REG - Record PLC - Final Results <Origin Href="QuoteRef">RECL.L</Origin> - Part 3
16/06/2017 07:05
- Part 3: For the preceding part double click ID:nRSP2591Ib
At 1 April 2015 1,150 1,150
Additions 39 39
Disposals - -
At 31 March 2016 1,189 1,189
Amortisation
At 1 April 2015 646 646
Charge for the year 244 244
Disposals - -
At 31 March 2016 890 890
Net book amounts
At 31 March 2016 299 299
At 1 April 2015 504 504
Intangible assets includes the capitalised development costs of the Group's
middle and back office system which was completed in June 2012 and has an
estimated useful economic life of five years. The annual contractual
commitment for the maintenance and support of software is £174,941 (2016:
£138,112). All amortisation charges are included within administrative
expenses.
12. Investments
Company
Investments in subsidiaries are shown at cost less impairment losses. The
capitalised investment in respect of share-based payments offered by
subsidiaries is equal to the cumulative fair value of the amounts payable to
employees recognised as an expense by the subsidiary. Investments in funds are
measured at fair value through profit or loss.
2017 2016
£'000 £'000
Investment in subsidiaries (at cost)
Record Currency Management Limited 10 10
Record Group Services Limited 10 10
Record Portfolio Management Limited 10 10
Record Currency Management (US) Inc. - -
Record Fund Management Limited - -
N P Record Trustees Limited - -
Total investment in subsidiaries (at cost) 30 30
Capitalised investment in respect of share-based payments
Record Currency Management (US) Inc. 68 79
Record Group Services Limited 789 578
Total capitalised investment in respect of share-based payments 857 657
Total investment in subsidiaries 887 687
Particulars of subsidiary undertakings
Name Nature of business
Record Currency Management Limited Currency management services (FCA registered)
Record Group Services Limited Management services to other Group undertakings
Record Portfolio Management Limited Dormant
Record Currency Management (US) Inc. US advisory and service company (SEC and CFTC registered)
Record Fund Management Limited Dormant
N P Record Trustees Limited Dormant trust company
The Group's interest in the equity capital of subsidiary undertakings is 100%
of the ordinary share capital in all cases. Record Currency Management (US)
Inc. is incorporated in Delaware (registered office: Corporation Service
Company, 2711 Centerville Road, Wilmington, DE 19808), and all other
subsidiaries are registered in England and Wales with their registered office
at Morgan House, Madeira Walk, Windsor, Berkshire, SL4 1EP, UK.
Investment in funds
In addition to the subsidiaries listed above, funds are consolidated where the
Group has determined that a controlling interest exists through an investment
holding in the fund, in accordance with IFRS 10 Consolidated Financial
Statements. These funds are seed investments, which have various investment
objectives and policies and are subject to the terms and conditions of their
offering documentation. The principal activity of each is to invest capital
from investors in a portfolio of assets in order to provide a return for those
investors.
The Group has controlled both the Record Currency - Emerging Market Currency
Fund and the Record Currency - Strategy Development Fund throughout the year
ended 31 March 2017 and the comparative period, the year ended 31 March 2016,
and both were consolidated in full, on a line-by-line basis in the Group's
financial statements throughout these periods.
The Group was not in control of the Record Currency - FTSE FRB10 Index Fund as
at 1 April 2015, at which point the Group did not consolidate the fund on a
line-by-line basis, but the Group did regain control of the fund on 1
September 2015 and has consolidated it in full on a line-by-line basis since
that date.
In May 2013, the Company invested in the Record Currency - Global Alpha Fund
which changed its name to Record Currency - Strategy Development Fund in
November 2015. The Group has controlled this fund since inception, and the
fund is consolidated in full on a line-by-line basis.
All three fund investments are presented within investments in the Company
statement of financial position.
2017 2016
Investment in funds £'000 £'000
Record Currency - FTSE FRB10 Index Fund 1,146 1,060
Record Currency - Emerging Market Currency Fund 1,104 1,000
Record Currency - Strategy Development Fund (formerly Global Alpha Fund) 1,060 919
Total 3,310 2,979
All three fund entities are sub-funds of the Record Umbrella Fund, an
open-ended umbrella unit trust authorised in Ireland.
