Globe Capital Limited - Annual report For the year ended 31 December 2023

Globe Capital Limited

("Globe Capital" or the "Company")

Annual report

For the year ended 31 December 2023

Chairman’s statement

For the year ended 31 December 2023

Globe Capital Limited (AQSE : GCAP) is pleased to announce its audited annual results for the year ended 31 December 2023.

Chairman’s statement

I am pleased to announce the final audited results for Globe Capital Limited (the "Company") and its subsidiaries (the "Group") for the year ended December 31, 2023.

Financial performance

The turnover for the year was £Nil (2022: £Nil) and the loss was £99,211 (2022: £94,111). The loss per share was 0.04 pence (2022: 0.04 pence). In the past year, the Directors have kept operational costs at a minimum, where possible.

Review of operations

The Company’s investment strategy is to seek and evaluate appropriate investment opportunities in businesses that offer capital growth.

The Company’s full annual report, includes a going concern note in relation to the preparation of the financial statements, which confirms that whilst the Company’s current liabilities exceeded its current assets as at 31 December 2023 by £186,133, continued support is currently being provided by the Company’s Directors and shareholders Burns Singh Tennent-Bhohi (Glenpani Group & Eastport Ventures Inc.) and Simon Grant-Rennick. The Auditors have indicated a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern but have not qualified their opinion.

The Company is still well placed to take advantage of any opportunities as they arise through 2024 onwards and will continue to look for further fund raising opportunities and investments.

Simon Grant Rennick

Chairman

Date: 28 June 2024

The directors of Globe Capital Limited accept responsibility for this announcement.

For further information

Globe Capital Limited

Darren Edmonston

Tel: +44 (0) 1279 635511

CORPORATE ADVISER AND CONTACT DETAILS:

Peterhouse Capital Limited

Tel: +44 (0) 207 469 0930

Strategic Report

For the year ended 31 December 2023

REVIEW OF BUSINESS

The Company has been unable to pursue any significant investment transactions this year. As with the previous year, the primary focus has been on reducing administrative costs and settling legacy debts from prior management, while the Board considers the most suitable investment strategy, anticipating a more favourable environment within the capital markets community.

In addition to the Directors who have extended finance to the Company, the Company's other significant legacy lender, holding a £100,000 6% convertible redeemable loan note, is now Brustir Pte Ltd. Brustir has been highly supportive and understanding of the Company's objectives, and discussions up to the year-end have been positive in seeking a solution to retire this note.

The Company, with the support of its Board and shareholders, remains committed to evaluating suitable investment opportunities and will continue to maintain a disciplined cost base while preparing for a more favorable market.

POST YEAR-END REVIEW

The Board of Directors has been engaged in positive conversations and is excited to enter the next financial period with promising discussions ongoing.

Consistent with the Company’s activity up to the year-end 2023, the Board has not significantly progressed any investment transactions as of the date of this report.

Key considerations for the Company's future success include reassessing its current investment policy, evaluating distressed operating assets, and retiring its final creditor, Brustir Pte Ltd. Brustir, which acquired a legacy convertible loan note last year, has been an extremely supportive lender. Ongoing discussions with Brustir are focused on potential solutions to redeem the outstanding balance and associated interest.

OUTLOOK

The Board are committed to deliver value to the shareholders of the Company and whilst presented with current market challenges remain optimistic of identifying investment opportunities that present attractive growth profiles.

Burns Singh Tennent-Bhohi

Director

Date: 28 June 2024

DIVIDENDS

No dividends have been declared for the year ended 31 December 2023.

Consolidated statement of profit or loss and other comprehensive income

For the year ended 31 December 2023

All operations are considered to be continuing.

Globe Capital Limited

Consolidated statement of financial position

As at 31 December 2023

Approved and authorised for issue by the Board of Directors on 28 June 2024

Globe Capital Limited

Company statement of financial position

As at 31 December 2023

The loss of the parent company for the year ended 31^st December 2023 was £99,211 (2022 - £84,352)

Approved and authorised for issue by the Board of Directors on 28 June 2024

Globe Capital Limited

Statement of changes in equity

For the year ended 31 December 2023

Group

Company

Globe Capital Limited

Consolidated statement of cash flows

For the year ended 31 December 2023

1.         General information

Globe Capital Limited (the “Company”, together with its subsidiaries, the “Group”) is an exempted company limited by shares and incorporated in the Cayman Islands on 18 September 2009. The address of the Company’s registered office is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Group is principally engaged in the promotion of companies from the UK and EU within the gulf region.

