- Part 2: For the preceding part double click ID:nRSa2983Xa
services tended to roll along
· A majority of the clients have long term storage requirements (legal and health records) which require documents to
be retained and then called out of storage as required
· There are significant costs in moving the boxes to another storage unit. As such customers are more likely to start
using another supplier whilst maintaining the existing operation rather than completely transferring the business
At acquisition, the sales and on-going costs of the existing operation were forecast and were discounted back using the
Group's Weighted Average Cost of Capital. This gave a valuation of £280,000, which is amortised over 10 years on a
straight-line basis, being the estimated life of these assets. The amortisation charge is shown within administrative
expenses.
Ancora Solutions Brand Valuation
The relief from royalty valuation method assumes that if a business did not own the Ancora Solutions' brand it would have
to pay a royalty to the owners of the brand for its use. The value of the brand is the capitalised value of the royalties
that the owner is relieved from paying as a result of the ownership of the asset. The royalty attributed to the purchase
was valued using a similar basis to the Customer Relationships and applying a 0.25% royalty rate. At acquisition this gave
a valuation of £3,000, which is amortised over 10 years on a straight-line basis, being the estimated life of these assets.
The amortisation charge is shown within administrative expenses.
f) Land, building, plant and equipment
Land, buildings, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Leased plant
is included in plant and equipment only where it is held under a finance lease.
Disposal of assets
The gain or loss arising on disposal of an asset is determined as the difference between the disposal proceeds and the
carrying amount of the asset and is recognised in profit or loss.
Depreciation
Depreciation is calculated to write down the cost less estimated residual value of all plant and equipment assets by equal
annual instalments over their expected useful lives. The rates generally applicable are:
· Land not depreciated
· Buildings 2%
· Motor vehicles 33%
· Fixtures and fittings 20% to 50%
· Plant 20% to 50%
· Computer equipment 33%
Material residual value estimates are updated as required, but at least annually.
g) Impairment testing of goodwill, other intangible assets, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows ("cash-generating units"). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level.
Goodwill and intangible assets not yet available for use are tested for impairment at least annually. All other individual
assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less cost to sell, and
value in use based on an internal discounted cash flow evaluation. Any impairment loss is first applied to write down
goodwill to nil and then is charged pro rata to the other assets in the cash-generating unit. With the exception of
goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised no longer
exists.
h) Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the leased asset. The related asset is recognised at
the time of inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum
lease payments plus incidental payments, if any, to be borne by the lessee. A corresponding amount is recognised as a
finance leasing liability.
The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged
to profit or loss over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to profit or loss on a
straight-line basis over the lease term. Lease incentives are spread over the term of the lease.
i) Taxation
Current tax is the tax payable based on the profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally
provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of goodwill, nor the initial recognition of an asset or liability, unless
the related transaction is a business combination or affects tax or accounting profit. In addition, tax losses available
to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences will be able to be offset against future taxable
income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted at the year end.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the statement of
comprehensive income, except where they relate to items that are charged or credited to other comprehensive income or
directly to equity in which case the related tax charge is also charged or credited directly to other comprehensive income
or equity.
j) Dividends
Dividend distributions payable to equity shareholders are included in "other short term financial liabilities" when the
dividends are approved in general meeting prior to the year end.
k) Financial assets and liabilities
The Group's financial assets comprise cash and trade and other receivables, which under IAS 39 are classed as "loans and
receivables". Financial assets are recognised on inception at fair value plus transaction costs. Loans and receivables are
non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and
receivables are measured subsequent to initial recognition at amortised cost using the effective interest method, less
provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in profit or
loss in the year.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all
amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is determined as
the difference between the assets' carrying amount and the present value of estimated future cash flows.
