The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

3 December 2019

BLOCK COMMODITIES LIMITED

("Block Commodities" or the "Company")

Block Commodities Limited / Epic: BLCC / Sector: Mining

Final Results

Block Commodities Limited is pleased to announce its final audited results for the year ended 30 June 2019 (the "Annual Report and Accounts 2019"). 

Copies of the Annual Report and Accounts 2019 will be made available on the Company's website at www.blockcommodities.com.

Chairman's Statement

During the year under review, the Company continued its evolution from solely a junior exploration company with its Lac Dinga potash exploration licence, to a forward-thinking agri-tech company in sub-Saharan Africa, deploying new technologies to maximise value in African agriculture.

Farmer 3.0 Eco system

Leveraging its connections in Africa, the Company has worked on developing a platform to empower small scale farmers ("SSF") to raise productivity and secure better returns for produce, while establishing African communities as significant future global agricultural players. The platform uses blockchain technology to provide loans of utility tokens to the SSF which are then used to procure inputs from the Company.  The loans are repaid by the delivery of outputs, either direct to a contracted off-taker or to Company warehouses where a system of warehouse receipts will enable SSF produce to be consolidated and traded on local commodities exchanges, further enhancing the return to the SSF and the Company. Over time, as the volume of commodities traded on the local and regional exchanges scales up, the purchase of inputs will be secured with derivatives traded on these exchanges.  The blockchain will be fundamental to the development of this Ecosystem.

During the year, the key partnerships to build this platform were put in place and pilot projects in Zambia and Uganda were established. However delays in procuring inputs lead to these being postponed. No trading has been possible in the year under review.

Lac Dinga

The Company retains its interest in the exploration side of the fertiliser industry through its 70% interest in La Société des Potasses et des Mines S.A. ('SPM'), which holds the exclusive right to conduct exploration activities for potash salts over the Lac Dinga Project Area ('Lac Dinga' or the 'Project') in highly prospective Kouilou region in the Republic of Congo.

After extensive delays, the licence was formally renewed for a further two year period in July 2019. The renewal of the license was the key condition precedent to moving forward with the project. With the rainy season commencing in October, no significant work was able to be undertaken by our farm-in partner, African Agronomix limited ("AAX"). Preliminary planning work for a 10,000 m drilling campaign has been carried out. As set out in note 11 to the financial statements, the Company undertook an impairment review of the project and a key assumption was that AAX would mobilise to start the work set out in the agreement.

Financial Results

The trading result for the year showed a net trading loss of $nil (2018: $12,000) as existing inventory and receivables were unwound. Operating expenses were reduced to $0.7m (2018: $1.0m). After other gains of $0.1m, and the impairment charge in respect of the Company's investment in Vipa of $0.1m (2018: impairment charges of $0.2m) the loss before interest fell to $0.7m (2018: 1.1m).  Finance charges for the period were $0.4m (2018: $0.4m) which led to the Group reporting a loss before and after tax of $1.1m (2017: $1.5m). During the year the Company raised $27,000 in equity and $333,000 in new convertible debt. Accordingly, the Group is reporting net liabilities of $0.9m (2018: net assets $0.1m). This includes current liabilities of $4m (2018: $3m) which includes $1.2m of accrued expenses (2018: $0.8m).

Subsequent to the year end, the convertible notes have converted automatically into equity and additional equity has been raised. In addition, the Company is in negotiation to restructure its $1.6m loan facility with its lender and should the loan be converted into shares then shareholders holding will be diluted accordingly. Cash balances at 30 June 2019 were $80,000 (2018: $153,000).

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out above and the risks facing the business are outlined within the Corporate Governance report..  Note 4 to the financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. 

The board has detailed its considerations relating to Going Concern in note 1 of the financial statements.  The Group's forecast cash-flows are dependent on the negotiation and fulfillment of new contracts that are not yet finalised and the successful conclusion of related financing lines.  Without these cash-flows the Group will need to raise additional finance either through borrowing or the issue of new equity. In addition, the bridge loan facility (see note 17) fell due for repayment on 1 September 2019. Negotiations to restructure the facility are being held with the lender.  Notwithstanding this uncertainty, the directors are confident that, with an anticipated equity raise, renegotiation of the loan facility and current cash there will be sufficient cash resources to enable the Group to pay debts as they fall due and to continue the development of its operations for the foreseeable future and thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. The auditors have made reference to going concern as a material uncertainty within their audit report.

