- Part 3: For the preceding part double click ID:nRSZ2949Gb
100%
Impetus Automotive Pty Limited Note 6 Automotive consulting 100%
New Medical Technology LimitedZero-Stik Limited Note 2Note 2 DormantDormant 98.6%98.6%
Note 1 - Registered at Shire House, Tachbrook Road, Leamington Spa, Warwickshire, CV31 3SF, England.
Note 2 - Registered at c/o Wright, Johnston & Mackenzie LLP, 302 St Vincent St, Glasgow, G2 5RZ, Scotland.
Note 3 - Registered at Tournament Court, Edgehill Drive, Warwick, CV34 6LG, England.
Note 4 - Registered at Bismarckstraβe 30, 64668 Rimbach, Germany.
Note 5 - Registered at Office No 1562 NCI Tower, 12a Jianguomenwai Avenue, 100022 Beijing,China.
Note 6 - Registered at 75 Wensleydale Drive, Mornington, Victoria 3931, Australia.
Note 7 - The Group owns 100% of the A ordinary shares and none of the B ordinary shares of Impetus Automotive Limited,
which at the date of these financial statements gives an economic interest in the total equity of approximately 83%.
Impetus Automotive Limited owns 100% of Impetus Automotive GmbH, Impetus Automotive Consulting Services (Beijing) Co., Ltd
and Impetus Automotive Pty Limited.
11 Goodwill and other intangible assets
Goodwill£'000 Other intangible assets£'000 Total£'000
Cost
At 1 January 2015 - 441 441
Acquisitions - 2015 380 95 475
Additions - 2015 - 65 65
At 31 December 2015 and at 31 December 2016 380 601 981
Amortisation
At 1 January 2015 - 441 441
Amortisation - 2015Amortisation - 2016 -- 8932 8932
At 31 December 2016 - 562 562
Net book value
At 31 December 2016 380 39 419
At 31 December 2015 380 71 451
Goodwill is that arising on the acquisition of Impetus Automotive Limited as outlined in note 22.
As required by IAS 38 goodwill is not amortised and is instead tested annually for impairment. The business unit to which
the goodwill attaches generated profits (before tax and intra-group management and interest charges) of almost £1.5m in
2016 and the carrying value of the goodwill is £380,000. Impairment testing therefore readily indicates that there is no
impairment in the carrying value of goodwill, even if extremely conservative assumptions are used.
Other intangible assets comprise a mix of intellectual property rights and software. The net book value of
internally-generated intangible assets was £39,000 (2015: £71,000).
12 Property, plant and equipment
Short LeaseholdProperty£'000 Freehold Plant & Machinery£'000 Total£'000
Property£'000
Cost
At 1 January 2015 130 2,430 3,829 6,389
Acquisition 180 - 188 368
Additions 92 - 863 955
Disposals - - (24) (24)
Disposals - discontinued operations (222) - (216) (438)
At 31 December 2015 and 1 January 2016 180 2,430 4,640 7,250
Additions - - 322 322
Disposals - - (322) (322)
At 31 December 2016 180 2,430 4,640 7,250
Accumulated depreciation
At 1 January 2015 26 75 927 1,028
Acquisitions 54 - 131 185
Disposals - - (8) (8)
Disposals - discontinued operations (52) - (138) (190)
Charge for the year - including discontinued operations 35 20 407 462
At 31 December 2015 and 1 January 2016 Disposals 63 - 95 - 1,319 (235) 1,477 (235)
Charge for the year 12 22 402 436
At 31 December 2016 75 117 1,486 1,678
Net book value
At 31 December 2016 105 2,313 3,154 5,572
At 31 December 2015 117 2,335 3,321 5,773
The net book value of property, plant and equipment held on finance leases was £779,000 (2015: £695,000). Freehold
property was subjected to an independent valuation on 15 April 2014. The valuation was £2,430,000 which was reflected as
the fair value on acquisition and thus represents the historic cost to the Group.
