reasonable
endeavours to not only ensure these skills are maintained and
enhanced, but also keep the employees safe, incentivised and
motivated.
Diversity and equality
The Board recognises the importance of diversity, both in its
membership, and in the Group's employees. It has a clear policy to
promote diversity across the business. The Board considers that
quotas are not appropriate in determining its composition and has
therefore chosen not to set targets. All aspects of diversity,
including but not limited to gender, are considered at every level
of recruitment. Gender diversity of the Board and the Group is set
out below.
Directors, employees and gender representation
As at 31 December 2020 the Group had 14 full time equivalent
staff of whom 8 were male and 6 female. There were 3 male and 1
female Directors of the Board and in addition there was 1 male
staff in a senior management position.
Social, community and human rights issues
The Group seeks to achieve the highest ethical standards and
behaviours in conducting its business, with integrity, openness,
diversity and inclusiveness being high priority from the Board to
senior management and throughout the workforce. We have adopted a
formal equal opportunities policy which is contained in our
employee handbook. The aim of the policy is to ensure no job
applicant, employee or worker is discriminated against either
directly or indirectly on the grounds of race, sex, disability,
sexual orientation, gender reassignment; marriage or civil
partnership; pregnancy or maternity; religion or belief or age.
Directors' statement under section 172 (1) of the Companies Act
2006
Section 172 of the Companies Act 2006 requires Directors to take
into consideration the interests of stakeholders and other matters
in their decision making.
The Directors continue to have regard to the interests of the
Group's employees and other stakeholders, the impact of its
activities on the community, the environment and the Group's
reputation for good business conduct, when making decisions.
In this context, acting in good faith and fairly, the Directors
consider what is most likely to promote the success of the Group
for its members in the long term. We explain in the Corporate
Governance section of this annual report how the Board engages with
stakeholders.
The Directors are fully aware of their responsibilities to
promote the success of the Group in accordance with section 172 of
the Companies Act 2006.
At this time, the Board believes that it is compliant with all
ten Principles of the QCA Code. More information can be found in
the Corporate Governance section below.
The key Board decisions made in the year are set out below:
Significant events/decisions Key s172 matter(s) affected Actions and impact
RTO, listing, placing s172 (1) a, b, c & e In January 2019, there was a change in strategy
and the Group announced its intention to sell
all its business and assets, and this sale was
completed in February 2019.From the date of
the sale of the business the Group became a cash
shell that was seeking new investment
opportunities.
These endeavours culminated successfully after the
2019 year end and on 23 March 2020 Abal
Group plc successfully raised funds through a
GBP2,240,317 placing, issued 331,604,094
consideration
shares to secure the acquisition of Supply@ME
S.r.l. via a reverse takeover and gained admission
to the Official List as a Main Market company,
standard segment, trading on the London Stock
Exchange.
Supply@ME Capital plc changed its name from Abal
Group plc on 30 March 2020.
---------------------------- ---------------------------------------------------
Changed Year End s172 (1) a & e In the fourth quarter of 2020, the Board decided
to change its accounting reference date to
31 December in order to streamline and
future-proof its financial reporting processes.
This
resulted in having to insert a set of audited
statutory financial reports for the 9 months
to 31 December 2019. These were issued in January
2021 - the lateness of which incurred a
temporary suspension of the Company's shares,
lifted on 9 March 2021.
---------------------------- ---------------------------------------------------
Chief Financial Officer recruiting s172 (1) a The Company's Nomination Committee recommended the
appointment of a Chief Financial Officer.
This was achieved post year-end.
---------------------------- ---------------------------------------------------
Approved by the Board and signed on its behalf by
Alessandro Zamboni
Director
25 June 2021
*************************
Directors
The current board comprises four directors, whose details are
set out below:
EXECUTIVE DIRECTORS
Alessandro Zamboni - appointed 23 March 2020
Mr Zamboni is a director who specializes in the financial
services industry and related strategic and digital operating
models.
Since 2008, he has been managing the delivery and the sales
operations of a consulting company specialising in Regulatory &
Internal Controls for Banks and Insurance Firms.
Mr Zamboni founded The AvantGarde Group, the former parent
company of Supply@ME S.r.l., in 2014.
NON-EXECUTIVE DIRECTORS
Dominic White - (Non-Executive Chairman) appointed 23 March
2020
Chair of Audit Committee
Mr White has invested in public markets and private equity for
25 years. He has acquired and managed more than GBP3 billion of
assets across Europe and held board positions at a number of public
companies including KCR Residential, REIT Plc, Eight Capital
Partners Plc and Limitless Earth Plc, as well as at international
investment institutions such as Security Capital European and
Henderson Global Investors.
He is a member of the Institute of Chartered Financial
Analysts.
Susanne Chishti - appointed 23 March 2020
Chair of Remuneration and Nominations Committee and Senior
Independent Director
Ms Chishti brings over 20 years of financial expertise and
board-level experience focused on organisational governance, and a
strong understanding of the small/medium size enterprise market.
Her experience draws on 14 years in banking with senior positions
at Morgan Stanley, Lloyd's Banking Group and Deutsche Bank.
As CEO of FINTECH Circle she is an award winning entrepreneur
and global expert in financial technology, new business models and
a bestselling Editor of The FINTECH Book Series published by Wiley
.
Enrico Camerinelli - appointed 23 March 2020
Mr. Camerinelli is a Supply Chain specialist. He takes part in
projects launched by the United Nations Economic Commission for
Europe, the World Bank, the World Trade Board, and the Council of
Supply Chain Management Professionals relating to Supply Chain
finance and research.
He regularly attends major industry events as an invited guest
speaker.
Other directors in the year
Simon Charles (Non-Executive Director) - resigned 23 March
2020
Former Chair of Audit Committee and Remuneration Committee
Mr Charles is joint senior equity partner at the City of London
firm of solicitors Marriott Harrison LLP, having joined the firm in
March 2004. He is a qualified solicitor in England and Wales and
has substantial experience advising private and public companies
and investors in both a corporate and legal capacity. Mr. Charles
had worked closely with the Company for a number of years. Prior to
joining Marriott Harrison LLP, Mr. Charles worked in the corporate
finance department at Numis Securities Limited, where he advised
both AIM quoted and Main Market companies as a nominated advisor
and sponsor.
John Treacy (Non-Executive Director) - resigned 23 March
2020
Mr Treacy is a London based experienced small cap financier who
specialises in working with growing companies. He qualified as a
solicitor in the London office of a major international law firm
where he specialised in Capital Markets and Merger &
Acquisitions. From there he moved to practice corporate finance in
the advisory teams of several prominent UK brokerages where he
acted as an adviser to a number of AIM companies and advised on
numerous IPOs, acquisitions, debt restructurings and placings.
Board committees
The Board maintains three sub-committees:
-- The Audit Committee, responsible, amongst other things, for
making recommendations to the Board on the appointment of auditors
and the audit fee, monitoring and reviewing the integrity of the
Company's financial statements and any formal announcements on the
Company's financial performance as well as reports from the
Company's auditors on those financial statements. In addition, the
Audit Committee reviews the Company's internal financial control
and risk management systems to assist the Board in fulfilling its
responsibilities relating to the effectiveness of those systems,
including an evaluation of the capabilities of such systems in
light of the expected requirements for any specific acquisition
target. The Audit Committee meets at least twice a year, or more
frequently if required, and is chaired by the Chairman of the Board
with Susanne Chishti, a Non-Executive Director as a further
member.
-- The Remuneration Committee, which assists the Board in
determining its responsibilities in relation to remuneration,
including making recommendations to the Board on the policy on
executive remuneration, including setting the over-arching
principles, parameters and governance framework of the Company's
remuneration policy and determining the individual remuneration and
benefits package of each of the executive Directors. The
Remuneration Committee also ensures compliance with the Corporate
Governance Code in relation to remuneration wherever possible. The
Remuneration Committee meets not less than twice each year, and is
and comprised of two Non-Executive Directors: Susanne Chishti
(Chair) and Enrico Camerinelli.
-- The Nominations Committee, responsible, amongst other things,
for reviewing the structure, size and composition of the Board and
ensuring that it is comprised of the right balance of skills,
knowledge and experience, identifying and nominating for approval
candidates to fill any vacancies on the Board as and when they
arise, giving full consideration to succession planning for the
Company and making recommendations as to the composition of the
other committees of the Board. The Corporate Governance Code
recommends that a majority of the members of a nomination committee
should be independent non-executive directors. The Company's
Nomination Committee meets this requirement and meets not less than
twice a year and is chaired by Susanne Chishti; the other
Non-Executive Director being Enrico Camerinelli.
In the financial reporting period to 31 December 2019 as the
Group was non-trading, the board did not establish an audit
committee nor a remuneration committee.
Attendance at Board and Committee meetings 2020
Board Nominations committee Audit committee Remuneration committee
Meetings attended / held :
Alessandro Zamboni 8/8 1/1 1/1 1/1
Dominic White 8/8 1/1 1/1 1/1
Enrico Camerinelli 8/8 1/1 1/1 1/1
Susanne Chishti 7/8 1/1 1/1 1/1
Simon Charles 0/0 0/0 0/0 0/0
John Treacy 0/0 0/0 0/0 0/0
*************************
Directors' Report
The Directors present their report together with the audited
consolidated financial statements for the year ended 31 December
2020. A comprehensive review and assessment of the Group's
activities during the year as well as its position at the year end
and prospects for the forthcoming year are included in the Chairman
and Chief Executive's Statement and the Strategic Report. These
reports can be found in the relevant sections above and should be
read in conjunction with this report.
Results and dividends
The consolidated statement of comprehensive income is set out
Group consolidated financial statements and shows the results for
the year. Details about the reverse acquisition completed in the
year are disclosed in note 3 to the Group consolidated financial
statements.
The loss before tax for the year was GBP2,819,000 (2019: loss
GBP687,000).
The directors do not recommend the payment of a dividend.
Directors of the Group
The Directors, who held office during the period, and
subsequently, together with current Directors are as follows:
Mr Enrico Camerinelli - Non-Executive (appointed 23 March
2020)
Mrs Susanne Chishti - Non-Executive (appointed 23 March
2020)
Mr Dominic White - Non-Executive Chairman (appointed 23 March
2020)
Mr Alessandro Zamboni - Chief Executive (appointed 23 March
2020)
Mr Simon Charles (resigned 23 March 2020)
Mr John Treacy (resigned 23 March 2020)
Details of the Directors are set out in the Directors section
above.
Matters covered in the Strategic Report
A review of the business, future developments, subsequent events
and principal risks and uncertainties are disclosed in the
Strategic Report.
Corporate governance statement
The Corporate Governance Report set out in below forms part of
the Directors' Report.
Directors' and officers' liability insurance
During the year the Company had, as permitted by s234 and 235 of
the Companies Act 2006, maintained insurance cover on behalf of the
Directors and Company Secretary indemnifying them against certain
liabilities which may be incurred by them in relation to the
Company.
Financial Instruments
Note 22 to the Group consolidated financial statements sets out
the risks in respect of financial instruments. The board reviews
and agrees policies, delegating appropriate authority for applying
these policies to the Chief Executive and Chief Financial Officer.
Financial instruments are used to manage the financial risks facing
the Group and speculative transactions are prohibited. Treasury
operations are reported at each board meeting and are subject to
weekly internal reporting.
IFRS
The Directors have prepared the Group consolidated financial
statements in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
("adopted IFRS") and with those parts of the Companies Act 2006
applicable to companies preparing their accounts under adopted
IFRS.
Political and charitable donations
No political or charitable donations were made during the
period.
Directors' interests
The directors who held office during the year and their
interests in the ordinary shares of the Company were as
follows:
At 31 December 2020 At 31 December
2019
Ordinary shares Ordinary shares
--------------------- ----------------
Dominic White (held through IWEP Ltd) 970,723,449 Nil
--------------------- ----------------
Alessandro Zamboni (held through AvantGarde Group SpA) 12,742,513,009 Nil
--------------------- ----------------
Enrico Camerinelli Nil Nil
--------------------- ----------------
Susanne Chishti Nil Nil
--------------------- ----------------
Simon Charles (resigned 23 March 2020) Nil 315,371
--------------------- ----------------
John Treacy (resigned 23 March 2020) Nil Nil
--------------------- ----------------
Going concern
For the reasons set out below, the Directors consider that it is
appropriate to adopt the going concern basis in preparing these
nancial statements.
At the year-end the Group had cash balances of GBP552,000 (2019:
GBP143,000) and net current liabilities of GBP1,332,000 (2019: net
current liabilities GBP748,000). The Group has posted a loss for
the year after tax of GBP2,964,000 (2019: loss GBP554,000) and
retained losses were GBP3,706,000 (2019: losses GBP705,000).
The net current liabilities as at the year end of GBP1,332,000
included current liabilities of GBP1,131,000 in relation to
down-payments made by clients with respect to due diligence
services provided. The loss after tax of GBP2,964,000 was after
charging an exceptional, non-cash cost of GBP1,376,000 relating to
the Reverse Takeover referred to in note 3 to the Group
consolidated financial statements and a GBP145,000 tax charge which
is expected to be substantially reduced by research and development
credits for which the Group is applying.
During the year, the Group was successfully admitted to trading
as a Main Market company, standard segment, trading on the London
Stock Exchange having also issued placing shares with gross
proceeds of GBP2,240,000 (net proceeds of GBP1,615,000 after
deducting all costs in respect of the placing and reverse
takeover).
The Directors have reviewed the forecast cashflows for the next
12 months and consider the Group to be a going concern.
The cashflow forecasts are based on the enlarged group,
following the Reverse Takeover in March 2020 and therefore relate
to cashflows arising from the Group's Fin Tech platform that
focusses on inventory monetisation facilities. The Directors have
prepared the forecast using their best estimates; however, the
company is in its start-up phase and therefore they have identified
the following uncertainty in the model.
The ability of the Group to acquire inventory is reliant on
investment funding for securitisation being received, and whilst
the Group is in very advanced negotiations with several interested
partners, no securitisation investment had been finalised as at the
date of this report. If no, or limited investment is secured during
the next 12 months, the Group cannot acquire inventory as assumed
in the model and generate the service fee income.
In addition the group has a portfolio of interested customers,
with some having signed term sheets. The cashflow model assumes a
growth in customer base in line with the interest that has been
received in the product but there is uncertainty over the ability
of the group to be able to secure these new customers.
On the basis of the above matters the directors have a material
uncertainty in relation to its going concern status . In
mitigation, however, a corporate funding organisation has made
sufficient funds available to stimulate the growth of the Group and
accommodate any delays in revenue generation. Therefore, given the
significant interest from a growing secured customer base, as
described elsewhere in this report and the advanced nature of
securitisation funding negotiations, the Directors consider it
appropriate to prepare the financial statements on a going concern
basis.
Impact of the global pandemic
As noted previously in numerous announcements, the Board has
monitored closely the impact of COVID-19 on business
operations.
