REG - Aquila Services Grp - Annual Financial Report and Notice of AGM <Origin Href="QuoteRef">AQSG.L</Origin> - Part 2
29/06/2017 07:07
- Part 2: For the preceding part double click ID:nRSc5004Ja
taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised
if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply to the
year when the asset is realised or the liability is settled. Deferred tax is
charged or credited in the profit or loss, except when it relates to items
credited or charged in other comprehensive income directly to equity, in which
case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets
Management regularly assesses the likelihood that deferred tax assets will be
recovered from future taxable income. No deferred tax asset is recognised
when management believe that it is more likely than not that a deferred asset
will not be realised.
Impairment of assets
The Group assesses at each statement of financial position date if there is
any indication that an asset may be impaired. If any such indication exists,
the Group estimates the recoverable amount of the asset.
If there is any indication that an asset may be impaired, the recoverable
amount is estimated for the individual asset. If it is not possible to
estimate the recoverable amount of the individual asset, the recoverable
amount of the cash-generating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of
its fair value less costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount. That
reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation
or amortisation is recognised immediately in profit or loss.
An entity assesses at each reporting date whether there is any indication that
an impairment loss recognised in prior periods for assets other than goodwill
may no longer exist or may have decreased. If any such indication exists, the
recoverable amounts of those assets are estimated.
The increased carrying amount of an asset other than goodwill attributable to
a reversal of an impairment loss does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the
asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated
depreciation or amortisation other than goodwill is recognised immediately in
profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and a reliable estimate of
the amount can be made. If the effect is material, provisions are determined
by discounting the expected future cash flows at an appropriate pre-tax
discount rate.
Operating leases
Rentals payable under operating leases, net of lease incentives, are charged
to the statement of comprehensive income on a straight-line basis over the
term of the lease.
Share capital / equity instruments
Ordinary shares are classified as equity. Equity instruments issued by the
Company are recorded at the proceeds received, net of direct issue costs. The
Company has one class Ordinary share which carries no right to fixed income.
Each share carries the right to one vote at general meetings of the Company.
Share based payments
The Group has issued share options to certain directors and employees. The
share options granted become exercisable at varying future dates. If certain
conditions are met, following the vesting period, the employee will be
eligible to exercise their option at an exercise price determined on the date
the share options are granted.
The share based payment charge is recognised in the statement of comprehensive
income and is calculated based on the Company's estimate of the number of
share options that will eventually vest.
The fair value of share options granted is determined by applying the Black
Scholes model. This model utilises inputs for the risk-free rate, expected
volatility in share price, dividend yield and the current share price at fair
value, which are factors determined on the date the share options are
granted.
Adoption of new and revised standards
The following pronouncements have been adopted in the year and either had no
impact on the financial statements or resulted in changes to presentation and
disclosure only:
§ Annual Improvements 2012-2014 *
§ IFRS 11 (amendments) Accounting for acquisitions of interests in joint
operations *
§ IFRS 14 Regulatory Deferral accounts *
§ IAS 16 Property, Plant & Equipment and IAS 38 - Intangible assets
(amendments) *
§ IAS 27 (amendments) Equity Method in Separate Financial Statements *
§ IAS 16 Property, Plant & Equipment and IAS 41 - Bearer Plants (amendments)
*
§ IAS 1 Disclosure initiative *
*Effective for annual periods beginning on or after 1 January 2016
Standards issued but not yet effective
At the date of authorisation of these financial statements, the following
Standards and Interpretations relevant to the Group, which have not been
applied in these financial statements, were in issue but were not yet
effective. In some cases these standards and guidance have not been endorsed
by the European Union.
§ IAS 7 (amendments) Statement of cashflows disclosure *
§ IAS 12 (amendments) Income taxes on Recognition of deferred tax losses for
unrealised losses *
§ IFRS 2 (amendments) Share based payments **
§ IFRS 9 Financial Instruments **
§ IFRS 15 (amendments) Revenue from contracts with customers **
§ IFRS 16 Leases ***
§ IFRS 4 (amendments) 'Insurance contracts' regarding the implementation of
IFRS 9 'Financial Instruments' **
§ IFRIC 22 Foreign currency transactions and advance consideration **
§ Annual Improvements 2014-2016 Cycles *
*Effective for annual periods beginning on or after 1 January 2017
**Effective for annual periods beginning on or after 1 January 2018
***Effective for annual periods beginning on or after 1 January 2019
The directors are evaluating the impact that these standards will have on the
financial statements of the Group.