13. Deferred taxation - Group
Deferred tax is the future tax consequences of temporary differences between
the carrying amounts and tax bases of assets and liabilities shown on the
statement of financial position. The amount of deferred tax provided is based
on the expected manner of recovery or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively enacted at
the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. The carrying amount of the deferred tax assets are reviewed at each
statement of financial position date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all
or part of the asset to be recovered.
A deferred tax liability is generally recognised for all taxable temporary
differences.
Deferred tax assets or liabilities arising on goodwill are not recognised but
are however recognised on separately identifiable intangible assets. Deferred
tax arising on the initial recognition of an asset or liability, other than a
business combination, that at the time of the transaction affects neither the
accounting nor taxable profit or loss, is not recognised.
2017 2016
£'000 £'000
Credit/(charge) to income statement in period 59 (30)
Asset brought forward 43 73
Asset carried forward 102 43
The deferred tax asset consists of the tax effect of temporary differences in
respect of:
2017 2016
£'000 £'000
Deferred tax allowance on unvested share options 191 10
Shortfall of taxation allowances over depreciation on fixed assets (89) 33
Total 102 43
At the year end the Group had deferred tax assets of £101,606 (2016: £42,850).
At the year end there were share options not exercised with an intrinsic value
for tax purposes of £1,006,095 (2016: £47,742). On exercise the Group will be
entitled to a corporation tax deduction in respect of the difference between
the exercise price and the strike price. There is no unprovided deferred
taxation.
14. Trade and other receivables
Trade and other receivables are stated at their original invoice value, as the
interest that would be recognised from discounting future cash receipts over
the short credit period is not considered to be material. Individual
receivables are considered for impairment when they are past due or when other
objective evidence is received that a specific counterparty will default.
Impairment of trade receivables is presented within administrative expenses.
An analysis of the Group's receivables is provided below:
2017 2016
£'000 £'000
Trade receivables 5,937 4,027
Accrued income 85 1,055
Other receivables 29 25
Prepayments 921 588
Total 6,972 5,695
All amounts are short term. The Directors consider that the carrying amount of
trade and other receivables approximates to their fair value. All of the
Group's trade and other receivables have been reviewed for indicators of
impairment; no such indicators were noted. The Group has not renegotiated the
terms of any receivables in the year ended 31 March 2017. The carrying amount
of receivables whose terms have been renegotiated, that would otherwise be
past due or impaired is £nil (2016: £nil).
15. Derivative financial assets and liabilities
Derivative financial instruments are initially recognised at cost on the date
on which the contract is first entered into unless the fair value at
acquisition is different to cost, in which case fair value is recognised.
Subsequently they are measured at fair value with gains and losses recognised
in profit or loss. Transaction costs are immediately recognised in profit or
loss. The fair values of derivative financial instruments are determined by
reference to active market transactions.
The Group holds derivative financial instruments for two purposes. The Group
uses forward foreign exchange contracts to reduce the risk associated with
sales denominated in foreign currencies, and additionally uses both foreign
exchange options and forward foreign exchange contracts in order to achieve a
return within the seed funds. The instruments are recognised at fair value.
The fair value of the contracts is calculated using the market rates
prevailing at the period end date. The net gain or loss on instruments is
included within revenue.
2017 2016
Derivative financial assets £'000 £'000
Forward foreign exchange contracts held to hedge cash flow 18 -
Forward foreign exchange contracts held for trading 35 106
Total 53 106
2017 2016
Derivative financial liabilities £'000 £'000
Forward foreign exchange contracts held to hedge cash flow (5) (108)
Forward foreign exchange contracts held for trading (43) -
Total (48) (108)
Derivative financial instruments held to hedge cash flow
At 31 March 2017 there were outstanding contracts with a principal value of
£7,786,158 (31 March 2016: £5,996,550) for the sale of foreign currencies in
the normal course of business. The fair value of the contracts is calculated
using the market forward contract rates prevailing at 31 March 2017. The Group
does not apply hedge accounting.
