REG - General Industries - Annual Financial Report and Notice of AGM <Origin Href="QuoteRef">GNIG.L</Origin> - Part 2
27/06/2016 07:05
- Part 2: For the preceding part double click ID:nRSa2772Ca
cases these standards and guidance have not been endorsed
by the European Union.
§ Annual Improvements 2012-2014 cycle - effective for annual periods beginning
on or after 1 January 2016
§ IFRS 11 (amendments) Accounting for acquisitions of interests in joint
operations - effective for annual periods beginning on or after 1 January
2016
§ IFRS 14 Regulatory Deferral accounts - effective for annual periods
beginning on or after 1 January 2016
§ IAS 16 Property, Plant & Equipment and IAS 38 - Intangible assets
(amendments) - effective for annual periods beginning on or after 1 January
2016
§ IAS 27 (amendments) Equity Method in Separate Financial Statements -
effective for annual periods beginning on or after 1 January 2016
§ IAS 16 Property, Plant & Equipment and IAS 41 - Bearer Plants (amendments) -
effective for annual periods beginning on or after 1 January 2016
§ IAS 1 Disclosure initiative - effective for annual periods beginning on or
after 1 January 2016
§ IFRS 15 Revenue from contracts with Customers - effective for annual periods
beginning on or after 1 January 2018
§ IFRS 16 Leases - effective for annual periods beginning on or after 1
January 2019
§ Amendments to IFRS 10, IFRS 12 and IAS 28 Investment entities - Applying the
Consolidation Exception - effective for annual periods beginning on or after 1
January 2016
§ Amendments to IAS 12 - Recognition of Deferred Tax for Unrealised Losses -
effective for annual periods beginning on or after 1 January 2017
§ Amendments to IAS 7 - Disclosure initiative - effective for annual periods
beginning on or after 1 January 2017
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.
Basis of consolidation
The directors consider that the share for share exchange between the Company
and Altair Consultancy and Advisory Services Limited (Altair) to be a reverse
acquisition as Altair is considered to be the acquirer.
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.
Share based payments (continued)
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: Proforma Proforma
2016 2015
£ £
Continuing operations
Specialist housing consultancy income 4,628,195 4,074,257
Treasury management consultancy income 117,949 -
4,746,144 4,074,257
Interest revenue on bank deposits 1,713 2,502
4,747,857 4,076,759
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 derived exclusively from operations in
the UK. 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.
Proforma Proforma
2016 2015
£ £
Revenue from Consultancy 2,974,901 2,481,290
Revenue from Interim management 1,653,294 1,592,967
Revenue from Treasury management 117,949 -
4,746,144 4,074,257
Cost of sales from Consultancy 2,045,190 1,640,633
Cost of sales from Interim management 1,413,342 1,404,885
Cost of sales from Treasury management - -
3,458,532 3,045,518
Gross profit from Consultancy 929,711 840,657
Gross profit from Interim management 239,952 188,082
Gross profit from Treasury management 117,949 -
1,287,612 1,028,739
Administrative expenses (997,786) (414,506)
Operating profit 289,826 614,233
6 (Loss) / profit before tax
Proforma Proforma
2016 2015
£ £
(Loss) / profit before taxation is arrived at after charging:
Deemed cost of listing 3,104,527 -
Auditors' remuneration 36,000 35,000
Other fees payable to auditors:
- Taxation- Corporate finance services 12,00025,000 --
Depreciation of property, plant and equipment 5,457 -
Staff costs (see note 7) 2,407,049 1,517,843
Operating lease costs - land and buildings 39,400 30,324
The share option charge for the year of £254,607 (2015: £11,923) is included within administrative expenses.
7 Staff costs
Proforma Proforma
2016 2015
The average monthly number of employees (including directors) employed by the Group was: 30 21
2016 2015
£ £
Aggregate remuneration (including directors)
Wages and salaries 1,878,993 1,307,848
Share-based payments 254,607 11,923
Pension contributions 80,770 54,632
Social security costs 192,679 143,440
2,407,049 1,517,843
8 Finance costs
Proforma Proforma
2016 2015
£ £
Loan interest - 13,472
Other interest - 952
- 14,424
9 Taxation
Proforma Proforma
2016 2015
£ £
Corporation tax:
Current year 116,918 108,346
Adjustment in respect of prior years - 24,851
116,918 133,197
Deferred tax charge/(credit) 7,401 (19,072)
124,319 114,125
The tax charge for the year can be reconciled to the (loss)/profit in the income statement as follows:
Proforma Proforma
2016 2015
£ £
(Loss)/profit before taxation (2,812,988) 602,311
Tax at the UK corporation tax rate of 20% (2015: 21%) (562,598) 126,485
Expenses not deductible 66,012 4,027
Deemed cost of listing 620,905 -
Tax effect of utilising unrecognised deferred tax asset - (21,752)
Marginal rate relief - (7,126)
Adjustments in respect of prior years - 24,851
686,917 (12,360)
Tax expense for the year 124,319 114,125
10 Profit for the financial year
As permitted by section 408 Companies Act 2006, the Company has not presented
its own Income Statement in these financial statements. The Company made a
profit of £200,724 (2015: loss of £35,604) for the year ended 31 March 2016.
