REG - Ross Group PLC - Annual Financial Report <Origin Href="QuoteRef">RGP.L</Origin> - Part 2
28/04/2016 17:35
- Part 2: For the preceding part double click ID:nRSb7355Wa
Cash flows from financing activities
Loan Repayment (67) (119)
Amount withdrawn by directors (8) (30)
Share issue - 132
Net cash from financing activities (75) (17)
(Decrease)/increase in cash and cash equivalents (11) 14
Cash and cash equivalents at beginning of year 2 15 1
Cash and cash equivalents at end of year 2 4 15
Ross Group Plc & Subsidiaries
Company Statement of Cash Flows
for the Year Ended 31st December 2015
31.12.15 31.12.14
Notes £'000 £'000
Cash flows from operating activities
Cash generated from operations 1 67 31
Net cash from operating activities 67 31
Cash flows from financing activities
Loan repayment (70) (119)
Amount withdrawn by directors (8) (30)
Share issue - 132
Net cash from financing activities (78) (17)
(Decrease)/increase in cash and cash equivalents (11) 14
Cash and cash equivalents at beginning of year 2 15 1
Cash and cash equivalents at end of year 2 4 15
Ross Group Plc & Subsidiaries
Notes to the Statements of Cash Flows
for the Year Ended 31st December 2015
1. RECONCILIATION OF PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Group
31.12.15 31.12.14
£'000 £'000
Profit before income tax 111 2
Increase in trade and other receivables (11) (1)
(Decrease)/increase in trade and other payables (36) 30
Cash generated from operations 64 31
Company
31.12.15 31.12.14
£'000 £'000
Profit before income tax 114 5
Increase in trade and other receivables (11) (2)
(Decrease)/increase in trade and other payables (36) 28
Cash generated from operations 67 31
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Group Company
Year ended 31st December 2015
31.12.15 1.1.15 31.12.15 1.1.15
£'000 £'000 £'000 £'000
Cash and cash equivalents 4 15 4 15
Year ended 31st December 2014
31.12.14 1.1.14 31.12.14 1.1.14
£'000 £'000 £'000 £'000
Cash and cash equivalents 15 1 15 1
Ross Group Plc & Subsidiaries
Notes to the Consolidated Financial Statements
for the Year Ended 31st December 2015
1. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards on a going concern basis.
The adoption of all relevant new Standards issued by the International
Accounting Standards Board in the current period has not led to any changes in
the Group's accounting policies or financial statements. The directors have
adopted these policies to the extent they feel is appropriate.
At the date of authorisation of these financial statements a number of
Standards, amendments and Interpretations, issued by the IASB and not applied
in these financial statements, were in issue but not yet effective (and in
some cases had not yet been adopted by the EU) none of which will have a
significant impact on the financial statements.
Going concern
Although the Group has incurred significant losses in the past resulting in
negative retained earnings and total liabilities exceed total assets the
Directors feel the going concern basis is appropriate. The change in
management structure that took place in 2009 year has led to a new strategy
being adopted by the Group and will allow them to take advantage of new,
profitable business opportunities.
Basis of consolidation
The group financial statements consolidate those of the company and of its
subsidiary undertakings drawn up to 31 December 2015. Profits or losses on
intra-group transactions and intra-group balances are eliminated in full. On
acquisition of a subsidiary, all of the subsidiary's assets and liabilities
which exist at the date of acquisition are recorded at their fair values
reflecting their condition at that date.
Revenue recognition
Revenue is the total amount receivable by the group for goods supplied and
services provided to third parties, excluding VAT.
Financial instruments
Financial assets and liabilities are recognised on the Statement of Financial
Position when the entity becomes party to the contractual provisions of the
instrument.
The Group's financial instruments consist primarily of cash and cash
equivalents, accounts receivable and accounts payable.
Cash and cash equivalents
Cash and cash equivalents comprise cash and short term deposits held with
banks, bank overdrafts are recorded under current liabilities on the Statement
of Financial Position.
Trade and other receivables
Trade and other receivables are stated at their nominal value as reduced by
appropriate allowances for estimated irrecoverable amounts and included in
current assets or non-current assets as appropriate.
Trade and other payables
Trade and other payables are stated at their nominal value and included in
current liabilities or non-current liabilities as appropriate.