2.         Basis of preparation

(a)        Statement of compliance

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets. The Historical Financial Information is presented in pounds sterling, which is the functional currency of the company.

(b)        The following standards and interpretations apply for the first time to financial reporting periods commencing on or after 1 January 2022:

2.         Basis of preparation (Cont’d)

The following standards and interpretations apply for the first time to financial reporting periods commencing on or after 1 January 2023:

(c)        Adoption of going concern

When preparing the consolidated financial statements, the Group’s ability to continue as a going concern has been assessed. These consolidated financial statements have been prepared by the directors of the Company (the “Directors”) on a going concern basis notwithstanding that the Group incurred a net loss of GBP99,211 for the year ended 31 December 2023 and as at that date, the Company’s current liabilities exceeded its current assets by GBP186,133 and its total liabilities exceeded its total assets by GBP431,614 respectively as Glenpani Group and Simon Grant Rennick, a shareholder and the company’s director, has indicated to provide continuing financial support to the Group.

3.         Critical accounting estimates and judgements

Estimates and judgements are evaluated and are based on these consolidated financial statements and previous experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. However, there are no estimates or assumptions used on these consolidated financial statements that the Directors expect will have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4.         Significant accounting policies

(a)        Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis as modified by the revaluation of financial assets at fair value through profit or loss.

(b)        Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company:

         has power over the investee;

         is exposed, or has rights, to variable returns from its involvement with the investee; and

         has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

(c)        Business combination and goodwill

Business combination is accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities assumed by the Group from the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs are expensed as incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value as at the acquisition date through profit or loss.

4.         Significant accounting policies (cont’d)

(c)        Business combination and goodwill (cont’d)

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or a liability is recognised either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it shall not be re-measured until it is finally settled within equity.

Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquire over the identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items are lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash generating units, or group of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash generating units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

(d)        Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.  A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns different from those of segments operating in other economic environments.

The Directors consider the group is an investing group and no segmental analysis is necessary.

4.         Significant accounting policies (cont’d)

(e)        Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly ventures to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the end of the reporting period.

(f)         Foreign currency transactions

Transactions in currencies other than the functional currency are translated at the foreign exchange rate ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

4.         Significant accounting policies (cont’d)

(g)        Financial assets

The Group classifies its financial assets into one of the following measurement categories at initial recognition as subsequently measured at: fair value through profit or loss and amortised cost. The classification depends on the Group’s business model for managing its financial instruments and the contractual cash flow characteristics of the instruments, or the election of fair value option. All financial assets are recognised initially at fair value. Except for financial assets carried at fair value through profit or loss, all transaction costs of financial assets are included in their initial carrying amounts.

Financial assets at fair value through profit or loss

A financial asset which has been acquired or incurred principally for the purpose of selling in the short term or is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking is classified as held for trading. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

These assets are recognised initially at fair value, with transaction costs taken directly to profit or loss, and are subsequently re-measured at fair value.

Gains and losses from changes in the fair value of such assets (excluding the interest component) are reported in net trading gain/loss or net gain/loss on financial instruments designated at fair value through profit or loss. The interest component is reported as part of the interest income. Dividend income of this category are also recognised in net trading gain/loss or net gain/loss on financial instruments designated at fair value through profit or loss when the Group’s right to receive payment is established.

Financial assets at amortised cost

Financial assets are classified as subsequently measured at amortised cost if both of the following conditions are met: (i) the financial assets are held within a business model with the objective to hold financial assets in order to collect contractual cash flows (“hold-to-collect” business model), and (ii) the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. They are initially recognised at fair value plus any directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method less allowances for impairment losses. Interest income which includes the amortisation of premium or discount is calculated using the effective interest method and is recognised in the profit or loss, gains or losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

4.         Significant accounting policies (cont’d)

(h)        Receivables and allowance for expected credit losses

Receivables are recognised when the Group has an unconditional right to receive consideration. A right to receive consideration is unconditional if only the passage of time is required before the payment of consideration is due. Receivables are measured at amortised cost using the effective interest rate method less allowance for expected credit losses (“ECLs”).

