DEV CLEVER HOLDINGS PLC
Annual Report and Accounts for the
year ended 31 October 2019
Company number: 11589976
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Company Information
Directors
CM Jeffries
NAR Ydlibi
CB Forrest
DR Ivy
Secretary
NAR Ydlibi
Company number
11589976
Registered office
Auditor
Banker
Financial PR
Joint Brokers
Ventura House
Ventura Park Road
Tamworth
Staffordshire
B78 3HL
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London
E14 4HD
Santander UK Plc
Bridle Road
Bootle
Merseyside
L30 4GB
Buchanan Communications Limited
107 Cheapside
London
EC2V 6DN
Pello Capital
7th Floor
10 Lower Thames Street
London
EC3R 6AF
Novum Securities Limited
8 - 10 Grosvenor Gardens
London
SW1W 0DH
1
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Registrar
Solicitors
Neville Registrars
Neville House
Steelpark Road
Halesowen
B62 8HD
Fladgate LLP
16 Great Queen Street
London
United Kingdom
WC2B 5DG
2
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Contents
Chairman and Chief Executive Officer's Statement
Chief Financial Officer’s Review
Strategic Report
The Board and Governance
Directors’ Remuneration Report
Audit Committee Report
Directors' Report
Directors' Responsibilities Statement
Independent Auditor's Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Pages
4 to 7
8 to 9
10 to 12
13 to 24
25 to 29
30 to 31
32 to 34
35
36 to 41
42
43
44
Consolidated Statement of Changes in Equity
45 to 46
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
46
47
48
Notes to the Financial Statements
49 to 79
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Chairman and Chief Executive Officer’s Statement
I am pleased to present the annual report and financial statements of Dev Clever Holdings plc ("Dev
Clever" the “Group” or the "Company") for the year ended 31 October 2019.
Overview of the year
2019 was an important year for Dev Clever: the Company was admitted to the Official List, by way of
a standard listing, and started trading on the London Stock Exchange’s main market for listed
securities. In addition to this key development, Dev Clever has continued to make significant internal
investment into the development and productisation of its proprietary cloud-based platforms. These
went live in the year and will enable the Company to rapidly scale across different global markets, in
line with its growth ambitions. The completion of this foundational stage in the Company's strategy,
combined with securing key strategic partnerships and collaborations with a global technology
manufacturer, provides a direct sales route to a global market for the Company’s SaaS based products
and positions Dev Clever for a transformational year of growth as it scales products and service
offerings internationally from 2020.
Alongside the Listing, the Board of two Executive Directors were joined by Chantal Forrest and David
Ivy, two highly experienced Non-Executive Directors. The management team has been further
strengthened through the appointment of Tim Heaton, Chief Operating Officer and Chief Sales Officer,
who has a wealth of SaaS experience in driving sales and expansion in growth environments.
In 2019, the Company successfully delivered on the operational milestones that were set out at the
time of its IPO in January 2019, when it raised £0.7m. These milestones included the first release of
the Company’s fully immersive careers engine, Launchyourcareer.com and VICTAR VR, and the
establishment of sales teams across all three core sales channels (Educate, Engage and Experience) by
the end of February 2019.
The Board is confident that the Company’s financial performance will start to reflect the significant
operational progress made in 2019 of productising software and establishing commercial agreements.
The Group incurred a pre-tax loss of £1,065k in the year ended 31 October 2019 (2018: loss £540k).
The losses reflect on-going investment in the productisation of the Group's software platforms and
the development of commercial relationships. The loss is stated after share-based payment expenses
of £110k (2018: £nil), costs arising from the placing of £114k (2018: £136k) and the impairment of
previously capitalised software development costs of £174k (2018: £nil).
The Company raised an additional £0.4m through a secondary placing in August 2019.
Review of the business.
Dev Clever is a software development company that looks to apply imagination intelligently through
technology. It seeks to provide interactive, digital, student and consumer experiences and activations
through the clever application of innovative technology which engages with users to provide an
immersive and motivational experience.
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Educate
The Company believes that 2020 is going to be a transformational year in the adoption of VR
technology across the global education sector with major manufacturers positioning themselves and
their affordable standalone VR equipment to take advantage of the mass adoption of this new
technology wave across the world.
The Group's virtual reality careers guidance platforms, Launchyourcareer.com and VICTAR VR, are
designed to connect young people, their influencers, schools, FE/HE institutions, employers and
training providers together. Since release, the platform is being successfully used by a number of
early-adopting schools, academies and colleges in the UK as well as being utilised by World Skills UK
to engage with school children attending the UK’s largest careers event, World Skills Show Live.
The Company believes that Launchyourcareer.com and VICTAR VR, is the pivotal application in the
adoption of VR technology within the education sector. It only requires a school to purchase a single
VR headset while at the same time providing every young person with a meaningful and unparalleled
careers guidance experience that addresses a global issue of skills gaps and the disconnect of career-
based skills learning.
The Company’s Educate proposition is well placed to benefit from recent legislation including the UK
Government's mandatory requirement for schools to improve the level of personal engagement in
careers advice and the US Federal Government's focus on career-based skills learning. Dev Clever has
developed VICTAR VR and Launchyourcareer.com with the objective of enabling educational
establishments to comply with and support these requirements. By securing a collaboration with the
world’s largest technology manufacturer and provider of technology to the education sector in line
with its own strategy to rollout VR across the world, Dev Clever is positioned for transformational
growth in 2020.
In November 2019, Dev Clever’s careers guidance platform became fully operational in the UK, a
market which the Company estimates to be in excess of £100 million per annum. To support this,
the Company secured collaborations and strategic partnerships with WorldSkills Organisation, CDI
(Careers Development Institute), Icould and a global hardware manufacturer. As announced
previously, working in collaboration with the global hardware manufacturer, the Company intends to
localise its Educate solution for other territories, commencing with North America in April 2020, a
market which the Company estimates as six times larger than the UK, and therefore believes the
opportunity deriving from its collaboration with the global hardware manufacturer is significant.
The adoption and take-up of Dev Clever’s careers guidance platform is contingent on the effective
supply of hardware. The Company’s collaboration with the global hardware manufacturer and its
focus on the launch in North America has diverted hardware from the UK market in preparation for
the April 2020 launch. Accordingly, the Company has been focused on ensuring that it is well
prepared for the US launch.
Engage
The Group has successfully launched its ENGAGE cloud-based gamification platform which enables
brands and retailers to utilise digital incentive promotions to drive higher levels of consumer
engagement whilst fully controlling spend. Since its launch, the Company has successfully delivered
several consumer incentive campaigns for blue-chip brands and national retailers including Bosch,
Pepsi Max, J20, Tango, Paul, Jewsons and Whitbread. The Company’s strategy has been to grow its
partner network of resellers, EPOS and digital voucher providers across the world. Since the launch
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
of the platform in March 2019, the Company has secured commercial partnerships with Eagle Eye,
Yoyo Wallet, Valassis, Toshiba and TOTUM and is in the process of integrating the solution into Oracle's
EPOS platforms.
Revenues through Engage have taken longer to mature than envisaged at the time of the IPO due to
the length of time required to complete commercial agreements, delaying access to partners' brand
and retail customer bases. The Company is confident that the current year will see a significant uplift
in revenues through the increased exposure to its partners’ brand and retail customers.
Having made further significant investment throughout 2019 in its proprietary software and the
development of the commercial relationships to bring its products to market, Dev Clever is now in a
position to capitalise on this investment.
Experience
Dev Clever’s proprietary multi-user VR framework enables customers of its Educate and Engage
channels to extend their consumer and student experiences through VR to exploit the significant
growth forecast for the VR market. In an attempt to commercialise the framework at an early stage,
the Company has developed two out of home immersive games, Vanguard: Fight for Rudiarius and
Easter Squad. During the year, the Company has piloted Vanguard within leisure venues across the
UK and received positive feedback on the game play from both venue employees and consumers.
A focused strategy
Each of Dev Clever’s Educate, Engage and Experience offerings have been successful in their own right.
It has, however, become clear to the Board that the most attractive market for Dev Clever to focus its
attention on is Educate. In order to position the Company to make the most of the significant
opportunity for the Group's VR careers guidance platform, supported by the partnership with the
global hardware manufacturer, the Board has decided to restructure the Company’s operations.
Educate will be the Company’s primary division, and the focus of management and capital resource.
In order to recognise this focus, the Board has suspended further rollout of its Experience workstream
and merged it with Engage to form a new division called Agency Services. Investment in Agency
Services’ existing commercial relationships will continue, in order to drive sales performance. The
Board firmly believes these changes will lead the Company to a breakeven position by the end of Q3
this financial year.
As a result, the Board has written down the value of the associated software development costs and
an impairment charge of £174,085 has been booked in cost of sales within the financial statements.
Educate business model
The Company’s primary revenue model is two-phased. Initially revenue will be secured from fixed
annually-recurring SaaS licences from the users of the VICTAR VR application and the supporting
analytics available through Launchyourcareer.com. The costs of these licences are included in the
retail value of the hardware manufacturer’s VR classroom solutions and are payable to Dev Clever by
the hardware manufacturer on sale of the supporting hardware. Launchyourcareer.com and VICTAR
VR are taken to market by the hardware manufacturer’s direct sales teams and their network of
distributors and resellers.
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The Company will subsequently look to exploit additional commercial opportunities by providing
employers and further education establishments the opportunity to promote their respective
employment opportunities and courses through a self-service advertising framework, on an annual
subscription basis.
Outlook
Since the year end, the Company has raised a further £0.75m net, comprising a placing (£0.35m) and
the provision of a convertible loan from the Chairman and CEO (£0.4m) in January 2020. This funding,
the significant opportunity arising from the launch of Launchyourcareer.com and VICTAR VR in the
USA, in collaboration with Lenovo, and an improved trading position since the year end provide the
Board with confidence for the outlook for 2020.
On behalf of the Board, I would also like to take this opportunity to thank all our shareholders for their
support as well as commend our employees for their hard work and dedication in this landmark period
for the Group.
Chris Jeffries
Chairman and Chief Executive Officer
27 February 2020
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Chief Financial Officer’s Review
Dev Clever Holdings Plc comprises a holding company, Dev Clever Holdings Plc and its trading
subsidiary, DevClever Limited. These are the first financial statements of the Group since its formation
and subsequent IPO and compare the results of the Group for the year ended 31 October 2019 to the
results reported for its trading subsidiary, DevClever Limited, being the only business in the Group
which traded in the year ended 31 October 2018. The Company and consolidated financial statements
have been prepared on the basis outlined in note 2 basis of consolidation. The prior year numbers
are not fully comparative and are unaudited. Whilst DevClever Limited remains the only subsidiary
and trading entity within the Group, the operating expenses reported within the current period now
reflect the increased regulatory and compliance costs arising from the maintenance of the listing. The
Directors believe that these increased costs will offset over time through the accelerated growth that
will arise from the additional capital accessed by the Group through its listing.
Revenues in each of the Company’s operating segments are comprised of development and set up
fees, alongside subscription, hosting and support fees. Total revenue for the year was broadly
consistent with the prior year at £481k (2018: £467k) an increase of 2.8% and reflects a longer than
expected lead time in both the establishment of the Group's new commercial partnerships and their
commercial exploitation.
Gross margin loss £(41)K (2018: profit £206k) reflects the impairment of £174k of previously
capitalised software development costs following impairment review at the period end and the
decision of the Board to suspend further development of the Company's gaming experiences to focus
on the accelerated roll out of its Careers' platform in the US from April 2020. The gross margin reflects
a higher level of employed staff and reduction in use of external contractors. This is due to a
combination of a move to reduce the number of consultants used by the business to mitigate the risks
of off-payroll working legislation and the introduction of a time recording system in the second half of
the prior year to better record the utilisation of staff time that had previously been reported solely
within administrative expenses.
The overall EBITDA loss was £1,015k compared to a loss of £498k in the prior period. The loss includes
a charge of £174k for the impairment of capitalised software development costs (2018: £nil), following
the decision of the Board to suspend further investment at this time in the Group's VR gaming
experiences to focus on the adaptation of its Launchyourcareer.com and VICTAR VR careers platforms
for release in the US in April 2020. It also includes charges for share based payments £110k (2018:
£nil) arising from options and warrants issued at the time of the IPO and one-off costs associated with
the IPO itself of £113k (2018: £136k).
The loss before tax was £1,065k compared to £540k in the prior period. In addition to the one-off
costs noted above, the loss reflects the Group's on-going investment in the productisation of its
software platforms and the putting in place of the central management and sales teams to exploit its
newly established commercial partnerships. The Group is now focused on delivering the significant
revenue growth that the Board expects these opportunities to provide.
Overall cash inflow in the year was £424k (2018: outflow £180k) and reflects net financing proceeds
of £1,360k (2018: £290k). Operating cash flow, adjusting for the capitalisation of software
development reported within investing activities was a net outflow of £905k (2018: outflow £450k),
reflecting the costs of the IPO of £193k, including £80k of the prior year's expense settled in the
current period, and the increased investment in the management team, sales team and infrastructure
required to launch our software platforms. The Board is conscious of the increased level of cost
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
investment within the business and has begun to re-balance the focus of the business from product
development to revenue performance, whilst at the same time looking for opportunities to reduce
costs.
The Group had cash reserves of £497k (2018: £73k) at the period end. In January 2020 the Group also
raised a further £438k gross proceeds, £350k net proceeds, through a placing and £400k through a
convertible loan facility provided by its Chairman and CEO.
Nicholas Ydlibi
Chief Financial Officer
27 February 2020
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Year ended 31 October 2019
Strategic Report
The Directors present their strategic report on the Group for the period ended 31 October 2019.
Principal activity
The principal activity of the Group is the development of software solutions that enable its clients to
engage with their customers. Its primary products are its Launchyourcareer.com careers platform,
supported by the VICTAR VR virtual reality careers experience, and its Engage gamification engine.
Review of the business and future developments
The review of business and future developments is set out in the Chairman and Chief Executive
Officer's statement on pages 4 to 7.
Key performance indicators
The Board of Directors monitors the activities and performance of the Group on a continuing basis. At
this early stage of the Company's development, the Directors consider the main performance
indicators to be:
Establishment of the key strategic partnerships and collaborations that will provide a direct sales
route to market for the Company's SaaS based proprietary software.
Educate: Commercial partnerships and / or heads of terms agreed with: World Skills UK Live, Lenovo,
Icould.
Engage: Commercial partnerships agreed with: Eagle Eye Solutions, Yoyo Wallet, Valassis, Toshiba and
TOTUM. Integration into Oracle's EPOS platforms is on-going.
Experience: Pilots conducted at Quasar (Harlow) and Teamsports (Birmingham & Leicester). The
Company has taken the decision to suspend any further rollout of its gaming experiences, Vanguard:
Fight for Rudiarius and Easter Squad to concentrate on the opportunities provided by its education
products.
The Company believes that the launch, in April 2020, of its careers’ platform (launchyourcareer.com)
and supporting virtual reality careers experience (VICTAR VR) in the USA will transform the
performance of the Group. At this stage the key performance indicator will be the volume of user
licences sold.
Cash and cash equivalents.
Tracking the cash balance ensures that the Group retains sufficient cash resources to finance the on-
going development and marketing of its product portfolio and to meet its obligations as they fall due.
Cash and cash equivalents as at 31 October were £497k (2018: £73k). The cash balance represented
approximately three months operating expenses at the year end. In January 2020, the Group raised
a further £750k after expenses by way of a placing for £350k and a convertible loan from its Chairman
and CEO for £400k.
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Principal risks and uncertainties
Whilst the Group focusses on exploitation of
its
Launchyourcareer.com and VICTAR VR careers platform within education and its Engage gamification
platform, the Board considers the principal risks for the Group to be the ability to scale the business
and the maintenance of cash reserves.
its commercial partnerships through
The Group operates in an uncertain environment and is subject to a number of risk factors. The Board
considers the following to be of particular relevance, but this is by no means an exhaustive list as there
may be other risk factors not currently known.