The Group has a number of financial liabilities including trade and other payables and bank borrowings. These are classed
as "financial liabilities measured at amortised cost" in IAS 39. These financial liabilities are carried on inception at
fair value net of transaction costs, and are thereafter carried at amortised cost under the effective interest method.
l) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value.
m) Equity
Equity comprises the following:
· "Share capital" represents the nominal value of equity shares
· "Share premium" represents the difference between the nominal and issued share price
· "Other reserves" represents the Merger Reserve resulting from the demerger from KDM International PLC in November 1999
and represents the difference between the value of the shares acquired (nominal value plus related share premium) and the
nominal value of shares issued
· "Profit and loss account" represents retained profits
· "Treasury shares" represents ordinary shares owned by the company and the cost of treasury shares are deducted from
the Consolidated Statement of Comprehensive Income
n) Contribution to defined contribution pension schemes
The pension costs charged against profits represent the amount of the contributions payable to the schemes in respect of
the accounting period.
o) Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the year end.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different
from those at which they were initially recorded are recognised in the profit or loss in the period in which they arise.
p) Share options
The directors do not consider that the amounts involved are material and, as the performance criteria are not expected to
be met, no charge has been recognised as explained in Note 20.
q) Capital management
The capital structure of the Group consists of debt, cash, loans and equity. The Group's objective when managing capital is
to maintain the cash position to protect the future on-going profitable growth which will reflect in shareholder value.
At 30 June 2015 the Group had a closing cash balance of £1,040,822 (2014: £459,693) and an outstanding mortgage of
£1,137,484 (2014: £1,160,455).
5. PROFIT BEFORE TAXATION
Profit on ordinary activities is stated after:
2015 2014
£ £
Auditors' remuneration
Fees payable to the Company'sauditors for the audit of the Company's annual accounts 9,000 9,000
Fees payable to the Group's auditors for other services
The audit of the company's subsidiaries pursuant to legislation 13,500 12,000
Taxation services 5,000 6,250
All other services 1,680 1,100
Depreciation and amortisation - charged in administrative expenses
Buildings 49,743 49,265
Intangible assets - amortisation - 134,074
Intangible assets - impairment - 322,974
Plant and equipment - owned 121,122 126,125
Plant and equipment - leased 38,856 53,890
Rents payable 216,775 75,483
Foreign exchange gain/(loss) 829 (22,403)
Profit on early surrender of lease - 352,367
Profit/(loss) on sale of fixed asset - (1,625)
Amounts of research and development written off 136,128 -
══════ ══════
6. FINANCE INCOME
2015£ 2014£
Bank interest receivable 2,323 3,439
══════ ══════
7. FINANCE EXPENDITURE
2015£ 2014£
Interest on bank borrowings 35,974 38,674
Finance charges in respect of finance leases 4,490 6,675
Other 560 3,372
────── ──────
41,024 48,721
══════ ══════
8. DIRECTORS AND EMPLOYEES
Staff costs of the Group, including the directors who are considered to be part of the key management personnel, during the
year were as follows:
2015£ 2014£
Wages and salaries 4,694,213 6,056,388
Social security costs 361,326 473,500
Other pension costs 90,533 85,278
─────── ───────
5,146,072 6,615,166
═══════ ═══════
2015Heads 2014Heads
Average number of employees during the year 255 302
══════ ══════
Remuneration in respect of directors was as follows:
2015£ 2014£
Emoluments 466,231 461,065
Pension contributions to money purchase pension schemes 35,871 35,871
─────── ───────
502,102 496,936
═══════ ═══════
During the year 3 (2014: 3) directors participated in money purchase pension schemes.
The amounts set out above include remuneration in respect of the highest paid director as follows:
2015 2014
£ £
Emoluments 162,442 162,979
Pension contributions to money purchase pension schemes 14,734 14,734
═══════ ═══════
A detailed breakdown of the Directors' Emoluments, in line with the AIM rules, appears in the Directors' Report.
