REG - Supply@ME Capital - Independent Auditor's Report

Supply@Me CapitalAnnouncement

09/05/2024 17:15

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RNS Number : 8693N  Supply@ME Capital PLC  09 May 2024

 

9 May 2024

Supply@ME Capital plc

(the "Company", "Supply@ME" or "SYME" and, together with its subsidiaries, the
"Group")

Independent Auditor's Report

SYME, the fintech business which provides an innovative fintech platform (the
"Platform") for use by manufacturing and trading companies to access Inventory
Monetisation© ("IM") solutions enabling their businesses to generate
cashflow, following the announcement of and with reference to its 2023 Annual
Report and Accounts provided on the 1 May 2024, provides the full independent
auditor's report received from its auditors, Crowe U.K. LLP, dated 30 April
2024. SYME expects to publish the full Annual Report and Accounts on its
website shortly.

Independent auditor's report to the members of Supply@ME Capital plc

Opinion

We have audited the financial statements of Supply@ME Capital plc (the
"Company") and its subsidiaries (the "Group") for the year ended 31 December
2023 which comprise the consolidated statement of comprehensive income, the
consolidated and company statements of financial position, the consolidated
and company statements of changes in equity, the consolidated statement of
cashflows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in the preparation of the group financial statements is applicable law and
UK-adopted international accounting standards. The financial reporting
framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland (United Kingdom
Generally Accepted Accounting Practice).

In our opinion:

·    the financial statements give a true and fair view of the state of
the Group's and of the Company's affairs as at 31 December 2023 and of the
Group's loss for the year then ended;

·    the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;

·    the parent company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted Accounting Practice; and

·    the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.

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 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.

Material uncertainty relating to going concern

We draw your attention to note 2 which indicates the existence of
uncertainties in relation to assumptions about future trading and the quantum
and timing of financing transactions that support the going concern basis of
preparation. As stated in note 2, these events or conditions, along with other
matters as set forth in note 2 indicate that a material uncertainty exists
that may cast significant doubt on the Group's and company's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.

In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group and company's ability to continue to adopt the going
concern basis of accounting included:

·    we reviewed and challenged the forecast revenues and agreed, where
possible, to underlying term sheets. The resulting cash flows within the
assessment period are uncertain and this fact is disclosed in note 2;

·    we challenged management over the forecast of cash inflows from
financing activities, the receipt of which the going concern assumption is
reliant on. We removed these cashflows from the model to ascertain whether
they were material to the model. The reliance on the model to these inflows
and the uncertainty over the quantum and timing are disclosed in note 2;

·    we tested the mathematical accuracy of the model;

·    we reviewed forecast cost assumptions having regard to historic
experience and current trading levels;

·    we agreed the appropriateness of the time period covered by the
assessment; and

·    we reviewed the appropriateness of the disclosure made and its
consistency with our review of the going concern assessment.

Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.

Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £208,000 (2022 £600,000), based on
approximately 5% of the loss before tax for the year. Materiality for the
parent company financial statements as a whole was set at £190,000 (2022:
£310,000) based on 4% of its individual result.

We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements.  Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment.  We determined performance materiality to be £124,800 (2022
£360,000) for the Group and £114,000 (2022: £186,000) for the parent
company. Where considered appropriate performance materiality may be reduced
to a lower level, such as, for related party transactions and directors'
remuneration.

We agreed with the Audit Committee to report to it all identified errors in
excess of £10,000 (2022: £7,200). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.

Overview of the scope of our audit

As at 31 December 2023, the group consists of three components, Supply@ME
Capital plc, a holding company based in London, United Kingdom and its trading
subsidiaries, Supply@ME Srl and Supply@ME Technologies Srl both based in
Italy. Supply@ME Capital plc was audited by us and was conducted from the UK.
Audit work on the significant non-UK components being Supply@ME Srl, and
Supply@ME Technologies Srl were carried out by a member of the Crowe Global
network as component auditor. Limited procedures were performed by a member of
the Crowe Global network on disclosures relating to TradeFlow Capital
Management Pte Ltd, which is based in Singapore, a component which was
disposed of in the year.

In establishing our overall approach to the Group audit, we determined the
type of work that needed to be undertaken at each of the components by us, as
the primary audit engagement team. For the full scope components in Italy,
where the work was performed by component auditors,

we determined the appropriate level of involvement to enable us to ensure
that sufficient appropriate audit evidence had been obtained as a basis for
our opinion on the Group as a whole.