Impact on Client companies
SYME's Client company customer base remains strong and the
demand for inventory monetisation continues to grow. The number of
Client companies being originated by SYME has grown each quarter
since the Reverse Take Over in March 2020. Increasingly, following
COVID-19, many businesses are consciously choosing to build
inventory to avoid supply chain shortages and subsequent loss of
trade, rather than keep stock levels low. This is positive
development for SYME's business model as it expects that Client
companies internationally will look to monetise these higher
volumes of stock held.
Impact on Inventory funders
The impact of COVID-19 on Inventory funders, that is the
investors through the SYME Platform into the inventory portfolios,
has been more difficult to interpret.
Interest rates are at historic lows which means that investors
are getting lower returns on capital compared to previous years
when higher interest rates were the norm. SYME's new inventory
asset class will offer a strong relative margin compared to
interest rates on a risk adjusted basis. However, investors are
undoubtedly more cautious and taking longer to make decisions. Time
to close transactions, not only in Inventory funding, but across
the investment spectrum, has increased.
The announced delay to June 2021 forecast to complete the first
Inventory Monetisation has been the result.
We are positive about the performance of the Company in the
coming months as we expect the first securitisation transaction to
close and the Captive Bank to launch as announced in the latest
Trading Update. The re-opening of the global economies as the
uncertainty caused by COVID-19 dissipates, particularly in the UK,
Italy, the USA and UAE, our key target geographies, where
vaccination programmes are now showing the virus to be broadly
under control, should be a strong stimulus to the Group's timely
product offering.
Post balance sheet events
In the first four months of 2021, the Company announced the
following material events:
-- 11 January 2021: SYME announced that it has entered into an
agreement with Lenovo Financial Services META LLC ("LFS"). The SYME
Platform will be positioned as an alternative solution to
complement LFS's existing vendor programme offerings to their
network of customers in the Middle East, Turkey and Africa region
(excluding South Africa).
The purpose of the co-operation agreement, made with the
strategic support of iMASS, was to deliver a dedicated inventory
monetisation programme to LFS's customers which may also allow them
to evaluate the opportunity to adopt the upcoming Shariah version
of the Platform.
-- 20 January 2021: following the announcement of 3 November
2020, the Company, by virtue of the support of the Shariah Funding
Specialist and iMASS, announced that the authorisation process for
SYME's Shariah compliant Inventory Monetisation Platform was
successfully completed.
-- 21 January 2021: further to the Company's announcement of 19
January, 2021, the Company's shares were temporarily suspended from
trading on 21 January 2021 due to a technical breach of DTR rule
2.0 (reporting timetable). This happened because SYME had, in
accordance with company law, proactively taken the decision to
change its accounting reporting date to 31 December to match that
of its current subsidiaries and likely future subsidiaries in the
middle east and USA. Countries have different standard reference
accounting dates but it had become clear that the typical reporting
period across the Group's target business geographies was the
calendar year.
Therefore, on 19 January 2021, the Company changed its
Accounting Reference Date from 30 September to 31 December.
This change required the Company to produce two sets of historic
accounts:
o Audited accounts for the nine months to 31 December 2019,
which were published on 28 January 2021
o Unaudited Interim accounts to for the six months to 30 June
2020, published on 29 January 2021
Although this created additional work in the short-term, it had
the immediate benefit of allowing the Company to produce 2020
accounts completely segregated from the Abal Group' business and it
also became clear that in the longer term, aligning all of the
reporting dates to the calendar year would significantly streamline
the financial reporting consolidation process.
Despite being compliant with company law timetables for
reporting when accounting reference dates are changed, the Company
was advised that it had triggered a technical stock exchange
reporting timeline breach and the Company therefore requested the
temporary suspension of its shares on 21 January 2021.
The subsequent restoration process was managed directly with the
FCA during February and trading in the Company's shares resumed on
9 March 2021.
-- 9 March 2021: following confirmation from the Financial
Conduct Authority, the Company was announced the restoration of its
Listing on the Standard List of The London Stock Exchange and the
resumption of dealings in its Ordinary shares.
-- 17 March 2021: SYME announced on 17 March 2021 the signing of
Heads of Terms ("HoT") for the acquisition of Tradeflow Capital
Management Pte Ltd., the leading FinTech-powered commodities trade
enabler, focused on SMEs, based in Singapore.
A sale and purchase agreement was signed and announced on 26 May
2021.
The conclusion of the acquisition (expected in early July 2021)
will allow SYME's Platform to complete its global offering, by
monetising inventory (in particular commodities) "in-transit". Not
least, it generates a number of attractive synergy benefits for
SYME from both a funding and customer origination perspective.
-- 1 April 2021: Finally, the Company, in the current trade
update released on 1 April 2021, announced the appointment of Ms
Amy Benning as Chief Financial Officer with effect from 7 June
2021. Ms Benning joins from Alfa Financial Software Holdings plc, a
UK main market listed company. Prior to this she spent 12 years at
PwC London where she specialised in UK capital raising
transactions, M&A and IPOs for a range of clients.
-- 16 June 2021: The Company announced that it had entered into
a subscription agreement ("Subscription Agreement") with Negma
Group Ltd for the issue of an initial tranche of GBP5,600,000 of
Convertible Loan Notes at GBP56,000 par value for which it had
issued a drawdown notice at a subscription price of GBP50,000 per
Convertible Loan Note for an aggregate total of GBP5,000,000. The
Subscription Agreement allows for a further nine tranches to be
issued at the same par value at the exclusive option of the
Company.
Further details can be found in note 26 of the Group
consolidated financial statements.
Statement of Directors' Responsibilities
The Directors acknowledge their responsibilities 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 elected to prepare the Group consolidated financial statements
in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union ('IFRSs'). 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 of the Group's results for
that period.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and apply them consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether applicable IFRSs have been followed, subject
to any material departures disclosed and explained in the
financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and 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 Group and 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 that the Annual
Report and financial statements are made available on the website.
Financial statements are published on the Group'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 Directors are
responsible for the maintenance and integrity of the corporate and
financial information included on the Company's website. The
Directors' responsibility also extends to the ongoing integrity of
the financial statements contained therein.
Directors' responsibilities pursuant to DTR 4
The Directors confirm that to the best of their knowledge:
-- the Group consolidated financial statements have been
prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
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
-- the Annual Report includes a fair review of the development
and performance of the business and the position of the Group, and
the parent Company, together with a description of the principal
risks and uncertainties that they face.
Disclosure of information to the auditor
Each director at the date of approval of this annual report
confirms that:
-- so far as the directors are aware, there is no relevant audit
information of which the Group's and Company's auditor is unaware;
and
-- all the directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is
aware of that information.
Auditor
The auditor, Crowe U.K. LLP, will be proposed for re-appointment
at the forthcoming Annual General Meeting
Alessandro Zamboni
On behalf of the Board
Director
25 June 2021
*************************
Remuneration Report
The Company established a remuneration committee on 23 March
2020, at the time of its listing on the main London Stock Exchange
as described in the Strategic Report. The previous Remuneration
Committee in place was discontinued following the sale of the
business during February 2019.
The information in the Annual Remuneration Report only contains
information for the current year to 31 December 2020. Salary
information for prior year has not been provided as the company was
not listed on the main market. The financial statements for the
comparative period are available at Companies House.
Remuneration Committee
The Remuneration Committee assists the Board in determining its
responsibilities in relation to remuneration, including making
recommendations to the Board on the policy on Executive
remuneration, including setting the over-arching principles,
parameters and governance framework of the Group's remuneration
policy and determining the individual remuneration and benefits
package of each of the Executive Directors. The Remuneration
Committee will also ensure compliance with the Corporate Governance
Code in relation to remuneration wherever possible. The
Remuneration Committee, which is chaired by Susanne Chishti, meets
at least twice each year.
Nomination Committee
The Nomination Committee is responsible, amongst other things,
for reviewing the structure, size and composition of the Board and
ensuring that it is comprised of the right balance of skills,
knowledge and experience, identifying and nominating for approval
candidates to fill any vacancies on the Board as and when they
arise, giving full consideration to succession planning for the
Company and making recommendations as to the composition of the
other committees of the Board. The Corporate Governance Code
recommends that a majority of the members of a nomination committee
should be independent non-executive directors. The Company's
Nomination Committee will meet this requirement in due course. The
Nomination 'Committee which is chaired by Susanne Chishti meets at
least twice each year.
Remuneration Committee and Nomination Committee
The Remuneration Committee and Nomination Committee (the
"Committee") is responsible for the establishment and any changes
to the remuneration policy which will be reviewed every 12 months.
Under this policy the Committee approves the criteria and
parameters in respect of remuneration of the Board of Directors and
approve salary levels in respect of Executives and Personal by
external benchmarking and alignment of overall compensation.
Remuneration policy
The main aim of the Group's remuneration policy is the ability
to offer competitive remuneration packages which are designed to
attract, retain and provide appropriate incentives to Executive
Directors and Senior Management with the experience and necessary
skills to operate and develop the Group's business to its maximum
potential, thereby delivering the highest level of return for the
shareholders.
The remuneration policy was set on 7 June 2021 and will be
reviewed every 12 months by the Remuneration and Nomination
Committees.
Consistent with this policy, bene ts packages awarded to
Executives are intended to be competitive and will comprise a mix
of non-performance-related and performance-related remuneration
designed to provide appropriate incentives to them, but not to
detract from the goals of corporate governance.
Remuneration components for executive directors
Remuneration packages will be reviewed each year to ensure that
they are in line with the Group's business plan and budgetary
framework. No Executive Director has participated in decisions
about their own remuneration package.
Existing Board
The existing board has remained within the Company throughout
the period from Listing and there have been no settlement
agreements or departure of any board members.
Alessandro Zamboni - Founder & Chief Executive Officer
Mr Zamboni was appointed as Executive Director and Chief
Executive officer on 23 March 2020. The appointment is terminable
with 12 months' notice on either side. The appointment may be
terminated immediately, if, among other things, Mr Zamboni is in
material breach of his terms of appointment.
Dominic White - Non- Executive Chairman
Mr White was appointed as Non-Executive Chairman on 23 March
2020. The appointment is terminable with 3 months' notice on either
side. The appointment may be terminated immediately, if, among
other things, Mr White is in material breach of his terms of
appointment.
Enrico Camerinelli - Non-Executive Director
Mr Camerinelli was appointed as a Non-Executive Director on 23
March 2020. The appointment is terminable with 3 months' notice on
either side. The appointment may be terminated immediately, if,
among other things, Mr Camerinelli is in material breach of his
terms of appointment.
Susanne Chishti - Non-Executive Director
Ms Chishti was appointed as a Non-Executive Director on 23 March
2020. She is also chair of the Remuneration and Nominations
committees Her appointment is terminable with 3 months' notice on
either side. The appointment may be terminated immediately, if,
among other things Ms Chishti is in material breach of her terms of
appointment.
The current board members were entitled to the following annual
remuneration per their respective services during the year ended 31
December 2020. No amounts have been deferred.
Service Contracts
Annual Salary Reviewed Date of service contact Notice period
Executive directors Salaries are reviewed
in March each year
------------------------ ------------------------ ------------------------ --------------
Alessandro Zamboni GBP185,000 23 March 2020 12 months
------------------------ ------------------------ ------------------------ --------------
Non-executive directors
------------------------ ------------------------ --------------
Dominic White GBP100,000 to 31 August 23 March 2020 3 months
2020
GBP150,000 from 1
September 2020
------------------------ ------------------------ --------------
Enrico Camerinelli GBP30,000 23 March 2020 3 months
------------------------ ------------------------ --------------
Susanne Chishti GBP40,000 23 March 2020 3 months
------------------------ ------------------------ ------------------------ --------------
Potential maximum Benefit
The maximum amounts that the Executive Directors could earn for
the year ended 31 December 2020 is limited to the basic salary,
pro-rated, as no bonus scheme, pension scheme or other benefits
were set up during the year. The purpose of the basic salary is to
provide a market competitive remuneration taking into account the
roles, skills and contribution of the individual.
Subsequent to the reporting period as noted above, The
Remuneration and Nominations Committee approved the Company's
remuneration policy and this has resulted in changes in the
composition of packages for Executives. These changes will be in
force for the year ended 31 December 2021 and include additional
benefits for the Executive Directors. The remuneration policy now
also includes an annual bonus to incentivise the Chief Financial
Officer and Senior Management to achieve key strategic outcomes and
deliver value for the shareholders.
Policy on non- executive directors
Non-Executive directors receive fixed fees recommended by Chief
Executive Officer and approved by the Remuneration committee. In
determining the appropriate level of fees, the Chief Executive
Officer considers information available for comparator companies
and related market data. Non-Executive Directors are also entitled
to reimbursement of expenses in connection with attending board and
other committee meetings. It is the aim of the Company to ensure
that Non-Executive Directors are paid a level of fee that that
reflects their time commitment and responsibilities to ensure that
individuals with the appropriate experience and expertise are
retained.
Recruitment policy
The approach to remuneration with regard to recruiting staff is
to ensure the Company pays no more than necessary to attract the
candidates with the calibre and experience the fulfil the role. The
Company would only consider candidates for a directorship if they
hold the necessary experience and qualities to help the Group
enhance value to shareholders and assist in achieving its strategic
goals.
Directors' remuneration in the period
For the year ended 31 December 2020:
Pension/other
Salary GBP Bonus GBP GBP Total GBP
Executive directors
Alessandro Zamboni 138,750 - - 138,750
Non -executive
directors
Dominic White 98,141 - - 98,141
Enrico Camerinelli 21,054 - - 21,054
Susanne Chishti 30,923 - - 30,923
288,868 - - 288,868
======================== ============ ============== ==========
Pension and other benefits
No directors received any benefits under any Company or Group
pension schemes. No other remuneration was received by the
directors other than the salary noted above.
Share incentive and share option plans
The Company had no share incentive plans or share option schemes
for any of its directors for the year ended 31 December 2020.
Payments to past directors
There have been no payments in the year to past directors.
Payments for loss of office
There have been no payments during the period for loss of office
to past directors.
Statement of directors' substantial shareholdings
Ordinary shares Deferred shares
held held
Executive Directors
--------------------- ----------------
Alessandro Zamboni
* 12,742,513,009 Nil
--------------------- ----------------
Non -Executive Directors
--------------------- ----------------
Dominic White ** 970,723,449 Nil
--------------------- ----------------
Enrico Camerinelli Nil Nil
--------------------- ----------------
Susanne Chishti Nil Nil
--------------------- ----------------
* Held beneficially through the AvantGarde Group SpA
**Held beneficially through IWEP Ltd.
Susanne Chishti
Chair of the Remuneration Committee
25 June 2021
*************************
Corporate Governance
Statement of current Compliance with the QCA Corporate
Governance Code
As Chairman of the current Board of Directors of Supply@ME
Capital plc ("SYME", "We", or the "Company/Group" as the context
requires), it is my responsibility to ensure that SYME has both
sound corporate governance and an effective Board. My
responsibilities include leading the Board effectively, overseeing
the Company's corporate governance model, and ensuring that good
information flows freely between Executives and Non-Executives in a
timely manner.
SYME has adopted the Quoted Companies Alliance Corporate
Governance for small and Mid-Size quoted companies (QCA Code). This
report follows the structure of these guidelines and explains how
we have applied the guidance. We will provide annual updates on our
compliance with the QCA Code. The Board considers that the Group
complies with the QCA Code so far as it is practicable having
regard to the size, nature and current stage of development of the
Company, and will disclose any areas of non-compliance in the text
below.