1. ACCOUNTING POLICIES - continued
Deferred taxation
A deferred tax asset is provided for if material, using the tax rates
estimated to arise when the timing differences reverse and is accounted for to
the extent that it is probable that an asset will crystallise.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the statement of financial position date.
Foreign currencies
Transactions denominated 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 date. These transaction differences are dealt with in the income
statement. The financial statements of foreign subsidiaries are translated at
the rate of exchange ruling at the year end date. The exchange differences
arising from the retranslation of the opening net investment in subsidiaries
are taken directly to reserves.
2. SEGMENTAL REPORTING
The directors feel that due to the small amount of trading that has taken
place during the year it is not possible to identify any segments and as a
result cannot follow IFRS 8. The entire turnover was generated overseas and
relates to the principal activity of the Group. The directors will review
this assessment next year.
3. EMPLOYEES AND DIRECTORS
There were no staff costs for the year ended 31st December 2015 nor for the
year ended 31st December 2014.
The average monthly number of employees during the year was as follows:
31.12.15 31.12.14
Management 4 4
31.12.15 31.12.14
£ £
Directors' remuneration 4 4
4. PROFIT/(LOSS) BEFORE INCOME TAX
The profit before income tax is stated after charging:
31.12.15 31.12.14
£'000 £'000
Auditors' remuneration 42 45
5. INCOME TAX
No liability for UK corporation tax arose on ordinary activities for the year
ended 31 December 2015 or for the year ended 31 December 2014. The Group's
profit for the financial year was offset against the trading losses brought
forward.
Subject to the agreement with HM Revenue and Customs, the Group has allowable
trading losses at 31 December 2015 for set-off against future trading profits
of £11.85m (2014: £11.97m).
A deferred tax asset of £2.37m (2014: £2.39m) arises due to the large trading
losses described above. As it is not known when the Group will be able to
make use of these losses the asset has not been recognised in the financial
statements.
6. PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these financial statements.
The parent company's profit for the financial year was £113,699 (2014 -
£4,818).
7. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
31.12.15
Weighted
average
number Per-share
Earnings of amount
£'000 shares pence
Basic EPS
Earnings attributable to ordinary shareholders 111 179,479,428 0.06
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings 111 179,479,428 0.06
31.12.14
Weighted
average
number Per-share
Earnings of amount
£'000 shares pence
Basic EPS
Earnings attributable to ordinary shareholders 2 179,479,428 0.00
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings 2 179,479,428 0.00
8. SUBSIDIARIES
At 31 December 2015 the company held 100% of the allotted equity share capital
of the following:-
Name of subsidiary undertaking Country of registration and incorporation Class of share capital held Nature of business
Ross Diversified Trading Limited (formerly Sansui Electronics (UK) Limited) England and Wales Ordinary Distribution of consumer electronic branded products. They are currently dormant.
San Gain Industrial Company Limited Hong Kong Ordinary Distribution of consumer electronic branded products and complementary supply chain management services.
The costs of these fixed asset investments have been written off over the
previous periods.
9. INVESTMENTS
Group
Unlisted
investments
£'000
COST
At 1st January 2015
and 31st December 2015 344
PROVISIONS
At 1st January 2015
and 31st December 2015 344
NET BOOK VALUE
At 31st December 2015 -
At 31st December 2014 -
Company
Unlisted
investments
£'000
COST
At 1st January 2015
and 31st December 2015 344
PROVISIONS
At 1st January 2015
and 31st December 2015 344
NET BOOK VALUE
At 31st December 2015 -
At 31st December 2014 -
10. TRADE AND OTHER RECEIVABLES
Group Company
31.12.15 31.12.14 31.12.15 31.12.14
£'000 £'000 £'000 £'000
Current:
Amounts owed by group undertakings - - 4 4
Directors' current accounts 8 - 8 -
VAT 10 - 10 -
Prepayments and accrued Income 3 2 3 2
21 2 25 6
11. CASH AND CASH EQUIVALENTS
Group Company
31.12.15 31.12.14 31.12.15 31.12.14
£'000 £'000 £'000 £'000
Bank current account 4 15 4 15
12. CALLED UP SHARE CAPITAL
Group and Company 31.12.15 31.12.14
£ 000 £ 000
Authorised share capital
195,000,000 Deferred shares of 4.8p each 9,360 9,360
67,052,306 Deferred shares of 4p each 2,682 2,682
300,000,000 Ordinary shares of 0.1p each 300 300
2,700,000,000 Deferred shares of 0.1p each 2.700 2,700
15,042 15,042
Allotted, called up and fully paid
147,745,300 Deferred shares of 4.8p each 7,092 7,092
67,052,306 Deferred shares of 4p each 2,682 2,682
179,479,428 Ordinary shares of 0.1p each 179 179
1,225,628,316 Deferred shares of 0.1p each 1.226 1,226
11,179 11,179
The ordinary shares have both voting rights and the right to dividends. The
deferred shares have no rights to dividends and no voting rights.