Outlook

With the renewal of the Lac Dinga, license and the farm in agreement with AAX, the Group and its partners are in a position to progress the project and establish a stake in a potash resource, a key agricultural input. The farm-in agreement provides that AAX will both manage and fund the work program, with no significant demand on the Group's financial or management resources in the initial two phases of the project through to the initial publication of a resource estimate. Should a commercial resource be confirmed, then the Group has a right to participate or bring in additional partners as the project progresses.

In addition the board are aiming to expand the company's current investment focus, which aims to maximise the value of African agricultural commodities through the deployment of blockchain technology, to enable the Company to invest in projects in the developing market for producing and/or distributing Medicinal Cannabis, derivatives of it and/or related products.

The Company has sent a circular to shareholders today asking them to consider whether the Company should make investments in the Medicinal Cannabis sector. These products could include but would not be limited to nutraceuticals, dietary supplements and cosmetic products which contain cannabis or hemp (cannabis which contains less than 0.2% tetrahydrocannabinol ("THC") and THC derived cannabinoids.

The board has already taken legal advice on the new strategy and the countries where it initially intends to operate. This advice has confirmed that, in principle, the intended strategy of the Company does not breach the United Kingdom's Proceeds of Crime Act 2002.

On 21 November 2019, the Board was strengthened with the appointment of Ian Tordoff as Chief Executive Officer of the Company. He has extensive experience in tracking the evidence base for the efficacy of cannabidiol (CBD) and tetrahydrocannabinol (THC), two natural compounds found in cannabis plants and their associated treatments. Furthermore, he has built strong relationships through this work with relevant producers, laboratories, "brands" and customers.

In addition to Ian's appointment, the Company is looking to build a strong Scientific Advisory Team of external consultants to assist the board in implementing this investment strategy if approved by shareholders at the coming General Meeting.

The Board, in addition to its Lac Dinga asset, believe that the Company now has a firm foundation upon which to build a growing revenue generating business and look forward to reporting continued progress in the current year.

Chris Cleverly

Chairman

2 December 2019

DIRECTORS' REPORT for the year ended 30 June 2019

The directors of Block Commodities Limited ("Block Commodities" or the "Company") hereby present their report together with the audited Consolidated Financial Statements for the year ended 30 June 2019.

Principal activities, business review and future developments

A review of the Group's activity and prospects is given in the Chairman's Statement on pages 2 to 3.  During the year under review the Group's principle activities were the continued development of a trading platform for agricultural inputs using blockchain technology and working to renew the Lac Dinga potash exploration licence.  The Group also announced it was looking to invest into the Medicinal Cannabis and Wellness market, where it is envisaged that the blockchain will be influential. A review of the risks and uncertainties impacting on the Group's long term performance is included in the Corporate Governance report on pages 7 to 9. Details of the Group's exposure to foreign exchange and other financial risks are included in note 4.

Results and dividend

The Group results show a loss after taxation for the year attributable to the equity holders of the Company of $1.1m (2018 loss $1.5m).  The directors do not recommend payment of a dividend (2018: $nil).

Post balance sheet events

On 12 July 2019, the Lac Dinga exploration license was formally renewed by the government of the republic of Congo (see note 11).

On 15 November 2019, the group announced that it had raised £388,000 through the issue of £133,000 new ordinary shares at a price of 0.02p and  £255,000 of Convertible Loan Notes with a conversion price of £0.0002 per ordinary share These convert automatically into equity once the necessary authorities had been obtained at the Annual general meeting held on 13 May 2019 and were formally issued on 15 November 2019.

Directors

The directors who served since 1 July 2018 were as follows:

* member of the audit and remuneration committees

Directors' interests

The directors serving during the year had the following beneficial interests in the shares of the Company:

The following share options and warrants have been granted to directors and remain unexercised at the year end:

Options:

Warrants:

No share options or warrants were exercised by directors during the year (2018: $nil). 

On 15 November 2019 CJ Cleverley was allotted a further 379,144,700 shares as payment of fees and settlement of arrears, reducing creditors by $90,000.