SYME understands that application of the QCA Code supports the
Company's medium to long-term success whilst simultaneously
managing risks and providing an underlying framework of commitment
and transparent communications with stakeholders. We are committed
to monitoring and promoting a socially responsible corporate
culture, illustrated through internal policies and external
stakeholder engagement.
As a Main Market company, (standard segment, trading on the
London Stock Exchange) This information needs to be reviewed
annually and our website includes this information.
Dominic White
Non-Executive Chairman
Principle 1.
Establish a strategy and business model which promote long-term
value for shareholders.
The Company plans to continue its growth both organically and
potentially through acquisitions, expanding its range of services,
as well as expanding into new vertical and geographic markets. The
Company's strategy and business model, as well as the competitive
landscape can be found on the Company's website.
Principle 2.
Seek to understand and meet shareholder needs and
expectations.
Dominic White, (Non-Executive Chairman) and Alessandro Zamboni
(Chief Executive Officer) are the key shareholder liaison contacts
alongside the Company's Financial Advisers. In addition, Susanne
Chishti is the Senior Independent Non-Executive Director, whom
shareholders are encouraged to contact if there are any concerns
about matters relating to related party transactions and wider
corporate governance.
The Group seeks to maintain and enhance good relations with its
shareholders. The Company's interim and annual reports will be
supplemented by capital market presentations and through public
announcements to the market on corporate, technological and
financial progress.
The Board will actively engage with shareholders at least three
times a year. Meetings will be held following results announcements
and are either one-to-one or group meetings with institutional and
high net worth investors. Another forum for meeting shareholders is
the AGM, to which all shareholders will be invited to attend and
spend time with management. In addition, the Company will seek to
respond to shareholder queries sent to its designated shareholder
email address: shareholders@supplymecapital.com .
The Company's financial and investor relations advisers help to
provide the Board with investor feedback after investor
presentations and meetings, as well as calls with shareholders
following key items of news flow. Via communication with the
Company's advisers, and investment analysts, together with
Regulatory News Service announcements and the Company's Annual
Report, the Board gauges investor sentiment, sets expectations and
communicates the Company's intentions.
Where feedback is received directly from shareholders or
shareholder advisory groups, for example relating to voting
intentions on general meeting motions, this will be brought to the
attention of and discussed by the Board and the key Company
investor liaisons will discuss with investors their reasons for
voting and if necessary work with these and other investors to
determine an appropriate course of action for the benefit of all
shareholders.
Principle 3.
Take into account wider stakeholder and social responsibilities
and their implications for long-term success.
The Board considers the interests of shareholders and all
relevant stakeholders in line with section 172 of the Companies Act
2006. Engaging with our stakeholders strengthens our relationships
and helps us make better business decisions to deliver on our
commitments. The Board is regularly updated on wider stakeholder
engagement feedback to stay abreast of stakeholder insights into
the issues that matter most to them and our business, and to enable
the Board to understand and consider these issues in
decision-making. Details of how we seek to understand and meet
shareholder needs and expectations are set out at Principle 2,
above.
For its wider group of stakeholders, the Company intends to
engage with these via:
-- Face-to-face (physically or via remote systems) briefings for
staff to update on the Company's progress and developments;
-- Email updates for staff regarding developments;
-- Releasing public updates via the RNS service;
-- Regular meetings with key customers and commercial
partners.
Stakeholder feedback is passed to Senior Management via the
relevant team member as appropriate.
Principle 4.
Embed effective risk management, considering both opportunities
and threats, throughout the organisation.
The Board has established a risk management process for
identifying, assessing and mitigating the principal risks and
uncertainties facing the Group. The Company's risk register will be
considered by the Board on a quarterly basis, with ad hoc reviews
conducted as required. More detail about the identified principal
risks and uncertainties can be found in the Admission Document on
the Group's website. The Board is responsible for establishing and
maintaining the Company's system of internal financial controls and
the Audit Committee assists the Board in discharging its duties
relating to internal financial controls. Internal financial control
systems are designed to meet the particular needs of the Company
and the risk to which it is exposed, and by its very nature can
provide reasonable, but not absolute, assurance against material
misstatement or loss.
Areas of focus for internal financial controls include strategic
planning, approval of annual budgets, regular monitoring of
performance against budget (including full investigation of
significant variances), control of capital expenditure and ensuring
proper accounting records are maintained. The Directors will
continue to reassess internal financial controls as the Company
expands further. It is the Board's policy to ensure that the
management structure and the quality and integrity of the personnel
are compatible with the requirements of the Group.
The Company's auditors will be encouraged to raise comments on
internal control in their management letter following their audit,
and the points raised and actions arising will be monitored through
to completion by the Audit Committee.
Principle 5.
Maintaining the Board as a well-functioning, balanced team led
by the Chair.
The Board consists of the Non-Executive Chairman, the Chief
Executive and two additional Non-Executive Directors. The
biographical details of the Board members can be found in the
Admission Document and on the Company's Website.
The Board has determined that Enrico Camerinelli (Aged 57) and
Susanne Chishti (Aged 48) are independent in character and judgment
and satisfy the independence criteria under the QCA Code. Susanne
Chishti has also been appointed as Senior Independent Non-Executive
Director.
The Board is typically expected to meet monthly in order to,
amongst other things, approve financial statements, dividends and
significant changes in accounting practices and key commercial
matters.
The Directors commit the requisite amount of time to their
respective roles to ensure that they discharge their individual and
collective responsibilities in an effective manner. The Company has
effective procedures in place to monitor and deal with conflicts of
interest.
The Board is supported by an Audit Committee, a Remuneration
Committee and a Nomination Committee. Further details of which are
set out on the Company's website.
Future annual reports will include details of the number of
Board and Committee meetings taken place each year. Until the first
Annual Report is released, this is an area where the Company will
not be fully compliant with the QCA's principles.
Principle 6.
Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities.
The Board considers its overall size and current composition to
be suitable and have an appropriate balance of sector, financial
and public markets skills and experience as well as an appropriate
balance of personal qualities and capabilities. The structure, size
and composition of the Board based upon the skills, knowledge and
experience required will be regularly reviewed to ensure the Board
operates effectively.
In order to develop their skills and keep up to date with market
developments and corporate governance matters, the Board will
receive training as required. All directors are also able to take
independent professional advice in the furtherance of their duties,
if necessary, at the Company's expense.
Biographies for each of the directors, including details on
their experience and skills, are set out on the Company's website
and in the Directors section of this Annual Report.
Principle 7.
Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.
The Board's effectiveness and the individual performance of
Directors are considered regularly by the Board on an informal
basis, via feedback to the Chairman. Directors are encouraged to
provide feedback on all areas of the board efficacy, having due
regard to the balance of skills, experience, independence and
knowledge contributed by members of the Board, as well as the
successful operation of the Board as a unit, its diversity and
other factors relevant to its effectiveness. As the Board has just
recently been established, there is presently no formal process for
independent review of directors' performance.
Principle 8.
Promote a culture that is based on ethical values and
behaviours.
The Board believes that the promotion of a corporate culture
based on sound ethical values and behaviours is essential to
maximising shareholder value.
The executive team engenders open and positive interactions with
a key focus on innovation, creative solutions and collective
responsibility. These cultures are fostered throughout the
business.
The Company's policies set out its zero-tolerance approach
towards any form of modern slavery, discrimination or unethical
behaviour relating to bribery, corruption or business conduct.
Principle 9.
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
Whilst the Board is collectively responsible for defining
corporate governance arrangements, the Chairman is ultimately
responsible for corporate governance. The governance structures
within the Company have been assessed by the Board and are
considered appropriate for the size, complexity and risk profile of
the Company. This will be reviewed by the Board to ensure
governance arrangements continue to be appropriate as the Company
changes over time.
The Board is expected to typically meet bi-monthly to set the
overall direction and strategy for the Group and to review
operational and financial performance. The Board and its Committees
will receive appropriate and timely information prior to each
meeting: and a formal agenda will be produced for each meeting, and
Board and committee papers are distributed several days before
meetings take place. Any director may challenge Company proposals
and decisions are taken democratically after discussion. Any
director who feels that any concern remains unresolved after
discussion may ask for that concern to be noted in the minutes of
the meeting, which are then circulated to all directors. Any
specific actions arising from such meetings are agreed by the Board
or relevant Committee and then followed up by the Company's
management. The Company Secretary is responsible for ensuring that
Board procedures are followed and applicable rules and regulations
are complied with.
There is a formal schedule of matters reserved for the decision
of the Board that covers the key areas of the Company's affairs.
The schedule includes:
-- Determining the Company's overall strategy and direction;
-- Establishing and maintaining controls, audit processes and
risk management policies to ensure they
counter identified risks and that the Company operates
efficiently;
-- Ensuring effective corporate governance;
-- Approving budgets and reviewing performance relative to those
budgets;
-- Approving financial statements;
-- Approving material agreements and non-recurring projects;
-- Approving senior and Board appointments.
Each member of the Board has clearly defined roles and
responsibilities. The role of the Chairman is to lead the Board,
with responsibility for overall corporate governance, and to ensure
it is operating effectively in approving and monitoring the
strategic direction of the Company. The role of the Chief Executive
is to propose strategic direction to the Board and to execute the
approved strategy by leading the executive team in managing the
Company's business. The role of the Non-Executive Directors is to
act as a sounding board for the Chairman and a source of reciprocal
feedback for other members of the Board and shareholders, where
required. The Board is supported by an Audit Committee and
Remuneration Committee, further details of which are set out on the
Company's website. At present, the Company does not produce formal
Audit Committee or Remuneration Committee reports for the purposes
of the annual report, given the size and scale of the Company's
current operations. The Board however continually review this
position and at such time as it is deemed appropriate to do so,
will include formal Audit and Remuneration Committee reports in the
Company's annual report.
Principle 10.
Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders.
The Company is committed to open communications with all its
shareholders. Communication will be primarily through the Company's
website, the annual report and accounts, Regulatory announcements,
the AGM and one-to-one meetings with large existing or potential
new shareholders. All shareholders will receive a copy of the
annual report and an interim report at the half year is available
on the Company's website.
Matters reserved for the Board
The board had a formal written schedule of matters reserved for
its review and approval; this schedule included those matters
described in The role of the board and its committees section as
well as those in the following table.
Category Examples
==========================================================
Strategy and management Extension of the Group's activities into new
business or geographic areas; cessation of the
operation of all or any material part of the
Group's business.
==========================================================
Structure and Changes relating to the Group's capital structure;
capital major changes to the Group's corporate or management
and control structure; changes to the Company's
listing or its status as a plc.
==========================================================
Financial reporting Approval of the following: annual report and
and controls accounts, preliminary announcements of results,
significant changes in accounting policies or
practices, treasury policies, certain unbudgeted
capital or operating expenditure; declaration
or recommendation of dividends; review and approval
of expenditure authorisation limits.
======================= ==========================================================
Contracts Contracts in the ordinary course of business
material strategically or by reason of size;
contracts not in the ordinary course of business;
major investments.
==========================================================
Communication Approval of resolutions, circulars, prospectuses
and press releases concerning matters decided
by the board.
==========================================================
Board membership Changes to the structure, size and composition
and other appointments of the board; ensuring adequate succession planning
for the board and senior management; board appointments;
selection of the chair and the chief executive;
appointment of the senior independent director;
membership and chairs of board committees; continuation
in office of directors; appointment or removal
of the company secretary; appointment, reappointment
or removal of the external auditor to be put
to shareholders for approval.
======================= ==========================================================
Remuneration Approving the remuneration policy for the directors;
determining the initial remuneration of the non-executive
directors; introduction of new share incentive
plans or major changes to existing plans.
======================= ==========================================================
Delegation of Division of responsibilities between the chair
authority and the chief executive; establishing board committees
and approving their terms of reference.
==========================================================
Corporate governance Undertaking any formal and rigorous review of
the board's own performance, that of its committees
and individual directors, and the division of
responsibilities; determining the independence
of non-executive directors; review of the Group's
overall corporate governance arrangements; authorising
conflicts of interest where permitted by the
Company's articles of association.
======================= ==========================================================
Policies Approval of the following: compliance with the
and procedures Stock Exchange Rules and aspects of the Market
Abuse Regulation, company's insider list manual,
dealing code, anti-bribery policy, whistleblowing
policy and health and safety policy.
======================= ==========================================================
Attendance at Board and committee meetings in the year to 31
December 2020
Board Nominations committee Audit committee Remuneration committee
Meetings attended / held :
----- --------------------- --------------- ----------------------
Alessandro Zamboni 8/8 1/1 1/1 1/1
----- --------------------- --------------- ----------------------
Dominic White 8/8 1/1 1/1 1/1
----- --------------------- --------------- ----------------------
Enrico Camerinelli 8/8 1/1 1/1 1/1
----- --------------------- --------------- ----------------------
Susanne Chishti 7/8 1/1 1/1 1/1
----- --------------------- --------------- ----------------------
Simon Charles 0/0 0/0 0/0 0/0
----- --------------------- --------------- ----------------------
John Treacy 0/0 0/0 0/0 0/0
----- --------------------- --------------- ----------------------
Prior to the Reverse Takeover of Supply@ME S.r.l. the previous
Group had sold all of its business and business assets in February
2019, and from that date until the acquisition of Supply@ME S.r.l.
the Company was a non-trading cash shell seeking new investments
opportunities.
As such, the Company in the prior reporting period and the
period since the last year end to the date of the Reverse Takeover
did not:
-- operate an internal audit function
-- establish a remuneration committee
-- operate a remuneration committee
-- hold formal Board meetings.
In this period the Non-executive directors met on an ad hoc
basis to further the interests of the Company by seeking an
appropriate investment opportunity and to ensure there were
sufficient funds for the Company to continue until such an
investment was found.
Independence
Independent Directors
The role of the Independent or Senior Independent Director is to
be available to shareholders who wish to raise any concerns that
they have been unable to resolve through other channels and to
attend meetings between management and major investors.
From the date of the Main Market listing on 23 March 2020 to the
end of the period, Susanne Chishti was identified as the Group's
Senior Independent Director. Ms Chishti brings over 20 years of
financial expertise and board-level experience focused on
organisational governance, and a strong understanding of the
small/medium size enterprise market. She holds no shares in the
Company and the Board has concluded that she was independent
throughout the period since her appointment.
In the previous period and until the date of the Main Market
listing, Simon Charles was identi ed as the Group's Independent
Director.
The Board had concluded that Simon Charles was independent
throughout the period. Simon Charles is a partner in Marriot
Harrison, the former legal advisors to the Company and also held a
small number of shares. However transactions with Marriot Harrison
and his interests in shares were considered to be too small to
affect his independence and legal services had been tendered and
decided on by the other directors.
Time commitment
The executive directors are expected to devote substantially all
of their time and ability to their duties. The non-executive
directors were expected to devote about 12 days each year to the
Company's business.
Service contracts and letters of Appointment
Copies of all contracts of employment and letters of appointment
are available for inspection at the Company's registered
office.
