REG - Aeorema Comms Plc - Final Results <Origin Href="QuoteRef">AEO.L</Origin> - Part 2
29/10/2014 12:25
- Part 2: For the preceding part double click ID:nRSP4286Ua
1,029,306 1,001,550
22 Share-based payments
The Group operates an EMI Share option scheme for key employees. Options are
granted to key employees at an exercise price equal to the market price of the
Company's shares at the date of grant. Options are exercisable from the third
anniversary of the date of grant and lapse if they remain unexercised at the
tenth anniversary or upon cessation of employment. The following option
arrangements exist over the Company's shares:
Date of grant Exercise price Exercise period Number of options 2014 Number of options 2013
From To
28 October 2004 18.75p 28 October 2007 27 October 2014 9,000 113,000
20 July 2010 12.5p 20 July 2013 19 July 2020 300,000 1,200,000
25 April 2013 16.5p 25 April 2016 24 April 2023 300,000 300,000
609,000 1,613,000
Details of the number of share options and the weighted average exercise price
outstanding during the year are as follows:
Number of options Weighted average exercise price Number of options Weighted average exercise price
2014 2014 2013 2013
£ £
Outstanding at beginning of the year 1,613,000 0.11 1,943,000 0.09
Lapsed during the year (300,000) (0.13) (630,000) (0.23)
Granted during the year - - 300,000 0.17
Exercised during the year (704,000) (0.13)
Outstanding at end of the year 609,000 0.15 1,613,000 0.11
Exercisable at the end of the year 309,000 0.13 113,000 0.19
The exercise price of options outstanding at the year-end ranged between
£0.125 and £0.1875 (2013: £0.125 and £0.2325) and their weighted average
contractual life was 7.7 years (2013: 7.7 years).
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value as determined at the grant date of equity-settled
share-based payments is expensed on a straight line basis over the vesting
period, based on the Group's estimate of shares that will eventually vest. The
estimated fair value of the options is measured using an option pricing model.
The inputs into the model are as follows:
Grant date 28 October 2004 20 July 2010 9 March 2012 25 April 2013
Model used Binomial Black-Scholes Black-Scholes Black-Scholes
Share price at grant date 16.25p 8.75p 23.25p 16.5p
Exercise price 18.75p 8.75p 23.25p 16.5p
Contractual life 10 years 10 years 10 years 10 years
Risk free rate 6% 0.5% 0.5% 0.5%
Expected volatility 43% 100% 105% 104%
Expected dividend rate 0% 0% 0% 0%
Fair value option 5.9868p 7.779p 21.053p 14.889p
The expected volatility is determined by calculating the historical volatility
of the company's share price over the last three years. The risk free rate is
the office Bank of England base rate. The expected dividend rate is zero as
the company has not paid dividends in the past.
The Group recognised the following charges in the Statement of Comprehensive
Income in respect of its share-based payment plans:
2014 2013
£ £
Share-based payment charge 14,889 19,815
23 Related party transactions
The Group has a related party relationship with its subsidiaries and its
directors. Details of transactions between the Company and its subsidiaries
are as follows:
2014 2013
£ £
Management fees charged by subsidiaries to Aeorema Communications plc
Aeorema Limited (formerly Cheerful Scout Productions Limited) - 102,483
Amounts owed by subsidiaries
Total amount owed by subsidiaries 353,337 457,863
Amounts owed to subsidiaries
Total amount owed to subsidiaries 67,355 197,355
The compensation of key management (including directors) of the Group is as
follows:
2014 2013
£ £
Short-term employee benefits 297,687 119,176
Post-employment benefits 119,668 104,966
Share based payment expense 14,889 4,353
432,244 228,495
Aeorema Communications plc is a guarantor for a lease entered into by Aeorema
Limited (formerly Cheerful Scout Productions Limited), its subsidiary
undertaking.
Harris and Trotter LLP is a firm in which S Garbutta is a member. The amounts
charged to the Group for professional services is as follows:
Harris and Trotter LLP - charged during the year 2014 2013
£ £
Aeorema Communications plc 15,000 17,071
Aeorema Limited (formerly Cheerful Scout Productions Limited) 22,325 7,200
Twentyfirst Limited - 7,200
ST16 Limited - 1,600
37,325 33,071
24 Disposal of a subsidiary
On 7 December 2012 the Group disposed of its 100% subsidiary ST16 Limited,
which carried out Viral Film operations.