The primary team led by the Senior Statutory Auditor was ultimately
responsible for the scope and direction of the audit process. The primary
team, using technology, interacted regularly with the component teams where
appropriate during various stages of the audit, reviewed working papers and
were responsible for the scope and direction of the audit process. This,
together with the additional procedures performed at Group level, gave us
appropriate evidence for our opinion on the Group financial statements.

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
year 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 relating to
going concern above, we have determined the matter described below to be the
key audit matter to be communicated in our report.

 Key audit matter                                                                 How our scope addressed the key audit matter
 Disposal of TradeFlow Capital Management Pte Ltd                                 To assess the adequacy of the accounting for the presentation as Assets held

                                                                                for sale and Discontinued operations:
 As disclosed in note 26 to the financial statements, during the year the group

 disposed of 81% of TradeFlow Capital Management Pte Ltd. The conditions for      ·    We agreed the sale transaction to the signed share purchase
 discontinued operations were met and this has had a pervasive impact across      agreement, noting the key terms.
 the primary financial statements and related notes.

                                                                                ·    We reviewed the disclosures having regard to the requirements of IFRS
 In addition, linked to this transaction, the group was left with a 19%           5.
 residual interest that is accounted for at fair value, which is inherently

 judgmental and the consideration for the transaction was novated to The          ·    We considered the criteria for significant influence to exist which
 AvanteGarde Group and was not settled by 31 December 2023.                       could impact the accounting for the residual interest.

 Given the size and importance of the disposal of TradeFlow Capital Management    ·    We challenged managements calculation of the Fair value of the
 Pte Ltd and the additional accounting considerations that arose this was a key   residual interest at the disposal and reporting date and a downward fair value
 area of focus for our audit.                                                     adjustment was recorded following our challenge.

                                                                                  ·    We performed specified procedures on the result of the entity prior
                                                                                  to disposal and the assets and liabilities at the disposal date.

                                                                                  ·    We recalculated the associated gain on disposal, including agreeing
                                                                                  the consideration to the share purchase agreement and agreeing the net assets
                                                                                  disposed to supporting documentation.

                                                                                  ·    We assessed the recoverability of the consideration receivable.

                                                                                  Key observation:

                                                                                  We concluded that the accounting for the sale of TradeFlow Capital Management
                                                                                  Pte Ltd was appropriate.

Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.

Other information

The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report.

Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.

In our opinion based on the work undertaken in the course of our audit

·    the information given in the strategic report and the directors'
report for the financial 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 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 company, or
returns adequate for our audit have not been received from branches not
visited by us; or

·    the 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.

Responsibilities of the directors for the financial statements

As explained more fully in the statement of directors' responsibilities set
out on page 114, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for
assessing the 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.

Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:

·    enquiry of management and those charged with governance about the
Company's policies, procedures and related controls regarding compliance with
laws and regulations and if there are any known instances of non-compliance;
the laws and regulations we considered in this context were relevant company
law and taxation legislation;

·    examining supporting documents for all material balances,
transactions and disclosures;

·    review of the Board of directors and the Audit Committee minutes;

·    enquiry of management about litigations and claims and inspection of
relevant correspondence;

·    evaluation of the selection and application of accounting policies
related to subjective measurements and complex transactions;

·    analytical procedures to identify any unusual or unexpected
relationships;

·    testing the appropriateness of journal entries recorded in the
general ledger and other adjustments made in the preparation of the financial
statements;

·    review of accounting estimates for biases; and

·    Communications with component auditors to request identification of
any instances of non-compliance with laws and regulations that could give rise
to a material misstatement of the group financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.

A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.

Other matters which we are required to address

We were appointed by management on 22 September 2020 to audit the financial
statements for the period ending 31 December 2019. Our total uninterrupted
period of engagement is 5 years, covering the periods ending 31 December 2019
to 31 December 2023.

The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the company and we remain independent of the group
and the company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit
committee.

Use of our report

This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.

 

Leo Malkin

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London

 

30 April 2024

 

Contact information

Alessandro Zamboni, CEO, Supply@ME Capital plc, investors@supplymecapital.com
(mailto:investors@supplymecapital.com)

Notes

SYME and its operating subsidiaries provide its Platform for use by
manufacturing and trading companies to access inventory trade solutions
enabling their businesses to generate cashflow, via a non-credit approach and
without incurring debt.  This is achieved by their existing eligible
inventory being added to the Platform and then monetised via purchase by third
party Inventory Funders.  The inventory to be monetised can include
warehoused goods waiting to be sold to end-customers or goods that are part of
a typical import/export transaction.

 

 

 

 

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