*************************
Independent Auditor's Report to the Members of Supply@ME Capital
plc
Opinion
We have audited the financial statements of Supply@ME Capital
plc (the "Company") and its subsidiaries (the 'group') for the year
ended 31 December 2020 which comprise the Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity and Consolidated
Statement of Cash Flows and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Accounting
Standards in conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies in the
European Union. The financial reporting framework that has been
applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
-- the financial statements give a true and fair view of the
state of the group's and of the company's affairs as at 31 December
2020 and of the group's loss for the year then ended;
-- The group financial statements have been properly prepared in
accordance International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No. 1606/2002 as it applies in the European Union;
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006; and, as regards
the group financial statements, Article 4 of the IAS
Regulation.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw your attention to Note 2 which indicates the existence
of uncertainties in relation to assumptions about future trading
that support the going concern basis of preparation. As stated in
Note 2, these events or conditions, along with other matters as set
forth in Note 2 indicate that a material uncertainty exists that
may cast significant doubt on the company's ability to continue as
a going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting
included:
-- we reviewed and challenged the forecast revenues and
resulting cash flows within the assessment period, the
uncertainties that are disclosed in note 2 impact the quantum and
timing of these cashflows;
-- we agreed the cash inflows from the issue of convertible loan
notes to post year end bank statements;
-- we agreed the forecast cash outflows relating to the
acquisition of TradeFlow Capital Management Pte Limited to the
share purchase agreement;
-- we tested to ensure the mathematical accuracy of the model presented; and
-- we reviewed the appropriateness of the disclosure made and
its consistency with our knowledge of the business.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the financial statements as a whole to be
GBP72,000, based on 5% of the adjusted loss for the period.
Materiality for the parent company financial statements as a whole
was set at GBP21,000 based on its loss for the period.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment. We
determined performance materiality to be GBP54,000.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP1,250. Errors below that
threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
Following the reverse acquisition transaction in March 2020 the
group consists of two components, Supply@ME Capital plc, a holding
company based in London, United Kingdom and its only trading
subsidiary, Supply@ME Srl based in Italy. Supply@ME Capital plc was
audited by us and was conducted from the UK. Audit work on the
significant non-UK component, Supply@ME Srl, was carried out by a
member of the Crowe Global International network as component
auditor.
We engaged with the component auditor at all stages during the
audit process. We directed the component auditors regarding the
audit approach at the planning stage, issued instructions that
detailed the significant risks to be addressed through the audit
procedures and indicated the information we required to be reported
on.
The impact of the Covid-19 pandemic in relation to quarantine
restrictions in the UK and Italy, and international travel
restrictions in general, meant that is was not possible for the
audit team, including the audit engagement partner, to visit the
component auditors and the principal finance locations of the
significant non-UK component in order to review the component
auditors' working papers, discuss key findings directly with the
component audit team, specialist team members and component auditor
reporting partner and conclude on significant issues. Instead,
regular progress calls and file sharing were considered appropriate
in the circumstances.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
Other than the material uncertainty relating to going concern we
identified the following key audit matters:
Key audit matter How our scope addressed the key audit
matter
==================================== =================================================
Reverse acquisition accounting We developed an understanding of the
During the year to 31 December transaction to ensure the conditions
2020 the company entered for Reverse acquisition accounting were
into a reverse acquisition present.
transaction. This is the We obtained management's assessment
most material transaction regarding whether Supply@ME Capital
in the period and has the plc met the definition of a business
most significant impact as this would impact the accounting.
on the presentation of We reviewed the accounting policy for
the financial statements. the transaction to ensure it is in line
There is a risk that an with IFRS.
error in the reverse acquisition We reviewed the fair value assessment
accounting could have a of the share capital of the accounting
material impact on the acquiree by having regard to the pre-suspension
financial statements. share price.
We reviewed the accounting entries to
ensure their accuracy having regard
to the agreed policy.
We recalculated the deemed cost of listing
to ensure it is in line with our expectation.
Key observation:
Based on the procedures we performed
we did not identify anything which suggested
material error or omission relating
to the reverse acquisition accounting.
==================================== =================================================
Revenue recognition We obtained management's assessment
Following the reverse acquisition, regarding the revenue recognition policy
the Group has recognised under IFRS 15 to develop our understanding
revenues in both 2019 and of the group revenue streams and performance
2020. This is the first obligations.
year the legal subsidiary We obtained a sample of contracts and
has prepared its financial critically assessed if the revenue recognition
information under IFRS policy applied was appropriate, in line
and therefore there is with IFRS 15, and accurately reflected
an increased risk that the contract and performance obligations.
revenue has been incorrectly Key observation:
recognised having regard Based on the procedures we performed
to the requirements of we did not identify anything which suggested
IFRS 15. material error or omission relating
to the revenue recognition.
==================================== =================================================
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the strategic report and the
directors' report for the financial period for which the financial
statements are prepared is consistent with the financial
statements; and
-- the directors' report and strategic report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out in the Directors' Report the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Our audit procedures included:
-- enquiry of management about the Company's policies,
procedures and related controls regarding compliance with laws and
regulations and if there are any known instances of
non-compliance;
-- examining supporting documents for all material balances, transactions and disclosures;
-- review of the Board of directors and the Audit Committee minutes;
-- enquiry of management about litigations and claims and
inspection of relevant correspondence;
-- evaluation of the selection and application of accounting
policies related to subjective measurements and complex
transactions;
-- analytical procedures to identify any unusual or unexpected relationships;
-- testing the appropriateness of journal entries recorded in
the general ledger and other adjustments made in the preparation of
the financial statements; and
-- review of accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK). The
potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by management to audit the financial
statements for the year ending 31 December 2020. Our total
uninterrupted period of engagement is two periods, covering the
periods ending 31 December 2020 and 31 December 2019.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Company and we remain independent of the
Company in conducting our audit.
Our audit opinion is consistent with the additional report to
the board.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
25 June 2021
*************************
Consolidated Statement of Comprehensive Income for the Year
Ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBP 000 GBP 000
Continuing operations
Revenue 4 1,147 4
Cost of sales (739) (767)
------------ ------------
Gross profit 408 (763)
Administrative expenses (1,904) (98)
Exceptional costs 5 (1,376) -
Other operating income 6 53 174
------------ ------------
Operating (loss)/profit 7 (2,819) (687)
Finance costs - -
------------ ------------
(Loss)/profit before tax (2,819) (687)
Income tax 11 (145) 133
------------ ------------
(Loss)/profit for the year (2,964) (554)
Other comprehensive income
Foreign exchange differences on consolidation 2 3
------------ ------------
Total comprehensive (loss)/profit for
the year (2,962) (551)
============ ============
Loss attributable to:
Owners of the company (2,962) (551)
============ ============
Earnings per share (EPS) Pence Pence
Basic and diluted EPS 12 (0.01) 0.00
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated Statement of Financial Position as at 31 December
2020
As at 31 December As at 31
2020 December 2019
Note GBP 000 GBP 000
Non-current assets
Intangible assets 13 1,236 390
Property, plant and equipment 2 -
----------------- --------------
Total non-current assets 1,238 390
----------------- --------------
Current assets
Trade and other receivables 14 1,535 919
Cash and cash equivalents 552 143
----------------- --------------
Total current assets 2,087 1,062
----------------- --------------
Total assets 3,325 1,452
----------------- --------------
Current liabilities
Trade and other payables 17 3,395 1,810
Derivative financial instruments 16 24 -
----------------- --------------
Total current liabilities 3,419 1,810
----------------- --------------
Net current liabilities (1,332) (748)
Non-current liabilities
Provisions 18 358 199
Total non-current liabilities 358 199
Net liabilities (452) (557)
================= ==============
Equity attributable to owners of the
parent
Share capital 15 5,420 148
Share premium 15 11,820 -
Other reserves (13,986) -
Retained losses (3,706) (705)
----------------- --------------
Total equity (452) (557)
================= ==============
The accompanying notes form an integral part of these
consolidated financial statements.
The consolidated financial statements were approved and
authorised for issue by the Board on 25 June 2021 and signed on its
behalf by:
.........................................
Mr Alessandro Zamboni
Director
Supply@ME Capital plc
Registration number: 03936915
Consolidated Statement of Cash Flows for the Year Ended 31 December
2020
Year ended Year ended
31 December 31 December
2020 2019
GBP 000 GBP 000
Cash flows from operating activities
(Loss) for the year (2,819) (687)
Foreign exchange differences on retranslation 4 21
Depreciation, amortisation and impairments 203 94
Deemed cost of listing in reverse acquisition 1,376 -
Allocated to provisions 40 -
Other adjustments to increase non-monetary
items 16 -
Decrease/(increase) in trade and other
receivables (717) (1)
Increase/(decrease) in trade and other
payables 296 (119)
Other decreases/(increases) in net
working capital 682 967
------------ ------------
Cash flows from operations (919) 275
Finance costs -
Income taxes paid (19) -
------------ ------------
Other collections 6 -
------------ ------------
Net cash flow from operating activities (932) 275
------------ ------------
Cash flows from investing activities
Cash from reverse acquisition of Abal
plc 93 -
Acquisition of property, plant and
equipment (2) -
Acquisition of intangible assets (1,026) (132)
------------ ------------
Net cash flows from investing activities (935) (132)
------------ ------------
Cash flows from financing activities
Increase/(decrease) in short term bank
loans 22 (2)
New loans - -
Proceeds from issue of ordinary shares,
net of allowable issue costs 2,230 -
------------ ------------
Net cash flows from financing activities 2,252 (2)
------------ ------------
Net increase in cash and cash equivalents 385 141
Foreign exchange differences to cash
and cash equivalents on consolidation 24 -
Cash and cash equivalents at 1 January 143 2
------------ ------------
Cash and cash equivalents at 31 December 552 143
============ ============
The reconciliation of the movement in net debt is set out in
note 23.
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2020
Share capital Share premium Other reserves Forex reserve Retained earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 January 2019 148 - - - (163) (15)
Forex retranslation - - - - 9 9
At 1 January 2019 after
forex retranslation 148 - - - (154) (6)
Loss for the year - - - - (554) (554)
Forex retranslation
difference - - - 3 - 3
------------- ------------- -------------- ------------- ----------------- --------
Loss for the year and total
comprehensive income - - - 3 (554) (551)
At 31 December 2019 148 - - 3 (708) (557)
------------- ------------- -------------- ------------- ----------------- --------
The accompanying notes form an integral part of these
consolidated financial statements.
Merger Reverse
Share Share Other relief takeover Forex Retained
capital premium reserves reserve reserve reserve earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 January
2020 148 - - - - 3 (708) (557)
Forex
retranslation - - - - - - (34) (34)
------------ ------------ ----------- ----------- ----------- ------------ ----------- --------
At 1 January
2020 after
forex
retranslation 148 - - - - 3 (742) (591)
Loss for the
year - - - - - - (2,964) (2,964)
Forex
retranslation
difference - - (8) - - 10 - 2
Loss for the
year and
total
comprehensive
income - - (8) - - 10 (2,964) (2,962)
Transfer to
reverse
takeover
reserve (148) - - - 148 - - -
Recognition of
plc equity at
acquisition
date 4,767 9,597 - - (13,505) - - 859
Reverse
takeover of
Supply@ME
S.r.l. 646 - - 223,832 (224,478) - - -
Issue of
shares for
cash 7 2,234 - - - - - 2,241
Cost of share
issues - (11) - - - - - (11)
Legal reserve - - 12 - - - - 12
At 31 December
2020 5,420 11,820 4 223,832 (237,835) 13 (3,706) (452)
------------ ------------ ----------- ----------- ----------- ------------ ----------- --------
The accompanying notes form an integral part of these
consolidated financial statements.
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2020
1 General information
These consolidated financial statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
The financial statements of the Group, consisting Supply@ME
Capital plc (the "Company") and its subsidiaries, are presented in
Pounds Sterling and all values are rounded to the nearest thousand
pounds (GBP'000) excepted when otherwise stated.
These consolidated nancial statements have been prepared in
accordance with the accounting policies set out below, which have
been consistently applied to all the years presented.
2 Accounting policies
Going concern
For the reasons set out below, the Directors consider that it is
appropriate to adopt the going concern basis in preparing these
consolidated nancial statements.
At the year-end the Group had cash balances of GBP552,000 (2019:
GBP143,000) and net current liabilities of GBP1,332,000 (2019: net
current liabilities GBP748,000). The Group has posted a loss for
the year after tax of GBP2,964,000 (2019: loss GBP554,000) and
retained losses were GBP3,706,000 (2019: losses GBP705,000).
The net current liabilities as at the year-end of GBP1,332,000
included current liabilities of GBP1,131,000 in relation to
down-payments made by clients with respect to due diligence
services provided. The loss after tax of GBP2,964,000 was after
charging an exceptional, non-cash cost of GBP1,376,000 relating to
the Reverse Takeover referred to in note 3 and a GBP145,000 tax
charge which is expected to be substantially reduced by research
and development credits for which the Group is applying.
During the year, the Group was successfully admitted to trading
as a Main Market company, standard segment, trading on the London
Stock Exchange having also issued placing shares with gross
proceeds of GBP2,240,000 (net proceeds of GBP1,615,000 after
deducting all costs in respect of the placing and reverse
takeover).
The Directors have reviewed the forecast cashflows for the next
12 months and consider the Group to be a going concern.
The cashflow forecasts are based on the enlarged group,
following the Reverse Takeover in March 2020 and therefore relate
to cashflows arising from the Group's Fin Tech platform that
focusses on inventory monetisation facilities. The Directors have
prepared the forecast using their best estimates; however, the
Group is in its start-up phase and therefore they have identified
the following uncertainty in the model.
The ability of the Group to acquire inventory is reliant on
investment funding for securitisation being received, and whilst
the Group is in very advanced negotiations with several interested
partners, no securitisation investment had been finalised as at the
date of this report. If no, or limited investment is secured during
the next 12 months, the Group cannot acquire inventory as assumed
in the model and generate the service fee income.
In addition the Group has a portfolio of interested customers,
with some having signed term sheets. The cashflow model assumes a
growth in customer base in line with the interest that has been
received in the product but there is uncertainty over the ability
of the group to be able to secure these new customers.
On the basis of the above matters the Directors have a material
uncertainty in relation to its going concern status. In mitigation,
however, a corporate funding organisation has made sufficient funds
available to stimulate the growth of the Group and accommodate any
delays in revenue generation. Therefore, given the significant
interest from a growing secured customer base, as described
elsewhere in this report and the advanced nature of securitisation
funding negotiations, the Directors consider it appropriate to
prepare the consolidated financial statements on a going concern
basis.
Impact of the global pandemic
As noted previously in numerous announcements, the Board has
monitored closely the impact of COVID-19 on business
operations.
Impact on Client companies
The Group's Client company customer base remains strong and the
demand for inventory monetisation continues to grow. The number of
Client companies being originated by the Group has grown each
quarter since the Reverse Take Over in March 2020. Increasingly,
following COVID-19, many businesses are consciously choosing to
build inventory to avoid supply chain shortages and subsequent loss
of trade, rather than keep stock levels low. This is positive
development for Group's business model as it expects that Client
companies internationally will look to monetise these higher
volumes of stock held.