3 Critical accounting estimates and judgements
In application of the Group's accounting policies, which are described in note
2, the directors are required to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving
estimations, that the directors have made in the process of applying the
Group's accounting policies and that have a significant effect on the amounts
recognised in the financial statements.
Revenue recognition
Work in progress is calculated on a project by project basis using the fair
value of chargeable time that is un-invoiced at the period end. Historic
analysis shows that recovery rates of work in progress are very high; the
Group does not expect any work in progress to be irrecoverable. Work in
progress is reviewed on a monthly basis to ensure it is recognised
appropriately, it is probable that economic benefits will flow to the Group
and that the fair value can be reliably measured.
Share based payments
The Company has granted share options to certain employees and directors of
the Group. The share options granted become exercisable at varying future
dates. If certain conditions are met, following the vesting period, the
employee will be eligible to exercise their option at an exercise price
determined on the date the share options are granted.
The share based payment charge is recognised in the statement of comprehensive
income and is calculated based on the Company's estimate of the number of
share options that will eventually vest.
Assumptions regarding the fair value of the Company's shares and assumptions
regarding employee fluctuation are taken into account when measuring the value
of share-based payments for employees, which are required to be accounted for
as equity-settled share-based payment transactions pursuant to IFRS 2. The
resulting staff costs are recognised pro rata in the statement of
comprehensive income to reflect the services rendered as consideration during
the vesting period.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that may have a significant risk of
causing material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.
Impairment of goodwill
The carrying amounts of the Group's assets value are reviewed at each balance
sheet date to determine whether there is any indication of impairment. If any
such indication exists, the asset's recoverable amount is estimated and an
impairment loss is recognised where the recoverable amount is less than the
carrying value of the asset. Any impairment losses are recognised in the
income statement.
4 Revenue
An analysis of the Group's revenue is as follows:
2017 2016
£ £
Continuing operations - rendering of services
Specialist housing consultancy income 5,456,328 4,628,195
Treasury management consultancy income 471,873 117,949
5,928,201 4,746,144
Interest revenue on bank deposits 5,512 1,713
5,933,713 4,747,857
5 Operating segments
The Group has three reportable segments, being consultancy, interim management
and treasury management services, the results of which are included within the
financial information. IFRS 8 requires operating segments to be identified on
the basis of internal reports that are regularly reviewed by the Chief
Operating Decision Maker ("CODM"). In accordance with IFRS 8 'Operating
Segments', information on segment assets is not shown, as this is not provided
to the CODM. The Group's revenues are mainly derived from operations in the
UK and ROI. As a result, the CODM does not review segments by country or
continent.
The principal activities of the Group are as follows:
Consultancy - a range of services to support the business needs of a diverse
range of organisations (including housing associations and local authority)
across the housing sector. The majority of consultancy projects run over one
to two months requiring on-going business development to ensure a full
pipeline of consultancy work for the employed team.
Interim Management - individuals are embedded within housing organisations
(normally registered providers, local authorities and ALMOs) in a substantive
role, normally for a specified period of time. Interim management provides
the Group with a more extended forward sales pipeline as the average contract
is for six months. This section of the business provides low risk as the
interim consultants are placed on rolling contractual basis and provides
minimal financial commitment as associates to the business, rather than
employees, are used for these roles.
Treasury Management - a range of services providing treasury advice and
fund-raising services to non-profit making organisations working in the
affordable housing and education sectors. Within this segment of the business
a number of client organisations enter into fixed period retainers to ensure
immediate call-off of the required services.
The accounting policies of the reportable segments are the same as the Group's
accounting policies described in note 2. Segment profit represents the profit
earned by each segment, without allocation of central administration costs,
including Directors' salaries, finance costs and income tax expense. This is
the measure reported to the Group's Chief Executive for the purpose of
resource allocation and assessment of segment performance.