11 Earnings per share
Basic earnings per share is calculated by dividing the (loss) / profit 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. In
calculating the weighted average number of Ordinary shares during the period
in which the reverse acquisition occurs:
a) The number of Ordinary shares outstanding from the beginning of the
period to the acquisition date is computed on the basis of the weighted
average number of Ordinary shares of the legal acquiree (accounting acquirer)
outstanding during the period multiplied by the exchange ratio established in
the merger agreement; and
b) The number of Ordinary shares outstanding from the acquisition date to
the end of that period is the actual number of Ordinary shares of the legal
acquirer (accounting acquire) outstanding during that period.
The basic earnings per share for each comparative period before the
acquisition date shall be calculated by dividing the profit of the legal
acquiree in each of those periods by the legal acquiree's historical weighted
average number of Ordinary shares outstanding multiplied by the exchange
ratio.
Proforma Proforma
2016 2015
£ £
(Loss) / profit after tax attributable to owners of the parent (2,937,307) 488,186
Weighted average number of shares
- Basic 27,566,749 19,867,935
- Diluted 27,566,749 20,097,946
Basic (loss)/earnings per share (10.66p) 2.46p
Diluted (loss)/earnings per share (10.66p) 2.43p
Adjusted earnings per share before deemed cost of listing
(Loss)/profit after tax attributable to owners of the parent (2,937,307) 488,186
Deemed cost of listing 3,104,527 -
Adjusted earnings 167,220 488,186
Weighted average number of shares
- Basic 27,566,749 19,867,935
- Diluted 30,918,874 20,097,946
Adjusted basic earnings per share 0.61p 2.46p
Adjusted diluted earnings per share 0.54p 2.43p
Potential Ordinary shares are antidilutive when their conversion to Ordinary
shares would increase earnings per share or decrease loss per share from
continuing operations.
12 Intangible assets
Group Goodwill
£
Cost
At 1 April 2014 and 1 April 2015 (proforma) -
Additions 317,688
At 31 March 2016 317,688
Accumulated impairment losses
At 1 April 2014 and 1 April 2015 (proforma) -
Impairment losses for the year -
At 31 March 2016 -
Net book value
At 1 April 2014 -
At 31 March 2015 -
At 31 March 2016 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.
13 Property, plant and equipment
Group Computer equipment
£
Cost
At 1 April 2014 and 1 April 2015 (proforma) -
Additions 16,344
Acquired on purchase of subsidiary 3,767
At 31 March 2016 20,111
Accumulated depreciation
At 1 April 2014 and 1 April 2015 (proforma) -
Charge for the year 5,457
At 31 March 2016 5,457
Net book value
At 1 April 2014 -
At 31 March 2015 -
At 31 March 2016 14,654
14 Investment
Company Investments
in subsidiaries
£
Cost
At 1 April 2014 and 1 April 2015 -
Additions 9,602,280
At 31 March 2016 9,602,280
Accumulated impairment losses
At 1 April 2014 and 1 April 2015 -
Impairment losses for the year -
At 31 March 2016 -
Net book value
At 1 April 2014 -
At 31 March 2015 -
At 31 March 2016 9,602,280
Details of the Company's subsidiaries at 31 March 2016 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.
15 Business combinations
On 20 August 2015, General Industries 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 fair value of the shares in Altair Consultancy and Advisory Services
Limited has been determined from the quoted price of General Industries plc as
at the acquisition date. The value of the consideration shares was
£7,950,000. The fair value of the notional number of equity instruments that
the legal subsidiary would have had to have issued to the legal parent to give
the owners of the legal parent the same percentage ownership as in the
combined entity is £3,862,779. The difference between the notional
consideration paid by General Industries plc for Altair Consultancy and
Advisory Services Limited and the General Industries plc net assets acquired
of £758,252 has been charged to the Consolidated Statement of Comprehensive
Income as a deemed cost of listing amounting to £3,104,527.
Details of net assets acquired and the deemed cost of listing are as follows:
£
Notional consideration 3,862,779
Less net assets acquired:
- Trade and other receivables 7,562
- Cash and cash equivalents 795,690
- Trade and other payables (45,000)
758,252
Deemed cost of listing 3,104,527
Acquisition-related costs capitalised as part of the investment total
£154,086.
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.