Impact on Inventory funders
The impact of COVID-19 on Inventory funders, that is the
investors through the SYME Platform into the inventory portfolios,
has been more difficult to interpret.
Interest rates are at historic lows which means that investors
are getting lower returns on capital compared to previous years
when higher interest rates were the norm. SYME's new inventory
asset class will offer a strong relative margin compared to
interest rates on a risk adjusted basis. However, investors are
undoubtedly more cautious and taking longer to make decisions. Time
to close transactions, not only in Inventory funding, but across
the investment spectrum, has increased.
The announced delay to June 2021 forecast to complete the first
Inventory Monetisation has been the result.
We are positive about the performance of the Group in the coming
months as we expect the first securitisation transaction to close
and the Captive Bank to launch as announced in the latest Trading
Update. The re-opening of the global economies as the uncertainty
caused by COVID-19 dissipates, particularly in the UK, Italy, the
USA and UAE, our key target geographies, where vaccination
programmes are now showing the virus to be broadly under control,
should be a strong stimulus to the Group's timely product
offering.
Basis of consolidation
The Group nancial statements consolidate those of the Company
and its subsidiary undertaking drawn up to 31 December 2020.
Subsidiaries are entities over which the Group has control. Control
comprises an investor having power over the investee and is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
On 23 March 2020, the Company, completed a reverse acquisition
of Supply@ME S.r.l., a company registered in Italy. Further
information about this transaction is disclosed in note 3.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of
impairment.
The comparative period for the Group is 1 January 2019 to 31
December 2019 and includes the results of the subsidiary only.
New and revised accounting standards and interpretations
A number of relevant new standards are effective for annual
periods beginning as noted below, for which earlier application is
permitted. However, the Group has not adopted the new or amended
standards in preparing these consolidated financial statements. The
following amended standards and interpretations are not expected to
have a significant impact on the Group's consolidated financial
statements:
Standard and interpretations Effective for annual
periods beginning
on or after
Covid-19 related rent concessions - amendment 1 June 2020
to IFRS 16
Interest rate benchmark reform, phase 2 - 1 January 2021 *
amendments to IFRS 4, IFRS 9, IFRS 16 and
IAS 39
Deferral of IFRS 9 - amendment to IFRS 4 1 January 2021 *
* subject to UK endorsement
Revenue recognition
Revenue for the Group is measured at the fair value of the
consideration received or receivable. The Group recognises revenue
when the amount of revenue can be reliably measured and it is
probable that future economic benefits will flow to the entity.
At this stage of the Group's development, its earnings derive
from due diligence performed by Group subsidiaries on potential
clients to prequalify them as suitable candidates for inventory
securitisation. Those clients who sign a term sheet are required to
make a down payment to remunerate the subsidiary for the due
diligence work that has been completed or is to be done. Revenue is
recognised in the period in respect of the due diligence work that
has been completed in the period, which is assessed on a
client-by-client basis.
Where performance obligations exist in customer contracts,
revenue is recognised in accordance with the stage of completion of
the contract. Each performance obligation ("milestone") is
established in relation to individual contract and its specified
price. Revenue is only recognised when the work obligation
contracted has been performed. If partly performed against
pre-established milestones, only the revenue relating to the
completed milestones is recognised.
Cost of Sales
Cost of sales represents those costs that can be directly
related to the sales effort. At this early stage in the Group's
development, where sales are represented by fees for conducting
pre-qualification due diligence on potential clients, the entire
work force is engaged in that process, with input from external
consultants. Their costs, plus the amortisation of intangible
assets are regarded by management as the direct costs associated
with selling; in line with similar FinTech companies.
Leases
IFRS 16 Leases became effective for annual periods beginning on
or after 1 January 2019 and the company elected to adopt it on a
prospective basis. The Directors have considered the impact of this
new standard in the preparation of these consolidated financial
statements. At this time, the Group does not have any material
lease arrangements and therefore no adjustments are considered
necessary as a result of this new standard.
Property, plant and equipment
Recognition and measurement
All plant and equipment is stated at cost less subsequent
depreciation and impairment. The costs of the property, plant and
equipment is purchase price plus any incidental costs of
acquisition. Depreciation commences at the point the asset is
brought into use.
If there is any indication that an asset's value is less than
it's carrying amount an impairment review is carried out. Where
impairment is identi ed an asset's value is reduced to re ect
this.
The residual values and useful economic lives of xed assets are
reviewed by management on an annual basis and revised to the extent
required.
Depreciation
Depreciation is provided to write off the cost, less estimated
residual values, of all plant and equipment equally over their
expected useful lives. It is calculated at the following rates:
-- Equipment at 33% per annum.
Intangible assets
Recognition and measurement
The core activity of the business is the creation and marketing
of a software-driven secure system for the recording and management
of third party lots of inventory that can be funded through third
party securitisation contracts, from which the Group derives
fees.
Associated with that core activity are significant product
development requirements to address compliance with legal,
regulatory, accounting, valuation and insurance criteria. The three
main categories of cost are: Software development, intellectual
property (IP) related costs and professional fees.
Amortisation
These costs are capitalised and amortised over their estimated
useful economic lives, considered to be 5 years, on a straight line
basis. Amortisation methods and useful lives are reviewed at each
reporting date and adjusted if appropriate.
Impairment
At the end of each accounting period the Group assess the
recoverable amounts of intangible assets. Where there is an
indication of impairment an impairment loss is recognised for the
amount by which the assets carrying value exceed its recoverable
amount. Impairment losses are recognised in the profit and
loss.
Tax
The tax expense for the period comprises current tax. Tax is
recognised in pro t or loss, except that a charge attributable to
an item of income or expense recognised as other comprehensive
income is also recognised directly in other comprehensive
income.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the consolidated nancial
statements and the corresponding tax bases used in the computation
of taxable pro t and is accounted for using the statement of
nancial position liability method. 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 taxable pro ts will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the taxable pro t nor the
accounting pro t.
The carrying amount of any deferred tax assets is reviewed at
each statement of nancial position date and reduced to the extent
that it is no longer probable that suf cient taxable pro ts will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset
realised based on tax rates that have been enacted or substantively
enacted at the statement of nancial position date. Deferred tax and
current tax are charged or credited to pro t or loss, except when
it relates to items charged or credited in other comprehensive
income or directly to equity, in which case the deferred tax is
also recognised in other comprehensive income or equity
respectively.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and other
short-term highly liquid investments that are readily convertible
to a known amount of cash and are subject to an insignificant risk
of change in value.
Functional and presentational currencies
The consolidated financial statements are presented in pounds
sterling (GBP), the Company's functional currency.
Foreign currency
The main currencies for the Group are the euro (EUR) and pounds
sterling (GBP).
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional
currency using the average exchange rates in the month. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at the reporting period end
exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the statement of comprehensive
income.
Share capital, share premium and brought forward earnings are
translated using the exchange rates prevailing at the dates of the
transactions.
Consolidation of foreign entities:
On consolidation, results of the foreign entities are translated
from the local currency to pounds sterling, the presentational
currency of the Group, using average exchange rates during the
period. All assets and liabilities are translated from the local
functional currency to pounds sterling using the reporting period
end exchange rates. The exchange differences arising from the
translation of the net investment in foreign entities are
recognised in other comprehensive income and accumulated in a
separate component of equity.
Employee benefits
Short-term employee benefits
The Group accounts for employee benefits in accordance with IAS
19.
Short-term employee benefits are expensed as the related service
is provided. A liability is recognised for the amount expected to
be paid if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Defined contribution pension obligations
The Group accounts for retirement benefit costs in accordance
with IAS 19 Employee Benefits.
Contributions to the Group's defined contributions pension
scheme are charged to profit or loss in the period in which they
become payable.
Financial assets
Classification
Financial assets currently comprise trade and other receivables,
cash and cash equivalents.
Recognition and measurement
Loans and receivables
Loans and receivables are mainly contractual trade receivables
and are non-derivative nancial assets with xed or determinable
payments that do not have a signi cant nancial component and are
not quoted in an active market. Accordingly, trade and other
receivables are recognised at undiscounted invoice price. A reserve
for credit risk is made at the beginning of each transaction and
adjusted subsequently through pro t and loss.
Impairment provisions for trade receivables are recognised based
on the simplified approach within IFRS 9 using the lifetime
expected credit losses. During this process the probability of the
non-payment of trade receivables is assessed. This probability is
then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. For trade receivables, which are reported net,
such provisions are reported in a separate provision account with
the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated
provision.
Cash and cash equivalents
Cash and other short-term deposits in the Statement of Financial
Position comprise cash at banks and in hand and short-term deposits
with an original maturity of three months or less and where there
is an insignificant risk of changes in value. In the consolidated
cash flow statement, cash and cash equivalents consist of cash and
cash equivalents as defined above.
Financial liabilities
Classification
Financial liabilities comprise trade and other payables,
convertible loan notes and derivative financial instruments.
Recognition and measurement
Trade and other payables
Trade and other payables are initially recognised at fair value
less transaction costs and thereafter carried at amortised
cost.
Derivative financial instruments
The Group's derivative nancial instruments are a convertible
loan note that was both issued and then cleared in the previous
period year by a debt for equity swap, and warrants were issued
with options to acquire shares that are accounted for at fair
value, with changes in value taken through pro t and loss. The
release of the fair value discount on the debt for equity swap has
been taken direct to retained earnings.
Equity
"Share capital" represents the nominal value of equity shares
issued.
"Share premium" represents the excess over nominal value of the
fair value of consideration received for equity shares net of
expenses of the share issue.
"Other reserves" represents legal reserves in respect of
Supply@ME S.r.l. In accordance with Article 2430 of the Italian
Civil Code, Supply@ME S.r.l., a limited liability company
registered in Italy, with a corporate capital of euro 10,000 or
above shall annually allocate as a legal reserve an amount of 5% of
the annual net profit until the legal reserve will be equal to 20%
of corporate capital.
"Merger relief reserve" represents the excess of the value of
the consideration shares issued to the shareholders of Supply@ME
S.r.l. upon the reverse takeover over the fair value of the assets
acquired.
"Reverse takeover reserve" represents the accounting adjustments
required to reflect the reverse takeover upon consolidation.
Specifically, removing the value of the "investment" in Supply@ME
S.r.l., removing the share capital of Supply@ME S.r.l. and bringing
in the pre-acquisition equity of Supply @ME Capital plc.
"FX reserves" represents foreign currency translation
differences on consolidation of subsidiaries reporting under a
different functional currency to the parent company.
"Retained earnings" represents retained losses of the group. As
a result of the reverse takeover, the consolidated figures include
the retained losses of the Group only from the date of the reverse
takeover together with the brought forward losses of Supply@ME
S.r.l.
Critical judgements and significant accounting estimates
In determining and applying accounting policies, judgement is
often required in respect of items where the choice of specific
policy, accounting estimate or assumption to be followed could
materially affect the reported results or net asset position of the
Group should it later be determined that a different choice would
be more appropriate. The most significant areas where judgement and
estimates have been applied are as follows:
Judgements
The value of warrants for share options were measured, in
accordance with IFRS 2, by reference to their fair value at the
date on which they were granted or issued. Judgement was required
in determining the most appropriate valuation model (see Note
16).
At the end of each accounting period the Group assesses the
recoverable amounts of intangible assets. Where there is an
indication of impairment an impairment loss is recognised for the
amount by which the assets carrying value exceed its recoverable
amount. Impairment losses are recognised in the profit and
loss.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce, and
prepare the asset to be capable of operating in the manner intended
by management. Until completion of the development project, the
assets are subject to impairment testing only. Amortisation
commences upon completion of the asset and is shown within
'Administrative Expenses' on the consolidated statement of
comprehensive income.
At the end of each period all contracts with customers are
reviewed for contracts loss reserves.
At the end of each accounting period, the Group assesses its
ability to continue for a period of at least 12 months from the
date the consolidated financial statements are approve, by
reviewing budgets and forecasts for future trading years (as noted
above in note 2).
An assessment is made whether derivative financial instruments
on issue are debt or equity (see note 16).
During the year management made a judgement regarding the
recognition of a liability for VAT, further details can be found in
note 18. The potential penalties that could arise on this liability
range between GBP80k and GBP360k, management have made a provision
at the lower end of the range in line with professional advice
received.
Estimates
Significant assumptions were necessary in arriving at the inputs
into the valuation model for modified and new share option
arrangements (see note 16).
3 Reverse acquisition
On 23 March 2020, the Company acquired through a share for share
exchange the entire share capital of Supply@ME S.r.l, whose
principal activity is an early stage business that delivers an
innovative technology platform for inventory monetisation that
enables a wide range of manufacturing and trading customers to
improve their working capital position by releasing capital from
their inventory stock.
Although the transaction resulted in Supply@ME S.r.l. becoming a
wholly owned subsidiary of the Company, the transaction constitutes
a reverse acquisition as the previous shareholders of Supply@ME
S.r.l. own a substantial majority of the Ordinary Shares of the
Company and the executive management of Supply@ME S.r.l. became the
executive management of Supply@ME Capital plc, previously Abal
Group plc.
In substance, the shareholders of Supply@ME S.r.l. acquired a
controlling interest in the Company and the transaction has
therefore been accounted for as a reverse acquisition. As the
Company's activities prior to the acquisition were purely the
maintenance of the AIM Listing, acquiring Supply@ME S.r.l and
raising equity finance to provide the required funding for the
operations of the acquisition it did not meet the definition of a
business in accordance with IFRS 3 for the purpose of these
consolidated financial statements of the Group.
Accordingly, in these consolidated financial statements, the
reverse acquisition did not constitute a business combination and
was accounted for in accordance with IFRS 2 "Share-based Payments"
and the associated IFRIC guidance. Although, the reverse
acquisition is not a business combination, the Company has become a
legal parent and is required to apply IFRS 10 and prepare
consolidated financial statements. The Directors have prepared
these consolidated financial statements using the reverse
acquisition methodology, but rather than recognising goodwill, the
difference between the equity value given up by the Supply@ME
S.r.l.'s shareholders and the share of the fair value of net assets
gained by the Supply@ME S.r.l. shareholders is charged to the
statement of comprehensive income as a share-based payment on
reverse acquisition and represents in substance the cost of
acquiring a main market listing.
In accordance with reverse acquisition accounting principles,
these consolidated financial statements represent a continuation of
the consolidated statements of Supply@ME S.r.l. and include:
-- The assets and liabilities of Supply@ME S.r.l. at their
pre-acquisition carrying value amounts and the results for both
years; and
-- The assets and liabilities of the Company as at 23 March 2020
and its results from the date of the reverse acquisition (23 March
2020) to 31 December 2020.
On 23 March 2020, the Company issued 32,322,246,220 ordinary
shares to acquire the whole of the share capital of Supply@ME
S.r.l. The prospectus dated 4(th) March 2020 had an issue price of
GBP0.006945 per share of the Company's share capital to be issued
and therefore valued the investment in Supply@ME S.r.l. at
GBP224,478,000.