Management consider there to be no indicators to suggest that any items of property, plant and equipment are impaired.
Property, plant and equipment (which is all held within subsidiaries) with a net book value of £5.57 million is pledged as
collateral for Group borrowings (all of which are within subsidiaries).
13 Inventories
2016£'000 2015£'000
Raw materials Finished products 7541,328 360746
2,082 1,106
The total amount of inventories consumed in the year and charged to cost of sales was £9.21 million (2015: £9.57 million).
14 Financial assets (current)
2016£'000 2015£'000
Available-for-sale investments - 4,313
During the year the Group had invested in equity funds pursuant to its treasury management policies, although no such
investments were held at the end of the year.
15 Trade and other receivables
2016£'000 2015£'000
Trade receivables 6,512 6,400
Less: provision for impairment of trade receivables (1) (1)
Net trade receivables 6,511 6,399
Other receivables 271 1,166
Amounts recoverable on contracts 218 260
Prepayments and accrued income 231 248
7,231 8,073
Certain of the Group's subsidiaries have invoice discounting arrangements for their trade receivables which are pledged as
collateral. Under these arrangements it is considered that the individual subsidiaries remain exposed to the risks and
rewards of ownership, principally in the form of credit risk, and so the assets continue to be recognised. The associated
liabilities arising restrict the subsidiaries' use of the assets.
The carrying amount of the assets and associated liabilities is as follows:
2016£'000 2015£'000
Trade receivables 6,431 6,342
Borrowings (1,521) (650)
4,910 5,692
Because of the normal credit periods offered by the subsidiaries, it is considered that the fair value matches the carrying
value for the assets and associated liabilities.
The Group is exposed to credit risk with respect to trade receivables due from its customers, primarily in the automotive
consulting and food manufacturing segments. Both segments have a relatively large number of customers, however there is a
significant dependency on a small number of large customers who can and do place significant contracts. Provisions for bad
and doubtful debts are made based on management's assessment of the risk taking into account the ageing profile, experience
and circumstances. There were no significant amounts due from individual customers where the credit risk was considered by
the Directors to be significantly higher than the total population.
There is no significant currency risk associated with trade receivables as the vast majority are denominated in Sterling.
The ageing analysis of trade receivables is disclosed below:
2016£'000 2015£'000
Up to 3 months 6,431 6,206
3 to 6 months 80 190
6 to 12 months - 4
Over 12 months 1 -
6,512 6,400
16 Trade and other payables (current)
2016£'000 2015£'000
Trade payables 1,723 1,200
Other tax and social security 759 729
Other payables 108 84
Accruals 1,214 1,479
Deferred income 627 566
4,431 4,058
The fair value of all trade and other payables approximates to book value at 31 December 2016 and at 31 December 2015.
17 Financial instruments - risk management
The Group's principal financial instruments are:
· Trade receivables
· Cash at bank
· Current asset investments
· Loans and finance leases
· Trade and other payables
The Group is exposed through its operations to one or more of the following financial risks:
· Cash flow interest rate risk
· Foreign currency risk
· Liquidity risk
· Credit risk
· Other market price risk
Policy for managing these risks is set by the Board following recommendations from the Chief Financial & Operating Officer.
Certain risks are managed centrally, while others are managed locally following guidelines communicated from the centre.
The policy for each of the above risks is described in more detail below.