On appointment on 21 November IC Tordoff held 300,000,000 zero cost options to subscribe for new ordinary shares, of which 150,000,000 have vested and 150,000,000 will vest when the Company's share price is in excess of £0.002 for a period of 14 consecutive days.

There have been no other changes in directors' interests in shares or options between 1 July 2019 and the date of this report.

Substantial shareholdings

To the best of the knowledge of the board, except as set out in the table below, there are no persons who, as of the date of this report, are the direct or indirect beneficial owners of, or exercise control or direction over 3% or more of the Ordinary Shares in issue of the Company.

Employee involvement policies

The Group places considerable value on the awareness and involvement of its employees in the Group's performance.  Within bounds of commercial confidentiality, information is disseminated to all levels of staff about matters that affect the progress of the Group and that are of interest and concern to them as employees.

DIRECTORS' REPORT for the year ended 30 June 2019 (continued)

Creditors' payment policy and practice

The Group's policy is to ensure that, in the absence of dispute, all suppliers are dealt with in accordance with its standard payment policy to abide by the terms of payment agreed with suppliers when agreeing the terms of each transaction. Suppliers are made aware of the terms of payment.

Social and community issues

The Group recognises the value of employment and training to the continued economic growth in the countries in which it operates.  The Group is developing policies to ensure its expertise and specialist skills and facilities are made available to the broader community.

Environmental issues

The Group places great emphasis upon good environmental practice and respect for local community values.

African empowerment

As its ambitions for growth and diversification are realised, the Group will seek to empower, upskill and recruit local African staff, providing new opportunities for jobs of all skills including senior management.

Provision of information to auditor

The directors who were in office on the date of approval of these financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the directors have confirmed that they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

Auditors

PKF Littlejohn LLP has indicated its willingness to continue in office and a resolution to reappoint them will be presented to the annual general meeting.

Electronic communications

Additional information on the Company can be found on the Company's website at www.blockcommodities.com.

The maintenance and integrity of the Company's website is the responsibility of the directors; the work carried out by the auditor does not involve consideration of these matters and accordingly, the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

The Company's website is maintained in compliance with NEX exchange rule 75.

On behalf of the Board

CJ Cleverly

Chairman

2 December 2019

CORPORATE GOVERNANCE

The board of directors is accountable to the Company's shareholders for good corporate governance. The Company is not required, by the rules of the NEX exchange, to adopt the UK Corporate Governance Code. However, set out below is a summary of how, at 30 June 2019, the Group was dealing with corporate governance issues.

The Board of Directors

The Group is led and controlled by a board comprising the chairman, chief executive and two non‑executive directors. The board is responsible for formulating, reviewing and approving the Group's strategy, budgets and corporate actions.

There are no matters specifically reserved to the board for its decision, but no decision of any consequence is made other than by the directors.  There is no separate Nomination Committee due to the current size of the board and any new directors are appointed by the whole board.

The board has a Remuneration Committee, chaired by Mark Simmonds and an Audit Committee chaired by Mark Simmonds.

There is no agreed formal procedure for the directors to take independent professional advice at the Company's expense.

The Company has adopted a share dealing code for directors' dealings which is appropriate for a company quoted on the NEX Exchange Growth Market. The Directors comply with Rule 71 of the NEX Exchange Rules relating to directors' dealings and take all reasonable steps to ensure compliance by the Group's employees.

The Company's directors submit themselves for re-election at the Annual General Meeting at regular intervals in accordance with the Company's Articles of Association.

Relations with Shareholders

The Executive Chairman is the Group's principal spokesperson with investors, fund managers, the press and other interested parties. At the Annual General Meeting, investors are given the opportunity to question the board.

Compliance with relevant legislation

All directors are kept informed of changes in relevant legislation and changing commercial risks with the assistance of the Group's legal advisers and auditors where appropriate.  The directors have taken appropriate legal advice and implemented internal training and reporting procedures to ensure compliance with the UK Bribery Act 2010 (the "Bribery Act"). The Bribery Act prescribes criminal offences for businesses engaged or allowing others to engage in bribery or corrupt practices. Although the Company does not have a presence in the UK, the Bribery Act applies to the Directors as the company is listed in the UK. In addition, Guernsey, where the Company is incorporated, is subject to the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003 which contains broadly similar restrictions. Although the application of the UK and Guernsey legislation is uncertain as regards the Group, the Directors have formed the view that it is appropriate for the Group to implement relevant procedures to maintain compliance with the Bribery Act.