Because the legal subsidiary, Supply@ME S.r.l., was treated on
consolidation as the accounting acquirer and the then legal Parent
Company, Supply@ME Capital plc, was treated as the accounting
subsidiary, the fair value of the shares deemed to have been issued
by Supply@ME S.r.l. was calculated at GBP859,000 based on an
assessment of the purchase consideration for a 100% holding of
Supply@ME Capital plc, being its entire share capital of
101,094,276 Ordinary Shares at the last listing price of
GBP0.0085.
The fair value of the net assets of Supply@ME Capital plc at
acquisition was as follows:
GBP'000
Cash and cash equivalents 93
-------------------
Receivables 50
-------------------
Payables (660)
-------------------
Total Net Liabilities (517)
===================
The difference between the deemed cost (GBP859,000) and the fair
value of the net liabilities assumed per above of GBP517,000
resulted in GBP1,376,000 being expensed within "reverse acquisition
expenses" in accordance with IFRS 2, Share Based Payments,
reflecting the economic cost to Supply@ME S.r.l. shareholders of
acquiring a quoted entity.
The reverse acquisition reserve which arose from the reverse
takeover is made up as follows:
GBP'000
Pre-acquisition equity (1) (14,881)
----------------------
Supply@ME S.r.l. equity at acquisition (2) 148
----------------------
Investment in Supply@ME S.r.l. (3) (224,478)
----------------------
Reverse acquisition expense (4) 1,376
----------------------
(237,835)
======================
Notes:
1. Recognition of pre-acquisition equity of Supply@ME Capital plc as at 23 March 2020.
2. Supply@ME S.r.l. had issued equity of GBP148,000. As these
consolidated financial statements present the capital structure of
the legal parent entity, the equity of Supply@ME S.r.l. is
eliminated.
3. The value of the shares issued by the Company in exchange for
the entire share capital of Supply@ME S.r.l. The above entry is
required to eliminate the balance sheet impact of this
transaction.
4. The reverse acquisition expense represents the difference
between the value of the equity issued by the Company, and the
deemed consideration given by Supply@ME S.r.l. to acquire the
Company.
4 Deferred revenues and segmental reporting
The revenues do not include accruals and deferred income of
GBP1,131,000 (2019: GBP634,000) relating to payments in advance
made by client companies for due diligence to pre-qualify them for
access to the inventory monetisation scheme. Under Italian GAAP,
these amounts are recognised in revenue in the year. Under IFRS,
these amounts will be recognised in future periods.
The following information is given about the Group's reportable
segments:
The Chief Operating Decision Maker is the Board of Directors.
The Board reviews the Group's internal reporting in order to assess
performance of the Group. Management has determined the operating
segment based on the reports reviewed by the Board.
Type % Geography %
Due diligence 100 Italy 100
The Board considers that during the year ended 31 December 2020
the Group operated in the single business segment of due diligence
services and all activities were undertaken in Italy.
5 Exceptional costs
Year ended Year ended
31 December 2020 31 December 2019
GBP '000 GBP '000
Deemed cost of listing - share-based payment 1,376 -
================== ==================
As explained in note 3, the reverse acquisition of Supply@ME
S.r.l. does not meet the requirements of IFRS 3 Business
Combinations so has been accounted for under IFRS 2 Share Based
Payments.
The amount of GBP1,376,000 represents the deemed cost of
acquisition over the net assets of Supply@ME S.r.l. that were
acquired. Under IFRS 2, the deemed costs of obtaining the listing
has been expensed to profit and loss.
6 Other operating income
Year ended Year ended
31 December 2020 31 December 2019
GBP '000 GBP '000
Write back of payables 53 174
================== ==================
7 Operating loss
Year ended Year ended
31 December 2020 31 December 2019
GBP 000 GBP 000
Arrived at after charging / (crediting)
Amortisation 201 98
8 Auditors' remuneration
Year ended Year ended
31 December 2020 31 December 2019
GBP 000 GBP 000
Fees payable to the Company's auditors for the audit of the Company's annual
accounts 27 20
Fees payable to the Company's auditors and its associates for other services:
Audit of the accounts of subsidiaries 10 -
9 Staff costs
The aggregate payroll costs (including directors' remuneration)
were as follows:
Year ended Year ended
31 December 31 December
2020 2019
GBP 000 GBP 000
Wages and salaries 633 -
Social security costs 95 -
Pension costs, defined contribution scheme 1 -
Redundancy costs 16 -
745 -
============ ============
The average number of persons employed by the Group (including
directors) during the year, analysed by category was as
follows:
Year ended Year ended
31 December 31 December
2020 2019
No. No.
Executive directors 1 -
Risk 1 -
Sales and marketing 3 -
Legal 2 -
Administration 5 -
R&D / software 2 -
------------ ------------
14 -
============ ============
10 Key management personnel
Key management compensation
Year ended Year ended
31 December 31 December
2020 2019
GBP 000 GBP 000
Salaries and other short-term employee
benefits 361 -
No retirement benefits are accruing to Company Directors under a
defined contribution scheme (2019: none).
The Directors' emoluments are shown in the Remuneration Report
section of the Annual Report and Accounts.
The Directors of the Company and the Head of Enterprise Risk
Management are considered to be the key management personnel.
11 Income tax
Tax charged in the income statement:
Year ended Year ended
31 December 31 December
2020 2019
GBP 000 GBP 000
Current taxation
UK corporation tax - -
Foreign taxation paid/(receivable) by subsidiaries 145 (133)
------------ ------------
145 (133)
============ ============
The tax on loss before tax for the period is less than (2019 -
less than) the standard rate of corporation tax in the UK of 19%
(2019 - 19%).
The differences are reconciled below:
Year ended Year ended
31 December 31 December
2020 2019
GBP 000 GBP 000
Loss before tax 2,819 687
============ ============
Corporation tax at standard rate (536) (131)
Effect of expenses not deductible in determining
taxable profit (tax loss) 593 -
Increase in tax losses carried forward
which were unutilised in the current year 38 -
------------ ------------
Tax adjustments in respect of foreign subsidiaries 50 (2)
------------ ------------
Total tax charge/(credit) 145 (133)
============ ============
At 31 December 2020 the company had unutilised tax losses of
GBP9,000 (31 December 2019: GBP9,000). A deferred tax asset of
GBP2,000 (31 March 2019: GBP2,000) has not been recognised due to
the uncertainty around the timing of the availability of taxable
income to utilise the losses.
12 Earnings per share
The calculation of the Basic earnings per share (EPS) is based
on the loss attributable to equity holders of the parent Company
for the year from continuing operations of GBP2,962,000 (2019 -
loss GBP551,000) and on a weighted average number of ordinary
shares in issue of 27,118,800,563 (2019 - 32,322,246,220). The
basic EPS from continuing operations is (0.01) pence (2019 -
0.00).
The comparative equity disclosed in the Consolidated Statement
of Financial Position is that of Supply@ME S.r.l., as disclosed in
note 3. The equity of Supply@ME S.r.l. is not in the form of share
capital and therefore the EPS calculation has been based on the
consideration shares issued to complete the RTO.
The diluted EPS is the same as the basic EPS as they were all
losses.
13 Intangible assets
Capitalised internally developed platform costs
GBP 000
Cost or valuation
At 1 January 2019 441
Additions 132
At 31 December 2019 573
Forex retranslation adjustment 33
-----------------------------------------------
At 1 January 2020 606
Additions 1,027
At 31 December 2020 1,633
-----------------------------------------------
Amortisation
At 1 January 2019 88
Amortisation charge 95
-----------------------------------------------
At 31 December 2019 183
Forex retranslation adjustment 11
-----------------------------------------------
At 1 January 2020 194
Amortisation charge 203
At 31 December 2020 397
-----------------------------------------------
Carrying amount
At 31 December 2020 1,236
===============================================
At 31 December 2019 390
===============================================
14 Trade and other receivables
As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000
Trade receivables 489 4
Other receivables 601 629
Deferred tax asset 422 283
Prepayments 23 3
---------------------- ----------------------
Total current trade and other receivables 1,535 919
====================== ======================
15 Share capital
Allotted, called up and fully paid shares
As at 31 December 2020 As at 31 December 2019
No. 000 GBP 000 No. 000 GBP 000
Equity - - - 148
Ordinary shares of GBP0.00002
each 32,754,945 655 - -
Deferred shares of GBP0.04000
each 63,084 2,523 - -
2018 Deferred shares
of GBP0.01000 each 224,194 2,242 - -
33,042,223 5,420 - 148
============= ========= =========== ===========
The comparative equity is that of Supply@ME S.r.l., as disclosed
in note 3. The equity of Supply@ME S.r.l. is not in the form of
share capital so there is no disclosure of the number of
shares.
New shares allotted
On 23 March 2020, the Group completed a reverse acquisition
transaction with Supply@ME S.r.l. It was considered that Supply@ME
S.r.l. was the accounting acquirer in the transaction and so the
comparative share capital is that of Supply@ME S.r.l. Upon
completion of the transaction, the share capital of Supply@ME
Capital plc has been disclosed, to represent that of the legal
acquirer. 32,322,246,220 ordinary shares were issued as
consideration.
Also, on 23 March 2020, 331,604,094 ordinary shares were issued
through a placing which raised gross proceeds of GBP2,240,000.
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and
restrictions:
The Ordinary shares carry rights to participate in dividends and
distributions declared by the Company and each share carries the
right to one vote at any general meeting. There are no rights of
redemption attaching to the Ordinary shares.
Deferred shares have the following rights, preferences and
restrictions:
The deferred shares carry no rights to receive any dividend or
distribution and carry no rights to vote at any general meeting. On
a return of capital the Deferred shareholders are entitled to
receive the amount paid up on them after the Ordinary shareholders
have received GBP100,000,000 in respect of each share held by them.
The Company may purchase all or any of the Deferred shares at an
appropriate consideration of GBP1.
2018 Deferred shares have the following rights, preferences and
restrictions:
The deferred shares carry no rights to receive any dividend or
distribution and carry no rights to vote at any general
meeting.
Reconciliation of allotted, called up and fully paid shares
As at 31 December
As at 31 December 2020 2019
No. 000 GBP 000 No. 000 GBP 000
At 1 January - 148 - 148
Transfer to RTO reserve - (148) - -
Bring in plc share capital 388,373 4,767 - -
Reverse acquisition 32,322,246 646 - -
Issue of shares for cash 331,604 7 - -
------------- --------- --------- --------
At 31 December 33,042,223 5,420 - 148
============= ========= ========= ========
16 Share-based payments, convertible loan notes and derivative
financial instruments
(1) Convertible loan notes and derivative financial
instruments
As at 31 December 2020 two warrants for options to acquire
shares were outstanding that arose as detailed below. These have a
fair value of GBP24,000 (31 December 2019: GBP48,000). The
valuation of the warrants and further detail to the transactions
may be summarised as follows:
(i) In October 2018, following a placing of shares at 1.1p, a
warrant was issued for 7,272,727 options to acquire shares,
exercisable for 3 years at 1.1p per share option or, if lower, the
5 day average price on AIM prior to exercising the option. The
year-end fair value of these warrants is 0.21p (31 December 2019:
0.42p) per option to acquire a share and has been calculated using
the Black-Scholes model, and the average 5 - day year-end share
price of 0.60p (31 December 2019: 0.85p) giving a total fair value
of GBP15,000 (31 December 2019: GBP31,000) for all these options to
acquire shares. The other inputs into the model were volatility
111% (31 December 2019: 111%), dividend yield 0% (31 December 2019:
0%), and risk free rate of 1.1% (31 December 2019: 2.1%).
(ii) In October 2018, a 3 year unsecured convertible loan note
('CLN') for GBP90,000 was issued. The terms of the CLN was an
interest rate of 7.5% pa, and the conversion repayment option was
in two parts - the issue of shares to repay the principal amount of
the loan, and a warrant with the option to purchase additional
shares. If the conversion option was exercised, the ordinary shares
for the loan repayment would be issued a price of 1.1p or, if
lower, the 5 day average price on AIM prior to exercising the
conversion option. The warrant was for a number of options to
acquire shares equal to half the number of shares issued for the
repayment of the loan. The terms of the warrant were for 3 years
and an exercise price of 1.1p or, if lower, the 5 day average price
on AIM prior to exercising the warrant option. In January 2019, the
conversion option was exercised. For the repayment of the loan
8,181,818 ordinary shares were issued at a price of 1.1p. On
conversion, warrants were issued for options to acquire 4,090,909
shares, and these warrants were outstanding at both 31 December
2019 and 31 December 2020. For accounting purposes, the CLN on
issue was attributed a fair value of GBP69,000 by discounting the
loan repayments at an unsecured interest rate of 18%. As the Group
had no other comparable unsecured borrowings, higher or lower
interest rates might have been applied to calculate the discount
factor, but these would not change materially the fair value of the
CLN.
The gain on issue was credited to pro t and loss. On exercising
the conversion option in January 2019, the release of the GBP19,000
difference between the carrying value of the loan and the legal
value was credited direct to retained earnings. At the time of
exercising this conversion option, the fair value of share warrants
was GBP33,000 and these warrants were revalued at the year ended 31
December 2020 using the same basis and factors outlined in the
previous paragraph 18(2)(i), and giving a total value for these
warrants of GBP9,000 (31 December 2019: GBP17,000). The movement in
the fair value was credited to pro t and loss.
17 Trade and other payables
As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000
Bank loans and overdrafts 22 297
Trade payables 1,062 534
Amounts due to group companies - -
Other payables 271 220
Social security and other taxes 792 125
Accruals and deferred income 1,248 634
---------------------- ----------------------
3,395 1,810
====================== ======================
Included within accruals and deferred income is GBP1,131,000
(2019: GBP634,000) relating to payments in advance made by client
companies for due diligence to pre-qualify them for access to the
inventory monetisation scheme. Under Italian GAAP, these amounts
are recognised in revenue in the year. Under IFRS, these amounts
will be recognised in future periods.
18 Provisions
Provision Provision
Deferred Post-employment for risks for VAT
tax liabilities benefits and charges and penalties Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2019 - - - - -
Provided for in the
year 4 - - 195 199
----------------- ---------------- ------------- --------------- ---------
At 31 December 2019 4 - - 195 199
Forex retranslation
adjustment - - - 12 12
----------------- ---------------- ------------- --------------- ---------
At 1 January 2020 4 - - 207 211
Released to profit
and loss (4) - - - (4)
Provided for in the
year - 32 40 79 151
At 31 December 2020 - 32 40 286 358
================= ================ ============= =============== =========
In advance of the Group's first monetisation transaction, a
number of advance payments have been received from potential client
companies in accordance with agreed contractual terms. These
advance payments, for which an invoice has not yet been issued,
have been made exclusive of VAT. As at 31 December 2020, the Group
has included a provision relating to a potential VAT liability,
including penalties, in respect of these advance payments of
GBP286,000 (31 December 2019: GBP195,000).
At the point in the future when the associated monetisation
transaction takes place, the potential VAT liability will be
settled by the Group. At this same point in time, the Directors
expect to be able to recover the VAT from the client companies as
invoices in respect of the monetisation transactions are issued.