The net gain or loss on forward foreign exchange contracts held to hedge cash
flow is as follows:
2017 2016
Derivative financial instruments held to hedge cash flow £'000 £'000
Net loss on forward foreign exchange contracts at fair value through profit or loss (506) (315)
Derivative financial instruments held for trading
The Record Currency - FTSE FRB10 Index Fund and the Record Currency - Emerging
Market Currency Fund, use forward foreign exchange contracts in order to
achieve a return. The Record Currency - Strategy Development Fund may use a
variety of instruments including forward foreign exchange contracts, options
and futures in order to achieve a return.
All derivative financial instruments held by the Record Currency - Strategy
Development Fund (formerly the Global Alpha Fund) and the Record Currency -
Emerging Market Currency Fund were classified as held for trading throughout
the period. The derivative financial instruments held by the Record Currency -
FTSE FRB10 Index Fund were classified as held for trading from 1 September
2015 when the fund was consolidated into the Group financial statements.
At 31 March 2017 there were outstanding contracts with a principal value of
£16,085,621 (31 March 2016: £14,621,185).
The net gain or loss on derivative financial instruments held for trading for
the year was as follows:
2017 2016
Derivative financial instruments held for trading £'000 £'000
Net gain/(loss) on forward foreign exchange contracts and foreign exchange options at fair value through profit or loss 612 (178)
16. Cash management
The Group's cash management strategy employs a variety of treasury management
instruments including cash, money market deposits and treasury bills. Whilst
the Group manages and considers all of these instruments as cash, which are
subject to its own internal cash management process, not all of these
instruments are classified as cash or cash equivalents under IFRS.
IFRS defines cash and cash equivalents as cash in hand, on demand and
collateral deposits held with banks, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value. Moreover, instruments
can only generally be classified as cash and cash equivalents where they are
held for the purpose of meeting short-term cash commitments rather than for
investment or other purposes.
In the Group's judgement, bank deposits and treasury bills with maturities in
excess of 3 months do not meet the definition of short-term or highly liquid
and are held for purposes other than meeting short-term commitments. In
accordance with IFRS, these instruments are not categorised as cash or cash
equivalents and are disclosed as money market instruments with maturities >3
months.
Assets managed as cash Group Company
2017 2016 2017 2016
£'000 £'000 £'000 £'000
Bank deposits with maturities > 3 months 15,203 11,518 - -
Treasury bills with maturities > 3 months 2,899 1,502 - -
Money market instruments with maturities > 3 months 18,102 13,020 - -
Cash 7,457 5,439 2 2
Bank deposits with maturities <= 3 months 11,663 16,281 - -
Cash and cash equivalents 19,120 21,720 2 2
Total assets managed as cash 37,222 34,740 2 2
Cash and cash equivalents Group Company
2017 2016 2017 2016
£'000 £'000 £'000 £'000
Cash and cash equivalents - sterling 14,174 16,641 2 2
Cash and cash equivalents - USD 1,026 1,941 - -
Cash and cash equivalents - CHF 3,846 3,067 - -
Cash and cash equivalents - other currencies 74 71 - -
Total cash and cash equivalents 19,120 21,720 2 2
The Group cash and cash equivalents balance incorporates the cash held by any
fund deemed to be under control of Record plc (refer to note 12 for
explanation of accounting treatment). As at 31 March 2017, the cash and cash
equivalents held by the seed funds over which the Group had control totalled
£5,140,828 (31 March 2016: £5,380,007) and the money market instruments with
maturities > 3 months held by these funds were £2,899,233 (31 March 2016:
£1,502,326).
17. Current liabilities
Trade and other payables are stated at their original invoice value, as the
interest that would be recognised from discounting future cash payments over
the short payment period is not considered to be material.