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all expected cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive).

In measuring ECLs, the Group takes into account reasonable and supportable information that is available without undue cost or effort. This includes information about past events, current conditions and forecasts of future economic conditions.

ECLs are measured on either of the following bases:

• 12-month ECLs: these are losses that are expected to result from possible default events within the 12 months after the reporting date; and

• Lifetime ECLs: these are losses that are expected to result from all possible default events over the expected lives of the items to which the ECL model applies.

Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.  For other receivables, the Group recognises a loss allowance equals to 12-month ECLs unless there has been a significant increase in credit risk of the other receivables since initial recognition, in which case the loss allowance is measured at an amount equals to lifetime ECLs.

In assessing whether the credit risk of a receivable has increased significantly since initial recognition, the Group compares the risk of default occurring on the receivable assessed at the reporting date with that assessed at the date of initial recognition.  In making this reassessment, the Group considers that a default event occurs when (i) the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or (ii) the financial asset is 90 days past due.  The Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

4.         Significant accounting policies (cont’d)

(h)        Receivables and allowance for expected credit losses (cont’d)

Depending on the nature of the receivables, the assessment of a significant increase in credit risk is performed on either an individual basis or a collective basis. When the assessment is performed on a collective basis, the receivables are grouped based on shared credit risk characteristics, such as past due status and credit risk ratings.

ECLs are remeasured at each reporting date to reflect changes in the receivables’ credit risk since initial recognition. Any change in the ECLs amount is recognised in profit or loss.  The Group recognises an impairment gain or loss for all receivables with a corresponding adjustment to their carrying amount through a loss allowance account.

At each reporting date, the Group assesses whether a financial asset is credit-impaired.  A financial asset is considered credit-impaired if there is observable evidence that the debtors have significant difficulties.

The gross carrying amount of receivable is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.

(i)         Impairment of non-financial assets

At the end of each reporting period, the Group determines whether there is any indication of impairment of assets. If there is any indication of impairment, the recoverable amount of the relevant asset or group of assets is estimated and compared with the carrying amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). If the recoverable amount of an asset or a group of assets is less than its carrying amount, the carrying amount of the asset or group of assets is reduced to the recoverable amount.  Impairment losses are recognised as an expense in profit or loss.

4.         Significant accounting policies (cont’d)

(j)         Payables

Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, unless the effect of discounting would be immaterial in which case they are stated at cost.

(k)        Provisions

Provision is recognised in the consolidated statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation, and the obligation can be reliably measured. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(l)         Cash equivalents

Cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(m)       Employee benefits

Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the period in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.

(n)        Related parties

A person or a close member of that person’s family is related to the Group if that person:

1. has control or joint control over the Group;
2. has significant influence over the Group; or
3. is a member of the key management personnel of the Group or the Group 's parent.

4.         Significant accounting policies (cont’d)

(n)        Related parties (cont’d)

An entity is related to the Group if any of the following conditions applies:

1. The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
2. One entity is an associate or a joint venture of the other entity (or an associate or a joint venture of a member of a group of which the other entity is a member).
3. Both entities are joint ventures of the same third party.
4. One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
5. The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.
6. The entity is controlled or jointly controlled by a person identified in the preceding paragraph.
7. A person identified in (i) of the preceding paragraph has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
8. The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Group 's parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

(o)        Events after the reporting period

Events after the reporting period that provide additional information about the Group’s position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the financial statements.  Events after the reporting period that are not adjusting events are disclosed in the notes to the financial statements when material.

6.         Income tax

(a)        No provision for income tax has been made in these consolidated financial statements as the Group has no estimated taxable profit in the jurisdiction in which it operates.

Income tax is reconciled to loss before income tax as follows:

(b)        The Group had no significant temporary differences at the end of the reporting period.