The timing of these future monetisation transactions currently
remains uncertain and as such no corresponding VAT receivable has
been recognised as at 31 December 2020, however there is a
contingent asset of GBP204,000 as at 31 December 2020 (31 December
2019: GBP139,000) in respect of this.
From time to time, during the course of business, the Group may
be subject to disputes which may give rise to claims. The Group
will defend such claims vigorously and provision for such matters
are made when costs relating to defending and concluding such
matters can be measured reliably. There were no cases outstanding
as at the year end. Management have been informed of one potential
matter arising subsequent to the year-end however, at this time,
this would not meet the criteria for a provision to be
recognised.
19 Pension and other schemes
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The
assets of the scheme are recognised as being held separately from
those of the Group and Company and will be paid over to an
independently administered fund. The pension cost charge represents
contributions payable by the group to the fund.
The total pension charge for the year represents contributions
payable by the Group to the scheme and amounted to GBP1,000 (2019:
GBPnil).
Contributions totalling GBP2,000 (2019: GBPnil) were payable to
the scheme at the end of the year and are included in
creditors.
20 Capital commitments
There were no capital commitments for the Group at 31 December
2020 or 31 December 2019.
21 Contingent liabilities
There were no contingent liabilities for the Group at 31
December 2020 or 31 December 2019.
22 Financial instruments
Financial assets
Carrying value Fair value
As at 31 December As at 31 December As at 31 December
2020 2019 2020 As at 31 December 2019
GBP 000 GBP 000 GBP 000 GBP 000
Financial assets at
amortised cost:
Cash and cash
equivalents 552 143 552 143
Trade receivables 489 4 489 4
Other receivables 601 629 601 629
1,642 776 1,642 776
===================== ===================== ===================== ======================
Valuation methods and assumptions: The directors believe that
the fair value of all financial assets approximates to the carrying
value
Financial liabilities
Carrying value Fair value
As at 31 December 2020 As at 31 December 2019 As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000 GBP 000 GBP 000
Financial liabilities
at amortised cost:
Bank loans and
overdrafts 22 297 22 297
Trade payables 1,062 534 1,062 534
Other payables 271 220 271 220
---------------------- ---------------------- ---------------------- ----------------------
1,355 1,051 1,355 1,051
====================== ====================== ====================== ======================
Fair value
As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000
Financial liabilities at fair value through profit and loss:
Derivative financial instruments 24 48
====================== ======================
Valuation methods and assumptions: The directors believe that
the fair value of trade and other payables approximates to the
carrying value - see note 16 for further details of the fair value
of derivative financial instruments.
Risk management
The Group is exposed through its operations to the following
nancial risks: credit risk, foreign exchange risk; and liquidity
risk.
In common with all other businesses, the Group is exposed to
risks that arise from its use of nancial instruments. This note
describes the Group's objectives, policies and processes for
managing these risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these nancial statements. There have been no substantive
changes in the Group's exposure to nancial instrument risks, its
objectives, policies and processes for managing those risks or the
methods used to measure them from previous periods unless otherwise
stated in this note.
Principal nancial instruments
The principal nancial instruments used by the Group, from which
nancial instrument risk arises, were as follows:
- trade receivables;
- cash at bank; and
- trade and other payables.
General objectives, policies and processes
The board had overall responsibility for the determination of
the Group's risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it had delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's nance function. The board received monthly reports from the
chief Financial Of cer through which it reviewed the effectiveness
of the processes put in place and the appropriateness of the
objectives and policies it had set. The overall objective of the
board was to set polices that sought to reduce risk as far as
possible without unduly affecting the Group's competitiveness and
exibility. Further details regarding these policies are set out
below.
Interest rate risk
At present the directors do not believe that the Group has
significant interest rate risk and consequently does not hedge
against such risk. Cash balances earn interest at variable
rates.
The Group's interest generating financial assets as at 31
December 2020 comprised cash at bank of GBP552,000 (2019:
GBP142,000). Interest is paid on cash at floating rates in line
with prevailing market rates.
As at 31 December 2020, the group had no liabilities for which
interest is payable (2019 - no liabilities).
Sensitivity analysis
At 31 December 2020, had the LIBOR 1 MONTH rate of 0.01913 (2019
- 0.70388) increased by 1% with all other variables held constant,
the increase in interest receivable on financial assets would
amount to approximately GBPnil (2019 - GBP1,000). Similarly a 1%
decrease in the LIBOR 1 MONTH rate with all other variables held
constant would result in a decrease in interest receivable on
financial assets of approximately GBPnil (2019 - GBP1,000).
Credit risk and impairment
Credit risk is the risk of nancial loss to the group if a
customer or a counterparty to a nancial instrument fails to meet
its contractual obligations. The Group is mainly exposed to credit
risk from credit sales. It is Group policy, implemented locally, to
assess the credit risk of new customers before entering contracts.
Such credit ratings take into account local business practices. The
Group has a credit policy under which each new customer is analysed
individually for creditworthiness before the Group's standard
payment and delivery terms and conditions are offered.
Credit risk also arises from cash and cash equivalents and
deposits with banks and nancial institutions. To manage this, the
Group has made sure that they use reputable banks.
The Group's chief nancial of cer monitors the utilisation of the
credit limits regularly.
The Group's maximum exposure to credit by class of individual
financial instrument is shown in the table below:
Carrying Maximum Carrying Maximum
value exposure value exposure
as at as at as at as at
31 December 31 December 31 December 31 December
2020 2020 2019 2019
GBP 000 GBP 000 GBP 000 GBP 000
Cash and cash equivalents 552 552 143 143
Trade receivables 489 489 4 4
------------- ------------- ------------- -------------
1,041 1,041 147 147
============= ============= ============= =============
As at 31 December 2020, the assets held by the group are not
past due or impaired.
Trade receivables are all considered to be low risk and have
been fully repaid since year end.
Foreign exchange risk
Foreign exchange risk arises because the Group has operations
located in various parts of the world whose functional currency is
not the same as the functional currency in which the Group
operates. Although its global market penetration reduces the
Group's operational risk, in that it has diversified into several
markets, the Group's net assets arising from such overseas
operations are exposed to currency risk resulting in gains or
losses on retranslation into sterling. Only in exceptional
circumstances would the group consider hedging its net investments
in overseas operations as generally it does not consider that the
reduction in foreign currency exposure warrants the cash flow risk
created from such hedging techniques.
The Group's policy is, where possible, to allow group entities
to settle liabilities denominated in their functional currency
(primarily Euros or pound sterling) with the cash generated from
their own operations in that currency. Where group entities have
liabilities denominated in a currency other than their functional
currency (and have insufficient reserves of that currency to settle
them) cash already denominated in that currency will, where
possible, be transferred from elsewhere within the group.
Currency profile
Financial assets
- Cash Sterling: GBP539,000 (2019 - GBPnil)
- Cash Euro: GBP13,000 (2019 - GBP143,000)
- Trade receivables Sterling: GBPnil (2019 - GBPnil)
- Trade receivables Euro: GBP489,000 (2019 - GBP4,000)
Financial liabilities
- Trade payables Sterling: GBP342,000 (2019 - GBPnil)
- Trade payables Euro: GBP720,000 (2019 - GBP534,000)
Sensitivity analysis
At 31 December 2020, if Sterling had strengthened by 10% against
EUR with all other variables held constant, loss before tax for the
year would have been approximately GBP41,000 lower (2019 -
GBP81,000 lower), mainly as a result of foreign exchange gains on
translation of EUR denominated cash and cash equivalents and trade
receivables, compensated by foreign exchange gains on translation
of EUR denominated trade payables and deferred revenues.
Conversely, if Sterling had weakened by 10% against EUR with all
other variables held constant, loss before tax for the year would
have been approximately GBP41,000 higher (2019 - GBP81,000
higher).
Liquidity risk
Liquidity risk arises from the Group's management of working
capital and the finance charges and principal repayments on its
debt instruments. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall
due.
The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due.
The board receives rolling 12-month cash flow projections on a
regular basis as well as information regarding cash balances. At
the statement of financial position date, these projections
indicated that the group expects to have sufficient liquid
resources to meet its obligations under all reasonably expected
circumstances.
There were no undrawn facilities at 31 December 2020 or 31
December 2019.
Between 3 and 12 Between 1 and 2 Between 2 and 5
At 31 December 2020 Up to 3 months months years years Over 5 years
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Liabilities
Loans and
borrowings 22 - - - -
Trade and other
payables 1,333 - - - -
Social security and
other taxes 792 - - - -
Total liabilities 2,147 - - - -
=============== ==================== ==================== ==================== =============
Between 3 and 12 Between 1 and 2 Between 2 and 5
At 31 December 2019 Up to 3 months months years years Over 5 years
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Liabilities
Loans and
borrowings 297 - - - -
Trade and other
payables 754 - - - -
Social security and
other taxes 125 - - - -
Total liabilities 1,176 - - - -
=============== ==================== ==================== ==================== =============
Capital risk management
The Group's capital management objectives are to ensure the
Group is appropriately funded to continue as a going concern and to
provide an adequate return to shareholders commensurate with risk.
The Group defines capital as being total shareholder's equity. The
Group has no external debt finance and hence gearing is not
measured. The Group's capital structure is periodically reviewed
and, if appropriate, adjustments are made in the light of expected
future funding needs, changes in economic conditions, financial
performance and changes in Group structure.
The Group adheres to the capital maintenance requirements as set
out in the Companies Act.
Capital for the reporting periods under review is summarised as
follows:
- Net liabilities: (GBP452,000) (2019: (GBP557,000))
- Cash and cash equivalents: GBP552,000 (2019: GBP143,000)
23 Net debt
The Group reconciliation of the movement in net debt is set out
below:
At 1 January 2020 Cashflows Foreign exchange At 31 December 2020
GBP 000 GBP 000 GBP 000 GBP 000
Cash at bank 143 407 24 574
Bank overdraft - (22) - (22)
143 385 24 552
================== ========== ================= ====================
At 1 January 2019 Cashflows Foreign exchange At 31 December 2019
GBP 000 GBP 000 GBP 000 GBP 000
Cash at bank 4 139 - 143
Bank overdraft (2) 2 - -
2 141 - 143
================== ========== ================= ====================
24 Related party transactions
During the year to 31 December 2020, the following are treated
as related parties:
The AvantGarde Group SpA
The AvantGarde Group currently holds 38.9 per cent of the shares
in Supply@ME Capital plc as announced on 24 December 2020.
In the same RNS, the Company disclosed, among things, a merger
between 1AF2 S.r.l. and the AvantGarde Group S.p.A. (TAG). The
merged company will be named "the AvantGarde Group". 1AF2 S.r.l.
was a Company, with Alessandro Zamboni as Director, also involved,
together with Quadrivio Group in the "Captive Bank" project as per
RNS published by SYME on 21 September 2020. In this regard, 1AF2
S.r.l. originated in 2020 several Client companies analysed by
Supply@ME S.r.l. and to which SYME charged due diligence fees,
pursuant to its revenue recognition policies.
Following the above transaction between IAF2 and the AvantGarde
Group S.p.A., as at 31 December 2020 the amount due to the Company
is GBP485,339 (2019: due by the Company GBP204,887)
iWEP Ltd is owned by iWolf Ltd and White Amba Investments
LLP
The beneficial owner of iWEP, iWolf and White Amba is Dominic
White, the Chairman of SYME.
Eight Capital Partners Plc
Dominic White is a Director of the company. IWEP owns 29.8% of
Eight Capital Partners Plc.
Epsion Capital Ltd
Epsion Capital, is a wholly owned subsidiary of Eight Capital
Partners Plc and conducted the placing for the RTO.
Dominic White
Dominic White holds directorships across these companies that
are therefore related parties (iWEP Ltd, iWolf Ltd, White Amba
Investments LLP and Eight Capital Partners Plc).
Alessandro Zamboni
Alessandro Zamboni is on the Board of The AvantGarde Group SpA
as well as holding numerous directorships across companies that are
related parties.
25 Controlling party
At 31 December 2020 the Directors do not believe that a
controlling party exists.
26 Subsequent events
In the first six months of 2021, the Company announced the
following material events:
-- 11 January 2021: SYME announced that it has entered into an
agreement with Lenovo Financial Services META LLC ("LFS"). The SYME
Platform will be positioned as an alternative solution to
complement LFS's existing vendor programme offerings to their
network of customers in the Middle East, Turkey and Africa region
(excluding South Africa).
The purpose of the co-operation agreement, made with the
strategic support of iMASS, was to deliver a dedicated inventory
monetisation programme to LFS's customers which may also allow them
to evaluate the opportunity to adopt the upcoming Shariah version
of the Platform.
-- 20 January 2021: following the announcement of 3 November
2020, the Company, by virtue of the support of the Shariah Funding
Specialist and iMASS, announced that the authorisation process for
SYME's Shariah compliant Inventory Monetisation Platform was
successfully completed.
-- 21 January 2021: further to the Company's announcement of 19
January, 2021, detailing a change to its Accounting Reference Date
to 31 December and a revised financial reporting calendar, SYME
requested a suspension of the listing of its shares pending
publication of its audited accounts for the nine months to 31
December 2019 and its 2020 Interim Results for the six months ended
30 June.
-- 9 March 2021 : Restoration of its Listing on the Standard
List of The London Stock Exchange and the resumption of dealings in
its Ordinary shares.
-- 17 March 2021: SYME announced on 17 March 2021 the signing of
Heads of Terms ("HoT") for the acquisition of TradeFlow Capital
Management Pte Ltd., the leading FinTech-powered commodities trade
enabler, focused on SMEs, based in Singapore.
A sale and purchase agreement was signed and announced on 26 May
2021. The transaction is expected to complete shortly.
-- 1 April 2021: The Company announced the appointment of Ms Amy
Benning as Chief Financial Officer with effect from 7 June 2021
.
-- 16 June 2021: The Company announced that it had entered into
a subscription agreement ("Subscription Agreement") with Negma
Group Ltd for the issue of an initial tranche of GBP5,600,000 of
Convertible Loan Notes at GBP56,000 par value for which it had
issued a drawdown notice at a subscription price of GBP50,000 per
Convertible Loan Note for an aggregate total of GBP5,000,000. The
Subscription Agreement allows for a further nine tranches to be
issued at the same par value at the exclusive option of the
Company.
Company Statement of Financial Position as at 31 December
2020
As at 31 December As at 31
2020 December 2019
Note GBP 000 GBP 000
Non-current assets
Property, plant and equipment 2 -
Investments 3 646 -
----------------- --------------
Total non-current assets 648 -
----------------- --------------
Current assets
Trade and other receivables 4 282 67
Cash and cash equivalents 539 81
----------------- --------------
Total current assets 821 148
----------------- --------------
Total assets 1,469 148
----------------- --------------
Current liabilities
Trade and other payables 7 894 409
Derivative financial instruments 6 24 48
----------------- --------------
Total current liabilities 918 457
----------------- --------------
Net assets/(liabilities) 551 (309)
================= ==============
Equity attributable to owners of the
parent
Share capital 5 5,420 4,767
Share premium 5 11,820 9,599
Retained earnings (16,689) (14,675)
----------------- --------------
Total equity 551 (309)
================= ==============
A separate income statement for the parent company has not been
presented, as permitted by section 408 of the Companies Act 2006.