On a winding up the holders of the deferred shares of 4.8p each shall be
entitled to receive 1p per share after the repayment of all amounts payable to
the holders of any other class of share and the payment of £5,000 on each
ordinary share for the time being in issue. On a winding up the holders of
deferred shares of 0.1p each shall be entitled to receive 0.1p per share after
the payment of £5,000 on each ordinary share for the time being in issue but
shall not confer the right to participate in any surplus.
The deferred shares of 4.8p each are redeemable at the company's option any
time at a price of 1p for each of the deferred shares held by any member. The
deferred shares of 0.1p each are transferable at the company's option at any
time to any person at a total price of 1p for all of the shares held by a
shareholder. The deferred shares of 0.1p each are redeemable or cancellable
at the company's option at any time at a total price of 1p for all of the
shares held by a shareholder.
As the deferred shares rank behind the ordinary shares, they are recognised as
equity.
Managing Capital
The Group considers only the allotted share capital set out above to be the
capital of the group. Thee are no financial liabilities considered to be part
of the capital , and no components of equity excluded from it.
The Group's objectives when managing capital are:
- To safeguard the entity's ability to continue as a going concern, so
that it can continue to provide returns for shareholders and benefits for
other stakeholders.
- To provide an adequate return to shareholders by pricing products and
services at an appropriate level taking into account the level of risk.
The Group sets an amount of capital in proportion to risk. The Group manages
the capital structure and makes adjustments to it in the light of changes in
economic conditions and risk characteristics of the underlying assets.
The entity is not subject to any externally imposed capital requirements.
13. RESERVES
Group
Retained Share Other
earnings premium reserves Totals
£'000 £'000 £'000 £'000
At 1st January 2015 (35,740) 2,803 15,384 (17,553)
Profit for the year 111 - - 111
At 31st December 2015 (35,629) 2,803 15,384 (17,442)
Company
Retained Share Other
earnings premium reserves Totals
£'000 £'000 £'000 £'000
At 1st January 2015 (50,789) 2,803 30,938 (17,048)
Profit for the year 114 - - 114
At 31st December 2015 (50,675) 2,803 30,938 (16,934)
Other reserves of the Group consist of a capital redemption reserve of £1.92m
(2014: £1.92m), a non-distributable capital reserve of £3.33m (2014: £3.33m),
and a special reserve of £10.13m (2014: £10.13m).
Other reserves of the company consist of a capital redemption reserve of
£1.92m (2014: £1.92m) and a special reserve of £29.02m (2014: £29.02m).
14. TRADE AND OTHER PAYABLES
Group Company
31.12.15 31.12.14 31.12..15 31.12.14
£ 000 £ 000 £ 000 £ 000
Current:
Trade Creditors 132 127 132 137
Amounts owed to group undertakings - - 3,519 3,522
Other Creditors 23 23 23 23
Accruals and deferred income 51 92 48 89
206 242 3,722 3,761
15. FINANCIAL LIABILITIES - BORROWINGS Group Company 31/12/15 31/12/14 31/12/15 31/12/14 £ 000 £ 000 £ 000 £ 000 Current: Other loans - less than 1 year 10 10 - - Non-current: Other loans - 1 - 2 years 6,072 6,139 2,062 2,129
Group Company
31/12/15 31/12/14 31/12/15 31/12/14
£ 000 £ 000 £ 000 £ 000
Current:
Other loans - less than 1 year 10 10 - -
Non-current:
Other loans - 1 - 2 years 6,072 6,139 2,062 2,129
Terms and debt repayment schedule
Group
1 year or less 1 - 2 years Totals
£ 000 £ 000 £ 000
Other loans 10 6,072 6,082
The Current Financial Liabilities - Borrowings figure is due to Mr F
Ruttonshaw, who is not a related party. The loan agreement says this is due
for repayment in less than 12 months.