Key management compensation:
2015£ 2014£
Short term employee benefits 721,095 754,178
Post employment benefits 52,996 51,871
─────── ───────
774,091 806,049
═══════ ═══════
9. SEGMENTAL INFORMATION
IPPlus PLC operates three business sectors, Ansaback, CallScripter and Ancora Solutions (the discontinued activity). These
divisions are the basis on which the Group reports its segment information. IP3 Telecom and PCI-PAL are part of the
Ansaback division. The results of these two activities are not reported separately to management and are not treated as
separate segments. The inter-segment sales are insignificant. Segment results, assets and liabilities include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated assets
comprise items such as cash and cash equivalents, taxation and borrowings. All liabilities, other than the bank loan, are
unallocated. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are
expected to be used for more than one period.
Ansaback CallScripter Central Continuing Activities DiscontinuedActivities Total
£ £ £ £ £ £
2015
Revenue 5,441,094 1,045,847 - 6,486,941 362,803 6,849,744
─────── ─────── ─────── ─────── ─────── ───────
Segment result 424,508 (31,466) (612,585) (219,543) (53,856) (273,399)
Finance income - - 2,323 2,323 - 2,323
Finance costs - - (41,024) (41,024) - (41,024)
─────── ─────── ─────── ─────── ─────── ───────
Profit/(loss) before tax 424,508 (31,466) (651,286) (258,244) (53,856) (312,100)
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Segment assets 2,715,970 256,894 1,145,223 4,118,087 - 4,118,087
Segment liabilities (1,189,246) - (1,016,600) (2,205,846) - (2,205,846)
Other segment items:
Capital Expenditure
- Plant and Equipment 58,443 962 - 59,405 3,784 63,189
Depreciation (note 13) 146,696 13,282 - 159,978 20,674 180,652
Amortisation of intangible assets (note 12) - - - - 14,150 14,150
Depreciation of Buildings (note 14) 49,743 - - 49,743 - 49,743
Ansaback CallScripter Central Continuing Activities DiscontinuedActivities Total
£ £ £ £ £ £
2014
Revenue 7,292,026 1,099,867 - 8,391,893 731,494 9,123,387
─────── ─────── ─────── ─────── ─────── ───────
Segment result* 1,262,185 (678,653) (241,061) 342,471 (84,706) 257,765
Finance income - - 3,439 3,439 - 3,439
Finance costs - - (48,721) (48,721) - (48,721)
─────── ─────── ─────── ─────── ─────── ───────
Profit/(loss) before tax 1,262,185 (678,653) (286,343) 297,189 (84,706) 212,483
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Segment assets 3,280,204 411,242 257,938 3,949,384 833,798 4,783,182
Segment liabilities (1,160,455) - (1,071,276) (2,231,731) - (2,231,731)
Other segment items:
Capital Expenditure
- Plant and Equipment 224,370 2,069 - 226,439 31,181 257,620
- Intangible Assets - 157,687 - 157,687 - 157,687
Depreciation (note 13) 171,534 8,481 - 180,015 44,782 224,797
Amortisation of intangible assets (note 12) - 134,074 - 134,074 28,300 162,374
Impairment of intangible assets (note 12) - 322,974 - 322,974 - 322,974
Depreciation of Buildings (note 14) 49,265 - - 49,265 - 49,265
* included within the segment result of Central is the profit on lease surrender of £352,367 and of CallScripter is the
loss on impairment of Intangible Assets of £322,974.
Revenue can be split by location of customers as follows:
2015 2014
£ £
Continuing activities
Ansaback division
United Kingdom 5,396,625 7,246,356
United States 2,793 5,360
Ireland 3,129 5,476
Hong Kong 2,203 9,505
France 4,779 4,783
Australia 27,428 115
Luxembourg - 9,880
Other countries 4,137 10,551
─────── ───────
5,441,094 7,292,026
─────── ───────
CallScripter division
United Kingdom 404,313 480,270
United States 522,941 521,797
Ireland 6,109 12,557
Australia 47,500 50,817
Belgium 12,136 16,857
France 3,535 -
Netherlands 36,838 3,416
Denmark 7,637 8,237
Cyprus 4,838 5,916
─────── ───────
1,045,847 1,099,867
─────── ───────
Continuing activities 6,486,941 8,391,893
Discontinued activities
Ancora Solutions division
United Kingdom 362,803 731,494
─────── ───────
6,849,744 9,123,387
═══════ ═══════
One single external customer generates 14% - £772,622 (2014: 41% - £2,990,855) of the Ansaback division's revenues.