Risk
Potential Impact
Mitigation and Control
to
Failure
the
implement
Group's strategy
A failure to implement the Group's strategy
may have an adverse impact on its business,
profitability and financial position. There
can be no assurance that the Group will be
able to maintain or grow its financial
performance to anticipated future levels.
or
developments
Technology risks The software industry is prone to rapid
change with new entrants and
ideas
continuously changing the market. There is
a risk that the Group's proprietary software
products could become obsolete or
uncompetitive, which could have a material
adverse impact on the prospects of the
Group. Any failure to keep pace with
technological
the
development of superior products by a
competitor could result in the Group failing
to successfully commercialise its products,
which may have a material adverse effect
on the Group's business, profitability and
financial position.
The dynamic state of the market in which
the Group operates means that there may
be current and new competitors that have
brand
greater market
recognition,
and
economies of scale or lower cost bases that
enable them to respond more effectively to
changes in market conditions, any of which
may give them a competitive advantage
over the Group.
The Group is in an early stage of its
development, requiring it to utilise its cash
resources to provide the working capital to
Cash
requirement
Competition
presence,
resources
financial
11
updates
circulated
its targets.
The Group has regular Board
meetings and the Board and
management
consistently
monitor the Group's performance
Weekly
against
and
performance
monthly management accounts
senior
are
management
monitor
performance
Industry trends are monitored
and the Group attends trade
shows
to monitor products
coming to market. The Group
continues to re-invest in its core
platforms to ensure they remain
current.
to
to
The Group's strategy has been to
build commercial partnerships
with global blue-chip companies
to provide it with a competitive
advantage and protect its routes
to market.
cash
forecasts
are
Rolling
maintained
regularly
updated to manage short term
and
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
bring its products to market, in advance of
revenue generation. There is a risk that the
Group runs out of cash resources before its
revenue streams mature.
Dependence on
key personnel
and
management
risks
Data
General
Protection
Regulations
(GDPR)
a
the
services of
The Group's business is dependent on
retaining
small
management team and the loss of a key
individual could have an adverse effect on
the future of the Group's business. The
Group's future success will also depend in
large part upon its ability to attract and
retain highly skilled personnel.
The Group's software solutions may result
in the Group either holding its customers'
personal data as data owner or it being
required to utilise personal data held by its
customers as a data processor. Any failure
to look after this data in accordance with
GDPR may result
in damage to the
reputation of the Group and / or a material
penalty, either of which may have a
material impact on the Group's business,
profitability and financial position.
Foreign
exchange
movements
is
The Group
currently negotiating
commercial agreements for its products to
be launched in overseas markets. The
agreements may be denominated in foreign
currency and therefore expose the Group to
the
rate
risk of adverse exchange
movements that may cause its revenue to
reduce, resulting in reduced profitability
cash requirements. The Group
also maintains on-going lines of
communication with the markets,
through its brokers, to secure its
capital requirements.
The Group offers a combination
of competitive remuneration and
share options to both incentivise
and retain key personnel.
The Group has GDPR policies in
place to ensure any data held is
held for a specific legal purpose,
supported by best practice
policies and procedures for the
storage of personal data. The
Group also retains the services of
a specialist GDPR consultant to
review its compliance with the
regulations and to support in the
assessment of any new risks
associated with changes in its
product offer, business processes
and regulations
The Group does not currently use
financial instruments to hedge
against potential currency losses,
as foreign currency requirements
are minimal.
However, the
Directors will review the potential
benefits and associated costs of
foreign currency hedges once the
value of foreign currency cash
flows are established.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the Board and
Governance Report on pages 13 to 24. A gender analysis is also included in this report
Approved on behalf of the Board of Directors on 27 February 2020
Chris Jeffries
Chairman and Chief Executive Officer
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The Board and Governance
The Board currently comprises an Executive Chairman, one other Executive Director and two
independent Non-Executive Directors. The Directors are of the view that the Board and its
Committees consist of Directors with an appropriate balance of skills, experience, independence and
diversity of background to enable them to discharge their duties and responsibilities effectively.
Appointments – no separate nomination committee has been established for appointments to the
Board. Nominations are handled by the Board as a whole. The Directors advertise vacancies and
engage appropriate professional assistance in filling positions as circumstances merit.
Time commitment - All Directors have disclosed any significant commitments to the Board and have
confirmed that they have sufficient time to discharge their duties. The Non-Executive Directors’ duties
are expected to require up to two days of time commitment each month.
Conflicts of interest – A Director has a duty to avoid a situation in which he or she may have a direct
or indirect interest that conflicts with those of the Company. The Board has satisfied itself that there
is no compromise to the independence of those Directors who have appointments on the Boards, or
other relationships with, companies outside the Company. The Board requires Directors to declare all
appointments or other situations which could result in a possible conflict of interest at each meeting.
The Board consists of three male Directors and one female Director and the Board supports the
Financial Reporting Council’s aim of encouraging such diversity. Given the stage of the Company’s
development and number of employees, there is currently no formal diversity policy in place.
However, this is something that will be considered by the Board as the Company grows. The following
table provides a breakdown by gender as at 31 October 2019:
Board of Directors
Senior managers
Other Employees
Total
Male
Female
3
2
10
15
1
2
4
7
Biographical details of the Board members are set out below.
Christopher Jeffries (Chairman and Chief Executive Officer)
Chris started his career in commercial radio and successfully preformed various roles from Commercial
Director, Group SPI Director to Group Managing Director working for media brands such as Capital
and MMI. Towards the end of that part of his career, Chris focused on introducing the adoption of
digital into the media portfolio and, as a result, developed an invaluable client network across multiple
sectors and developed a reputation for integrating innovative technology into consumer-focused
campaigns. In 2007 Chris established his own agency to capitalise on his previous success and to target
brands and educators directly to help them adopt digital as part of their overall marketing objectives.
Chris founded DevClever in 2013 to exploit emerging opportunities in immersive customer
experiences through the application of mobile technology and networking products and is the
architect behind the Group’s development frameworks including its proprietary gaming engine,
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Launchyourcareer.com careers engine and communication tools (CleverFLIP and CleverHub). Chris’
expertise in the digital sector has resulted in him taking consultant roles in digital ventures specialising
in facial recognition technology, educational applications and digital legacies. He has stepped back
from these roles to concentrate solely on the growth of the Group across its core channels, Educate
and Engage.
Chris is the Company's Chairman and Chief Executive Officer and is ultimately responsible for all day-
to-day management decisions and for implementing the Company's long- and short-term plans. The
Chairman is accountable to the Board and acts as a direct liaison between the Board and the
management of the Company. The Chairman acts as the communicator for Board decisions where
appropriate.
Nick Ydlibi (Chief Financial Officer)
Nick is a chartered accountant and joined Dev Clever on a full-time basis in April 2018, following a 25
years career at Walgreens Boots Alliance, where he held a number of senior finance roles. His most
recent role within that group was the Financial Controller for the UK Opticians Division.
Nick is the Company's Chief Financial Officer and is primarily responsible for managing the financial
risks of the Company and for financial planning and record-keeping, as well as financial reporting to
higher management.
Chantal Forrest (Non-Executive Director)
Chantal is a governance expert and an experienced Director, company secretary and trustee. Between
1993 and 2001, Chantal served as Legal Manager & Assistant Company Secretary for Yorkshire
Electricity Group Plc, where she was appointed as a Director of the Share Scheme Trustee Company
and managed all major legal issues. Between 2002 and 2008, Chantal served as Company Secretary
and Legal Counsel for WBB Minerals (now Sibelco UK) and was appointed Director of the company
and a trustee of its pension scheme. Between 2008 and 2014 she served as Company Secretary &
General Counsel for Electricity North West, where she was part of the executive management team.
Her most recent role, between 2014 and 2018 was serving as Group Company Secretary for Yorkshire
Water Services Ltd / Kelda Group, where during her tenure she managed company secretarial,
pensions, legal, insurance, GDPR and governance matters within the group and was a member of the
Kelda Management Team.
Currently, Chantal is a Governor and Chair of the Governors’ Health and Safety Committee for the
Greenhead College. She is a corporate solicitor, is admitted as an attorney to the State Bar of California
and as a barrister to the Bar of New South Wales, Australia.
Chantal is Chair of the Remuneration Committee
David Ivy (Non-Executive Director)
David has over 19 years of experience in the digital sector. He served as an agency head, producing
projects for BBC, BT, Bank of England, Microsoft, AVG, Fairtrade and many others. As such David has
developed multiple products, including a CMS, ECommerce platform and email marketing. In 1999 he
established a web design and development agency, Ellipsis Media Ltd. Acting as a Creative Director /
Digital Director between 1999 and 2010, he grew the agency into the dotDigital Group and created
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
such leading products and revenue streams as dotMailer, dotEditor and dotCommerce, eventually
taking the email marketing platform dotMailer to the UK’s number one spot and to listing on AIM.
Following that he continued providing consultancy services to a variety of organisations, large and
small, including Ebay, Monocle and Grosvenor, advising small to medium size companies on growth
strategy and mentoring aspiring directors through company change. David served as a trustee of the
charity Prisoners of Conscience (213766) for eight years.
David is Chair of the Audit Committee
Directors
The Directors who held office during the period and up to the date of signature of the financial
statements were as follows:
CM Jeffries
NAR Ydlibi
CB Forrest
DR Ivy
Appointed
Appointed
Appointed
Appointed
26 September 2018
26 September 2018
21 January 2019
21 January 2019
Directors interests
Name
CM Jeffries
NAR Ydlibi
Share options
Ordinary shares at 31 October
2019
Percentage of
issued share
capital
250,000,000
1,250,000
64.37%
0.32%
Name
Date of Grant
Exercise
Price
Exercise
conditions
Lapse date
Aggregate
number of
options
granted
NAR Ydlibi
Leadership
17 January
2019
10,000,000
Placing price
Admission
17 January
2029
The Board, led by the Executive Chairman, guides and monitors the business and affairs of the
Company on behalf of the Company’s shareholders to whom it is accountable, and for corporate
governance matters. The Executive Chairman is the Company’s leading representative presenting the
Company’s aims and policies to the outside world including shareholders and other stakeholders.
Through the Company Secretary, the Executive Chairman is responsible for determining:
-
-
the order of items on the Board agenda
the timely provision of information to the Board
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DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
During meetings, the Executive Chairman is also responsible for
-
-
ensuring the involvement of all the individual Directors in discussions and decision-
making
summarising discussions to ensure all Directors understand what has been agreed
Whilst certain key matters are reserved for the Board, it has delegated responsibilities for the day to
day operational, corporate, financial and administrative activities of the Company to the Executive
Chairman / Chief Executive Officer and Chief Financial Officer.
The Board’s core activities are carried out through the scheduled meetings of the Board and its
committees, which are timed to complement key events in the corporate calendar. Additional
meetings and calls are arranged to consider matters which require decisions outside the scheduled
meetings. During the year ended 31 October 2019, the Board met on 15 occasions. Outside these
meetings, the Directors maintain frequent contact with each other to discuss any issues of concern
they may have in relation to the Company or areas of their responsibility and to keep them fully
informed on the Company’s progress.
The key matters specifically reserved for the consideration and approval of the Board include:
-
-
-
-
-
the Company’s overall strategy
capital structure and financing
financial reporting, risk management and the internal control framework
the annual Budget, material investments, contacts and purchase commitments
the Company’s corporate governance, compliance arrangements and corporate policies
Attendance
Directors' attendance at meetings of the Board and its Committees during the year ended 31 October
was as follows:
Board
Audit
Remuneration
Meetings
Attended Meetings
Attended Meetings Attended
CM Jeffries
NAR Ydlibi
CB Forrest
DR Ivy
15
15
11
11
15
15
11
11
-
-
5
5
-
-
-
5
5
-
-
2
2
The Board intends to keep under review the effectiveness of its performance, the performance of its
committees and the performance of individual Directors. Given that the Board in its current
composition was only established on 21 January 2019, no formal review took place in the year ended
31 October 2019. On 21 January 2019, the Board established the Audit and Remuneration
Committees with formally delegated duties and responsibilities, details of which are summarised
below:
16
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Audit Committee
The Audit Committee is chaired by David Ivy, who is considered by the Board to have recent and
relevant financial experience. The Committee meets at least two times per year. Chantal Forrest also
serves on the Audit Committee. The Committee's responsibilities include:
-
ensuring appropriate financial reporting procedures are properly maintained and
reported upon
- meeting with the Group's auditors to discuss matters of relevance including risk issues
-
-
-
-
ensuring the internal controls of the Group are properly maintained
reviewing the financial statements prior to issue to the shareholders
reviewing reports from the Group's auditors
reviewing and approving the scope and content of the Group's annual risk assessment
programme and annual audit
- monitoring the independence and objectivity of the external auditors and the
effectiveness of the audit process.
The Group's Chief Financial Officer and the external auditors attend meetings of the Audit Committee
by invitation. The Committee also holds separate meetings with the auditors, without management
present, as appropriate.
The Group does not have an internal audit function as this is not considered appropriate given the
scale of the Group's operations.
Remuneration Committee
The Remuneration Committee is chaired by Chantal Forrest and meets at least two times per year.
David Ivy also serves on the Remuneration Committee. The Remuneration Committee's
responsibilities include:
- determining and agreeing with the Board the framework for remuneration of the
-
-
executive directors, chairman and other members of executive management
reviewing the appropriateness and relevance of the remuneration policy
approving the design and targets for any performance related pay schemes operated by
the Company
reviewing the design of all share incentive plans
-
- determining the policy and scope of pension arrangements for the Executive Directors
-
and senior executives
in consultation with the Executive Chairman and within the terms of the agreed
remuneration policy, determining the remuneration package of the Executive Directors
and senior executives
The Executive Chairman and the Chief Financial Officer may, by invitation, also attend the
Remuneration Committee but are not involved in decisions regarding their own remuneration.
Members of the Remuneration Committee do not participate in decisions regarding their own pay.
The full terms of reference of the Committees can be found on the Company's website
www.devcleverholdingsplc.com
17
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Corporate Governance
As a Company with a standard listing, the Company is not required to comply with the provisions of
the Corporate Governance Code published by the Financial Reporting Council (FRC Corporate
Governance Code). The Company notes that it will not undertake the following steps which are
required by the FRC Corporate Governance Code as the Company does not consider these to be
relevant at the current time:
-
- Given the size of the Board and the Company’s current status, certain provisions of the
FRC Corporate Governance Code (in particular the provisions relating to the composition
of the Board and the division of responsibilities between the Chairman and the Chief
Executive Officer)
The FRC Corporate Governance Code recommends the submission of all directors for re-
election at annual intervals. None of the Directors will be required to be submitted for
re-election until the first annual general meeting of the Company. Thereafter, all Directors
will be submitted for re-election at annual intervals
The Board does not comply with the provision of the FRC Corporate Governance Code in
that it has not appointed a Senior Independent Director
-
However, all the Directors of Dev Clever believe firmly in the importance of good corporate
governance for the creation of shareholder value over the medium to long term and to engender trust
and support amongst the Company's wider stakeholders. As a result, the Board has decided to
formally adopt the provisions of the Corporate Governance Code published by the Quoted Companies
Alliance (QCA Corporate Governance Code) insofar as it is appropriate having regard to the size and
nature of the Company and the size and composition of the Board.
The QCA code is constructed around ten broad principles and a set of disclosures. The QCA has stated
what it considers to be appropriate arrangements for growing companies and asks companies to
provide an explanation about how they are meeting these principles through the prescribed
disclosures. The Directors have considered how they apply each principle and below provides an
explanation of the approach taken in relation to each. Any areas of non-compliance are explained in
the text below.
Deliver growth
1
Establish a strategy and
business model which
promote
long-term
value for shareholders
The Group’s strategy is reviewed by the Board on a bi-annual basis
at offsite strategy events. The Group’s strategy is to drive long-
term value for shareholders through the exploitation of its
expertise in digital innovation and through the commoditisation of
its product offering:
Educate:
- Release of Launchyourcareer.com careers platform and VICTAR
VR supported by commercial partnerships
- Extending education platform to primary school sector, young
adults who have fallen outside education and training and life-long
learners
- Realising opportunities in new geographies commencing with the
North American market in 2020
Engage:
- Continued development of the Group's proprietary gamification
offering
18
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
2
Seek to understand and
meet shareholder needs
and expectations
- Exploitation of the commercial partnerships with Oracle, Valassis,
Yoyo Wallet, Toshiba and Eagle Eye.