2017 2016
£ £
Revenue from Consultancy 3,712,790 2,974,901
Revenue from Interim management 1,743,538 1,653,294
Revenue from Treasury management 471,873 117,949
5,928,201 4,746,144
Cost of sales from Consultancy 2,627,985 2,045,190
Cost of sales from Interim management 1,483,353 1,413,342
Cost of sales from Treasury management 342,128 -
4,453,466 3,458,532
Gross profit from Consultancy 1,084,805 929,711
Gross profit from Interim management 260,185 239,952
Gross profit from Treasury management 129,745 117,949
1,474,735 1,287,612
Administrative expenses (964,692) (997,786)
Operating profit 510,043 289,826
6 Profit / (loss) before tax
2017 2016
£ £
Profit / (loss) before taxation is arrived at after charging:
Deemed cost of listing - 3,104,527
Auditors' remuneration 37,200 36,000
Other fees payable to auditors:
- Taxation- Corporate finance services -- 12,00025,000
Depreciation of property, plant and equipment 11,694 5,457
Staff costs (see note 7) 2,702,039 2,407,049
Operating lease costs - land and buildings 49,605 39,400
The share option charge for the year of £147,651 (2016: £254,607) is included within administrative expenses.
7 Staff costs
2017 2016
The average monthly number of employees (including directors) employed by the Group was: 37 30
2017 2016
£ £
Aggregate remuneration (including directors)
Wages and salaries 2,322,383 1,878,993
Share-based payments 147,651 254,607
Pension contributions 88,565 80,770
Social security costs 257,513 192,679
2,816,112 2,407,049
Directors' remuneration
Salary (including taxable benefits) 347,362 270,443
Share-based payments 65,500 110,526
Pension contributions 12,000 11,366
424,862 392,335
The amounts set out above include remuneration to the highest paid director as follows:
Salary (including taxable benefits) 106,513 109,050
Share-based payments 22,866 55,263
Pension contributions 6,000 7,700
135,379 172,013
8 Taxation
2017 2016
£ £
Corporation tax:
Current year 117,738 116,918
Adjustment in respect of prior years (18,064) -
99,674 116,918
Deferred tax charge 11,671 7,401
111,345 124,319
The tax charge for the year can be reconciled to the profit/(loss) in the income statement as follows:
2017 2016
£ £
Profit/(loss) before taxation 515,555 (2,812,988)
Tax at the UK corporation tax rate of 20% (2016: 20%) 103,111 (562,598)
Expenses not deductible 26,298 66,012
Adjustment in respect of prior years (18,064) -
Deemed cost of listing - 620,905
8,234 686,917
Tax expense for the year 111,345 124,319
9 Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) after tax
attributable to the equity holders of the Group by the weighted average number
of shares in issue during the year. Diluted earnings per share is calculated
by adjusting the weighted average number of shares outstanding to assume
conversion of all potential dilutive shares, namely share options.
2017 2016
£ £
Profit / (loss) after tax attributable to owners of the parent 404,210 (2,937,307)
Weighted average number of shares
- Basic 32,633,381 27,566,749
- Diluted 37,301,635 27,566,749
Basic earnings/(loss) per share 1.24p (10.66p)
Diluted earnings/(loss) per share 1.08p (10.66p)
Adjusted earnings per share before deemed cost of listing
Profit / (loss) after tax attributable to owners of the parent 404,210 (2,937,307)
Deemed cost of listing - 3,104,527
Adjusted earnings 404,210 167,220
Weighted average number of shares
- Basic 32,633,381 27,566,749
- Diluted 37,301,635 30,918,874
Adjusted basic earnings per share 1.24p 0.61p
Adjusted diluted earnings per share 1.08p 0.54p
Potential Ordinary shares are antidilutive when their conversion to Ordinary
shares would increase earnings per share or decrease loss per share from
continuing operations.
10 Intangible assets
Group Goodwill
£
Cost
At 1 April 2015 -
Additions 317,688
At 31 March 2016 317,688
Additions -
At 31 March 2017 317,688
Accumulated impairment losses
At 1 April 2015 and 31 March 2016 -
Impairment losses for the year -
At 31 March 2017 -
Net book value
At 31 March 2015 -
At 31 March 2016 317,688
At 31 March 2017 317,688
Goodwill acquired in a business combination is allocated, at acquisition, to
the cash generating units that are expected to benefit from that business
combination.