Internal Control

The board acknowledges its responsibility for establishing and monitoring the Group's systems of internal control.  Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group's systems are designed to provide the directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

The board reviews the effectiveness of the systems of internal control and considers the major business risks and the control environment.  The board has taken steps to ensure that announcements to the market are approved by more than one director and after careful consideration of the Company's Nex Exchange corporate adviser to ensure greater clarity.  No weakness in internal financial control has resulted in material losses, contingencies or uncertainties which would require disclosure as recommended by the guidance for directors on reporting on internal financial control.

In light of this control environment the Board considers that there is no current requirement for a separate internal audit function.

Risks and uncertainties

There are a number of risks and uncertainties facing the Group, principally the following:

Regulatory risk

Whilst the Group believes that its operations are currently in substantial compliance with all relevant material environmental and health and safety laws and regulations, there can be no assurance that new laws and regulations, or amendments to, or stringent enforcement of, existing laws and regulations will not be introduced, which could have a material adverse impact on the Group.

Risks associated with operating in sub-Saharan Africa

Changes in government, monetary policies, taxation, exchange control and other laws can have a significant impact on the Group's assets and operations. Several countries in sub-Saharan Africa have experienced periods of political instability, and there can be no guarantees as to the level of future political stability. Changes to government policies and applicable laws could adversely affect the operations and/or financial condition of the Group. The jurisdictions in which the Group might operate in the future may have less developed legal systems than more established economies, which could result in risks such as (i) effective legal redress in the courts being more difficult to obtain; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations. In certain jurisdictions, the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to the Group's licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed.

Risks associated with mineral exploration and mining projects

Exploration risks

The business of exploration for minerals and mining involves a high degree of risk. The successful exploration and development of potash (or associated minerals) is speculative and subject to a number of uncertainties. Geographical location can present logistical difficulties and the available resources and reserves, once established, may be significantly lower than estimated.

Early stage of operations

The Group intends to invest in projects whose operations are at an early stage and success in each stage of trading, exploration and mine development will depend on the Directors' ability to manage the current projects and to take advantage of further opportunities which may arise. The success of the Group will depend on its ability to identify prospective projects and its ability to access equity markets for its development requirements.

Potash market risk

The marketability and availability of a ready market for potash is affected by and dependent on numerous factors beyond the Group's control, the precise effects of which cannot be accurately predicted. These factors include market fluctuations, general economic activity, action taken by other potash producing nations, availability of transportation capacity and government regulations such as regulations relating to taxation, royalties, production levels, exports and the environment. Movements in market prices could render uneconomic any of the mining activities to be undertaken.

Risks associated with blockchain trading operations

Early stage of operations

Significant time and resource can be expended penetrating new markets and to identify those opportunities which can lead to profitable revenue generation.

Competition

The Group competes with numerous other companies (many of which have greater financial resources than the Group) and individuals in the trading of fertiliser and other agriculture commodities and for the recruitment and retention of qualified employees.

Fertiliser distribution

Differences in terms under sales and procurement contracts can lead to significant exposure to financial loss. The logistical complications of distributing a high value product in sub-Saharan Africa can lead to loss or theft. 

Foreign exchange

The Company raises its share capital in Sterling, however it's fertiliser trading and potash  exploration activities and, if successful, potash production are markets which are denominated in US Dollars ($). The directors therefore consider the functional and presentational currency to be US Dollars. Some of its working capital requirements may be denominated in currencies other than US Dollars. As a result, fluctuations in currency exchange rates could have a material adverse effect on the financial condition, results, operations or cash flows of the Group.

Risks associated with Medicinal Cannabis projects

If the additional investment strategy is approved by shareholders at the coming General Meeting, entry into the Medicinal Cannabis market presents additional risks. These are set out in the circular announced today to shareholders. In particular the board has already taken legal advice on the new strategy and the countries where it initially intends to operate. This advice has confirmed that, in principle, the intended strategy of the Company does not breach the United Kingdom's Proceeds of Crime Act 2002. A copy of the circular may be found on our website at http://www.blockcommodities.com/corporate-documents

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Guernsey company law requires the directors to prepare Group Financial Statements for each financial year in accordance with generally accepted accounting principles. The directors are required by the rules of the NEX Exchange Growth Market to prepare Group Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").