Scaling the cost base efficiently with the objective of becoming
EBITDA positive and cash generative in line with management
expectations.
In addition to the opportunity for the Directors to engage with and
welcome shareholders at the Annual General Meeting, the Group
has taken the opportunity to present to and listen to shareholders
at a series of events including:
- Investor roadshows
- Broker sponsored presentation evenings
- Regular podcasts through Vox markets
All published information for shareholders is also available on the
Company website, including copies of interim reports, circulars and
announcements.
The Company also maintains a dedicated e-mail address for
investors to communicate with the business:
investorenquiries@devclever.co.uk
3
Take into account wider
stakeholder and social
responsibilities and their
implications
long-
term success
for
The Group’s key stakeholders are its shareholders (see “Seek to
understand and meet shareholder needs and expectations” above),
employees, customers and suppliers. The Group’s focus on careers
education and the promotion of life-long learning ensures its long-
term success is directly linked with a wider social purpose.
Employees: The Group’s employees are provided with quarterly
updates that provide both a business update and the opportunity
to celebrate success and ask questions of the management team.
Informal meet and greet sessions are held with the Non-Executive
Directors, who also attend company-wide social events. The
executive team have an open-door policy. Health and Safety are an
integral part of the culture with appointed representatives. People
and Health and Safety are the standing first agenda items on Board
meeting agendas.
is founded on the collaborative
Customers: The business
commercial partnerships that provide its products with access to
their markets. Regular meetings are held with client teams to
understand their and their clients’ business needs. Directors
regularly attend customer events / roadshows to jointly promote
and receive feedback on product offerings.
The
largest suppliers are for hosting services,
Suppliers:
professional services and temporary resources. The Company has
a small and trusted supplier base with a good understanding of the
Group’s needs. Supplier payment terms are honoured.
The Board is responsible for the Group’s system of internal controls
and risk management and for reviewing its effectiveness. The Audit
Committee regularly reviews the effectiveness of the Group's
19
4
Embed effective
management,
considering
risk
both
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
and
opportunities
threats, throughout the
organisation
systems of internal financial control and risk management.
Although no system of internal control can completely eliminate
the risk of failure to achieve business objectives or provide absolute
assurance against material misstatement or loss, the Group’s
controls are designed to provide reasonable assurance over the
reliability of financial information and the Group’s assets.
Key controls:
- The Executive Directors have a close involvement with the day to
day operations and with the involvement of staff, identify business
risks and monitor controls.
- Routine financial reporting is undertaken based on the Budget
approved by the Board. Monthly financial results are reported with
analysis of variances against expectations.
- The corporate risk register has been created by the Executive
Directors and is reviewed by the Board on a quarterly basis. The
register considers the impact, probability, controls in place and any
mitigating factors to be considered for each risk.
- Staff may contact Chantal Forrest, in confidence, under the
Company's whistleblowing policy to raise genuine concerns of
possible improprieties in financial reporting or other matters.
The Group’s principal risks and uncertainties are set out in the
Strategic Report on pages 10 to 12.
There is currently no internal audit function as the Board and Audit
Committee considers that given the Group’s current stage of
development, it is not necessary. This will be reviewed by the
Board as the Group evolves.
Maintain an effective management framework
5 Maintain the board as a
well-functioning,
balanced team led by
the chair
is responsible to shareholders for the proper
The Board
management of the Group.
A statement of Directors’
responsibilities is set out on page 35 and the interests and
experience of the Board are set out on pages 13 to 15. The Non-
Executive Directors have a particular responsibility to ensure that
the strategies proposed by the Executive Directors are fully
considered.
The Board comprises the Executive Chairman and CEO, one other
Executive Director and two Non-Executive Directors who are both
considered to be independent.
The Board holds regular meetings and
is responsible for
formulating, reviewing and approving the Group’s strategy,
budgets and corporate actions and overseeing the Group’s
progress towards its goals. Each year, the Non-Executive Directors
are required to attend 10 to 12 Board meetings, 9 to 10 Board
Committee meetings and 2 full day strategy sessions, which helps
to shape the Group’s strategy for the coming year and beyond.
20
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The Board has established the Audit and Remuneration
Committees with clearly defined terms of reference which are set
by the Board. The role, work and members of the committees are
outlined on page 17.
Meetings of the Board and its committees held during the year and
the attendance of the Directors are summarised above.
The Board has a schedule of regular business, financial and
operational matters and each Board committee has a schedule of
work to ensure all areas for which the Board has responsibility are
addressed and reviewed during the course of the year. The
Company Secretary compiles the Board and committee papers
which are circulated to the Directors prior to meetings. The
Company Secretary provides minutes for each meeting and every
Director is aware of the right to have any concerns minuted and to
seek
independent advice at the group’s expense where
appropriate.
Ensure
that between
them the Directors have
the necessary up-to-
date experience, skills
and capabilities
Directors duties are expected to require a time commitment of up
to two days each month.
The Non-Executive Directors have finance, media, technology, legal
and corporate governance business expertise. The executive
leadership team includes two members of the Board, the Chairman
and CEO who has a media and technology background and the
Finance Director, who has a finance background in the retail sector.
and
board
Evaluate
performance based on
relevant
clear
objectives,
seeking
continuous
improvement
8
Promote a corporate
culture that is based on
and
ethical
behaviours
values
The Directors demonstrate a commitment to on-going personal
development, learning and enhancing their understanding of the
digital sector.
Relevant experience is detailed more fully in the Board and
Governance section and Director biographies.
At present this aspect of the Code is not complied with as the
Directors consider that the Company and Board are not yet of a
sufficient size or suitably developed for a full Board evaluation to
make commercial and practical sense, given the stage of the
Company's development. In the frequent Board meetings and
conference calls, Directors can discuss any areas where they feel a
change would benefit the Company and the Company's advisers
remain on hand to deliver impartial advice. The Board will keep this
under review as the Company develops.
The Board has elected not to have a Nomination Committee. The
Board itself deals with matters such as including the balance of the
Board and succession planning.
The Board considers it acts in a professional manner at all times and
imparts that corporate culture throughout the Group. It also
considers that at all times it promotes ethical values and behaviour
to its employees. The Group has established policies relating to
21
6
7
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
governance
9 Maintain
structures
and
processes that are fit for
purpose and support
good
decision-making
by the board
anti-bribery and corruption, use of drugs and alcohol and share
dealing.
Within the policy framework, management operate an "open door"
policy and are available to staff to discuss any issues or concerns
they may have. Regular business updates are undertaken with staff
and an open two-way dialogue is held. The Board listens to the
views of its staff and ensures these are taken into consideration in
the ethical delivery of the Company’s business objectives.
In support of the information set out regarding the Board and its
committees referred to under “maintain the Board as a well-
functioning, balanced team led by the Chair” and “ensure that
between them the Directors have the necessary up-to-date
experience, skills and capabilities”:
Remuneration Committee
The Remuneration Committee is currently chaired by Chantal
Forrest and consists of two Non-Executive Directors.
The
Committee is expected to meet no fewer than two times each year.
Executive Directors may attend meetings at the Committee’s
invitation.
The Remuneration Committee is responsible for determining and
agreeing with the Board the broad policy for the remuneration and
employment terms of the Executive Directors, and other senior
executives, and in consultation with the Executive Chairman for
determining the remuneration packages of the Executive Directors
and such other members of the executive management of the
Group as it is designated to consider. The Committee is also
responsible for the review of and making recommendations to the
Board in connection with share option plans, for designing
performance related pay schemes and determining their
associated targets and for the oversight of the employee benefit
structures across the Group. The Chair of the Remuneration
Committee is also responsible for the approval of the CEO’s
expenses.
The remuneration of Non-Executive Directors is a matter for the
Board. No Director may be involved in any decision as to their own
remuneration. The Remuneration Committee report includes a
summary of the remuneration policy and the Annual Report on
Remuneration.
Audit Committee
The Audit Committee is chaired by David Ivy and consists of the two
Non-Executive Directors. The Audit Committee meets formally not
less than two times every year and otherwise as required. The
external auditors are invited to attend meetings during the year
and the Chief Executive Officer and Chief Financial Officer attend
by invitation.
22
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The Committee assists the Board in meeting its responsibilities in
respect of corporate governance, external financial reporting and
internal controls including amongst other things reviewing the
Group’s annual financial statements, reviewing and monitoring the
extent of the non-audit services undertaken by the external
auditors, advising on the appointment of external auditors and
reviewing the effectiveness of the Group’s internal controls and risk
management systems.
In fulfilment of the objectives the Committee:
- Reviews the Group’s Financial statements and finance related
announcements including compliance with statutory and listing
requirements.
- Considers whether these statements and announcements
provide a fair, balanced and understandable view of the group’s
strategy and performance, and the associated risks. Further
consideration of these matters is also provided by the Board as a
whole
- Considers the appropriateness of accounting policies and
significant accounting judgements and the disclosure of these in
the financial statements
- Reviews the effectiveness of financial controls and systems. The
Group does not have an internal audit function and the Committee
continues to be of the view that the Group is not yet of a size and
complexity to warrant the establishment of such a function and
- Oversees the relationship with and performance of the external
auditors
The Board will continue to review governance structures on an on-
going basis as the business evolves.
10 Communicate how the
is governed
company
is performing by
and
maintaining a dialogue
with shareholders and
other
relevant
stakeholders
Communication with shareholders are set out above under “Seek
to understand and meet shareholder needs and expectations”.
Meetings with analysts and shareholders are planned to be held
following the release of the full year results and interim results
going forward. These will be undertaken by the CEO and Finance
Director. There is an opportunity at the annual general meeting for
individual shareholders to raise general business matters. Notice
of the annual general meeting is provided at least 21 days in
advance of the meeting being held.
Communications with other relevant stakeholders are set out
above under “take into accounts wider stakeholder and social
responsibilities and their implications for long-term success”. The
Group’s website contains information considered to be of interest
to new and existing investors. In addition, the Group has employed
the services of its joint brokers, Pello Capital and Novum Securities
Limited, and a PR agency, PHA, providing an additional contact
avenue for investors.
23
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Corporate Social Responsibility
The Group aims to operate ethically and be socially responsible in its actions. Below are a number of
the approaches through which this is achieved.
Business Conduct, Ethics and Anti-Corruption
It is the Group's policy to conduct it business in an honest and transparent way without the use of
corrupt practices or acts of bribery to obtain an unfair advantage. The Group has a zero-tolerance
approach to bribery and corruption. On 21st January 2019, the Group adopted an Anti-Bribery and
Corruption Policy, which was provided to all staff at the time and is given to all new starters. Any
breach of this policy results in disciplinary action which may include dismissal.
Social, Community and Human Rights Matters
The Company operates a gender diverse business and ensures that employment practices take into
account the necessary diversity requirements and compliance with all employment laws. The Board
has experience in dealing with such issues and sufficient training and qualifications to ensure they
meet all requirements.
Relationships with Employees
The Group encourages an environment of openness and debate and welcomes feedback from within.
All employees are co-located within the offices in Tamworth, including the Executive Directors and
senior management team. There are regular full team meetings where employees are kept up to date
with developments within the business. This forum is also used to inform employees of the Group's
performance at appropriate times.
The Group has established employment policies which are compliant with current legislation and
codes of practice. The Group is an equal opportunities employer.
Payment of suppliers
The Group's policy is to pay suppliers in accordance with the relevant contractual terms between the
Group and the supplier. Where no specific terms are agreed, the Group's standard policy is 30 days.
Carbon emissions
The Group has, as yet, minimal greenhouse gas emissions to report from the operations of the
Company and its subsidiaries and does not have responsibility for any other emission producing
sources under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2014.
Approved on behalf of the Board of Directors on 27 February 2020
Chris Jeffries
Chairman & Chief Executive Officer
24
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Directors’ Remuneration Report
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended
31 October 2019, prepared in accordance with The Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 and the Companies Act 2006. Where
information set out below has been audited it is indicated as such.
We are required to seek shareholder approval of the Directors’ remuneration policy in this year and
at least every third year thereafter. Any changes to the remuneration policy will require shareholder
approval. An ordinary resolution to approve the Directors’ remuneration policy will be put to a binding
shareholder vote at the Company’s forthcoming Annual General Meeting (AGM), at the Company’s
offices, on 26 March 2020 at 11:00 A.M. A binding vote means that if it is not successful, the Board
will be obliged to revise the policy and seek further shareholder approval at a general meeting
specially convened for that purpose.
At the AGM, shareholders will also be asked to consider an advisory resolution on the contents of the
Directors’ Remuneration Report. An advisory resolution is a non-binding resolution.
Directors’ remuneration policy
In setting the policy, the Board has taken the following into account:
-
-
The need to attract, retain and motivate individuals of a calibre who will ensure successful
leadership and management of the Group;
The Group's general aim of seeking to reward all employees fairly, according to the nature
of their role and their performance;
- Remuneration packages offered by similar companies within the same sector;
-
The need to align the interests of shareholders with the long-term growth of the Group;
and
The need to be flexible and adjust with operational changes throughout the term of this
policy.
-
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and guidance from
shareholder bodies. This feedback, plus any additional feedback received from time to time, is
considered as part of the Company’s periodic reviews of its policy on remuneration.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account
contractual obligations.
Remuneration Components
The Executive Directors currently receive an amount of remuneration made up of base pay and a
company pension contribution. The Executive Chairman and CEO also receives a company car
allowance. The Non-Executive Directors receive an amount of fixed pay made up of base fees only.
No pay increase awards were made in the year.
The proposed remuneration policy of the Group is outlined below.
25
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Future Policy Table
Element
Purpose
Policy
Operation
Executive Directors
Base fees
To award for
services
provided
Pension
To award for
services
provided
Benefits
Annual
bonus
To award for
services
provided
Alignment
with
shareholder
returns
Share
options
Alignment
with
shareholder
returns
Non-Executive Directors
Base fees
To award for
services
provided
Opportunity
and
performance
conditions
Individual
performance
Paid monthly
in cash and
be
will
reviewable
annually
N/A
Paid monthly
in cash and
will
be
reviewable
annually
Paid monthly
in cash and
be
will
reviewable
annually
Paid annually
in arrears
The remuneration of Directors is
based on comparison with similar
in other companies of a
roles
sector and
size and
similar
Company
individual
and
performance. Inflationary rises are
normally aligned with those of
other employees.
Executive Directors' pensions are
aligned with those of the other
employees of the Group.
The
Group offers a workplace pension
arrangement through The People's
Pension Scheme, provided by
B&CE.
Benefit
include
company cars, company mobile
telephones and health insurance
packages
to
A short-term annual bonus scheme
is under review. The proposed
scheme is to be performance based
and will be dependent upon both
the individual and the Company
achieving agreed trading results
and milestones
Not awarded
N/A
N/A
Maximum
opportunity
of 40% of
base
pay
with a target
of 20% for
threshold
performance
N/A
N/A
Paid monthly
and
reviewable
annually.
on
Board
determines
The
the
remuneration of Non-Executive
Directors
the
based
recommendations of the Chairman
and
other
comparison with
companies of a similar size and
sector. There is no element of
remuneration for performance.
26
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Pension
Benefits
Annual
bonus
Share
options
N/A
N/A
N/A
N/A
Notes to the future policy table
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
The Directors shall be paid by the Group all travelling, hotel and other expenses as they may incur in
attending meetings of the Directors or general meetings or otherwise in connection with the discharge
of their duties.
Policy for new appointments
Base salary levels will consider market data for the relevant role, internal relativities, the individual's
experience and their current base salary. Where an individual is recruited at below market norms,
they may be re-aligned over time (e.g. two to three years), subject to performance in the role. Benefits
will generally be in accordance with the approved policy.
For external and internal appointments, the Board may agree that the Group will meet certain
relocation and/or incidental· expenses as appropriate.