The Company's loss for the year was GBP2,014,000 (2019: profit for
the period 1 April 2019 to 31 December 2019 of GBP532,000).
The accompanying notes form an integral part of these Company
financial statements.
The Company financials were approved and authorised for issue by
the Board on 25 June 2021 and signed on its behalf by:
.........................................
Mr Alessandro Zamboni
Director
Supply@ME Capital plc
Registration number: 03936915
Company Statement of Changes in Equity for the Year Ended 31
December 2020
Share capital Share premium Other reserves Retained earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 April 2019 4,767 9,599 1,217 (15,207) 376
Loss for the period - - - (685) (685)
Employee share-based payment options - - (1,217) 1,217 -
------------- ------------- -------------- ----------------- --------
Total comprehensive loss for the period - - (1,217) 532 (685)
At 31 December 2019 4,767 9,599 - (14,675) (309)
------------- ------------- -------------- ----------------- --------
Share capital Share premium Other reserves Retained earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 January 2020 4,767 9,599 - (14,675) (309)
Loss for the year - - - (2,014) (2,014)
------------- ------------- -------------- ----------------- --------
Total comprehensive loss for the period - - - (2,014) (2,014)
Reverse takeover of Supply@ME S.r.l. 646 - - - 646
Issue of shares for cash 7 2,234 - - 2,241
Cost of share issues - (13) - - (13)
At 31 December 2020 5,420 11,820 - (16,689) 551
============= ============= ============== ================= ========
The accompanying notes form an integral part of these Company
financial statements.
Notes to the Company Financial Statements for the Year Ended 31 December 2020
1 General information
Supply@ME Capital plc (the "Company" or "SYME") is a public
company limited by share capital incorporated and domiciled in
England. The address of its registered of ce is 27/28 Eastcastle
Street, London WlW 8DH. The Company's ordinary shares are traded on
the Main Market of the London Stock Exchange.
These financial statements are the separate financial statements
for the Company and have been prepared in compliance with Financial
Reporting Standard 102, the Financial Reporting Standard applicated
in the United Kingdom and the Republic of Ireland ("FRS 102") and
the Companies Act 2006.
In order to simplify the accounting for the parent company this
is the first year in which the financial statements have been
prepared in compliance with FRS 102. The transition from preparing
the financial statements in accordance with International Financial
Reporting Standard to FRS 102 has had no material impact on either
the financial position or the financial performance as previously
reported by the company.
The Company's financial statements are presented in Pounds
Sterling, the Company's functional and presentational currency, and
all values are rounded to the nearest thousand pounds (GBP'000)
excepted when otherwise stated.
These nancial statements have been prepared under the historical
cost convention, modified to include certain financial instruments
at fair value. The principal accounting policies are set out below,
which have been consistently applied to all the years presented.
The comparative period for the Company is 1 April 2019 to 31
December 2019 being the results of Supply@ME Capital plc.
As permitted by FRS 102 section 1.12, the Company has taken
advantage of the disclosure exemptions available under that
standard in relation to:
-- Section 7 'Statement of Cash Flows': Presentation of a
statement of cash flow and related notes and disclosures;
-- Section 11 'Basic Financial Instruments' and Section 12
'Other Financial Instrument Issues': Carrying amounts, interest
income/expense and net gains/losses for each category of financial
instrument; basis of determining fair values; details of
collateral, loan defaults or breaches, details of hedges, hedging
fair value changes recognised in profit or loss and in other
comprehensive income;
-- Section 26 'Share based Payment': Share-based payment expense
charged to profit or loss, reconciliation of opening and closing
number and weighted average exercise price of share options, how
the fair value of options granted was measured, measurement and
carrying amount of liabilities for cash-settled share-based
payments, explanation of modifications to arrangements;
-- Section 33 'Related Party Disclosures': Compensation for key management personnel.
The parent company meets the definition of a qualifying entity
under FRS 102. Where required, equivalent disclosures are given in
the Group accounts of Supply@ME Capital plc.
Supply@ME Capital plc is the parent company of the Group and its
results are included in the Group consolidated financial
statements.
2 Accounting policies
Going concern
These financial statements have been prepared on a going concern
basis, under historical cost convention. The Directors have
assessed the Company's ability to continue in operational existence
for the foreseeable future and consider it appropriate to continue
to prepare these financial statements on a going concern basis.
The full going concern assessment of the Group, being the
Company and its subsidiaries, has been set out in note 2 to the
Group consolidated financial statements.
Investments in subsidiaries
Subsidiaries are all entities over which the Company has
control. The Company controls an entity when the Company is exposed
to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its
power over the entity.
The value of the acquisition of Supply@ME S.r.l. as shown in the
accounts of the holding company has been determined by applying the
sections 610, 612 and 615 of the Companies Act 2006 as they relate
to merger relief. These sections of the Companies Act 2006 are
applicable to corporate investments where more than 90% of the
acquired entity is represented by a share for share exchange, as
occurred with the acquisition of Supply@ME S.r.l. In this instance
FRS 102 allows the investment to be carried in the Company's
balance sheet at the nominal value of the shares issued, ignoring
any associated share premium.
The carrying value referred to above is then adjusted by any
provision for impairment in the value. Where events or changes in
circumstances indicate that the carrying value of an investment may
not be recoverable, an impairment review is carried out. An
impairment write down is recognised to the extent that the carrying
value of the investment exceeds the higher of fair value less costs
to sell and value in use.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and other
short-term highly liquid investments that are readily convertible
to a known amount of cash and are subject to an insignificant risk
of change in value.
Financial assets
Classification
Financial assets currently comprise trade and other receivables,
cash and cash equivalents.
Recognition and measurement
Loans and receivables
Loans and receivables are mainly contractual trade receivables
and are non-derivative nancial assets with xed or determinable
payments that do not have a signi cant nancial component and are
not quoted in an active market. Accordingly, trade and other
receivables are recognised at undiscounted invoice price. A reserve
for credit risk is made at the beginning of each transaction and
adjusted subsequently through pro t and loss.
Cash and cash equivalents
Cash and other short-term deposits in the Statement of Financial
Position comprise cash at banks and in hand and short-term deposits
with an original maturity of three months or less and where there
is an insignificant risk of changes in value.
Impairment of financial assets
Financial assets, other than those held at fair value through
profit and loss, are assessed for indicators of impairment at each
reporting end date. Financial assets are impaired where there is
objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the
estimated future cash flows have been affected. If an asset is
impaired, the impairment loss is the difference between the
carrying amount and the present value of the estimated cash flows
discounted at the asset's original effective interest rate. The
impairment loss is recognised in profit or loss. If there is a
decrease in the impairment loss arising from an event occurring
after the impairment was recognised, the impairment is reversed.
The reversal is such that the current carrying amount does not
exceed what the carrying amount would have been, had the impairment
not previously been recognised. The impairment reversal is
recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual
rights to the cash flows from the asset expire or are settled, or
when the Company transfers the financial asset and substantially
all the risks and rewards of ownership to another entity, or if
some significant risks and rewards of ownership are retained but
control of the asset has transferred to another party that is able
to sell the asset in its entirety to an unrelated third party.
Financial liabilities
Classification
Financial liabilities comprise trade and other payables,
convertible loan notes and derivative financial instruments.
Recognition and measurement
Trade and other payables
Trade and other payables are initially recognised at fair value
less transaction costs and thereafter carried at amortised
cost.
Derivative financial instruments
The Company's derivative nancial instruments are a convertible
loan note that was both issued and then cleared in the previous
period year by a debt for equity swap, and warrants were issued
with options to acquire shares that are accounted for at fair
value, with changes in value taken through pro t and loss. The
release of the fair value discount on the debt for equity swap has
been taken direct to retained earnings.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's
contractual obligations expire or are discharged or cancelled.
Equity
"Share capital" represents the nominal value of equity shares
issued.
"Share premium" represents the excess over nominal value of the
fair value of consideration received for equity shares net of
expenses of the share issue.
"Retained earnings" represents retained losses of the
Company.
Foreign currency transactions
Foreign currency transactions are translated into the functional
currency using the average exchange rates in the month. Foreign
exchange gains and losses resulting from the settlement of such
transactions, and from the translation at the reporting period end
exchange rates of monetary assets and liabilities denominated in
foreign currencies, are recognised in the statement of
comprehensive income.
Critical judgements and significant accounting estimates
In determining and applying accounting policies, judgement is
often required in respect of items where the choice of specific
policy, accounting estimate or assumption to be followed could
materially affect the reported results or net asset position of the
Company should it later be determined that a different choice would
be more appropriate. The most significant areas where judgement and
estimates have been applied are as follows:
Judgements
The value of warrants for share options were measured, in
accordance with FRS 102 section 26, by reference to their fair
value at the date on which they were granted or issued. Judgement
was required in determining the most appropriate valuation model
(see Note 7).
At the end of each accounting period, the Company assesses its
ability to continue for a period of at least 12 months from the
date the financial statements are approved, by reviewing budgets
and forecasts for future trading years (as noted above in note
2).
An assessment is made whether derivative financial instruments
on issue are debt or equity (see note 7).
At the end of the accounting period the Company assesses if
there are any indicators of impairment with respect to its
investments in subsidiaries. The carrying value as at 31 December
2020 was supported by a discounted cash flow model of future free
cash flows. The Directors have reviewed the valuation based on
current knowledge and projections. They have concluded that the
current carrying value is supported by the present value of future
free cash flows and that no impairment of the investment is
required.
Estimates
Significant assumptions were necessary in arriving at the inputs
into the valuation model for modified and new share option
arrangements (see note 7).
3 Investments
Details of undertakings
Details of the investments in which the Company holds 20% or
more of the nominal value of any class of share capital are as
follows:
Undertaking Country of Holding Proportion of voting Proportion of voting
incorporation rights and shares rights and shares held
held
Subsidiary undertakings 2020 2019
Supply@ME S.r.l. Italy Legal capital 100% -
Abal (Goswell) Limited England and Wales Ordinary shares 0% 100%
Supply@ME Stock Company Italy Legal capital 100% -
1 S.R.L
Supply@ME Stock Company Italy Legal capital 100% -
2 S.R.L
Supply@ME Stock Company Italy Legal capital 100% -
3 S.R.L
Supply@ME S.r.l. is the Group's main operating company engaged
in inventory monetisation.
The business and assets of Abal (Goswell) Limited were sold in
February 2019, and the company was dissolved in November 2020. The
investment of GBP1 has been disposed of in the year.
Subsidiary
undertakings
Investments GBP 000
As at 1 April 2019 -
As at 31 December 2019 -
--------------
As at 1 January 2020 -
Additions at cost 646
Disposals -
As at 31 December 2020 646
==============
On 23 March 2020, the Company issued 32,322,246,220 ordinary
shares to acquire the whole of the share capital of Supply@ME
S.r.l. These shares had a nominal value of GBP0.00002 per share and
an issue price of GBP0.006945 per share. As outlined in note 2
above the value of the acquisition of Supply@ME S.r.l. has been
determined by applying the sections 610, 612 and 615 of the
Companies Act 2006 as they relate to merger relief. These sections
of the Companies Act 2006 are applicable to corporate investments
where more than 90% of the acquired entity is represented by a
share for share exchange, as occurred with the acquisition of
Supply@ME S.r.l. In this instance FRS 102 requires the investment
to be carried in the Company's balance sheet at the nominal value
of the shares issued, ignoring any associated share premium.
The fair value of the investment has been reviewed for
impairment. The carrying value as at 31 December 2020 was supported
by a discounted cash flow model of future free cash flows. The
Directors have reviewed the valuation based on current knowledge
and projections. They have concluded that the current carrying
value is supported by the present value of future free cash flows
and that no impairment of the investment is required.
4 Trade and other receivables
As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000
Trade receivables - -
Other receivables 260 67
Prepayments 22 -
---------------------- ----------------------
Total current trade and other receivables 282 67
====================== ======================
5 Share capital
Allotted, called up and fully paid shares
As at 31 December 2020 As at 31 December 2019
No. 000 GBP 000 No. 000 GBP 000
Ordinary shares of GBP0.00002
each 32,754,945 655 101,095 3
Deferred shares of GBP0.04000
each 63,084 2,523 63,084 2,523
2018 Deferred shares
of GBP0.01000 each 224,194 2,242 224,194 2,241
33,042,223 5,420 388,373 4,767
============= ========= =========== ===========
New shares allotted
On 23 March 2020, the Group completed a reverse acquisition
transaction with Supply@ME S.r.l. Upon completion of the
transaction, the share capital of Supply@ME Capital plc has been
disclosed, to represent that of the legal acquirer. 32,322,246,220
ordinary shares were issued as consideration.
Also, on 23 March 2020, 331,604,094 ordinary shares were issued
through a placing which raised gross proceeds of GBP2,240,000.
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and
restrictions:
The Ordinary shares carry rights to participate in dividends and
distributions declared by the Company and each share carries the
right to one vote at any general meeting. There are no rights of
redemption attaching to the Ordinary shares.
Deferred shares have the following rights, preferences and
restrictions:
The deferred shares carry no rights to receive any dividend or
distribution and carry no rights to vote at any general meeting. On
a return of capital the Deferred shareholders are entitled to
receive the amount paid up on them after the Ordinary shareholders
have received GBP100,000,000 in respect of each share held by them.
The Company may purchase all or any of the Deferred shares at an
appropriate consideration of GBP1.
2018 Deferred shares have the following rights, preferences and
restrictions:
The deferred shares carry no rights to receive any dividend or
distribution and carry no rights to vote at any general
meeting.
6 Share-based payments, convertible loan notes and derivative
financial instruments
(1) Convertible loan notes and derivative financial
instruments
As at 31 December 2020 two warrants for options to acquire
shares were outstanding. These have a fair value of GBP24,000 (31
December 2019: GBP48,000). Further details about these warrants and
their valuation are set out in note 16 to the Group consolidated
financial statements.
7 Trade and other payables
As at 31 December 2020 As at 31 December 2019
GBP 000 GBP 000
Bank loans and overdrafts - -
Trade payables 342 303
Amounts due to group companies 331 -
Other payables 51 45
Social security and other taxes 53 3
Accruals and deferred income 118 58
---------------------- ----------------------
895 409
====================== ======================
8 Related party transactions
The Company has taken advantage of the exemption under FRS
102:33.1A from disclosing transactions with other, wholly owned
members of the Group.
A full list of the Company's subsidiaries and related party
transactions are set out in note 24 to the Group consolidated
financial statements.
9 Controlling party
At 31 December 2020 the Directors do not believe that a
controlling party exists.
10 Subsequent events
A full list of the Company's subsequent events are set out in
note 26 to the Group consolidated financial statements.
[1] "Gross origination" includes the estimated value of
inventory to be monetised by all client companies that have signed
an NDA, a term sheet, or are in, or have completed, the onboarding
process. For clarity, the gross origination also includes
commercial opportunities postponed or lost/ not eligible.
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END
FR SEFFUWEFSESM
(END) Dow Jones Newswires
June 28, 2021 02:00 ET (06:00 GMT)
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