Trade and other payables
Group Company
2017 2016 2017 2016
£'000 £'000 £'000 £'000
Trade payables 418 171 - -
Amounts owed to Group undertakings - - 11 11
Other payables 82 2 - -
Other tax and social security 324 248 - -
Accruals 2,189 1,951 - -
Total 3,013 2,372 11 11
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
Current tax liabilities
Group Company
2017 2016 2017 2016
£'000 £'000 £'000 £'000
Corporation tax 804 776 67 -
18. Called up share capital
The share capital of Record plc consists only of fully paid ordinary shares
with a par value of 0.025p each. All shares are equally eligible to receive
dividends and the repayment of capital and represent one vote at the
shareholders' meeting.
2017 2016
£'000 Number £'000 Number
Authorised
Ordinary shares of 0.025p each 100 400,000,000 100 400,000,000
Called up, allotted and fully paid
Ordinary shares of 0.025p each 55 221,380,800 55 221,380,800
Movement in Record plc shares held by the Record plc Employee Benefit Trust
("EBT")
The EBT was formed to hold shares acquired under the Record plc share-based
compensation plans. Under IFRS the EBT is considered to be under de facto
control of the Group, and has therefore been consolidated into the Group
financial statements.
Neither the purchase nor sale of own shares leads to a gain or loss being
recognised in the Group statement of comprehensive income.
Number
Record plc shares held by EBT as at 31 March 2015 3,848,062
Adjustment for net purchases by EBT 1,094,186
Record plc shares held by EBT as at 31 March 2016 4,942,248
Adjustment for net sales by EBT (1,323,253)
Record plc shares held by EBT as at 31 March 2017 3,618,995
The holding of the EBT comprises own shares that have not vested
unconditionally to employees of the Group. Own shares are recorded at cost and
are deducted from retained earnings.
Further information regarding the Record plc share-based compensation plans
and relevant transactions made during the year is included in note 19.
19. Share-based payments
During the year ended 31 March 2017 the Group has managed the following
share-based compensation plans:
a) The Group Profit Share Scheme: share awards issued under the Group Profit
Share Scheme are classified as share-based payments with cash alternatives
under IFRS 2.
b) The Record plc Share Scheme: share options issued under the Record plc
Share Scheme are classified as equity-settled share-based payments under IFRS
2.
c) The Record plc Share Incentive Plan: the Group operates the Record plc
Share Incentive Plan ("SIP") to encourage more widespread ownership of Record
plc shares by employees. The SIP is a tax-approved scheme offering attractive
tax savings for employees retaining their shares in the scheme over the medium
to long term.
All obligations arising from the three schemes are fulfilled through
purchasing shares in the market.
a. Group Profit Share Scheme
Share-based payments with cash alternatives
These transactions are compound financial instruments, which include a debt
element and an equity element. The fair value of the debt component of the
amounts payable to the employee is calculated as the cash amount alternative
offered to the employee at grant date and the fair value of the equity
component of the amounts payable to the employee is calculated as the market
value of the share award at grant date less the cash forfeited in order to
receive the share award. The debt component is charged to profit or loss over
the period in which the award is earned and remeasured at fair value at each
reporting date. The equity component is charged to profit or loss over the
period in which the award is earned.
The Group Profit Share Scheme allocates a proportion of operating profits to a
profit share pool to be distributed between all employees of the Group. The
Remuneration Committee has the discretion to vary the proportion awarded to
the profit share pool between 25% and 35% of operating profits, with the
intention of maintaining an average level of 30% of operating profits over the
medium term. Directors and senior employees receive one third of their profit
share in cash, one third in shares ("Earned Shares") and may elect to receive
the final third as cash only or to allocate some, or all, of the amount for
the purchase of Additional Shares. The charge to profit or loss in respect of
Earned Shares in the period was £733,858 (2016: £631,252). Other employees
receive two thirds of their profit share in cash and may elect to receive the
final third as cash only or to allocate some, or all, of the amount for the
purchase of Additional Shares.