Details of net assets acquired and the goodwill:
£
Consideration:
Cash 868,032
Ordinary shares issued (see note 18) 331,968
1,200,000
Less net assets acquired:
Property, plant and equipment 3,767
Investments 207,834
Trade and other receivables 52,502
Cash and cash equivalents 785,262
Trade and other payables (167,053)
882,312
Goodwill 317,688
Acquisition-related costs capitalised as part of the investment total
£31,664.
Included within the Consolidated statement of comprehensive income are the following amounts in relation to Murja Limited:
£
Revenue 117,949
Loss 31,431
16 Trade and other receivables
Proforma
Group Group Company Company
2016 2015 2016 2015
£ £ £ £
Trade receivables 995,660 919,605 - -
Other receivables 17,081 9,100 1,770 -
Prepayments and accrued income 146,095 93,813 - 18,000
1,158,836 1,022,518 1,770 18,000
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 2016 995,660 687,310 236,379 50,149 21,822
31 March 2015 919,605 516,936 368,931 7,862 25,876
17 Deferred tax assets
Group
The following are the major deferred tax assets recognised and the movements thereon during the current and prior reporting period.
Decelerated capital allowances Other timing differences Total
£ £ £
At 1 April 2014 (proforma) - - -
Credit to profit or loss (proforma) 3,045 16,027 19,072
At 1 April 2015 (proforma) 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
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.
18 Trade and other payables
Proforma
Group Group Company Company
2016 2015 2016 2015
£ £ £ £
Trade payables 220,307 265,407 19,621 -
Other payables 61,067 21,575 - -
Amounts owed to Group undertakings - - 183,409 -
Taxes and social security costs 354,117 254,030 - -
Accruals and deferred income 641,010 572,496 15,500 2,835
1,276,501 1,113,508 218,530 2,835
The directors consider that the carrying amount of trade payables approximates to their fair value.
19 Share capital
2016 2015
£ £
Allotted, called up and fully paid
32,608,688 (2015: 10,300,000) Ordinary shares of 5p each 1,630,434 515,000
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
£ £ £
Ordinary shares of £1 each issued at par on incorporation 50,000 50,000 - -
Subdivided into Ordinary shares of 5p each on 29 May 2014 950,000 - - -
Issued at £30,000 per share on 29 May 2014 1 - 30,000 -
Issued at 10p per share on 28 August 2014 9,299,999 465,000 465,000 -
Transaction costs of issue of shares - - (30,040) -
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
20 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.
21 Dividends
Proforma
2016 2015
£ £
Amounts recognised as distributions to equity holders
Interim dividend paid prior to Group reconstruction - 134,370
Interim dividend paid of 0.22p per share 69,300 -
69,300 134,370
Proposed final dividend of 0.44p per share 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 18 August 2016 to
shareholders on the Register of Members on 5 August 2016. The total
recommended dividend to be paid is 0.44p per share. The payment of this
dividend will not have any tax consequences for the Group.
22 Share-based payment transactions
The Company operates various share option schemes. The total expense
recognised in the year to 31 March 2016 arising from share-based payment
transactions is 254,067.
On 22 August 2014, the Company granted 1,030,000 share options to certain
directors at an exercise price of 10p per share. The options are exercisable
between the date granted and 22 August 2019.
On 10 November 2014, the Company granted 300,000 to a further director at an
exercise price of 26p per share. The options are exercisable between the date
granted and 22 August 2019.
Weighted
Number of average
shares exercise price
Outstanding at 1 April 2015 1,330,000 13.6p
Options granted during the year - -
Forfeited during the year - -
Exercised during the year 206,000 10p
Expired during the year - -
Outstanding at 31 March 2016 1,124,000 12.06p
Exercisable at 31 March 2016 1,124,000 12.06p
At the date the options above were exercised, the share price was 47.5p. The
exercise price of the options outstanding at 31 March 2016 ranges between 10p
and 26p. The weighted average remaining contractual life of the options at 31
March 2016 is 3.4 years.
On 28 November 2014, Altair granted 32 EMI share options to certain employees
and directors at an exercise price of £1 per share. 16 of the options were
exercisable between 1 April 2016 and 31 March 2023, with the other 16 options
exercisable between 1 April 2017 and 31 March 2024.
On 31 March 2015, Altair granted 49 EMI share options to certain employees and
directors at an exercise price of £1 per share. The options were exercisable
between 1 April 2018 and 31 March 2025.
As part of the reverse acquisition in August 2015, the above options were
surrendered and replaced by options granted by the Company. The number of
options granted by the Company as replacements was based on the original
number of Altair options multiplied by the exchange ratio established in the
acquisition. In accordance with IFRS 2, the replacement options are accounted
for as modifications. The modification did not result in any increase in the
original fair value of the options granted.