Directors’ remuneration (audited)
Details of Directors' remuneration during the periods ended 31 October 2019 and 31 October 2018
are as follows:
Director
Salary and
fees
Taxable
benefits
Bonus
£
£
Executive Directors:
CM Jeffries
NAR Ydlibi
Non-Executive Directors
CB Forrest
DR Ivy
80,000
65,000
15,000
15,000
175,000
9,000
-
-
-
9,000
£
-
-
-
-
-
Director
Salary and
fees
Taxable
benefits
Bonus
CM Jeffries (1)
NAR Ydlibi (2)
40,000
35,389
75,389
8,888
-
8,888
-
-
-
Pension
related
benefits
£
1,095
1,095
-
-
2,190
Pension
related
benefits
403
421
824
Consultancy
fees
£
-
-
-
-
-
2019
Total
£
90,095
66,095
15,000
15,000
186,190
Consultancy
fees
2018
Total
-
-
-
49,291
35,810
85,101
(1) CM Jeffries emoluments from 1 May 2018 to 31 October 2018
(2) NAR Ydlibi emoluments from date of appointment as Director of Dev Clever Limited on 16
April 2018 to 31 October 2018
27
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Statement of Directors' shareholding and share interests (audited)
The Directors who held office at 31 October 2019 and who had beneficial interests in the Ordinary
Shares of the Company are summarised as follows:
Director
CM Jeffries
NAR Ydlibi
Position
Executive Chairman and Chief Executive Officer
Executive Director and Chief Financial Officer
Details of these beneficial interests can be found in the Board and Governance Report.
Service Agreements and Letters of Appointment
The service contracts with Chris Jeffries and Nick Ydlibi are on a continuous basis, subject to
termination provisions, and are subject to termination upon 12 months' and 6 months' notice, given
by either party, respectively. The appointments of Chantal Forrest and David Ivy are on a continuous
basis, subject to termination provisions, and are subject to termination upon 3 months' notice given
by either party.
Copies of the service agreements and letters of appointment will be available for review at the Annual
General Meeting on 26 March 2020 and on request from the Company Secretary, NAR Ydlibi.
Terms of appointment
The services of the Directors, provided under the terms of agreement with the Group are dated as
follows:
Director
CM Jeffries
NAR Ydlibi
CB Forrest
DR Ivy
Year of
appointment
2018
2018
2019
2019
Number of years
completed
1
1
¾
¾
Date of current
engagement letter
26 September 2018
26 September 2018
4 January 2019
4 January 2019
The Company’s articles of association require Directors to retire from office at the third annual general
meeting after the annual general meeting or general meeting at which they were appointed or last
reappointed. However, in compliance with best practice, all Directors will be submitted for re-election
at annual intervals.
Payments made to former Directors and payments for loss of office during the year
There were no payments for loss of office made during the year and no payments to any former
Director of the Company.
Consideration of employment conditions elsewhere in the Group
The Committee has not consulted with employees about executive pay but considers that the current
remuneration of Executive Directors is consistent with pay and employment benefits across the wider
Group.
28
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year performance graph comparing the
Company’s Total Shareholder Return with that of a comparable indicator. The Directors do not
currently consider that including the graph will be meaningful as the Company has only been listed
since January 2019, is not paying dividends and is currently incurring losses as it gains scale. In
addition, the remuneration of Directors is not currently linked to performance and the Directors do
not consider the inclusion of this graph to be useful to shareholders as the current time. The Directors
will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of
spend on pay compared to shareholder dividends paid. Given that the Company does not currently
pay dividends we have not considered it necessary to include such information.
Approved on behalf of the Board of Directors on 27 February 2020
CB Forrest
Chair of remuneration committee
29
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Audit Committee Report
The Audit Committee comprises the two Non-Executive Directors (Chantal Forrest and David Ivy). It
was established on 21 January 2019 and has met five times during the year, approving the interim
financial statements at its meeting in July 2019. The Committee oversees the Company’s internal
controls and financial reporting and provides a formal reporting link with the external auditors. The
ultimate responsibility for approving the annual report and accounts and interim financial statement
remains with the Board. The Chief Financial Officer and the external auditors attend meetings of the
Audit Committee by invitation. The Committee may hold separate meetings with the auditors,
without management present, as required.
Significant Accounting Issues
Revenue recognition
The Audit Committee has reviewed the Group's revenue recognition policy following the adoption of
IFRS 15 in the current accounting period and has agreed the following treatments for the Group's
three separate and distinct transaction streams:
Commercial development activity
Commercial development activity is undertaken on behalf of clients towards a client defined goal.
Such agreements are individually evaluated to determine if revenue is recognised at a point in time or
over time based on the delivery of contractual milestones that are aligned to the satisfaction of
performance obligations within the underlying contract / project brief.
Software licence fees and subscriptions
Revenue is recognised when the client has obtained control of the licence and the ability to use and
obtain substantially all the benefits from it. The client obtains control when a contract is agreed, the
licence delivered, and the client has the right to use it.
Support, maintenance and hosting contracts
Revenue is recognised in accordance with the performance obligations contained within the
associated support, maintenance and hosting agreement. Revenue is typically recognised based on
time elapsed and thus rateably over the term of the agreement. Under our standardised support
agreement, our performance obligation is to stand ready to provide technical product support and
unspecified updates, upgrades and enhancements on a when-and-if-available basis. Our customers
simultaneously receive and consume the benefit of these support services as we perform.
The basis for preparing the consolidated accounts
The Audit Committee has deemed that the acquisition of DevClever Limited by Dev Clever Holdings,
in a share for share exchange of the entire share capital of both entities, is indicative of DevClever
Limited being the accounting acquiror. The Committee has also concluded that, as Dev Clever
Holdings has no other assets or liabilities other than its holding in DevClever Limited, it does not
satisfy the definition of a business. As a result, it has concluded that the acquisition does not meet
the definition of a business combination under IFRS 3 and approved the production of consolidated
accounts through the application of the reverse acquisition methodology, without the need for
recognising goodwill. Under this treatment, the consolidated financial statements have been
prepared as a continuation of the financial statements of DevClever Limited, the opening net assets
of DevClever Limited have been recognised at book value and a merger reserve has been established
30
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
to write down the nominal value of equity in Dev Clever Holdings, at the time of the acquisition, to
the nominal value of the share capital in DevClever Limited.
Capitalisation of staff time spent creating the Group's proprietary software platforms
The Group has a dedicated team of software developers, virtual reality artists and designers who have
created a range of software products that will underpin future revenue generation for the Group.
These include the Group's careers platforms Launchyourcareer.com and VICTAR VR, the Engage
gamification solution and the Group's virtual reality gaming experiences, Vanguard and Easter Squad.
Where the conditions of IAS 38 are met, the Group capitalises the internal and external costs of
development as intangible assets. An impairment review was undertaken at the balance sheet date.
As part of its assessment, the Board considered its decision to accelerate the development of the
Launchyourcareer.com careers platform and supporting VICTAR VR virtual reality careers experience
to prepare them for launch in North America commencing April 2020. As a result, the Directors took
the decision to defer further development of its virtual reality gaming experiences. As future revenues
from the gaming experiences are uncertain, the Directors fully impaired the carrying value of the
gaming experiences and recognised an impairment charge of £174,085 in cost of sales.
Internal Audit
The Group does not have an internal audit function as this is not considered appropriate given the
scale of the Group's operations.
Internal Controls
The Board has overall responsibility for the Group's system of internal financial control and for
reviewing its effectiveness. The purpose of the system of internal control is to manage rather than
eliminate the risk of failure to achieve business objectives and can only provide reasonable, but not
absolute, assurance against misstatement or loss. Since its establishment on 21st January 2019, the
Audit Committee has kept the effectiveness of the Company's internal controls and risk management
systems under review. The Chief Financial Officer is the executive within the Group responsible for
day-to-day financial management of the Group's affairs and its internal accounting.
External Auditors
The Audit Committee monitors the independence and effectiveness of PKF Littlejohn, the Group's
external auditors, on an on-going basis and is satisfied in both respects. PKF's fees in the year in
respect of audit services were £34,000, (2018: £nil) and in respect of non-audit services were £24,437
(2018: £35,000) as detailed in note 5. PKF Littlejohn have signified their willingness to continue in
office and a resolution to reappoint PKF Littlejohn as auditor to the Group will be proposed at the
AGM.
Approved on behalf of the Board of Directors on 27 February 2020
David Ivy
Chair of the Audit Committee
31
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Directors’ Report
The Directors present their report and audited financial statements for the year ended 31 October
2019.
Results and dividends
The loss for the year after taxation amounted to £1,035k (2018: £498k). No dividends were paid during
the year (2018 £25k). The Directors do not propose a dividend in respect of the year ended 31 October
2019.
Earnings per share
Loss per share in the period from continuing operations was 0.29p (2018: loss 0.20p) and diluted loss
per share from continuing operations in the period was 0.29p (2018: loss 0.20p).
Underlying loss per share was 0.23p (2018: loss 0.14p) after adjusting for the one of expenses
associated with the IPO.
Directors
Details of the Directors who served during the year and their interests are outlined in the Board and
Governance Report on pages 13 to 24. During the year under review, the Company purchased and
maintained Directors' and officers' liability insurance for its Directors and officers as permitted by
section 233 of the Companies Act 2006.
Substantial shareholdings
As at 31 October 2019
Ordinary shares
Percentage of share
capital
CM Jeffries
Global Prime Partners LTD
The Bank of New York (Nominees) Limited
JIM Nominees Limited
James Capel (Nominees) Limited
250,000,000
30,541,300
19,345,000
18,249,474
11,644,687
64.37%
7.86%
4.98%
4.70%
3.00%
As at 20 February 2020
Ordinary shares
Percentage of share
capital
CM Jeffries
C Akers
Seguro Nominees Limited
James Capel (Nominees) Limited
Global Prime Partners LTD
ABN Amro Bank NV
JIM Nominees Limited
200,0000,000
30,900,000
18,800,000
18,144,993
15,040,900
13,554,218
13,331,736
46.28%
7.15%
4.35%
4.20%
3.48%
3.14%
3.08%
32
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Controlling shareholder
CM Jeffries, the Chief Executive Officer, was the controlling shareholder of the Company through his
direct holding of 64.37 per cent of the Ordinary share capital of the Company. CM Jeffries ceased
being the controlling shareholder in the Company following his disposal of 50,000,000 shares in
January 2020. As at the date of signing the financial statements, the Directors believe that the
Company no longer has a controlling shareholder.
Transactions with Directors
Transactions with Directors are disclosed within note 23 of the financial statements.
Corporate Governance
The governance report is contained within the Board and Governance Report on pages 13 to 24 of this
annual report and accounts. The corporate governance report forms part of this Directors’ Report
and is incorporated into it by cross reference.
Post balance sheet events
On 21 January 2020 the Group issued 43,785,107 new ordinary shares of 1p at par value, raising net
proceeds of £350k through a placing and subscription.
On 31st January 2020 the controlling shareholder, Christopher Jeffries, sold 50,000,000 ordinary
shares of 1p each that he held in the capital of the Company to third party purchasers procured by its
broker, Novum Securities Limited, at 1p per share (“Sale”). On completion of the Sale, Christopher
Jeffries’ holding reduced to 200,000,000 ordinary shares, representing 46.28 per cent of the
Company’s issued share capital.
At the same time as reducing his holding in the Company, Christopher Jeffries and the Company
entered into a convertible loan note agreement, pursuant to which the net proceeds of his share sale,
amounting to £400k after tax, costs and commission, were provided to the Company as subscription
amount for convertible loan notes. The loan notes are convertible into ordinary shares of 1p each at
Christopher Jeffries’ option, at any time, subject to, among other things, the Company not being
required to publish a prospectus in connection with the issue of shares on conversion of the notes and
no obligations under Rule 9 of the City Code on Takeovers and Mergers being triggered by such an
issue of shares. Unless previously repaid or converted, the loan notes will be redeemed at par by the
Company on their fifth anniversary. The Notes bear a zero coupon.
Going Concern
The Directors, having made due and careful enquiry, are of the opinion that the Group has adequate
working capital to meet its obligations over the next 12 months. The Directors therefore have made
an informed judgement, at the time of approving the financial statements, that there is a reasonable
expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in
the preparation of the annual financial statements.
Political donations and political expenditure
The Group did not make any political donations or expenditure.
33
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Financial Instruments
Details of the use of financial instruments by the Group are contained in note 19 of the financial
statements.
Provision of information to auditor
So far as each of the Directors is aware at the time this report is approved:
-
-
there is no relevant audit information of which the Group's auditor is unaware; and
the Directors have taken all steps that they ought to have taken to make themselves
aware of any relevant audit information and to establish that the Group's auditor is aware
of that information.
Auditors
The auditors, PKF Littlejohn LLP have indicated their willingness to continue in office, and a resolution
that they be re appointed will be proposed at the annual general meeting.
Approved on behalf of the Board of Directors on 27 February 2020
NAR Ydlibi
Chief Financial Officer
34
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under
that law the Directors have prepared the financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the
Directors must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and of the profit and loss of the Group for
that period. In preparing these financial statements, International Accounting Standard 1 requires
that the Directors are required to:
-
-
-
Properly select and apply suitable accounting policies;
Present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information;
Provide additional disclosures when compliance with the specific requirements in IFRSs
are insufficient to enable users to understand the impact of particular transactions, other
events and conditions on the entity's financial position and financial performance; and
- Make an assessment of the Group and Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made
available on a website. Financial statements are published on the Group and Company's website in
accordance with legislation in the United Kingdom governing the preparation and dissemination of
financial statements, which may vary from legislation in other jurisdictions. The maintenance and
integrity of the Group and Company's website is the responsibility of the Directors. The Directors'
responsibility also extends to the on-going integrity of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4 (Disclosure and Transparency Rules)
The Directors confirm to the best of their knowledge:
-
-
The Group and Company financial statements have been prepared in accordance with
lFRSs as adopted by 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 company; and
The annual report includes a fair review of the development and performance of the
business and financial position of the Group and Company together with a description of
the principal risks and uncertainties.
Approved on behalf of the Board of Directors on 27 February 2020
NAR Ydlibi
Chief Financial Officer
35
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Independent auditor’s report to the members of DEV CLEVER HOLDINGS PLC.
Opinion
We have audited the financial statements of DevClever Holdings Plc (the ‘parent company’) and its
subsidiary (the ‘group’) for the year ended 31 October 2019 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial
Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Statements of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union and as regards the parent company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 October 2019 and of the group’s and parent company’s loss for the
year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union and as applied in accordance with the provisions of
the Companies Act 2006; 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 group and parent 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 as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require
us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material
uncertainties that may cast significant doubt about the company’s ability to continue to adopt
the going concern basis of accounting for a period of at least twelve months from the date
when the financial statements are authorised for issue.
36
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and
qualitative thresholds for materiality determine the scope of our audit and the nature, timing and
extent of our audit procedures.
Materiality for the group financial statements was set at £29,000. This was calculated based on 4% of
the net assets. Using our professional judgement, we have determined this to be the principal
benchmark within the financial statements as it will be most relevant to members of the parent
company in assessing the Group operations as it is associated with the development costs that the
entity has been capitalising given the early stage of the company.
Materiality for the parent company financial statements was set at £28,999.
We agreed to report to the audit committee all corrected and uncorrected misstatements we
identified through our audit with a value in excess of £1,450. We also agreed to report any other audit
misstatements below that threshold that we believe warranted reporting on qualitative grounds.
There were no revisions in materiality in the course of the audit.
An overview of the scope of our audit
There are only two components in the Group – the listed Parent and the only subsidiary. As part of
our planning, we assessed that we performed full scope audits on all group entities in accordance with
ISA (UK) 600 for group and statutory reporting purposes. All entities in the Group were audited by a
single engagement team, we did not rely on the work of any component auditors.
In designing our audit, we determined materiality, as above, and assessed the risk of material
misstatement in the financial statements. Upon understanding of the Group’s transactions and
balances at planning stage, we identified areas which were most likely to give rise to a material
misstatement and identified what we considered to be key audit matters as outlined below and
planned our audit approach accordingly.
Key audit matters
Key audit matters are those matters that, in our professional judgment, 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) we identified, including those which had
the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team. 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.
In addition to the matter described in the material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be communicated in our
report.
37
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Key Audit Matter
How the scope of our audit responded to the key
audit matter
Revenue Recognition
Our work in this area included:
Under ISA (UK) 240 there is a presumption that
revenue recognition is a fraud risk.
There is the risk that revenue from development, set
up fees, subscription, hosting and support fees has
been incorrectly recognised within the financial
statements.
There is also a risk that material misstatement has
arisen as a result of the first-year adoption of IFRS 15,
and that sufficient disclosures have not been made in
order to comply with the new standard.