The Non-Current Financial Liabilities - Borrowings figure comprises the
following loans:
£4,010,000 due to One World Limited, which is not a related party. The loan
agreement for this states that the lender will not seek repayment of this loan
other than by means of conversion to equity and it is not anticipated that
such a conversion will be in the next 12 months.
£2,062,172 due to Excite Enterprises Limited, which is not a related party.
The loan agreement for this states that the lender must give at least 12
months' notice if they want repayment of all or part of the balance.
In the previous year it also included £66,520 due to Prime Growth Limited, a
company controlled by Barry Pettitt. This balance has now been amalgamated
with the other balances due to and from Barry Pettitt.
In the past these balances have been accounted for as Trade and Other
Payables, however the directors now feel that it is more appropriate to
account for them as Financial Liabilities - Borrowings. The 2014 comparative
figures have been restated as a result of this decision.
16. FINANCIAL INSTRUMENTS
The Group uses financial instruments, comprising borrowings, cash, liquid
resources and various items, such as trade debtors, trade creditors etc., that
arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the group's operations.
The Group did not enter into derivatives transactions such as interest rate
swaps, forward rate agreements and forward foreign currency contracts.
The Board of the Group considers that the interest rate risk, liquidity risk
and foreign currency risks arising from the Group financial instruments are
low. However it reviews policies for managing each of these risks and they
are summarised below. These policies have remained unchanged from previous
periods.
It is and has been throughout the year under review, the group policy that no
trading in financial instruments shall be undertaken.
Short-term debtors and creditors
Short-term debtors and creditors have been excluded from all the following
disclosures, other than the currency risk disclosures.
Interest rate risk
The Group finances its operations through a mixture of borrowings. It relies
on a loan from its shareholders to ensure sufficient liquidity is available to
meet foreseeable needs.
Prime Growth Enterprises Limited has waived it's right to the 6% interest it
initially stated was payable on the loan of £186,000. The directors of Prime
Growth Enterprises Limited have back-dated this decision to the inception of
the loan. This means the Group's exposure to interest rate fluctuations has
been limited by the fact that none of the loans incur interest.
Maturity of financial liabilities
For the Group financial liabilities analysis at 31 December 2015 see note 15.
Currency risk
The Group does not have foreign investments held in foreign currencies.
The Group's exposure to translation and transaction foreign exchange risk is
considered to be low by the board.
100% of the Group's worldwide income in the year was invoiced in sterling. As
a result the board does not consider there is a need for Group policy to
manage the currency risk as it considers the risk to be low.
Fair values
The Board considers that the fair values of the Group's borrowings are equal
to their book values.
17. RELATED PARTY DISCLOSURES
Group
The Group had the following balances with related parties at the year end:
31.12.15 31.12.14
£000 £000
Receivables
Barry Pettitt 8 -
8 -
Payables
Prime Growth Enterprises Limited - 67
- 67
Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc,
owns Prime Growth Enterprises Limited. Prime Growth Enterprises Limited owns
17% of the ordinary share capital in Ross Group Plc.
The amount owed by Barry Pettitt was repaid by 18 February 2016.
Barry Pettitt has pledged to cover the overheads of the Group until 31
December 2017.
Company
At the year end Ross Group plc had the following outstanding balances with its
related parties:
31.12.15 31.12.14
£000 £000
Receivables
Barry Pettitt 8 -
Ross Diversified Trading Limited (formerly Sansui Electronics (UK) Limited) 4 4
12 4
Payables
San Gain Industrial Company Limited 3,519 3,522
Prime Growth Enterprises Limited - 67
3,519 3,589
18. ULTIMATE CONTROLLING PARTY
The directors consider that there is no ultimate controlling party of Ross
Group Plc and subsidiaries for 2015; however Barry Pettitt, by virtue of his
position as CEO within the Group and his 19% shareholding, exerts a
significant influence.
20. RECONCILIATION OF MOVEMENTS IN RESERVES
Group
31.12.15 31.12.14
£'000 £'000
Profit for the financial year 111 2
Shares issued in the year - 132
Net addition to reserves 111 134
Opening reserves (6,374) (6,508)
Closing reserves (6,263) (6,374)
Company
31.12.14 31.12.13
£'000 £'000
Profit for the financial year 114 5
Shares issued during the year - 132
Net addition/(reduction)to reserves 114 137
Opening reserves (5,869) (6,006)
Closing reserves (5,775) (5,869)
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