The replacement options have an exercise price of 5p per share. Of the total
1,713,772 replacement options granted, 338,523 are exercisable between 1 April
2016 and 31 March 2025, 338,523 are exercisable between 1 April 2017 and 31
March 2025 and 1,036,726 are exercisable between 1 April 2018 and 31 March
2025.
Weighted
Number of average
shares exercise price
Outstanding at 1 April 2015 (equivalent to 81 Altair options) 1,713,722 5p
Options granted during the year - -
Forfeited during the year - -
Exercised during the year - -
Expired during the year - -
Outstanding at 31 March 2016 1,713,722 5p
Exercisable at 31 March 2016 - -
The exercise price of the options outstanding at 31 March 2016 is 5p. The
weighted average remaining contractual life of the options at 31 March 2016 is
9 years.
The weighted average fair value of the share options at modification date was
£0.162. The fair value of the options was calculated using the Black-Scholes
valuation model. The key inputs into the model were as follows:
Weighted average share price 37.5p
Expected volatility 1%
Risk free rate 0.8%
Option life 9.6 years
On 20 August 2015, the Company granted 1,360,000 unapproved share options to
certain employees and directors of the Group at an exercise price of 29.5p.
The options are exercisable between the date granted and 22 August 2020.
Weighted
Number of average
shares exercise price
Outstanding at 1 April 2015 - -
Options granted during the year 1,360,000 29.5p
Forfeited during the year - -
Exercised during the year - -
Expired during the year - -
Outstanding at 31 March 2016 1,360,000 29.5p
Exercisable at 31 March 2016 1,360,000 29.5p
The exercise price of the options outstanding at 31 March 2016 is 29.5p.
The weighted average remaining contractual life of the options at 31 March
2016 is 4.4 years.
The weighted average fair value of the share options at grant date was £0.092.
The fair value of the options was calculated using the Black-Scholes
valuation model. The key inputs into the model were as follows:
Weighted average share price 37.5p
Expected volatility 1%
Risk free rate 0.8%
Option life 5 years
On 31 March 2016, the Company granted 103,093 unapproved share options to a
certain director of the Group at an exercise price of 5p. The options are
exercisable between the 31 March 2018 and 31 March 2021.
Weighted
Number of average
shares exercise price
Outstanding at 1 April 2015 - -
Options granted during the year 103,093 5p
Forfeited during the year - -
Exercised during the year - -
Expired during the year - -
Outstanding at 31 March 2016 103,093 5p
Exercisable at 31 March 2016 - -
The exercise price of the options outstanding at 31 March 2016 is 5p.
The weighted average remaining contractual life of the options at 31 March
2016 is 5 years.
The weighted average fair value of the share options at grant date was £0.417.
The fair value of the options was calculated using the Black-Scholes valuation
model. The key inputs into the model were as follows:
Weighted average share price 37.5p
Expected volatility 21.5%
Risk free rate 0.88%
Option life 5 years
23 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:
2016 2015
£ £
Within one year 39,400 36,400
In the second to fifth years inclusive 91,000 127,400
130,400 163,800
Operating lease payments represent rentals payable by the Group for certain of its office properties.
24 Related party disclosures
Balances and transactions between the Group and other related parties are
disclosed below:
Remuneration of Directors and key management personnel
The remuneration of the directors, who are the key management personnel of the
Group, is set out below in aggregate for each of the categories specified in
IAS 24 Related Party Disclosures.
2016 2015
£ £
Short-term employee benefits 586,283 500,000
Share-based payments 212,116 8,940
Post-retirement benefits 22,934 21,220
821,333 530,160
Directors' transactions
Dividends totalling £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 to DMJ Consultancy Services Limited
for administrative services, a company in which Derek Joseph serves as a
director. At 31 March 2016, the balance owed to the Group by DMJ Consulting
Limited was £14,436.
During the year the Group was charged £12,410 by Jeffrey Zitron for
consultancy services.
25 Retirement benefit schemes
Defined contribution schemes
2016 2015
£ £
Contributions payable by the Group for the year 130,400 163,800
26 Control
In the opinion of the Directors there is no single ultimate controlling
party.
27 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 2016 year end, £68,808 (2015: £95,841) is due from one customer. There
are no other customers that represent more than 7% 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 £2,552,642 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 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
Capital requirements of the Group are governed by internal requirements.
Internal working capital requirements are low and the only need to retain
capital is for remuneration.
28 Post Balance Sheet event
In line with the remuneration policy, the Remuneration committee agreed that
500,000 share options would be granted to key members of staff in recognition
of their services in 2015-16.
29 Capital commitments
There were no capital commitments at 31 March 2016.
30 Contingent liabilities
There were no contingent liabilities at 31 March 2016.
This information is provided by RNS
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