7.         Loss per share

Basic loss per share is calculated by dividing loss for the year attributable to shareholders by the weighted average number of Ordinary Shares outstanding during the year.

The Group had no potential dilutive instruments during the current and preceding years.

8.         Goodwill

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

As at 31 December 2022 and 2023, the goodwill of GBP1,150 in relating to the acquisition of  Globe Capital Administration Limited was fully impaired.

            The fair value of the listed equity investments is based on quoted market price as at 31 December 2023.

10.        Other payables

            Other Payables less than one year

Included in other payable of £100,000 is bearing an interest rate of 6% per annum, unsecured and repayable within one year.

11.        Amounts due to related companies and directors

Amount due to Glenpani Group is unsecured, interest-free and not repayable within one year.

Amount due to Eastport Ventures Inc is bearing interest rate at 10% per annum, unsecured and not repayable within one year.

Amounts due to directors are unsecured, interest-free and not repayable within one year.

The maximum balance payable to the directors during the year was:

12.        Share capital and capital management

(b)        Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence and to sustain future development of the business. The Directors manage the Group’s affairs to achieve shareholder returns through capital growth and income.

The Group is not subject to any externally imposed capital requirements.

13.        Related party transactions

Apart from the transactions disclosed elsewhere in the notes to the consolidated financial statements, the Group had the following material transactions with its related parties during the year:

Included in Non-Current Liabilities and other payables is an amount of £57,977 (2022- £50,000)  payable to Glenpani Group a Company which Mr Burns Singh Tennent-Bhohi is Chairman and 100% Shareholder.

Included in Non-Current Liabilities and other payables is an amount of £78,694 payable to Eastport. Ventures Inc., a Company which Mr Burns Singh Tennent-Bhohi is Chairman, a material shareholder (more than 25% less than 50%) and founding partner of. Mr Simon Grant-Rennick is also a Non-Executive Director of Eastport Ventures Inc.

Amounts due to directors within Non-current liabilities include £42,042 (2022 - £42,042) payable to Mr Simon Grant Rennick and Mr Darren George Edmonston £69,734 (2022 - £45,735), both directors of the company.

During the year accountancy fees of £8,515 (2022 - £4,900) was payable to EDS Solutions Limited Trading As Bushwood Accountants a company which Mr Darren George Edmonston is a director and a shareholder. Included within current liabilities, other payables was an amount owing at the year end of £3,590 (2022 - £3,500).

14.        Financial risk management

The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk, currency risk and market price risk. Risk management is carried out by the Directors.

1. Credit risk

Credit risk is the risk that a party to a financial instrument will cause a financial loss for the Group by failing to discharge an obligation. The Group manages credit risk by setting up credit control policy and periodic evaluation of credit performance of the other parties, measured by the extent of past due or default.

Management makes periodic assessment on the recoverability of receivables based on historical payment records, the length of overdue period, the financial strength of the debtors and whether there are any disputes with the debtors.

The credit quality of other and loan receivables was assessed with reference to historical information about the counterparties default rates and financial position of the counterparties. The Directors have conducted a ECLs review and opined that except for those unrecoverable items that have been written off, the credit risk of the remaining items was low due to the sound collection history of due from them. Therefore, ECL rate of these items was assessed to be close to zero and no provision was made as at 31 December 2023 and 2022.

The Group’s deposits with banks are placed with certain banks in overseas, which the management believes are of high credit quality. Accordingly, the overall credit risk is considered limited.

2. Liquidity risk

Liquidity risk is the risk that the Group will encounter differently in meeting obligations associated with financial liabilities. The Group manages liquidity risk by obtaining continuing financial support from a shareholder to meet its liabilities when they fall due.

The maturity profile of the non-derivative financial liabilities of the Group as at 31 December 2023, based on contractual undiscounted obligations, is as follows:

14.        Financial risk management (cont’d)

3. Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.  The Group manages currency risk, when it is considered significant, by entering into appropriate currency forward contracts.

4. Market price risk

Market price risk is the risk that the fair value or future cash flows of a financial instrument traded in the market will fluctuate because of changes in market prices. The Group manages market price risk, when it is considered significant, by entering into appropriate derivative contracts.