If an individual elects to receive Additional Shares, the Group simultaneously
awards a Matching Share value amount using a multiple decided by the
Remuneration Committee. The multiple is dependent on the level of seniority of
the employee. The number of shares is determined by the post-tax cash
attributed to Earned Shares plus Additional Shares plus Matching Shares
divided by the aggregate market value achieved on the purchase of all such
shares in the market. The charge to profit or loss in respect of Matching
Shares in the period was £292,525 (2016: £262,426). Shares awarded under the
Profit Share Scheme do not include any vesting restrictions but rather
restrictions over subsequent sale and transfer. All shares which are the
subject of share awards vest immediately and are transferred to a nominee
allowing the individual to retain full rights in respect of the shares
purchased. These shares cannot be sold, transferred or otherwise disposed of
without the consent of the Remuneration Committee except as follows:
· Earned Shares - one third on each anniversary of the Profit Share
Payment date; and
· Additional or Matching Shares - the third anniversary of the Profit
Share Payment date for Directors and senior employees and the second
anniversary of the Profit Share Payment date for all other employees.
The Group Profit Share Scheme rules contain clawback provisions allowing for
the repayment of profit share payments under certain circumstances including a
material breach of contract, an error in performance of duties or a
restatement of accounts which leads to a change in any prior award under the
scheme.
Shares awarded under this scheme are purchased in the market.
b. The Record plc Share Scheme
Equity-settled share-based payments
The fair value of the amounts payable to employees under these awards is
recognised as an expense over the vesting period of the award, with a
corresponding increase in equity. All such awards made by the Group involve
the parent company granting rights to its equity instruments to employees of
its subsidiary. Consequently the subsidiary measures the services received
from its employees in accordance with the above classification under IFRS 2
and recognises a corresponding increase in equity as a contribution from the
parent. The parent has the obligation to settle the transaction with the
subsidiary's employees and therefore recognises an increase in its investment
in the subsidiary and a corresponding increase in equity.
The fair value of options granted is measured at grant date using an
appropriate valuation model, taking into account the terms and conditions upon
which the instruments were granted. The fair value amounts for the options
issued since flotation were determined using quoted share prices.
The Record plc Share Scheme allows deferred share awards to be granted to
employees and directors in the Record Group. Part 1 of the Record plc Share
Scheme allows the grant of Unapproved Options to employees and directors and
Part 2 allows the grant of HMRC Approved Options to employees and directors.
Each participant may be granted Approved Options over shares with a total
market value of up to £30,000 on the date of grant. There is no such limit on
the value of grant for Unapproved Options, which have recently been granted
with a market value exercise price in the same way as for the Approved
Options.
Options over an aggregate of 4,197,521 shares were granted under the Share
Scheme during the year (2016: 4,402,249), of which 3,790,000 were made subject
to Unapproved Options and 407,521 to Approved Options (2016: 3,197,500 made
subject to Unapproved Options and 1,204,749 to Approved Options). All options
were granted with an exercise price per share equal to the share price
prevailing at the time of grant.
The 328,574 Approved Options issued on 30 November 2016 each become
exercisable on the fourth anniversary of the date of grant, subject to the
employee being in employment with the Group at the relevant vesting date and
to the extent performance conditions have been satisfied.
The 1,590,000 Unapproved Options issued on 30 November 2016 each become
exercisable in four equal tranches on the first, second, third and fourth
anniversary of the date of grant, subject to the employee being in employment
with the Group at the relevant vesting date and to the extent performance
conditions have been satisfied.
The 2,200,000 Unapproved Options issued on 30 November 2016 each become
exercisable in three equal tranches on the third, fourth and fifth anniversary
of the date of grant, subject to the employee being in employment with the
Group at the relevant vesting date and to the extent personal performance
conditions have been satisfied.
The 78,947 Approved Options issued on 31 January 2017 each become exercisable
on the fourth anniversary of the date of grant, subject to the employee being
in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The fair value of the services provided by employees has been calculated
indirectly by reference to the fair value of the equity instruments granted.
Fair value amounts for the options granted in the year ended 31 March 2017
were determined using a Black Scholes option-pricing method and the following
assumptions:
Model input Weighted average value
Share price 34.1p
Exercise price 34.1p
Expected volatility 60%
Option life 2.3 years
Risk-free interest rate (%) 0.73%
Expected volatility is based on historical volatility.
The Group share-based payment expense in respect of the Share Scheme was
£200,220 for the year ended 31 March 2017 (2016: £240,067).
