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Registered number:
(formerly RSEF Ltd)
FOR THE YEAR ENDED 31 DECEMBER 2024
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KONEXUS HOLDINGS LIMITED
COMPANY INFORMATION
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KONEXUS HOLDINGS LIMITED
CONTENTS
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KONEXUS HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The director presents the strategic report for the year ended 31 December 2024 for Konexus Holdings Limited and its subsidiaries (together "the Group").
FY2024 represented a pivotal year for Konexus Holdings Limited, marked by strategic transformation initiatives. Key actions undertaken during the year included corporate rebranding, a comprehensive organizational structure & process optimisation initiative, and targeted steps toward portfolio diversification and value chain integration across sectors, commodities, and geographic markets in which the Group operates.
Significant progress was made with the transformation initiatives, despite significant external headwinds during the year such as ongoing geopolitical tensions, disruption of shipping routes due to the closure of the Red Sea,with vessels rerouted via the Cape of Good Hope leading to increased costs and delivery times. This development particularly impacted logistics and sales to our European markets. Despite these challenges, Konexus Resources Group remained agile, navigating the complexities with resilience and maintaining its strategic focus on long-term growth. In response to external challenges, the Group remained focused on unlocking synergies and driving strategic growth. As part of our ongoing diversification efforts, we expanded our portfolio and strengthened our presence across high-potential sectors and geographies. During the year, we acquired a Thailand-based company operating in the energy processing sector, enhancing our capabilities in the region. In parallel, we established anew subsidiary in Bahrain dedicated to core agri-staples processing, with regulatory licensing currently underway. These initiatives reflect our commitment to building an integrated, future-ready platform for sustainable growth. In addition to our strategic initiatives, several new entities were incorporated during the year to enhance operational efficiency and regulatory alignment. These structural enhancements have strengthened our ability to respond to evolving market dynamics, while ensuring greater agility, compliance, and scalability across our global operations.
The principal risks in this industry are:
∙Price volatility;
∙Currency exposure;
∙Counterparty risk;
∙Loss of asset risk;
∙Interest rate risk.
Price volatility and currency risk exposures are mitigated by the Group's hedging on the Futures market for the Price volatility and of the Currency exposure. For non-hedgeable commodities, the Group’s trades on back-to-back terms, thus eliminating the price risk. The base currency is US Dollars. A few trades are conducted in Euros and Sterling, and we have expenditure in other currencies, all of which are hedged on the futures markets. The exposures and hedges (both price and currency) are monitored and reported on daily to ensure the management of any exposure. The Counterpart risk is covered by Credit Risk insurance.
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KONEXUS HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Loss of assets risk is covered by a full marine insurance policy that covers materials internationally whether afloat or in warehouse.
Interest rate risk Exposure to interest risk is based upon its financing from institutions who support the financing of cargoes. The Group does not hedge the interest rate risk but does take the cost of financing into the equation when pricing with counterparties.
These indicators enable management to evaluate the Group's performance against our strategy and operating plan during the year. Below are several factors that define our group’s performance:
Turnover: The Group reported a turnover of $178.6 million for FY2024, compared to $168.7 million in the previous year. Despite a challenging external environment characterized by continued disruptions in global shipping lanes, particularly in the Red Sea, heightened geopolitical tensions, volatility in energy prices, evolving demand patterns, and foreign exchange fluctuations, the Group successfully sustained turnover at broadly the same levels year-on-year. Net Profit: The Group reported a net profit of $2.2 million for FY2024, compared to $0.3 million in FY2023. This improvement in profitability was primarily driven by the commencement of operations at the Group’s manufacturing facility in Bahrain, which made a substantial contribution to the year’s results.
Expansion into New Lines of Business: We have strategically expanded into the agri-processing sector to further diversify our portfolio. In addition, we have concluded several commercial trade arrangements that provide access to new markets, enhancing our geographical reach and strengthening our global footprint.
Enhanced Banking and Hedging Capabilities: To sustain our growth trajectory, we have secured additional banking facilities and established new hedging mechanisms, enabling us to meet emerging financial requirements and mitigate risks effectively.
The Companies (Miscellaneous Reporting) Regulations 2018 (`2018 MRR') requires the Director to explain how he considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 ('s172') when performing his duty to promote the success of the group under s172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the group. The Board welcomes the direction of the UK Financial Reporting Council (the 'FRC'). This s172 statement explains how the Director:
∙has engaged with employees, suppliers, customers, and others; and
∙has had regard to employee interests, the need to foster the Group's business relationships with suppliers, customers and other, and the effect of that regards, including on the principal decisions taken by the Group during the financial year.
The s172 statement focuses on matters of strategic importance to Konexus Holdings Limited, and the level of information disclosed is consistent with the size and the complexity of the business.