The Group tests goodwill annually for impairment, or more frequently if there
are any indications that goodwill might be impaired.
The recoverable amount of goodwill is determined from value in use
calculations. The key assumptions for the value in use calculations are those
regarding growth rate of client base and project fees. Management's approach
to determining the values to each key assumption is based on past experience
and project work already secured for future periods. Management have
projected cash flows over a period of 5 years, based on a minimum average
growth rate of 10% per annum. Projected cash flows have been discounted at a
rate of 5%.
11 Property, plant and equipment
Group Fixtures and fittings Computer equipment Total
£ £ £
Cost
At 1 April 2015 - - -
Additions - 20,111 20,111
At 31 March 2016 - 20,111 20,111
Additions 34,339 13,260 47,599
At 31 March 2017 34,339 33,371 67,710
Accumulated depreciation
At 1 April 2015 - - -
Charge for the year - 5,457 5,457
At 31 March 2016 - 5,457 5,457
Charge for the year 953 10,741 11,694
At 31 March 2017 953 16,198 17,151
Net book value
At 31 March 2015 - - -
At 31 March 2016 - 14,654 14,654
At 31 March 2017 33,386 17,173 50,559
12 Investment
Company Investments
in subsidiaries
£
Cost
At 1 April 2015 -
Additions 9,602,280
At 31 March 2016 9,602,280
Additions 147,651
At 31 March 2017 9,749,931
Accumulated impairment losses
At 1 April 2015 and 31 March 2016 -
Impairment losses for the year -
At 31 March 2017 -
Net book value
At 31 March 2015 -
At 31 March 2016 9,602,280
At 31 March 2017 9,749,931
The addition of £147,651 represents capital contributions made to the Company's subsidiaries in respect of the share option expense recognised in those subsidiaries on share options issued by the Company.
Details of the Company's subsidiaries at 31 March 2017 are as follows:
Place of incorporation and operation Principal activity Proportion of ownership and voting rights held
Altair Consultancy and Advisory Services Limited England and Wales Specialist housing consultancy 100%
Murja Limited England and Wales Treasury management consultancy 100%
The accounting reference date of each of the subsidiaries is co-terminus with
that of the Company. The registered office of each subsidiary is Tempus
Wharf, 29a Bermondsey Wall West, London, SE16 4SA.
13 Business combinations
On 20 August 2015, General Industries plc (now Aquila Services Group plc)
became the legal parent of Altair Consultancy and Advisory Services Limited by
way of reverse acquisition. The cost of the acquisition is deemed to have
been incurred by Altair Consultancy and Advisory Services Limited, the legal
subsidiary, in the form of equity instruments issued to the owners of the
legal parent. The deemed cost of listing arising on the reverse acquisition
was £3,104,527.
On 12 December 2015, the Group acquired 100% of the issued share capital of
Murja Limited, thereby obtaining control. The principal activity of Murja
Limited is that of treasury management services. Murja Limited was acquired
so as to broaden the range of services the Group can offer.
14 Trade and other receivables
Group Group Company Company
2017 2016 2017 2016
£ £ £ £
Trade receivables 1,153,940 995,660 - -
Other receivables 11,055 17,081 47 1,770
Prepayments and accrued income 185,192 146,095 - -
1,350,187 1,158,836 47 1,770
The directors consider that the carrying amount of trade receivables approximates to their fair value. Trade and other receivables are not considered impaired.
The aged profile of trade receivables not impaired is as follows:
Total <30 days 30-60 days 66-90 days >90 days
£ £ £ £ £
31 March 2017 1,153,940 774,753 299,432 30,933 48,822
31 March 2016 995,660 687,310 236,379 50,149 21,822
15 Deferred tax assets
The following are the Group's major deferred tax assets recognised and the movements thereon during the current and prior reporting period.