Outstanding share options
At 31 March 2017, the total number of ordinary shares of 0.025p outstanding
under Record plc share compensation schemes was 13,656,564 (2016: 13,369,249).
These deferred share awards and options are over issued shares, a proportion
of which are hedged by shares held in an Employee Benefit Trust. Details of
outstanding share options and deferred shares awarded to employees are set out
below:
Date of grant At 1 April 2016 Granted Exercised Lapsed / forfeited At 31 March 2017 Earliest vesting date Latest vesting date 14 Exercise price
08/08/11 75,000 - - (75,000) - 08/08/13 08/08/15 £0.3225
02/12/11 200,000 - (200,000) - - 02/12/15 02/12/15 £0.1440
18/12/12 1,440,000 - - (1,440,000) - 18/12/16 18/12/16 £0.3098
18/12/12 102,500 - (51,250) (51,250) - 18/12/13 18/12/16 £0.3098
27/09/13 480,000 - - - 480,000 27/09/17 27/09/17 £0.3085
27/09/13 982,500 - (321,250) (333,750) 327,500 27/09/14 27/09/17 £0.3085
18/11/13 1,400,000 - (233,333) (233,333) 933,334 18/11/16 18/11/18 £0.3000
26/11/14 2,160,000 - - - 2,160,000 26/11/17 26/11/19 £0.3586
24/03/15 320,000 - - (50,000) 270,000 24/03/19 24/03/19 £0.3450
24/03/15 1,847,000 - (452,375) (9,375) 1,385,250 24/03/16 24/03/19 £0.3450
01/12/15 1,800,000 - - - 1,800,000 01/12/18 01/12/20 £0.2888
27/01/16 1,325,000 - (331,250) - 993,750 27/01/17 27/01/20 £0.2450
27/01/16 837,249 - - (128,040) 709,209 27/01/20 27/01/20 £0.2450
27/01/16 327,500 - - - 327,500 27/01/19 27/01/21 £0.2450
27/01/16 72,500 - - - 72,500 27/01/19 27/01/21 £0.2450
30/11/16 - 328,574 - - 328,574 30/11/20 30/11/20 £0.34072
30/11/16 - 1,590,000 - - 1,590,000 30/11/17 30/11/20 £0.34072
30/11/16 - 2,200,000 - - 2,200,000 30/11/19 30/11/21 £0.34072
31/01/17 - 78,947 - - 78,947 31/01/21 31/01/21 £0.38000
Total options 13,369,249 4,197,521 (1,589,458) (2,320,748) 13,656,564
Weighted average exercise price of options £0.30 £0.34 £0.28 £0.31 £0.32
During the year 1,589,458 options were exercised. The weighted average share
price at date of exercise was £0.37. At 31 March 2017 a total of 461,750
options had vested and were exercisable.
The Directors' interests in the combined share schemes are as follows:
Ordinary shares held as at
31 March 31 March
2017 2016
Record plc Group Profit Share Scheme (interest in restricted share awards)
James Wood-Collins 573,568 783,651
Leslie Hill 759,618 542,301
Bob Noyen 374,641 343,548
Steve Cullen 380,429 270,824
Record plc Share Scheme (interest in unvested share options)
James Wood-Collins 2,663,334 2,580,000
Leslie Hill 1,730,000 1,180,000
Bob Noyen 1,730,000 1,180,000
Steve Cullen 1,370,000 895,000
Performance measures
Performance conditions attached to all options granted to Board Directors
differ to those granted for all other staff. All Executive Director option
awards are subject to a performance condition and vest on each of the third,
fourth and fifth anniversaries of the date of grant subject to an earnings per
share ("EPS") hurdle linked to the annualised EPS growth for the respective
three, four and five year periods from grant. Vesting is on a stepped basis,
with 25% of each tranche vesting if EPS growth over the relevant period is at
least RPI plus 4% per annum, increasing through 50%, 75% and with 100% vesting
if EPS growth exceeds RPI plus 13%, as shown in the table below. Options
awarded subject to EPS performance conditions are valued using a Black -
Scholes model.