The Financial Statements of the Group are required by law to give a true and fair view of the state of the Group's affairs at the end of the financial period and of the profit or loss of the Group for that period and are required by IFRS adopted by the EU to present fairly the financial position of the Group and the financial performance of the Group.

In preparing the Group Financial Statements, the directors should:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs adopted by the EU; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping accounting records which are sufficient to show and explain the group's and company's transactions and are such as to disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Financial Statements are properly prepared and in accordance with The Companies (Guernsey) Law 2008. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

On behalf of the board

C J Cleverly

Chairman

2 December 2019

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BLOCK COMMODITIES LIMITED

Opinion

We have audited the financial statements of Block Commodities Limited (the 'Group') for the year ended 30 June 2019 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows and related 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.

In our opinion, the financial statements:

• give a true and fair view of the state of the Group's affairs as at 30 June 2019 and of its loss for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

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 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 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 related to going concern

We draw attention to the Directors' report and to note 2 in the financial statements, which indicates that the Group incurred a net loss of US$1.1mil and operating cash outflows during financial year ended 30 June 2019 and at that date the Group held net liabilities  of US$922k. The financial statements have been prepared on a going concern basis which depends on receipt of new funds in order to enter into new arrangements and for existing debt holders to renegotiate settlement dates. As stated in note 2, these events or conditions, along with the other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Our application of materiality

Materiality is a key concept in the context of an audit. In providing an opinion on whether the financial statements provide a 'true and fair' view, we are providing an opinion on whether the financial statements as a whole are free from material misstatement whether due to fraud or error.

Materiality is an expression of the relative significance of a particular matter in the context of the financial statements as a whole.  An item, either individually or in aggregate, is considered material if omitting it or misstating it could reasonably be expected to influence decisions that users make on the basis of an entity's financial statements. Materiality has both quantitative and qualitative characteristics. It depends on the size or nature of the item or error judged in the particular circumstances of its omission or misstatement. 

We determine materiality in order to:

• Assist in establishing the scope of our audit engagement and the design of our audit tests;
• Calculate sample sizes where we are undertaking substantive testing; and
• Assist in evaluating the effect of known and likely misstatements on the financial statements.

We used gross assets as a basis for determining planning materiality as it was considered that this was where the core value of the Group lies and any changes to these would most impact investors. We have determined our Overall Financial Statement Materiality to be US$ 100,000. This has been set at 3% of total assets as we consider gross assets to be the most significant determinant of the Group's financial position and performance used by shareholders, with the key financial statement balances being the exploration asset and cash levels.

We set performance materiality at 60%. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. At the planning stage materiality is used to determine the financial statement areas that are included within the scope of our audit and the extent of sample sizes during the audit.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular we looked at areas involving significant accounting estimates and judgements by the Directors and considered future events that are inherently uncertain. As in all of our audit, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Our Group audit scope focused on the principal area of operation, being Africa. The Group comprises 6 components and we assessed the significance of each component to the Group audit. On this basis, 4 components were subject to audit where balances were material to the Group.

The Group and its subsidiaries are accounted for from one central location.  Given the nature of said location, our audit was concluded from our London office where the audit team was based with regular visits from the key Group individual responsible for the accounting function.

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.

Going concern would also have been identified as a Key Audit Matter if it were not required to be separately disclosed in the audit report.

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 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 Guernsey Act

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.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 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.

Use of our report

This report is made solely to the Group's members, as a body, in accordance with our engagement letter dated 31 October 2019.  Our audit work has been undertaken so that we might state to the Group'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 Group and the Group's members as a body, for our audit work, for this report, or for the opinions we have formed.

Joseph Archer (Senior Statutory Auditor)  15 Westferry Circus

For and on behalf of PKF Littlejohn LLP Canary Wharf

Statutory Auditor London E14 4HD

2 December 2019

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2019

All results relate to continuing activities. There is no taxation arising on other comprehensive income.

The notes on pages 19 to 46 form part of the financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The notes on pages 19 to 46 form part of the financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 2 December 2019 and were signed on its behalf.

C J Cleverly

Chairman