Decelerated capital allowances Other timing differences Total
£ £ £
At 31 March 2015 3,045 16,027 19,072
Charge to profit or loss (1,741) (5,660) (7,401)
At 31 March 2016 1,304 10,367 11,671
Charge to profit or loss (1,304) (10,367) (11,671)
At 31 March 2017 - - -
Deferred tax assets are recognised to the extent that it is probable that the future tax profits will allow the deferred tax assets to be recovered.
16 Trade and other payables
Group Group Company Company
2017 2016 2017 2016
£ £ £ £
Trade payables 274,420 220,307 140 19,621
Other payables 27,668 61,067 - -
Amounts owed to Group undertakings - - 183,865 183,409
Taxes and social security costs 341,020 354,117 - -
Accruals and deferred income 308,815 641,010 33,375 15,500
951,923 1,276,501 217,380 218,530
The directors consider that the carrying amount of trade payables approximates to their fair value.
17 Share capital
2017 2016
£ £
Allotted, called up and fully paid
32,651,003 (2016: 32,608,688) Ordinary shares of 5p each 1,632,550 1,630,434
The Company has one class Ordinary share which carries no right to fixed
income. Each share carries the right to one vote at general meetings of the
Company.
A reconciliation of share capital, share premium account and merger reserve is
set out below:
Number of Ordinary shares Amount called up and fully paid Share premium Merger reserve
£ £ £
At 1 April 2015 10,300,000 515,000 464,960 -
Issued at 37.5p per share on 19 August 2015 to acquire Altair 21,200,000 1,060,000 - 6,890,000
Issued at 46.5p per share on 15 December 2015 to acquire Murja 120,000 6,000 - 49,800
Issued at 43.65p per share on 11 March 2016 to acquire Murja 632,688 31,634 - 244,534
Issued at 43.65p per share on 11 March 2016 150,000 7,500 57,975 -
Issued at 10p per share on 11 March 2016 upon exercise of options 206,000 10,300 10,300 -
At 31 March 2016 32,608,688 1,630,434 533,235 7,184,334
Issued at 5p per share on 31 August 2016 upon exercise of options 42,315 2,116 - -
At 31 March 2017 32,651,003 1,632,550 533,235 7,184,334
18 Reserves
The share premium account represents the amount received on the issue of
Ordinary shares by the Company in excess of their nominal value and is
non-distributable.
The merger relief reserve arose on the Company's acquisition of Altair and
Murja. There is no legal share premium on the shares issued as consideration
as section 612 of the Companies Act 2006, which deals with merger relief,
applies in respect of the acquisition.
The reverse acquisition reserve arises due to the elimination of the Company's
investment in Altair. Since the shareholders of Altair became the majority
shareholders of the enlarged group, the acquisition is accounted for as though
the legal acquiree is the accounting acquirer.
19 Dividends
2017 2016
£ £
Amounts recognised as distributions to equity holders
Final dividend paid of 0.44p per share 143,478 -
Interim dividend paid of 0.24p per share (2016: 0.22p) 78,362 69,300
221,840 69,300
Proposed final dividend of 0.50p per share (2016: 0.44p) 163,255 143,478
The proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
financial statements. The proposed dividend is payable on 4 August 2017 to
shareholders on the Register of Members at 21 July 2017. The total
recommended dividend to be paid is 0.50p per share. The payment of this
dividend will not have any tax consequences for the Group.
20 Share-based payment transactions
The Company operates an Unapproved Scheme and an Enterprise Management
Incentives Scheme. The total expense recognised in the year to 31 March 2017
arising from share-based payment transactions is £147,651 (2016: £254,067).
Unapproved scheme Number Weighted average exercise price
Number of options outstanding at 1 April 2016 2,587,093 £0.23
Granted during period - -
Forfeited during period - -
Exercised during period - -
Number of options outstanding as at 31 March 2017 2,587,093 £0.23
Number of options exercisable as at 31 March 2017 2,587,093 £0.23
The exercise price of the options outstanding at 31 March 2017 ranges between
£0.10 and £0.42. The weighted average remaining contractual life of the
options outstanding at 31 March 2017 is 3 years (2016: 4 years).