All non-current assets are located in the United Kingdom.
10. EARNINGS PER SHARE
The calculation of the earnings per share is based on the profit after taxation added to reserves divided by the weighted
average number of ordinary shares in issue during the relevant period. No diluted profit per share is shown because all
options are non-dilutive as the vesting conditions are not met at the year end. Details of potential share options are
disclosed in note 20.
12 monthsended30 June2015 12 months ended30 June2014
(Loss)/profit after taxation added to reserves £(591,878) £217,184
Weighted average number of ordinary sharesin issue during the period 31,553,949 31,579,732
Basic and diluted earnings per share (1.88)p 0.69p
11. TAXATION
Analysis of charge in the year
2015 2014
£ £
Current tax:
In respect of the year:
UK Corporation tax based on the results for the year
At 20.75% (2014: 22.5%) 222 (222)
Adjustments in respect of prior periods - 32,923
─────── ───────
Total current tax credited 222 32,701
─────── ───────
Deferred tax:
Origination and reversal of temporary differences - (28,000)
Movement on capitalised intangibles (280,000) -
─────── ───────
Total deferred tax charged (280,000) (28,000)
─────── ───────
(Charge)/credit (279,778) 4,701
═══════ ═══════
Factors affecting current tax charge
The tax assessed on the profit on ordinary activities for the year was lower than the standard rate of corporation tax in
the UK of 20.75% (2014: 22.5%).
2015 2014
£ £
(Loss)/profit on ordinary activities before tax (312,100) 212,483
═══════ ═══════
Loss/(profit) on ordinary activities multiplied by standard
rate of corporation tax in the UK of 20.75% (2014: 22.5%) 64,762 (47,809)
Expenses not deductible for tax purposes (3,462) (11,148)
Depreciation (less than)/in excess of capital allowances
for the year (23,177) 6,155
Utilisation of tax losses (34,161) 98,600
Unrelieved tax losses 614 -
Other (4,576) (46,304)
Research and Development claim - 33,207
Movement on deferred tax timing differences (280,000) (28,000)
Prior year adjustment 222 -
─────── ───────
Total tax (charge)/credit for the year (279,778) 4,701
═══════ ═══════
During the previous year to 30 June 2014 the Group submitted a Research and Development claim to HMRC relating to the year
ended 30 June 2013 of £33,207. This credit was recognised in the Income Statement and included in Debtors.
The company has unrecognised tax losses carried forward of £2 million.
12. INTANGIBLE ASSETS
In calculating the value in use of the capitalised internal salaries in the CallScripter division, management make
judgements and estimates of future cash flows. In the previous year, due to these negative cash flow forecasts, the
directors fully impaired the Intangible Assets in this division.