Consideration received 2014 2013
£ £
Consideration received in cash and cash equivalents - 5
- 5
Analysis of assets and liabilities over which control was lost 2014 2013
£ £
Current assets
Cash and cash equivalents - 16,426
Trade and other receivables - 11,700
Non-current assets
Property, plant and equipment - 4,289
Current liabilities
Trade and other payables - (86,431)
Net liabilities disposed of - (54,016)
Gain on disposal of subsidiary 2014 2013
£ £
Consideration received - 5
Net liabilities disposed of - 54,016
- 54,021
Net cash outflow on disposal of subsidiary 2014 2013
£ £
Consideration received in cash and cash equivalents - 5
Less: Cash and cash equivalent balances disposed of - (16,426)
- (16,421)
25 Cash flows
Group Company
2014 2013 2014 2013
£ £ £ £
Cash flows from operating activities
Profit after taxation 415,696 263,501 59,674 680,821
Tax expense recognised in Consolidated Statement of Comprehensive Income 89,145 79,087
Depreciation 51,579 35,934 - -
Profit on disposal of property, plant and equipment - (44,875) - -
Profit on disposal of subsidiary - (54,021)
Share-based payment 14,889 19,815 - 7,776
Impairment of investment in subsidiaries - - - (20,000)
Dividends received by the Company - - (130,000) -
Finance income (406) (195) (250) (138)
570,903 299,246 (70,576) 668,459
Increase / (decrease) in trade and other payables 448,630 272,572 (192,351) 240,986
(Increase) / decrease in trade and other receivables (869,364) 201,285 110,589 (416,201)
Changes in working capital due to disposal of subsidiary:- Trade and other receivables- Trade and other payables -- (11,700)86,431 - -
Taxation paid (43,418) - - -
Cash generated / (used) from operating activities 106,751 847,834 (152,338) 493,244
26 Financial instruments
The Group is exposed to risks that arise from its use of financial
instruments. There have been no significant changes in the Group's exposure to
financial instrument risk, its objectives, policies and processes for managing
those from previous periods. The principal financial instruments used by the
Group, from which financial instrument risk arises, are trade receivables,
cash and cash equivalents and trade and other payables.
Credit risk
Credit risk arises principally from the Group's trade receivables. It is the
risk that the counterparty fails to discharge its obligation in respect of the
instrument. The maximum exposure to credit risk at 30 June 2014 was £1,401,432
(2013: £526,982). Trade receivables are managed by policies concerning the
credit offered to customers and the regular monitoring of amounts outstanding
for both time and credit limits. At the year end, the credit quality of trade
receivables is considered to be satisfactory.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group's policy is to meet its liabilities
when they fall due. The Group monitors cash flow on a regular basis. At the
year end, the Group has sufficient liquid resources to meets its obligations
of £1,589,007 (2013: £1,140,377).
Market risk
Market risk arises from the Group's use of interest bearing financial
instruments. It is the risk that the fair value of future cash flows of a
financial instrument will fluctuate. At the year end, the cash and cash
equivalents of the Group was £1,620,895 (2013: £1,581,790). The Group ensures
that its cash deposits earn interest at a reasonable rate.
Capital risk
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern while maximising the return to
stakeholders. The capital structure of the Group consists of equity
attributable to equity holders of the parent, comprising issued share capital,
reserves and retained earnings as disclosed in the Group Statement of Changes
in Equity. At the year end, total equity was £1,967,231 (2013: £1,501,116).
Fair value of financial assets
The Group's book value of the financial assets equates to their fair values.
27 Pension costs defined contribution
The Group makes pre-defined contributions to employees' personal pension
plans. Contributions payable by the Group for the year were £119,840 (2013:
£105,138). At the end of the reporting period £24,998 (2013: £17,948) of
contributions were due in respect of the period. The amounts were paid
subsequent to the end of the reporting period.
28 Dividends
On the 29 November 2013 an enhanced maiden dividend of 1.5 pence per share
(total dividend £120,564) was paid to holders of fully paid ordinary shares.
In respect of the current year, the directors propose that a final dividend of
2 pence per share and a special dividend of 3 pence per share be paid to
shareholders on 21 November 2014. The dividends are subject to approval by
shareholders at the Annual General Meeting and have not been included as
liabilities in these consolidated financial statements. The proposed dividends
are payable to all shareholders on the Register of Members on 24 October 2014.
The total estimated dividend to be paid is £437,525. The payment of this
dividend will not have any tax consequences for the Group.
29 Control
There is no overall controlling party.
30 Notice of AGM
The Annual General Meeting of Aeorema Communications plc will be held at Moray
House, 23-31 Great Titchfield Street, London W1W 7PA on 19 November 2014 at
10.30am. A formal notice of AGM along with the Annual Report and Accounts for
the year ended 30 June 2014 will be sent to shareholders and will be available
on the Company's website www.aeorema.com in due course.
This information is provided by RNS
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