• Documenting our understanding of the
and
internal
control
performing walkthrough testing;
environment
• Reviewing management’s assessment of the
impact of IFRS 15 in line with the 5-step
model and ensuring that the Group’s
revenue recognition is in line with IFRS 15;
• Obtaining supporting documentation of the
samples selected in the revenue to ensure
that it is complete; and
• Reviewing post-year end invoices and credit
notes to ensure revenue is appropriately
accounted for in the correct period.
Capitalisation of intangible assets
Our work in this area included:
in note 12, the carrying value of
As detailed
intangible assets as at 31 October 2019 was
£157k.There is a risk that costs capitalised in the year
(or not capitalised) do not meet the requirements of
International Accounting Standard 38 Intangible
Assets (IAS 38).
• Reviewing management's consideration of
how it considered the capitalisation criteria
per IAS 38 has been met and challenged
accordingly;
• Reviewing and challenging any judgements
and estimates made by management for
reasonableness;
Development costs capitalised in the year totalled
£204k. These costs were incurred in the development
of the Dev Clever's internally developed software
relating to
its LaunchPAD and VICTAR careers
education platform, the associated CLEVER suite of
loyalty
digital
intranet
applications and virtual reality gaming experiences.
This is material on a Group basis.
customer
products,
line with
impairment
• Considering whether there were indicators
IAS 36
in
of
(Impairment of Assets);
Testing a sample of costs capitalised in the
period to supporting documentation to
ensure
in
that
accordance with IAS 38;
treatment was
the
•
•
• Reviewing the amortisation policies for
reasonableness and testing a sample of
amortisation calculations to ensure that the
policy was being followed; and
Ensuring that sufficient and appropriate
disclosures have been made in relation to
the capitalisation in the year in order for
the
to adequately understand
users
treatment. For example, in note 3 under
Critical
and
Accounting
Judgements and within note 12.
Estimates
Valuation of investment in subsidiary
Our work in this area included:
The value of the investment in DevClever Limited as
at 31 October 2019 amounted to £2.5million as
detailed in note 14.
• Verification of ownership;
• Considering whether there are indications
of impairment; and
• Reviewing and challenging management’s
budgets, cash flow forecasts and
projections relating to DevClever Limited’s
38
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The subsidiary made losses during the period and
therefore there is a risk that the investment is
impaired.
future operations to ensure that the
investment in subsidiary is recoverable.
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. Our opinion on the group and parent company financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion 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 the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in
the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate
•
for our audit have not been received from branches not visited by us; or
the parent company financial statements 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.
39
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for
the preparation of the group and parent company 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 group and parent company financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the parent company or to cease operations, or
have no realistic alternative but to do so.
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.
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 the audit committee on 25 April 2019 to audit the financial statements for the
year ending 31 October 2019. Our total uninterrupted period of engagement is one year, covering the
year ending 31 October 2019.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the
parent company and we remain independent of the group and the parent company in conducting our
audit.
We identified areas of laws and regulations that could reasonably be expected to have a material
effect on the financial statements from our sector experience and through discussion with the
directors. We considered the extent of compliance with those laws and regulations as part of our
procedures on the related financial statements items. We communicated laws and regulations
throughout our audit team and remained alert to any indications of non-compliance throughout the
audit. As with any audit, there remained a higher risk of non-detection of irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls.
Our audit opinion is consistent with the additional report to the audit committee.
40
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Other matter
We draw attention to the fact that the prior year figures are unaudited.
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.
Joseph Archer (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
28 February 2020
15 Westferry Circus
Canary Wharf
London E14 4HD
41
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Consolidated Statement of Comprehensive Income
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Loss from operations
Finance income
Finance expense
Loss before tax
Tax credit
Note
Year ended 31
October 2019
£
Year ended 31
October 2018
£
4
5
5
8
8
480,585
(521,782)
467,286
(260,999)
(41,197)
206,287
(999,660)
(716,224)
(1,040,857)
(509,937)
811
(24,601)
-
(30,192)
(1,064,647)
(540,129)
10
45,016
42,408
Loss for the period from continuing operations
(1,019,631)
(497,721)
Other comprehensive income:
Items not reclassified to profit or loss in subsequent
periods:
Total other comprehensive income for the period
-
-
Total comprehensive income for the period
attributable to shareholders
(1,019,631)
(497,721)
Earnings per share
Basic (pence per share)
Diluted (pence per share)
Adjusted basic (pence per share)
Adjusted diluted (pence per share)
11
11
11
11
(0.29)
(0.29)
(0.23)
(0.23)
(0.20)
(0.20)
(0.14)
(0.14)
The notes to the consolidated financial statements form an integral part of these financial statements.
42
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Consolidated Statement of Financial Position
Non-current assets:
Intangible assets
Property, plant & equipment
Investments
Current assets:
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities:
Trade and other payables
Loans and borrowings, amounts falling due within one
year
Non-current liabilities:
Loans and borrowings, amounts falling due after more
than one year
Deferred tax
Total liabilities
Net assets
Share capital
Merger reserve
Share premium reserve
Share based payments reserve
Retained earnings
Note
As at 31
October 2019
£
As at 31
October 2018
£
12
13
14
15
16
17
17
18
20
20
20
20
20
157,673
41,706
1,125
200,504
6,200
156,614
496,707
659,521
131,477
29,756
-
161,233
-
182,084
72,689
254,773
860,025
416,006
(136,084)
(47,727)
(149,440)
(257,694)
(183,811)
(407,134)
(89,847)
(131,699)
(16,464)
(106,311)
(28,114)
(159,813)
(290,122)
(566,947)
569,903
(150,941)
3,884,017
(2,499,900)
246,246
110,212
(1,170,672)
100
-
-
-
(151,041)
Total equity to shareholders
569,903
(150,941)
The notes to the consolidated financial statements form an integral part of these financial statements.
This report was approved and authorised for issue by the Board of Directors on 27 February 2020 and
were signed on their behalf by:
CM Jeffries
Chairman and Chief Executive Officer
43
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Company Statement of Financial Position
Non-current assets:
Investments
Current assets:
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities:
Trade and other payables
Total liabilities
Net assets
Share capital
Share premium reserve
Share based payments reserve
Retained earnings
Total equity to shareholders
Note
14
15
16
20
20
20
20
As at 31
October 2019
£
2,500,000
2,500,000
1,425,472
325,374
1,750,846
4,250,846
(72,112)
(72,112)
(72,112)
4,178,734
3,884,017
246,246
110,212
(61,741)
4,178,734
The Company has taken advantage of section 408 of the Companies Act 2006 and consequently a
profit and loss account has not been presented for the Company. The Company’s loss for the financial
period was £61,741.
The notes to the Company financial statements form an integral part of these financial statements.
This report was approved and authorised for issue by the Board of Directors on 27 February 2020 and
were signed on their behalf by:
CM Jeffries
Chairman and Chief Executive Officer
Company registration No: 11589976
44
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Consolidated Statement of Changes in Equity
Share
capital
Merger
reserve
Share
premium
reserve
£
100
-
-
-
-
100
£
-
-
-
-
-
-
2,499,900
(2,499,900)
1,013,000
220,000
22,900
128,117
-
-
-
-
-
-
-
-
Balance as at 01 November
2017
Loss after taxation for the
period
Transactions with owners
recognised in equity:
Dividends paid
Balance at 01 November
2018
Acquired on acquisition of
subsidiary (1)
Pre IPO, IPO and subscription
Conversion of convertible
loan facility
Issue of warrants
Placing
Share based payments
Loss after taxation for the
period
Transactions with owners
recognised in equity:
Dividends paid
Share-
based
payment
reserve
£
-
-
-
-
-
-
-
-
-
Retained
earnings
Total
£
£
371,680
371,780
(497,721)
(497,721)
(497,721)
(497,721)
(25,000)
(25,000)
(25,000)
(25,000)
(151,041)
(150,941)
-
-
-
-
1,013,000
220,000
£
-
-
-
-
-
-
-
-
-
-
246,246
-
-
-
-
110,212
-
-
-
-
(1,019,631)
22,900
374,363
110,212
(1,019,631)
3,883,917
(2,499,900)
246,246
110,212
(1,019,631)
720,844
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 October 2019
3,884,017
(2,499,900)
246,246
110,212
(1,170,672)
569,903
(1) The acquisition of Dev Clever Limited by Dev Clever Holdings plc has been accounted for using the
reverse acquisition method (see note 2). As a result, the prior year comparative changes in equity
reflect the share capital and reserves movements for Dev Clever Limited and the movements arising
from the incorporation of Dev Clever Holdings and its subsequent acquisition of Dev Clever Limited have
been reported in the consolidated statement of changes in equity in the current period.
-
-
-
Share capital is the amount subscribed for shares at nominal value
The merger reserve relates to the adjustment required to account the acquisition of
DevClever Limited as a reverse acquisition
Share premium reserve is the additional amount of funds received in excess of the
nominal value of the shares and recorded net of associated transaction costs
45
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
-
The share-based payment reserve relates to the charge for share based payments arising
on the grant of employee share options and advisor warrants in accordance with IFRS 2
- Retained earnings represents the cumulative earnings of the Group attributable to equity
shareholders.
The notes to the consolidated financial statements form an integral part of these financial statements.
Company Statement of Changes in Equity
Share
capital
Share
premium
reserve
£
-
2,500,000
1,013,000
220,000
£
-
-
Share-
based
payment
reserve
£
-
-
Retained
earnings
Total
£
£
-
2,500,000
-
-
1,013,000
220,000
22,900
128,117
-
-
-
246,246
-
-
-
-
110,212
-
-
-
-
(61,741)
22,900
374,363
110,212
(61,741)
3,884,017
246,246
110,212
(61,741)
4,178,734
-
-
-
-
-
-
-
-
-
-
On incorporation on 26
September 2018
Shares issued on acquisition
of Dev Clever Limited
Pre IPO, IPO and subscription
Conversion of convertible
loan facility
Issue of warrants
Placing
Share based payments
Loss after taxation for the
period
Transactions with owners
recognised in equity:
Dividends paid
Balance at 31 October 2019
3,884,017
246,246
110,212
(61,741)
4,178,734
-
-
-
Share capital is the amount subscribed for shares at nominal value
Share premium reserve is the additional amount of funds received in excess of the
nominal value of the shares and recorded net of associated transaction costs
The share-based payment reserve relates to the charge for share based payments arising
on the grant of employee share options and advisor warrants in accordance with IFRS 2
- Retained earnings represents the cumulative earnings of the Group attributable to
equity shareholders.
The notes to the Company financial statements form an integral part of these financial statements.
46
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Consolidated Statement of Cash Flows
Cash flows from operating activities:
Loss before tax
Adjustments for:
Depreciation
Amortisation of intangibles
Impairment of intangibles
Finance Income
Finance expense
Share-based payment expenses
(Increase) / decrease in inventories
(Increase) / decrease in trade and other
receivables
Increase / (decrease) in trade and other payables
Income tax received
Net cash flows from operating activities
Cash flows from investing activities:
Payments to acquire property, plant and equipment
Payments to develop intangible assets
Payments to acquire investments
Net cash flows used in investing activities
Cash flows from financing activities:
Net proceeds from issue of equity
Proceeds from borrowings
Repayment of borrowings
Interest received
Interest paid
Dividends paid
Net cash flows from financing activities
Year ended 31
October 2019
£
Year ended 31
October 2018
£
(1,064,647)
(540,129)
14,692
11,207
174,085
(811)
24,601
110,212
(6,200)
(37,221)
(18,723)
96,058
(696,747)
(26,642)
(211,488)
(1,125)
(239,255)
1,421,362
-
(31,818)
811
(30,335)
-
1,360,020
11,656
-
-
-
30,192
-
-
23,777
95,730
60,042
(318,732)
(19,372)
(131,477)
-
(150,849)
-
462,413
(123,020)
-
(24,458)
(25,000)
289,935
Net increase/(decrease) in cash and cash equivalents
in the year
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
424,018
(179,646)
72,689
496,707
252,335
72,689
Cash and cash equivalents
496,707
72,689
The notes to the consolidated financial statements form an integral part of these financial statements.
47
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Company Statement of Cash Flows
Cash flows from operating activities:
Loss before tax
Adjustments for:
Finance Income
Share-based payment expenses
(Increase) / decrease in trade and other
receivables
Increase / (decrease) in trade and other payables
Net cash flows from operating activities
Cash flows from investing activities:
Loans to subsidiary undertakings
Repayments of loan from subsidiary undertaking
Net cash flows used in investing activities
Cash flows from financing activities:
Net proceeds from issue of equity
Interest received
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
in the year
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents
Year ended 31
October 2019
£
(61,741)
(52,431)
110,212
(18,654)
61,013
38,399
(1,233,000)
98,596
(1,134,404)
1,421,362
17
1,421,379
325,374
-
325,374
325,374
The notes to the Company financial statements form an integral part of these financial statements.
48
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Notes to the Financial Statements
1
General Information
Dev Clever Holdings Plc ("the Company") is publicly traded on the Standard List of the London
Stock Exchange. The Company is incorporated and domiciled in England and Wales. Its registered
office is Ventura House, Ventura Park Road, Tamworth, Staffordshire, B78 3HL and the registered
number is 11589976.
The Company is the parent company of Dev Clever Limited ("DevClever"). Dev Clever is
incorporated and domiciled in England and Wales with the same registered office as the
Company.
The Group is principally engaged in the development of immersive software products that deliver
customer engagement, through both its careers platform Launchyourcareer.com, supported by
VICTAR VR, and its Engage platform, that provides brands and merchants with fully controlled
promotions and incentives through gamification.
2
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
Basis of preparation
These consolidated financial statements have been prepared on a going concern basis under the
historical cost convention, and in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the EU and the International Financial Reporting Interpretations
Committee (“IFRIC”) interpretations issued by the International Accounting Standards Board
(“IASB”) that are effective or issued and early adopted as at the date of these financial statements
and in accordance with the provisions of the Companies Act 2006.
The preparation of financial statements requires management to exercise its judgement in the
process of applying accounting policies. The areas involving a higher degree of judgement, or
areas where assumptions and estimates are significant to the financial information, are disclosed
in note 3.
The presentational and functional currency of the Company is Sterling. Results in these financial
statements have been prepared to the nearest £1.
Basis of consolidation
IFRS 3 Business Combination requires that a transaction in which a company with substantial
operations ('operating company') arranges to be acquired by a shell company should be analysed
to determine whether it is a business combination. The Directors believe the acquisition of
DevClever Limited by Dev Clever Holdings in a share for share exchange of the entire share capital
of both entities, indicates that DevClever Limited is the accounting acquiror. The Directors have
also concluded that, as Dev Clever Holdings has no other assets or liabilities other than its holding
in DevClever Limited, it does not satisfy the definition of a business. As a result, the acquisition
does not meet the definition of a business combination under IFRS 3 and falls outside the scope
49
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
of IFRS 3. The Directors have therefore considered the requirements of IFRS 10 for the
production of consolidated accounts through the application of the reverse acquisition
methodology but without the need for recognising goodwill. As a result:
•
the consolidated financial statements of the legal parent, Dev Clever Holdings plc have
been prepared as a continuation of the financial statements of the operating company,
DevClever Limited. The opening net assets of Dev Clever Limited have been recognised
at book value and a merger reserve has been established to write down the nominal
value of equity in Dev Clever Holdings, at the time of the acquisition, to the nominal value
of the share capital in Dev Clever Limited, at that time.
•
the opening net assets of Dev Clever Limited have been recognised at book value.
• a merger reserve has been established to write down the nominal value of equity in Dev
Clever Holdings, at the time of the acquisition, to the nominal value of the share capital
in Dev Clever Limited, at that time. The merger reserve of £2,499,900 represents the
difference between the nominal value of equity in Dev Clever Holdings of £2,500,000 and
the nominal value of equity in Dev Clever Limited of £100.
The consolidated financial statements incorporate those of Dev Clever Holdings plc and its
subsidiary DevClever Limited. All financial statements are made up to 31 October 2019. Where
necessary, adjustments are made to the financial statements of subsidiary to bring the
accounting policies used into line with those used by other parts of the Group.