2015 Cost Goodwill£ Purchased intangibles £ Capitalised development costs £ Total £
Goodwill 32,500 - - 32,500
Ancora brand - 3,000 - 3,000
Ancora client relationships - 280,000 - 280,000
CallScripter internal salaries - - 1,083,711 1,083,711
──────── ──────── ──────── ────────
Cost at 1 July 2014 32,500 283,000 1,083,711 1,399,211
──────── ──────── ──────── ────────
Goodwill - - - -
Ancora brand - - - -
Ancora client relationships - - - -
CallScripter internal salaries - - - -
──────── ──────── ──────── ────────
Additions - - - -
──────── ──────── ──────── ────────
Goodwill (32,500) - (32,500)
Ancora brand - (3,000) - (3,000)
Ancora client relationships - (280,000) - (280,000)
CallScripter internal salaries - - - -
──────── ──────── ──────── ───────
Disposals (32,500) (283,000) - (315,500)
──────── ──────── ──────── ───────
Goodwill - - - -
Ancora brand - - - -
Ancora client relationships - - - -
CallScripter internal salaries - - - -
──────── ──────── ──────── ────────
Cost at 30 June 2015 - - 1,083,711 1,083,711
──────── ──────── ──────── ────────
2015 Goodwill£ Purchased intangibles £ Capitalised development costs £ Total £
Amortisation and impairment(included within administrative expenses):
Goodwill - - - -
Ancora brand - 700 - 700
Ancora client relationships - 93,633 - 93,633
CallScripter internal salaries - - 1,083,711 1,083,711
──────── ──────── ──────── ───────
Amortisation at 1 July 2014 - 94,333 1,083,711 1,178,044
──────── ──────── ──────── ────────
Goodwill - - - -
Ancora brand - 150 - 150
Ancora client relationships - 14,000 - 14,000
CallScripter internal salaries - - - -
──────── ──────── ──────── ───────
Charge for the year - 14,150 - 14,150
──────── ──────── ──────── ────────
Goodwill - - - -
Ancora brand - (850) - (850)
Ancora client relationships - (107,633) - (107,633)
CallScripter internal salaries - - - -
──────── ──────── ──────── ──────
Written out in the year - (108,483) - (108,483)
──────── ──────── ──────── ──────
Goodwill - - - -
Ancora brand - - - -
Ancora client relationships - - - -
CallScripter internal salaries - - 1,083,711 1,083,711
──────── ──────── ──────── ────────
Amortisation at 30 June 2015 - - 1,083,711 1,083,711
──────── ──────── ──────── ────────
Net book amount Goodwill£ Purchased intangibles £ Capitalised development costs £ Total £
Goodwill - - - -
Ancora brand - - - -
Ancora client relationships - - - -
CallScripter internal salaries - - - -
──────── ──────── ──────── ────────
Net book amount at 30 June 2015 - - - -
════════ ═════ 322,974 322,974
──────── ──────── ──────── ──────
Goodwill - - - -
Ancora brand - 700 - 700
Ancora client relationships - 93,633 - 93,633
CallScripter internal salaries - amortisation - - 760,737 760,737
CallScripter internal salaries - impairment - - 322,974 322,974
──────── ──────── ──────── ────────
Amortisation at 30 June 2014 - 94,333 1,083,711 1,178,044
──────── ──────── ──────── ────────
Goodwill 32,500 - - 32,500
Ancora brand - 2,300 - 2,300
Ancora client relationships - 186,367 - 186,367
CallScripter internal salaries - - - -
──────── ──────── ──────── ────────
Net book amount at 30 June 2014 32,500 188,667 - 221,167
════════ ════════ ═════════ ═══════
13. PLANT AND EQUIPMENT
2015 Plant£ Motor Vehicles£ Fixtures and Fittings£ ComputerEquipment£ Total£
Cost:
At 1 July 2014 172,502 62,108 447,218 606,529 1,288,357
Additions 3,784 - 2,846 56,559 63,189
Disposals (151,132) (3,000) (26,634) (151,986) (332,752)
──────── ──────── ──────── ──────── ────────
At 30 June 2015 25,154 59,108 423,430 511,102 1,018,794
──────── ──────── ──────── ──────── ────────
Depreciation (included within administrative expenses):
At 1 July 2014 85,200 42,577 358,170 381,154 867,101
Charge for the year 18,698 7,451 37,640 116,863 180,652
Disposals (93,694) (3,000) (26,008) (130,590) (253,292)
──────── ──────── ──────── ──────── ────────
At 30 June 2015 10,204 47,028 369,802 367,427 794,461
──────── ──────── ──────── ──────── ────────
Net book amount at 30 June 2015 14,950 12,080 53,628 143,675 224,333
════════ ════════ ════════ ════════ ════════
2014 Plant£ Motor Vehicles£ Fixturesand Fittings£ Computer Equipment£ Total£
Cost:
At 1 July 2013 135,621 58,113 400,238 448,038
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