EMI scheme Number Weighted average exercise price
Number of options outstanding at 1 April 2016 1,713,772 £0.05
Granted during period 510,000 £0.05
Forfeited during period (62,316) £0.05
Exercised during period (42,315) £0.05
Number of options outstanding as at 31 March 2017 2,119,141 £0.05
Number of options exercisable as at 31 March 2017 296,208 £0.05
The weighted average remaining contractual life of the options outstanding at
31 March 2017 is 8 years (2016: 9 years).
For the EMI share options granted during the year, the weighted average fair
value of the options is £0.42. The fair value of the options was measured
using the Black Scholes options valuation model. The inputs into that model
in respect of the EMI share options were as follows:
Share price £0.46
Exercise price £0.05
Expected volatility 19.29%
Expected option life 10 years
Risk-free rate 0.86%
The risk-free rate is based on the yield of a 10 year government bond.
The expected share price volatility is based on the Company's share price
since 20 August 2015.
For the EMI share options exercised in the year, the share price at the date
of exercise was £0.45.
21 Operating lease arrangements
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2017 2016
£ £
Within one year 49,605 39,400
In the second to fifth years inclusive 71,106 91,000
120,711 130,400
Operating lease payments represent rentals payable by the Group for certain of its office properties.
22 Remuneration of key management personnel
The remuneration of the key management personnel of the Group, including all
directors, is set out below in aggregate for each of the categories specified
in IAS 24 Related Party Disclosures.
2017 2016
£ £
Short-term employee benefits 694,790 586,283
Share-based payments 112,956 212,116
Post-retirement benefits 12,000 22,934
819,746 821,333
23 Related party disclosures
Balances and transactions between the Group and other related parties are
disclosed below:
Dividends totalling £153,646 (2016: £49,709) were paid in the year in respect
of Ordinary shares held by the Company's directors.
During the year the Group charged £24,060 (2016: £24,060) to DMJ Consultancy
Services Limited for administrative services, a company in which Derek Joseph
serves as a director. At 31 March 2017, the balance owed to the Group by DMJ
Consulting Limited was £7,219 (2016: £14,436).
During the year the Group was charged £257 (2016: £12,410) by Jeffrey Zitron
for consultancy services.
24 Retirement benefit schemes
Defined contribution schemes
2017 2016
£ £
Contributions payable by the Group for the year 88,565 80,770
25 Control
In the opinion of the Directors there is no single ultimate controlling
party.
26 Financial instruments
Financial risk management
The Group's activities are exposed to a variety of market risk (including
foreign currency risk and interest rate risk), credit risk and liquidity
risk.
Credit risk
Credit risk is the risk of financial loss to the Group resulting from
counterparties failing to discharge their obligations to the Group. The
Group's principal financial assets are trade and other receivables and cash
and cash equivalents.
The Group considers its credit risk to be low. Of the total trade receivables
at the 2017 year end, £107,604 (2016: £68,808) is due from one customer.
There are no other customers that represent more than 9% of the total balance
of trade receivables. The maximum exposure to credit risk is equal to the
carrying value of these instruments.
Liquidity risk
Liquidity risk is the risk of the Group being unable to meet its liabilities
as they fall due. The Group manages liquidity risk by maintaining sufficient
cash reserves and holding banking facilities, and by continuously monitoring
forecast and actual cash flows. In addition, the Group is a cash generative
business with income being received regularly over the course of the year. The
Group held cash reserves of £2,312,600 (2016: £2,552,642) at the year-end.
Foreign currency risk
Foreign exchange risk is the risk of loss due to adverse movements in the
exchange rates affecting the Group's profits and cash flows. Only a very
small number of clients are invoiced in Euros and USD and the foreign exchange
exposure is not considered a significant risk. The Group's principal
financial assets are cash and cash equivalents and trade and other
receivables, which are almost exclusively denominated in Pounds Sterling.
Interest rate risk
The Group does not undertake any hedging activity in this area. The main
element in interest rate risk involves sterling deposits which are placed on
deposit.
Capital risk management
Internal working capital requirements are low and are regularly monitored.
Externally imposed capital requirements to which the Group is subject have
been complied with in the year.
27 Post Balance Sheet event
There are no post balance sheet events.
28 Capital commitments
There were no capital commitments at 31 March 2017.
29 Contingent liabilities
There were no contingent liabilities at 31 March 2017.
This information is provided by RNS
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