The Company accounts have been prepared for the period from incorporation on 26th September
2018 to 31 October 2019. There were no material transactions in Dev Clever Holdings plc from
the date of incorporation until the 31 October 2018, other than the share for share exchange
resulting in the merger reserve disclosed above. In preparing the consolidated accounts utilising
the reverse acquisition methodology, the Directors have determined that the year ended 31
October 2019 and the comparative period of the year ending 31 October 2018 provides the most
meaningful and appropriate information for users of the accounts.
All intra-group transactions, balances and unrealised gains on transactions between group
companies are eliminated on consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from its activities, generally accompanied by a
shareholding giving rise to the majority of voting rights. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether
the Group controls another entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are deconsolidated from the date on which control
ceases. The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the elements of control.
Adoption of new and revised standards
The Company has adopted all recognition, measurement and disclosure requirements of IFRS as
adopted by the EU, including any new and revised standards and Interpretations of IFRS in effect
for financial periods commencing on or after 1 January 2018. Within these financial statements,
the Company has adopted the following standards and amendments for the first time:
•
IFRS 15 Revenue from Contracts with Customers.
50
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
•
•
•
•
IAS 7 Disclosure Initiative (amendments
IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (amendments)
IFRS 9 – Financial Instruments
IFRS 3 Business Combinations
The Company has adopted IFRS 15 for the current year and applied it retrospectively for the
preceding financial year in accordance with IFRS 15 C3(b) however no material adjustments
were identified between the requirements of IFRS 15 and the methods applied by the Company
in the application of IAS 18. There was no impact on the Company financial statements in
respect of IAS 7, IAS 12 or IFRS 9.
Standards which are in issue but not yet effective
New and amended standards and interpretations issued but not yet effective or not yet
endorsed for the financial year beginning 1 November 2018 and not yet early adopted.
At the date of authorisation of these financial statements, the Group and Company have not
applied the following new and revised IFRSs that have been issued but are not yet effective
and (in some cases) have not yet been endorsed by the EU. The Group and Company intend to
the adopt these standards, if applicable, when they become effective.
Effective date for
annual periods
beginning on or after
01-Jan-19
Standard
Description
IFRS 16
Leases - new standard. The standard
requires lessees to account for leases under
a single on-balance sheet model in a similar
way to finance leases under IAS 17. At the
commencement date of a lease, a lessee
will recognise a liability to make lease
payments and an asset representing the
right to use the underlying asset during the
lease term. Lessees will be required to
separately recognise the interest expense
on the lease liability and the depreciation
expense on the right of use asset. The
Company currently
its office
premises. The Directors expect that the
adoption of this standard will increase the
Company's non-current assets, current and
long-term liabilities in the statement of
financial position. In the income statement,
reduced,
operating expenses will be
amortisation and interest expense will be
increased.
leases
The total value of the leased asset as at 1
November 2019 is estimated at between
£90k and £100k and the associated lease
liability is estimated at a similar value. This
represents management’s best estimate at
the time of preparing these financial
51
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
IAS 12
IFRIC 23
IFRS 3
IAS 1
IAS 8
to
statements and will be re-assessed during
the 2020 financial year and subject to audit.
Amendments to IAS 12, "Income Taxes"
resulting from Annual improvements 2015-
2017 Cycle (income tax consequences of
dividends)
Uncertainty over Income Tax Treatments
"Business
Amendments
Combinations" to clarify the definition of a
business
Amendments to IAS 1, "Presentation of
the
Statements"
Financial
definition of "material"
Amendments to IAS 8, "Accounting Policies,
in Accounting Estimates and
Changes
errors"
the definition of
regarding
"material"
regarding
IFRS
3
01-Jan-19
01-Jan-19
01-Jan-20
01-Jan-20
01-Jan-20
The Group has not early adopted any of the above standards. The Directors have assessed the
impact of IFRS 16 (as disclosed in the table above) and continue to assess the impact of the
remaining amendments on future financial statements.
Going concern
As part of their going concern review the Directors have followed the guidelines published by the
Financial Reporting Council entitled “Guidance on Risk Management and Internal Control and
Related Financial and Business Reporting”.
The Directors have prepared detailed financial forecasts and cash flows looking at least 12
months from the date of approval of these financial statements. In developing these forecasts,
the Directors have made assumptions based upon their view of the current and future economic
conditions that will prevail over the forecast period.
On the basis of the above projections, the Directors are confident that the Company has sufficient
working capital to honour all of its obligations to creditors as and when they fall due. In reaching
this conclusion, the Directors have considered the forecast cash headroom, the resources
available to the Company and the potential impact of changes in forecast growth and other
assumptions, including the potential to avoid or defer certain costs and to reduce discretionary
spend as mitigating actions in the event of such changes. Accordingly, the Directors continue to
adopt the going concern basis in preparing these consolidated financial statements.
52
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sales of
goods of services in the ordinary course of the Company's activities. Revenue is measured at as
the fair value of the consideration received or receivable and is shown net of value added taxes,
rebates and discounts.
Under IFRS 15 - Revenue from Contracts with Customers, five stages of revenue recognition have
been applied to the Group’s revenue:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract;
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and that the revenue can be reliably measured and specific criteria have been met for
each of the group's activities as described below. The Company bases its estimates on historical
results taking into consideration the type of customer, the type of transaction and the specifics
of each arrangement.
Commercial development projects, customisation of software and set up fees
Client-driven development entails direct co-operation between the development team and the
client towards a client-defined goal. Such agreements are individually evaluated to determine if
revenue is recognised at a point in time or over time based on the delivery of contractual
milestones that are aligned to the satisfaction of performance obligations within the underlying
contract / project brief
Software subscription fees
Software is licenced to customers via subscription on fixed term agreements. Revenue is
recognised when the client has obtained control of the licence and the ability to use and obtain
substantially all the benefits from it. The client obtains control when a contract is agreed, the
licence delivered, and the client has the right to use it.
Support, maintenance and hosting contracts
Revenue is recognised in accordance with the performance obligations contained with the
associated support, maintenance and hosting agreement. Revenue is typically recognised based
on time elapsed and thus rateably over the term of the agreement. Under our standardised
support agreement, our performance obligation is to stand ready to provide technical product
support and unspecified updates, upgrades and enhancements on a when-and-if-available basis.
Our customers simultaneously receive and consume the benefit of these support services as we
perform.
Operating profit
Operating profit comprises the Company's revenue for the provision of services, less the costs of
providing those services and administrative overheads, including depreciation and amortisation
of the Company's non-current assets.
53
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker (CODM). The CODM, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board
of Directors that makes strategic decisions.
A business segment is a group of assets and operations, engaged in providing products or services
that are subject to risks and returns that are different from those of other operating segments.
The Board of Directors assess the performance of the operating segments based on the measures
of revenue, gross profit, operating profit and assets employed.
Finance costs
Finance costs represent the cost of borrowings and are accounted for on an amortised cost basis
in the income statement using the effective interest rate.
Dividends
Dividends to the Company's shareholders are recognised when the dividends are approved for
payment.
Earnings per share
Earnings per share represents the portion of the Company’s profit / (loss) from continuing
operations attributable to each outstanding share of the Company’s ordinary share capital.
Diluted earnings per share represents the portion of the Company’s profit / (loss) from continuing
operations attributable to each outstanding share of the Company’s ordinary share capital after
taking into consideration the conversion of all outstanding employee share options and advisor
warrants.
Adjusted earnings per share is an internal management measure of earnings per share in which
the profit / (loss) from continuing operations has been adjusted to remove the effect of certain
non-operating income and expenses. In determining the adjusted earnings per share,
management has removed the costs associated with the Company’s IPO of £112,770 (2018:
£135,773) and the share-based payments expense incurred in the period of £110,212 (2018: £nil).
Property, plant and equipment
Purchased property, plant and equipment is stated at cost less accumulated depreciation and
any provision for impairment losses. Cost includes the original purchase price of the asset and
the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is charged so as to write off the costs of assets over their estimated useful lives, on
the following bases:
Computer equipment
Fixtures and fittings
1 to 3 years
15%
Straight line
Reducing balance
54
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The asset's residual values and useful economic lives are reviewed by the Directors and adjusted,
if appropriate, at each balance sheet date. An asset's carrying amount is written down
immediately to its recoverable amount if the asset's carrying amount is greater than its estimated
recoverable value.
Gains and losses on disposals are determined by comparing the proceeds with the carrying
amount and are recognised within other (losses) or gains in the income statement. When
revalued assets are sold, the amounts included in other reserves are transferred to retained
earnings.
Intangible assets: Internal Use Software - Software Development
An internally generated development intangible asset arising from the Company's product
development is recognised if, and only if, the Company can demonstrate all of the following:
•
the technical feasibility of completing the intangible asset so that it will be available for
use or sale
its intention to complete the intangible asset and use or sell it
its ability to use or sell the intangible asset
•
•
• how the intangible asset will generate probable future economic benefits
•
the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset
its ability to measure reliably the expenditure attributable to the intangible asset during
its development
•
Internally generated development intangible assets are amortised, as a cost of sale, on a straight-
line basis over their useful lives of up to three years. Amortisation is charged to the income
statement from when the asset becomes available to use.
Where no internally generated intangible asset can be recognised, development expenditure is
recognised as an expense in the period in which it is incurred.
Impairment of property, plant and equipment, and intangible assets
At each balance sheet date, the Company reviews the carrying amounts of its assets annually to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Company estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. In the case of a cash-generating unit, any impairment loss is charged first to
any goodwill in the cash-generating unit and then pro rata to the other assets of the cash-
generating unit.
55
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Investments
Investments in subsidiaries are carried at cost less accumulated impairment losses in the
Company's balance sheet. On disposal, the difference between disposal proceeds and the
carrying amounts of the investments are recognised in profit or loss.
Financial instruments
Financial assets and financial liabilities are recognised in the consolidated statement of financial
position when the Company becomes party to the contractual provisions of the instrument.
Financial assets are de-recognised when the contracted rights to the cash flows from the financial
asset expire or when the contracted rights to those assets are transferred. Financial liabilities are
de-recognised when the obligation specified in the contract is discharged, cancelled or expired.
Financial assets and financial liabilities are initially measured at their fair value. Transaction costs
attributable to the acquisition of a financial asset or financial liability are added or deducted from
the fair value of the financial asset or financial liability.
At each reporting date, financial assets are reviewed to assess whether there is objective
evidence of impairment. If any such evidence exists, impairment loss is determined and
recognised based on the classification of the financial asset.
Loans and receivables (including trade receivables, prepayments, deposits and other receivables,
cash and bank balances) are non-derivative financial assets with fixed or determinable payments
that are not quoted on an active market. At each reporting date subsequent to initial recognition,
loans and receivables are carried at amortised cost using the effective interest method, unless
when there is objective evidence that the asset is impaired. Impairment is measured as the
difference between the asset's carrying amount and the present value of estimated future cash
flows discounted at the original effective interest rate. Impairment losses are reversed in
subsequent periods when an increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment is recognised, subject to a restriction that
the carrying amount of the asset at the date the impairment is reversed does not exceed what
the amortised cost would have been had the impairment not been recognised.
(a) Trade and other receivables
Trade and other receivables are recognised at their fair value. Appropriate provisions for
estimated irrecoverable amounts are recognised in the statement of comprehensive income
when there is objective evidence that the assets are impaired. Trade and other receivables are
shown in note 19 as “loans and receivables”.
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits held on call with banks.
Cash and cash equivalents are shown in note 19 as “loans and receivables”.
Financial liabilities and equity
(c) Trade and other payables
Trade payables are recognised at their fair value. Trade and other payables are shown in note 19
as “other financial liabilities”.
56
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
(d) Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest rate method. Gains and losses are recognised in the
income statement when the liabilities are derecognised as well as through the effective interest
rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance costs in the income statement.
(e) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the
proceeds received, net of issue costs.
Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
expected period of the lease. Any lease incentives received are recognised as part of the total
expense, over the term of the lease.
Employee benefits
The Company operates a defined contribution auto-enrolment pension scheme for employees of
the Company. The assets of the scheme are held separately from those of the Company in an
independently administered fund. The pension costs charged in the income statement are the
contributions payable to the scheme in respect of the accounting period.
Current tax
The tax currently payable is based on taxable profit or loss for the year. Taxable profit or loss
differs from the profit or loss for the financial year as reported in the statement of total
comprehensive income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Where tax credits are received in respect of allowable research and development expenditure,
these are recognised in the statement of comprehensive income.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that future taxable profits will
be available against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of
57
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the
liability is settled, or the asset is realised based on tax laws and rates that have been enacted or
substantively enacted at the reporting date. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited in other comprehensive income,
in which case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by
the same taxation authority and the Company intends to settle its current tax assets and liabilities
on a net basis.
Equity
Equity comprises the following:
• Share capital, representing the number of shares subscribed at nominal value;
• Merger reserve, relating to the adjustment required to account the acquisition of
DevClever Limited as a reverse acquisition
• Share premium, representing the additional amount of funds received in excess of the
nominal value of the shares and recorded net of associated transaction costs;
• Share-based payment reserve, relating to the charge for share based payments arising
on the grant of employee share options and advisor warrants, in accordance with
International Financial Reporting Standard 2;
• Retained income represents the cumulative earnings of the Group attributable to equity
shareholders.
Share based payments
The costs of equity settled transactions are measured at their fair value at the date at which they
are granted. The cost of advisor warrants is recognised at the grant date as they are issued in
respect of services already received. The cost of equity settled transactions with employees is
charged to the income statement as an expense over the vesting period, on a straight-line basis,
which ends of the date on which the relevant employees become fully entitled to the award.
Non-market vesting conditions are taken into consideration by adjusting the numbers of options
expected to vest, at each statement of financial position date, such that the cumulative charge
recognised over the vesting period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting condition. The movement in
cumulative expense since the previous reporting date is recognised in the statement of
comprehensive income within administration expenses with a corresponding entry in the
statement of financial position in the relevant share-based payment reserve.
Fair value is determined using the Black-Scholes model, details of which are given in note 9.
58
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
3
Critical accounting estimate and judgements
The preparation of these consolidated financial statements requires the Directors to make
judgements and estimates that affect the reported amounts of assets and liabilities at each
reporting date and the reported amounts of revenue during the reporting periods. Estimates and
judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the
circumstances. Actual results could differ from these estimates. Information about such
judgements and estimations are contained in individual accounting policies. The key judgements
and sources of estimation uncertainty that could cause an adjustment to be required to the
carrying amount of assets or liabilities within the next accounting period are outlined below:
Capitalisation of development costs
The Group recognises costs incurred on development projects as an intangible asset which
satisfies the requirements of IAS 38. The calculation of the costs incurred includes the time spent
by certain employees on the development project, as recorded through their timesheets. The
decision whether to capitalise and how to determine the period of economic benefit of a
development project requires an assessment of the commercial viability of the project and the
prospect of selling the related software to new or existing customers.
The Group capitalised £204,058 of internal development costs in the year (2018: £127,795)
Impairment of internally generated intangible assets
An impairment review of the Company's development costs is undertaken at least annually. This
review involves the use of judgement to consider the future projected income streams that will
result from the aforementioned costs. The expected future cash flows are modelled and
discounted over the expected life of the assets in order to test for impairment. An impairment
charge of £174,085 was made in the year (2018: £nil) to write down the previously capitalised
development costs associated with the Group’s gaming experiences due to the decision taken by
the Board to suspend further development activity in this area and to concentrate on accelerating
the development of the Group’s careers education platforms.
Share-based payments
During the period, the Group has issued share-based incentives to employees and advisors in the
form of employee share options and advisor warrants. The Directors have applied the Black
Scholes pricing model to assess the costs associated with the share-based payments. The Black
Scholes model is dependent upon a number of inputs where the Directors have to exercise their
judgement, specifically:
risk free investment rate
•
• expected share price volatility at the time of the grant
• expected dividend yield
• expected level of redemption
The assumptions applied by the Directors, and the associated costs recognised in the financial
statements are outlined in note 9 to these financial statements.
59
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangible assets and capitalised
staff costs requires judgements to be made in respect of estimating the useful lives of the
intangible assets to determine the appropriate amortisation rate. Capitalised development cost
is amortised on a straight-line basis over the period during which the economic benefits are
expected to be received, which has been estimated at 3 years.