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KONEXUS HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
General confirmation of Director's duties
When making decisions, the Director ensures that he acts in the way he considers, in good faith, would most likely promote the group's success for the benefit of its members, and in doing so have regard (among other matters) to: S172(1) (A) "The likely consequences of any decision in the long term" The Director understands the business and the evolving environment in which we operate. The strategy set by the Board is intended to strengthen our position as a leading physical commodity trader/producer, while keeping safety and social responsibility fundamental to our business approach. To help achieve these ambitions, the Board refreshed our strategy to further focus on developing Konexus Holdings Limited by moving into further diversified trade relationships and identifying long term trade flow and value accretive processing projects. In 2024, as per the Konexus Holdings vision and strategy, it has installed an Aluminium Rod Mill in Bahrain with cutting-edge technology and a focus on sustainability. It is poised to play a pivotal role in meeting the growing demand for high-quality Aluminium products. S172(1) (B) "The interests of the company's employees" The Director recognizes that Konexus Holdings Limited. groups employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the Director factors the implications of decisions on employees and the wider workforce, where relevant and feasible. S172(1) (C) "The need to foster the company's business relationships with suppliers. customers and others" Delivering our strategy requires strong mutually beneficial relationships with suppliers and customers. Konexus Holdings Limited seeks the promotion and application of certain general principles in such relationships. The ability to promote these principles effectively is an important factor in the decision to enter or remain in such relationships and this alongside other standards The businesses continuously assess the priorities related to customers and those with whom we do business, and the Board engages with the businesses on these topics. S172(1) (D) "The impact of the company's operations on the community and the environment" This aspect is inherent in our strategic ambitions, the Board receives information on these topics and takes the appropriate actions to ensure that we achieve the best interests of all parties. S172(1) (E) "The desirability of the company maintaining a reputation for high standards of business conduct" Konexus Holdings aims to meet the world's growing need for metals and core staple agri commodities in an economically and sustainable way, ensuring it is done in an environmentally, and socially responsible way. The Board periodically reviews and approves clear frameworks, to ensure that its high standards are maintained both within Konexus Holdings' businesses and with the business relationships. S172(1) (F) "The need to act fairly as between members of the company" After weighing up all relevant factors, the Director considers which course of action best enables delivery of our strategy through the long-term, taking into consideration the impact on stakeholders. In doing so, our director acts fairly as between the group's members.
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KONEXUS HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Culture
The Board recognizes that it has an important role in assessing and monitoring that our desired culture is embedded in the values, attitudes, and behaviours we demonstrate, including in our activities and stakeholder relationships. The Board has established honesty, integrity, and respect for people as Konexus Holdings' core values. The General Business Principles, Code of Conduct, and Code of Ethics help everyone at Konexus Holdings' act in line with these values and comply with relevant laws and regulations. The Konexus Holdings' commitment and Policy on Health, Safety, Security, Environment & Social Performance applies across Konexus Holding' and is designed to help protect people and the environment. We also strive to maintain a diverse and inclusive culture. Stakeholder engagement (including employee engagement) The Board recognizes the important role Konexus Holdings must play in society and is deeply committed to public collaboration and stakeholder engagement. This commitment is at the heart of Konexus Holdings' strategic ambitions. The Board strongly believes that Konexus Holdings will only succeed by working with customers, regulators, business partners, investors. and other stakeholders.
This report was approved by the board and signed on its behalf.
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KONEXUS HOLDINGS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The director presents his report and the financial statements for the year ended 31 December 2024.
The director is responsible for preparing the Group strategic report, the Director's report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to $1,933,430 (2023 - $349,648).
No dividends were declared and paid in the year (2023 - $nil).
The director who served during the year was:
Information regarding future developments is set out in the Strategic Report.
Information regarding engagement with suppliers, customers and others is set out in the Strategic Report.
The Group has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
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KONEXUS HOLDINGS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
There have been no significant events affecting the Group since the year end.
During the year Reddy Siddiqui LLP resigned as statutory auditor and Barnes Roffe LLP were appointed on 30 October 2024.
After the year end Barnes Roffe LLP resigned as auditors due to the transfer of its audit business and its successor, Barnes Roffe Audit Limited, was appointed by the directors under s485 Companies Act 2006.
This report was approved by the board and signed on its behalf.
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KONEXUS HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KONEXUS HOLDINGS LIMITED
We have audited the financial statements of Konexus Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation 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 auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
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KONEXUS HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KONEXUS HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The director is 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Director's report.
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KONEXUS HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KONEXUS HOLDINGS LIMITED (CONTINUED)
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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;
∙We focused on specific laws and regulations, which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and FRS 102;
∙We assessed the extent of compliance with laws and regulations identified above through making enquires of management and inspecting legal correspondence and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙Making enquires of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
∙Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙Performed analytical procedures to identify any unusual or unexpected relationships;
∙Tested journal entries to identify unusual transactions;
∙Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
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KONEXUS HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KONEXUS HOLDINGS LIMITED (CONTINUED)
∙Investigated the rationale behind significant or unusual transactions.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
for and on behalf of
Chartered Accountants
Statutory Auditor
Leytonstone House
3 Hanbury Drive
London
E11 1GA
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KONEXUS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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KONEXUS HOLDINGS LIMITED
REGISTERED NUMBER: 12912954
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
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KONEXUS HOLDINGS LIMITED
REGISTERED NUMBER: 12912954
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 44 form part of these financial statements.
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KONEXUS HOLDINGS LIMITED
REGISTERED NUMBER: 12912954
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 44 form part of these financial statements.
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