Record's average EPS growth Percentage of shares subject to the award which vest
>RPI growth + 13% 100%
>RPI growth + 10%, = RPI growth + 7%, = RPI growth + 4%, = 3 months 18,102 13,020
Cash and cash equivalents 19,120 21,720
43,326 39,953
The debtors' age analysis is also evaluated on a regular basis for potential
doubtful debts. It is management's opinion that no provision for doubtful
debts is required. The table below is an analysis of trade receivables and
accrued income by due date:
Carrying amount Neither impaired nor past due 0-3 months past due More than 3 months past due
At 31 March 2017 £'000 £'000 £'000 £'000
Trade receivables 5,937 5,790 147 -
Accrued income 85 85 - -
6,022 5,875 147 -
98% 2% 0%
Carrying amount Neither impaired nor past due 0-3 months past due More than 3 months past due
At 31 March 2016 £'000 £'000 £'000 £'000
Trade receivables 4,027 3,912 115 -
Accrued income 1,055 1,055 - -
5,082 4,967 115 -
98% 2% 0%
The Group offers standard credit terms of 30 days from invoice date. It is the
Group's policy to assess debtors for recoverability on an individual basis and
to make a provision where it is considered necessary. In assessing
recoverability the Group takes into account any indicators of impairment up to
the reporting date. The application of this policy generally results in debts
that are 0-3 months overdue not being provided for unless individual
circumstances indicate that a debt is impaired.
Trade receivables are made up of 54 debtors' balances (2016: 51). The largest
individual debtor corresponds to 16% of the total balance (2016: 15%). Debtor
days, based on the generally accepted calculation of debtor days, is 91 days
(2016: 70 days). This reflects the quarterly billing cycle used by the Group
for the vast majority of its fees. As at 31 March 2017 2.4% of debt was
overdue (2016: 2%). No debtors' balances have been renegotiated during the
year or in the prior year.
Liquidity risk
The Group is exposed to liquidity risk, namely that it may be unable to meet
its payment obligations as they fall due. The Group maintains sufficient cash
and marketable securities to be able to meet all such obligations. Management
review cash flow forecasts on a regular basis to determine whether the Group
has sufficient cash reserves to meet the future working capital requirements
and to take advantage of business opportunities. The average creditor payment
period is 33 days (2016: 14 days).
Contractual maturity analysis for financial liabilities:
Carrying amount Due or due in less than 1 month Due between 1 and 3 months Due between 3 months and 1 year
At 31 March 2017 £'000 £'000 £'000 £'000
Trade payables 418 272 27 119
Accruals 2,189 90 1,027 1,072
Derivative financial liabilities 48 45 3 -
Carrying amount Due or due in less than 1 month Due between 1 and 3 months Due between 3 months and 1 year
At 31 March 2016 £'000 £'000 £'000 £'000
Trade payables 171 107 14 50
Accruals 1,951 180 1,017 754
Derivative financial liabilities 108 38 70 -
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or
cash flows associated with the instrument will fluctuate due to changes in
market interest rates. Interest rate risk arises from interest-bearing
financial assets and liabilities held by the Group. Interest-bearing assets
comprise money market instruments and cash and cash equivalents which are
considered to be short-term liquid assets. It is the Group's policy to settle
trade payables within the credit terms allowed and the Group does not
therefore incur interest on overdue balances.
A sensitivity analysis has not been disclosed for the impact of interest rate
changes as any reasonable range of change in interest rate would not directly
have a material impact on profit or equity.
Interest rate profiles
Fixed rate Floating rate No interest rate Total
At 31 March 2017 £'000 £'000 £'000 £'000
Financial assets
Trade receivables - - 5,937 5,937
Accrued income - - 85 85
Other receivables - - 29 29
Derivative financial assets at fair value through profit or loss - - 53 53
Money market instruments with maturities > 3 months 18,102 - - 18,102
Cash and cash equivalents 11,663 7,457 - 19,120
Total financial assets 29,765 7,457 6,104 43,326
Financial liabilities
Trade payables - - (418) (418)
Accruals - - (2,189) (2,189)
Derivative financial liabilities at fair value through profit or loss - - (48) (48)
Total financial liabilities -
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