4
Revenue
Development and set up fees
Subscription, hosting and support fees
2019
£
311,941
168,644
480,585
2018
£
332,930
134,356
467,286
In the year to 31 October 2019, revenue from 3 of the Company's major customers represented
more than 10% of the Company's revenue. Revenue related to those customers was £83,358,
£79,720 and £45,388 respectively. In the year to 31 October 2018, revenue from 2 of the
Company's major customers accounted for more than 10% of the Company's revenue. Revenue
relating to those customers was £151,972 and £ 76,852 respectively.
All revenues are from external customers and can be attributed to the following geographical
locations, based on the customers' location as follows:
United Kingdom
Rest of Europe
Asia Pacific
USA
5
Expenses by nature
Cost of sales
Salary and other employee costs
Third party contractors
Less: software development costs capitalised
Amortisation of software
Impairment of capitalised software development costs
Direct materials and charges
2019
£
434,413
77
11,095
35,000
480,585
2019
£
370,598
143,982
(202,143)
11,207
174,085
24,053
2018
£
449,776
8,000
9,510
-
467,286
2018
£
-
240,636
(13,961)
-
-
34,324
Total cost of sales
521,782
260,999
60
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Administration expenses
Salary and other employee costs
Third party contractors
Depreciation
Legal, professional and regulatory fees
Information technology and telecommunications
Advertising and promotion
Travel expenses
Premises
Other administration expenses
435,975
10,000
14,692
305,208
92,844
41,738
24,121
61,217
13,865
406,177
-
11,656
153,906
34,207
24,620|
13,853
62,834
8,971
Total administration expenses
999,660
716,224
Auditors remuneration
Fees payable to the Company’s auditor and associates
Corporate finance in relation to reporting accountant
work for listing
For the audit of the Group and Company financial
statements
Other assurance services
2019
£
22,937
34,000
1,500
58,437
2018
£
35,000
-
-
35,000
6
Segmental analysis
The chief operating decision maker considers the Group's segments to be by geographical location
and by revenue type.
Revenue by geographical location
United Kingdom
Rest of Europe
Africa
Asia Pacific
USA
Revenue by geographical location
United Kingdom
Rest of Europe
Africa
Asia Pacific
USA
Educate
£
122,304
-
-
-
-
122,304
Educate
£
145,121
-
-
-
-
145,121
Year ended 31 October 2019
Engage
£
117,937
-
-
-
-
117,937
Other
£
194,172
77
-
11,095
35,000
240,344
Year ended 31 October 2018
Engage
£
189,487
-
-
-
-
189,487
Other
£
105,658
8,000
-
19,020
-
132,678
Total
£
434,413
77
-
11,095
35,000
480,585
Total
£
440,266
8,000
-
19,020
-
467,286
61
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Revenue by type
Development and set up fees
Subscription, hosting and support fees
Year ended 31 October 2019
Educate
£
27,043
95,261
122,304
Engage
£
114,637
3,300
117,937
Other
£
170,261
70,083
240,344
Total
£
311,941
168,644
480,585
Cost of sales
(139,404)
(63,620)
(318,758)
(521,782)
Gross profit / (loss) by segment
(17,100)
54,317
(78,414)
(41,197)
Operating loss by segment
(280,747)
(131,156)
(405,120)
(817,023)
Costs not allocated by segment
Total comprehensive income for the
period attributable to shareholders
(202,608)
(1,019,631)
Revenue by type
Development and set up fees
Subscription, hosting and support fees
Year ended 31 October 2018
Educate
£
62,519
82,602
145,121
Engage
£
185,062
4,425
189,487
Other
£
85,350
47,328
132,678
Total
£
332,931
134,355
467,286
Cost of sales
(85,613)
(82,228)
(87,637)
(255,478)
Gross profit / (loss) by segment
59,508
107,259
45,041
211,808
Operating loss by segment
(92,620)
(229,858)
(51,686)
(374,164)
Costs not allocated by segment
Total comprehensive income for the
period attributable to shareholders
(123,557)
(497,721)
The segmental analysis above reflects the parameters applied by the Board when considering the
Group's monthly management accounts. Costs not allocated to segments include share-based
payment expenses, listing costs, finance income and expense and taxation expenses.
62
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Financial position
Net current assets
Total assets
Financial position
Net current assets / (liabilities)
Total assets
7
Particulars of staff
Year ended 31 October 2019
Educate
£
Engage
£
Other
£
Total
£
166,300
149,470
112,286
99,380
197,124
321,053
475,710
569,903
Year ended 31 October 2018
Educate
£
Engage
£
(76,976)
(75,777)
(100,508)
(151,123)
Other
£
25,123
75,959
Total
£
(152,361)
(150,941)
The average number of persons employed by the Group, including Directors, during the year
was:
Product development
Sales and administration
The aggregate payroll costs of these persons were:
Wages and salaries
Social security costs
Pension costs – defined contribution plan
Share based payments - employee option expense
Being:
Salary and other employee costs reported within cost of
sales
Salary and other employee costs reported within
administration expenses
Less: wages and salaries capitalised within software
development costs
2019
No.
12
9
21
2019
£
683,114
64,525
11,217
47,717
806,573
2018
No.
12
3
15
2018
£
469,069
44,471
5,308
-
518,848
370,598
-
435,975
406,177
806,573
(186,678)
406,177
(112,671)
619,895
293,506
The Company employed two members of staff, being the Non-Executive Directors, at a total cost
of £31,355.
63
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Key management remuneration
Remuneration of the key management team, including Directors, during the year was as follows
Aggregate emoluments including short-term employee
benefits
Social security costs
Pension costs – defined contribution plan
Share based payments - employee option expense
2019
£
197,400
21,987
2,190
27,594
249,171
2018
£
104,721
11,254
851
-
116,826
Key management personnel include the Directors and Tim Heaton, the Chief Operating Officer.
Tim joined the Company on 1st October 2019.
Directors’ remuneration
Remuneration of the Director during the period was as follows:
Aggregate emoluments including short-term employee
benefits
Pension costs – defined contribution plan
Directors remuneration
Social security costs
Share based payments - employee option expense
8
Finance income and expense
Interest receivable on bank deposits
2019
£
184,000
2,190
186,190
20,237
27,594
234,021
2019
£
811
2019
£
2018
£
84,277
824
85,101
11,254
-
96,355
2018
£
-
2018
£
Interest expense on financial liabilities measured at
amortised cost
24,601
30,192
9
Share-based payments
Share-based payment schemes with employees
During the year ended 31 October 2019, Dev Clever Holdings plc introduced a share-based
payment scheme for employees (“the EMI share option plan"). The Scheme was created as part
of the listing process to grant existing employee’s options over the ordinary shares of the
Company and is classified as an equity settled share-based payment plan. The options granted
under the Scheme had vesting periods of up to 36 months.
64
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
There were 7,955,802 employee options granted during 2019 at an exercise price of £0.01 per
share and these vest subject to continued service by the employee over a period of 3 years.
Options expire at the end of a period of 10 years from the Grant Date of 14 January 2019 or on
the date on which the option holder ceases to be an employee. The options were valued under
the Black Scholes Model. The expense recognised in the income statement during the period
was £20,123.
Share-based payment expense with Director
On 14 January 2019, Dev Clever Holdings plc granted options to purchase 10m ordinary shares to
Nicholas Ydlibi, the Chief Financial Officer and Company Secretary. The options vest in equal
annual instalments, subject to continued service, over a period of 3 years and are exercisable at
a price of £0.01. The options expire at the end of a period of 10 years from the Grant Date of 14
January 2019 or on the date on which the option holder ceases to be an employee. The options
were valued under the Black Scholes Model. The expense recognised in the income statement
during the period was £27,594.
Advisor Warrants
As part of the listing process and as set out in the admission document, the Company issued
warrants over 2,290,000 shares to its brokers, Pello Capital (formerly Cornhill), at an exercise
price of £0.01, subject to expiry on 21 January 2024. The warrants were valued under the Black
Scholes model. The expense recognised in the income statement during the period was £10,138.
The warrants were exercised on 2 August 2019.
Under its facility agreement with Syminex, and as set out in the admission document, the
Company issued warrants over 11,826,264 shares, representing 3% of the fully diluted share
capital of the Company on admission. The shares have an exercise price of £0.01 and are subject
to expiry on 21 January 2024. The warrants were valued under the Black Scholes model. The
expense of £52,357 was recognised in the income statement during the period.
The Company has measured the fair value of the services received as consideration for equity
instruments of the Company, indirectly by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were issued during the period and the
principal assumptions used in the valuation.
During the period the Group and Company recognised a total expense of £110,212 (2018: £nil)
in the income statement in respect to share options and warrants in issue or committed to issuing
at the end of the reporting period.
The table below represents the weighted average exercise price (WAEP) of and the movements
in share options and warrants during the period:
Outstanding at beginning of the period
Issued in the period
Lapsed during the period
Exercised in the year
Outstanding at the end of the period
Exercisable at the end of the period
65
31 October
2019
No. of options
and warrants
-
32,072,065
-
(2,290,000)
29,782,065
11,826,264
WAEP
Pence
-
£0.01
£0.01
£0.01
£0.01
£0.01
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The fair values of the options and warrants granted have been calculated using the Black Scholes
model and applying the inputs shown below:
Type
Grant date
Number of options/warrants
Share price at grant date
Exercise price at grant date
Risk free rate
Option life
Expected volatility
Expected dividend yield
Expected redemption
Fair value of options/ warrants
10 Taxation
Current tax
UK corporation tax at 19% (2018: 19%)
Adjustments in respect of prior years
Deferred tax
In respect of current year
In respect of prior years
Tax on loss on ordinary activities
Tax reconciliation
Loss before taxation
Tax using UK corporation tax rate of 19% (2018: 19%)
Non-deductible expenses
Other tax adjustments
Incremental tax relief re research and development
expenditure
Restriction of relief on settlement of research and
development tax credits
Unutilised tax losses carried forward
Adjustment to deferred tax in respect of prior years
Adjustment to current tax in respect of prior years (1)
Options
14/01/2019
17,955,801
£0.01
Warrants
21/01/2019
14,116,264
£0.01
£0.01
1.30%
10 years
50.00%
0.00%
95%
£0.060
2019
£
33,366
-
33,366
11,650
-
11,650
45,016
£0.01
1.30%
5 years
50.00%
0.00%
100%
£0.044
2018
£
79,093
-
79,093
(36,685)
-
(36,685)
42,408
(1,064,647)
(540,129)
202,283
(24,482)
(20,488)
12,148
104,893
(26,574)
(12,496)
67,461
(5,090)
(24,546)
(136,319)
-
16,964
45,016
(53,838)
(12,492)
-
42,408
(1) adjustment to current tax in respect of prior year’s relates to the finalisation and
submission of research and development tax credit
66
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
11 Earnings per share
The basic earnings per share is calculated by dividing the profit attributable to equity
shareholders by the weighted average number of shares in issue. The Group has in issue
29,782,065 warrants and options at 31 October 2019. The loss attributable to equity holders and
the weighted average number of ordinary shares for the purposes of calculating diluted earnings
per ordinary share are identical to those used for the basic earnings per ordinary share. This is
because the exercise of warrants and options would have the effect of reducing the loss per
ordinary share and is therefore anti-dilutive.
2019
£
2018
£
Loss attributable to equity holders of the Group:
Continuing Operations
(1,019,631)
(497,721)
Weighted average number of shares for Basic and diluted
EPS
Basic and diluted earnings per share from continuing
operations (pence)
352,229,708
250,000,000
(0.29)
(0.20)
Adjusted loss attributable to equity holders of the
Group:
Continuing Operations
(796,649)
(361,948)
Weighted average number of shares for Basic and diluted
EPS
352,229,708
250,000,000
Basic and diluted earnings per share from continuing
operations (pence)
(0.23)
(0.14)
Weighted average number of shares for the prior year comparative represents the equity that
would have been in issue had the acquisition taken place on 31 October 2018.
The adjusted loss is calculated after adjusting for non-recurring one-off expenditure associated
with the placing and the costs of the warrants and options granted in the period
2019
£
2018
£
Loss attributable to equity holders of the Group
(1,019,631)
(497,721)
IPO expenses recognised in the period
Share-based payment - share options
Share-based payments - share warrants
112,770
47,717
62,495
135,773
-
-
Adjusted loss attributable to equity holders of the Group
(796,649)
(361,948)
67
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
12
Intangibles
Cost
At 1 November 2017
Additions
At 31 October 2018
Additions
At 31 October 2019
Amortisation
At 1 November 2017
Charge for the year
At 31 October 2018
Charge for the year
Impairment
At 31 October 2019
Net book value
At 31 October 2019
At 31 October 2018
Trademarks
£
-
3,682
3,682
-
3,682
-
-
-
-
-
-
Externally
purchased
software
£
-
-
-
7,430
7,430
-
-
-
(828)
-
(828)
Internal
use
software
£
-
127,795
127,795
204,058
331,853
-
-
-
(10,379)
(174,085)
(184,464)
Total
£
-
131,477
131,477
211,488
342,965
-
-
-
(11,207)
(174,085)
(185,292)
3,682
3,682
6,602
-
147,389
127,795
157,673
131,477
The Company's internally developed software relates to its Launchyourcareer.com and VICTAR VR
careers education platform, the associated CLEVER suite of intranet products, digital customer
loyalty applications and virtual reality gaming experiences.
An impairment review was undertaken at the balance sheet date. As part of its assessment, the
Board considered its decision to accelerate the development of the Launchyourcareer.com
platform and supporting VICTAR VR virtual reality careers experience to prepare them for launch
in North America commencing April 2020. As a result, the Directors took the decision to defer
further development of its virtual reality gaming experiences. As future revenues from the gaming
experiences are uncertain, the Directors took the decision to fully impair the carrying value of the
gaming experiences. An impairment charge of £174,085 has been recognised in cost of sales.
No further impairments were identified.
13 Property, plant and equipment
Cost
At 1 November 2017
Additions
Transfer between asset classes
At 31 October 2018
Additions
At 31 October 2019
68
Fixtures
and
fittings
£
17,673
8,148
(9,001)
16,820
1,875
18,695
Computer
equipment
Total
£
£
18,899
11,224
9,001
39,124
24,767
63,891
36,572
19,372
-
55,944
26,642
82,586
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Depreciation
At 1 November 2017
Charge for the year
Transfer between asset classes
At 31 October 2018
Charge for the year
At 31 October 2019
Net book value
At 31 October 2019
At 31 October 2018
(8,232)
(1,518)
7,425
(2,325)
(2,338)
(4,663)
(6,300)
(10,138)
(7,425)
(23,863)
(12,354)
(36,217)
(14,532)
(11,656)
-
(26,188)
(14,692)
(40,880)
14,032
14,495
27,674
15,261
41,706
29,756
An impairment review was undertaken at the balance sheet date. No impairments were
identified.
14
Investments - Group
Equity investments
2019
£
1,125
2018
£
-
The Group's investments at the balance sheet date represents share capital in the following
company:
Name of
undertaking
Country of
incorporation
Ownership
interest
Voting power
held
Nature of
business
Audoo Limited
UK
0.45%
0.45%
Audio devices
The Company holds 750 Ordinary A shares held in Audoo Limited, a developer of audio meters
to support performance rights organisations to track played music.
The fair value does not differ materially to the carrying value at the period end.
Investments - Company
Cost and carrying value
As at 26 September 2018
Additions
As at 31 October 2019
Shares in
subsidiaries
£
-
2,500,000
2,500,000
Details of the Company's subsidiaries at 31 October 2019 are as follows:
Name of
undertaking
Country of
incorporation
Ownership
interest
Voting power
held
Nature of
business
DevClever
Limited
UK
100%
100%
Digital media
69
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The Company's interest in Dev Clever Limited was acquired on 2nd October 2018. The
registered office of Dev Clever Limited is Ventura House, Ventura Park Road, Tamworth, B78
3HL.
15 Trade and other receivables - Group
Trade receivables
Less: Provision for impairment of trade receivables
Prepayments
Accrued income
Income taxes
Taxation and social security
Other receivables
The ageing of trade receivables that were not impaired at
31 October was:
Not past due
Up to three months past due
More than three months past due
2019
£
62,346
(11,765)
50,581
33,522
-
16,402
6,109
50,000
156,614
2019
£
22,692
24,869
3,020
50,581
2018
£
89,263
(4,500)
84,763
6,261
10,734
79,093
-
1,233
182,084
2018
£
36,588
28,765
19,410
84,763
Accrued income and other receivables are not past due (2018: not past due).
The Company trades only with recognised, credit-worthy third parties. Receivable balances are
monitored on an ongoing basis with the aim of minimising the Company's exposure to bad debts.
The Company has reviewed in detail all items comprising the above not past due and overdue
but not impaired trade receivables to ensure that no impairment exists. As at 31 October 2019,
trade receivables of £11,765 (2018: £4,500) were impaired and provided for. The amount of the
provision was £11,765 at 31 October 2019 (2018: £4,500). Movements on the provision for
impairment of trade receivables are as follows:
At 1 November
Provision for impairment of receivables released /
(charged)
Receivables written off during the year
At 31 October
2019
£
(4,500)
(11,765)
4,500
(11,765)
2018
£
-
(4,500)
-
(4,500)
The other classes within trade and other receivables do not contain impaired assets. The
maximum exposure to credit risk for trade and other receivables at the reporting date is the
carrying value of each class of receivable disclosed above.
70
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The carrying amounts of all the Company's trade and other receivables are denominated GBP
Sterling.
Trade and other receivables - Company
Amounts owed by Group undertakings
Prepayments
Taxation and social security
Other receivables
2019
£
1,134,404
17,418
6,109
267,541
1,425,472
Accrued income and other receivables are not past due (2018: not past due).
On 21 January 2019, the Company provided an intra-group loan facility to its subsidiary, Dev
Clever Ltd for £1,233,000, following its admission to the Standard List of the London Stock
Exchange and the receipt of the placing proceeds. The loan, which is unsecured and
repayable on demand, bears interest at 4.75% above the Bank of England Base Rate. Dev Clever
Limited had drawn down £1,134,404 as at 31 October 2019.
The other classes within trade and other receivables do not contain impaired assets. The
maximum exposure to credit risk for trade and other receivables at the reporting date is the
carrying value of each class of receivable disclosed above.
The carrying amounts of all the Company's trade and other receivables are denominated GBP
Sterling.
16 Trade and other payables - Group
Current
Trade payables
Accruals
Deferred income
Other taxation and social security
Other payables
2019
£
(12,048)
(75,110)
(603)
(36,645)
(11,678)
(136,084)
2018
£
(34,104)
(73,118)
(4,283)
(32,858)
(5,077)
(149,440)
The carrying amounts of all the Group’s trade and other payables are denominated GBP Sterling.
Trade and other payables - Company
Trade payables
Accruals
Other taxation and social security
Other payables
71
2019
£
(409)
(67,910)
(1,304)
(2,489)
(72,112)
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
The carrying amounts of all the Company's trade and other payables are denominated GBP
Sterling.
17 Loans and Borrowings
The Directors believe the book value of loans and borrowings approximates fair values. Books
values are:
Unsecured loans
- Crowdfunding
Collateralised borrowings
Non-current
Unsecured loans
- Crowdfunding
2019
£
(47,727)
-
(47,727)
2018
£
(47,694)
(210,000)
(257,694)
(89,847)
(89,847)
(131,699)
(131,699)
Total loans and borrowings
(137,574)
(389,393)
All the Group's loans and borrowings are denominated in GBP Sterling. The Group has no
committed borrowing facilities.
On 3 October 2017, the Group obtained a loan of £50,000, net of transaction costs of £2,750 from
Funding Circle at an effective interest rate of 10.7%. The loan is repayable in monthly instalments
of £1,067 over a 5-year term and is secured by way of a personal guarantee by Christopher
Jeffries, Director.
On 9 April 2018, the Group obtained a loan of £152,413, net of transaction costs of £9,729 from
Crowd2Fund at an effective interest rate of 14.2%. The loan is repayable in monthly instalments
of £4,112 over a 4-year term and is secured by way of a personal guarantees
by Christopher Jeffries (Director), Katie Jeffries (spouse of Christopher Jeffries) and Nicholas Ydlibi
(Director).
On 12 June 2018, the Group entered into a secured convertible loan facility with Acqam
International FZE in the aggregate amount of £200,000. The purpose of the loan was to cover
the initial costs of the listing process and to provide additional working capital. The Company
had drawn £100,000 under the facility prior to it being repaid in full on or around 15 August 2018.
On 10 August 2018, the Group entered into a secured convertible loan facility with Syminex FZE
in the aggregate amount of £210,000. The Group withdrew £210,000 to repay the loans drawn
under the Acqam International FZE Facility of £110,000, inclusive of interest, and a further
£100,000 for general working capital purposes. The facility, which expired on 21 January 2019,
bore interest of 10%, payable when the amount of interest exceeds £11,000. The associated
fixed and floating charges over the assets of Dev Clever Limited were released on conversion of
the loan.
Syminex elected to convert the outstanding balance of the loans drawn into ordinary shares of
the parent company, Dev Clever Holdings plc, at the placing price of £0.01 per ordinary share, on
its admission to the London Stock Exchange on 21 January 2019. Under the facility, the Group
72
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
has also undertaken to procure the grant of warrants for 3% of the fully diluted share capital of
Dev Clever Holdings plc on Admission at the placing price of £0.01 per share exercisable for a
term of 5 years from admission.
18 Deferred tax - Group
The elements of deferred taxation are as follows
Accelerated capital allowances and intellectual property
(16,464)
(28,114)
2019
£
2018
£
Movement in deferred tax:
At 1 November 2017
Credited to income statement
At 31 October 2018
Charged to income statement
At 31 October 2019
Accelerated
capital
allowances
and
intellectual
property
£
8,571
(36,685)
(28,114)
11,650
(16,464)
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set
off current tax assets and current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same tax authority.
19 Financial instruments and financial risk management –
Group
The Group is exposed to a variety of financial risks that arise from its use of financial instruments:
credit risk, liquidity risk, foreign exchange risk and capital risk
Principal financial instruments
The principal financial instruments used by the Group from which financial instrument risk arises
are as follows:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
• Debt finance
73
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Financial assets
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Other financial liabilities
Trade and other payables
Loans and borrowings
2019
£
140,212
496,707
636,919
2018
£
102,991
72,689
175,680
(136,084)
(137,574)
(273,658)
(149,440)
(389,393)
(538,833)
Disclosures in respect of the Company's financial risks are set out below:
Financial risk management
The Company’s activities expose it to credit, liquidity and foreign exchange risks. The Company's
overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Company's financial performance.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from trade receivables
from customers and cash deposits with financial institutions. The Company's exposure to credit
risk is influenced mainly by the individual characteristics of each customer. Credit checks are
performed on new and potential customers and receivable balances are monitored on an
ongoing basis with the aim of minimising the Company's exposure to bad debt. The Directors
consider the above measures to be sufficient to control the credit risk exposure.
The Company gives careful consideration to which organisations it uses for its banking services
in order to minimise credit risk. At the reporting date, the Company's cash held on short-term
deposit with Santander Bank plc in the United Kingdom was £496,707 (2018: £72,689).
The carrying amount of financial assets recorded in the consolidated financial statements
represents the Company's maximum exposure to credit risk without taking into account the value
of any collateral obtained. In the Directors’ opinion there have been no impairments of
financial assets in the period, other than in relation to trade receivables written off of £11,765
(2018: £4,500).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The Group manages its cash flows to ensure that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or damage to the Group's reputation. During the course of the year, the
Group has raised additional equity finance to support to on-going development and
commoditisation of its software portfolio.
On 14 December 2018, the Group raised £335,000 by way of a pre-IPO placing of 33,500,000
ordinary shares of £0.01 at par value
74
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
On 21 January, the Group raised gross proceeds of £678,000 through its Initial Public Offer with
£590,000 arsing on the placing of 59,000,000 ordinary shares of £0.01 at par value and a further
£88,000 arising through a subscription for 8,800,000 ordinary shares of £0.01 at par value.
On 2 August 2019, the Group raised £22,900 on the exercise of advisor warrants over 2,290,000
£0.01 ordinary shares at an exercise price of £0.01.
On 22 August, the Group raised gross proceeds of £435,599 through a placing of 12,811,736
ordinary shares of £0.01 at a placing price of £0.034.
The Directors manage liquidity risk by regularly reviewing the Group's cash requirements by
reference to short-term cash flow forecasts and medium-term working capital projections
prepared by management.
Foreign exchange risk
The vast majority of the Company's revenues and costs are in Sterling (the Company’s functional
currency) and involve no currency risk. Activities in currencies other than Sterling are funded as
much as possible through operating cash flows, mitigating foreign exchange risk.
The Company has the following cash and cash equivalent deposits:
Sterling
2019
£
2018
£
496,707
72,689
The gross value of receivables and payables by currency is disclosed in notes 15 and 16
respectively. The Group has the following net other financial instruments:
Sterling
2019
£
2018
£
359,133
(316,704)
Maturity of financial assets and liabilities
Financial liabilities include two loans with outstanding balances of £32,978 (2018: £46,063) and
£104,596 (2018: £152,413). The total amount payable in more than one year from the reporting
date is £89,847 (2018: £159,073) analysed as follows:
Amounts repayable within 1 year
Amounts repayable within 1 to 2 years
Amounts repayable within 2 to 5 years
Total
2019
£
47,727
53,978
35.869
137,574
2018
£
251,960
47.587
89,846
389,393
The Company's other financial assets and liabilities at each reporting date are either receivable
or payable within one year.
75
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Capital management
The Company's capital structure is comprised of a combination of shareholders’ equity and
external loan finance. The objective of the Company when managing capital is to maintain
adequate financial flexibility to preserve its ability to meet financial obligations, both current
and long term. The capital structure is managed and adjusted to reflect changes in economic
conditions. The Company funds its expenditures on commitments from existing cash and cash
equivalent balances, primarily received from operating cash flows and from the crowd funding
loans received. There are no externally imposed capital requirements. Financing decisions are
made by the Directors based on forecasts of the expected timing and level of capital and
operating expenditure required to meet the Company's commitments and development plans.
20 Share capital and reserves
Share Capital - Group and Company
Number of
shares issued
and fully paid
No.
Share capital
£
388,401,736
3,884,017
-
1
-
-
249,999,999
2,500,000
33,500,000
335,000
67,800,000
678,000
22,000,000
220,000
2,290,000
22,900
12,811,736
128,117
388,401,736
3,884,017
2019
£
-
(2,499,900)
(2,499,900)
2018
£
-
-
-
Ordinary share capital
Issued and fully paid Ordinary shares of £0.01 each
Reconciliation of movement during the year:
As at 1 November 2017
Ordinary share of £0.01 issued at £0.01 on incorporation
on 26 September 2018
Ordinary shares of £0.01 issued on 2 October 2018 for
shares in DevClever Limited
Ordinary shares of £0.01 issued at £0.01 on 14 December
2018 for cash
Ordinary shares of £0.01 issued at £0.01 on 21 January
2019 for cash
Ordinary shares of £0.01 issued at £0.01 on 21 January
2019 on conversion of loan
Ordinary shares of £0.01 issued at £0.01 on 2 August
2019 for cash
Ordinary shares of £0.01 issued at £0.034 on 22 August
2019 for cash
Merger reserve – Group
At the beginning of period
Transfer to merger reserve arising from accounting
treatment of acquisition of subsidiary
76
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Share premium account - Group and Company
At beginning of period
Premium arising on issue of new shares
Share issue expenses
Share-based payments reserve – Group and Company
At the beginning of period
Compensation expense recognised in period arising on
issue of share options
Fair value of advisor warrants issued in period
Retained earnings - Group
At the beginning of period
Loss for the year
Dividends paid
Retained earnings - Company
At the beginning of period
Loss for the year
2018
£
-
-
-
-
2018
£
-
-
-
-
2018
£
371,680
(497,721)
(25,000)
(151,041)
2019
£
-
307,482
(61,236)
246,246
2019
£
-
47,717
62,495
110,212
2019
£
(151,041)
(1,019,631)
-
(1,170,672)
2019
£
-
(61,741)
(61,741)
21 Operating lease commitments - Group
At 30 April 2018, the Company had aggregate minimum lease payments under non-cancellable
operating leases for office and other sites as follows:
Due within 1 year
Due within 2-5 years
2019
£
33,500
67,000
100,500
2018
£
33,500
100,500
134,000
On 3 October 2017, the Company moved into new premises at Unit 1, Ninian Park, Ninian Park
Way, Tamworth. The associated initial lease term expires on 24 December 2022 and carries an
annual charge of £33,500.
77
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
22 Capital commitments – Group and Company
As at 31 October 2019 and 31 October 2018 there were no capital commitments.
23 Related party transactions - Group
31 October 2019
31 October 2018
Income /
(expense)
in year
Amounts
Outstanding
Income /
(expense)
in year
Amounts
Outstanding
Aggregate emoluments
CM Jeffries
NAR Ydlibi
T Heaton
CB Forrest
DR Ivy
Share option expense
NAR Ydlibi
Staff expense advances
CM Jeffries
Purchases
Clever Dev
Dev Clever Consortium
Sales
Forever Worldwide
90,095
66,095
13,400
15,000
15,000
199,590
27,594
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49,292
35,810
-
-
-
85,102
-
-
-
-
-
-
-
-
Director
Director
Key management
Director
Director
Director
1,000
248
Director
21,618
81,164
102,782
4,000
4,000
-
-
-
-
-
CM Jeffries, Director and shareholder in Dev Clever Holdings is also a Director and shareholder of Clever
Dev, Dev Clever Consortium and Forever Worldwide Limited.
Save as disclosed above, none of the key management personnel of the Company owe any amounts to
the Company (2018: £nil), nor are any amounts due from the Company to any of the key management
personnel (2018: £nil).
Related party transactions - Company
Aggregate emoluments
CB Forrest
DR Ivy
31 October 2019
Income /
(expense
in year)
15,000
15,000
30,000
Amounts
Outstanding
-
-
-
78
Director
Director
DEV CLEVER HOLDINGS PLC
Year ended 31 October 2019
Intra-Group
transactions
Dev Clever Limited
- Parent company loan
- Accrued interest
- Management services
1,233,000
52,414
165,127
1,450,541
1,134,404
52,414
165,127
1,351,945
Group Company
Group Company
Group Company
Group Company
24 Ultimate controlling party - Group and Company
Christopher Michael Jeffries, the CEO and Executive Chairman of Dev Clever Holdings plc, has
ultimate control of the Group through his ownership of 64.37% of the issued share capital of the
holding company, as at 31 October 2019.
On 31 January 2020 the controlling shareholder, Christopher Jeffries, sold 50,000,000 ordinary
shares of 1p each reducing his holding to 200,000,000 ordinary shares, representing 46.28 per
cent of the Company’s issued share capital. The net proceeds of the disposal, of £400,000, were
re-invested back into the Company by way of a convertible loan entitling Christopher Jeffries to
convert his loan back into ordinary shares of 1p each (see note 25).
25 Events after the Reporting Period - Group and Company
On 21 January 2020 the Group issued 43,785,107 new ordinary shares of 1p at par value, raising
gross proceeds of £437,785 through a placing and subscription.
On 31 January 2020 the controlling shareholder, Christopher Jeffries, sold 50,000,000 ordinary
shares of 1p each that he held in the capital of the Company to third party purchasers procured
by its broker, Novum Securities Limited, at 1p per share (“Sale”). On completion of the Sale,
Christopher Jeffries holding reduced to 200,000,000 ordinary shares, represented 46.28 per cent
of the Company’s issued share capital.
At the same time as reducing his holding in the Company, Christopher Jeffries and the Company
entered into a convertible loan note agreement, pursuant to which the net proceeds of his share
sale, amounting to £400,000 after tax, costs and commission, were provided to the Company as
a subscription amount for convertible loan notes.
The loan notes are convertible into ordinary shares of 1p each at Christopher Jeffries’ option, at
any time, subject to, among other things, the Company not being required to publish a
prospectus in connection with the issue of shares on conversion of the notes and no obligations
under Rule 9 of the City Code on Takeovers and Mergers being triggered by such an issue of
shares. Unless previously repaid or converted, the loan notes will be redeemed at par by the
Company on their fifth anniversary. The Notes bear a zero coupon.
79