Interest rate risk
Due to the relatively low level of borrowings, the Directors do not have an explicit policy for managing cash flow interest
rate risk. All current and recent borrowing has been on variable terms, with interest rates of between 3% and 4% above
base rate, and the Group has cash reserves sufficient to repay all borrowings promptly in the event of a significant
increase in market interest rates. All cash is managed centrally and subsidiary operations are not permitted to arrange
borrowing independently. The Group's investments may attract interest at fixed or variable rates, or none at all. The
market price of such investments may be impacted positively or negatively by changes in underlying interest rates. It is
not considered relevant to provide a sensitivity analysis on the effect of changing interest rates since, at the year end,
the Group's investments had the following interest profiles which contained no variable rates:
2016£'000 2015£'000
No interest - 4,313
Fixed interest - -
- 4,313
Foreign currency risk
Foreign exchange risk arises when individual Group operations enter into transactions denominated in a currency other than
their functional currency (sterling). The Directors monitor and review their foreign currency exposure on a regular basis;
they are of the opinion that as the Group's trading exposure is limited to transactions with a small number of customers
and suppliers it is not appropriate to actively hedge that element of its foreign currency exposure, nor is its exposure to
foreign currency risk considered to be significant.
Liquidity risk
The Group maintains significant cash reserves and therefore does not require facilities with financial institutions to
provide working capital. Surplus cash is managed centrally to maximise the returns on deposits.
Credit risk
The Group is mainly exposed to credit risk from credit sales. The Group's policy for managing and exposure to credit risk
is disclosed in note 17.
Other market price risk
The Group has generated a significant amount of cash and this has been held partly as cash deposits and partly invested
pursuant to the Group's investing strategy. Investments were made in 2016 in equity funds, which reflect the Group's need
to access capital. All such investments were disposed in the year, so there is no market price risk as at 31 December 2016.
The directors believe that the exposure to market price risk from this activity is acceptable in the Group's
circumstances.
Capital management
The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue
to trade profitably in the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so
as to minimise its cost of capital.
The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by
monitoring its gearing ratio on a regular basis.
The Group considers its capital to include share capital, share premium, fair value reserve and retained earnings. Net
debt includes short and long-term borrowings (including lease obligations) and shares classed as financial liabilities, net
of cash and cash equivalents. The Group has not made any changes to its capital management during the year. The Group is
not subject to any externally imposed capital requirements.
An analysis of what the Group manages as capital is outlined below:
2016£'000 2015£'000
Total debt (3,662) (2,882)
Add cash and cash equivalents 20,063 11,967
Net funds/(debt) 16,401 9,085
Total equity (capital) 26,625 24,294
Net funds/(debt) to capital ratio 61.6% 37.4%
18 Financial assets and liabilities - numerical disclosures
Analysis of financial assets by category:
2016£'000 2015£'000
Non-financial items carried at fair value
Freehold property 2,430 2,430
Financial instruments carried at fair value
Available for sale investments - 4,313
Assets carried at amortised cost
Loans and receivables 7,000 7,825
Cash and cash equivalents 20,063 11,967
Total financial assets 29,493 26,535
Liabilities carried at amortised cost
Trade and other payables 2,590 2,013
Borrowings 3,662 2,882
Total financial liabilities 6,252 4,895
Fair values
The table above analyses assets in a fair value hierarchy based on the valuation technique used to determine fair value as
follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices);
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Directors consider the carrying values of all financial assets and liabilities to be a reasonable approximation of
their fair values. In 2015 investments held at fair value were all listed on a recognised market and hence their valuation
was not subject to significant judgement or uncertainty. Such investments are therefore considered to fall under Level 1
in the IFRS 7 fair value hierarchy. Freehold property is carried at fair value and is therefore considered to fall under
Level 3 in the IFRS 7 fair value hierarchy. Freehold property was subjected to an independent valuation on 15 April 2014.
The valuation was in accordance with RICS guidelines on open market value. There is no movement in the year in the fair
value. The directors do not consider that the value is below the highest and best use value for the property.
Maturity of financial assets
The maturities and denominations of financial assets at the year end, other than cash and cash equivalents, and loans and
receivables (note 15 above) are as follows:
2016£'000 2015£'000
Sterling
No fixed maturity - 4,313
Maturity of financial liabilities
The maturity of borrowings (including finance leases) carried at amortised cost is as follows:
2016£'000 2015£'000
Less than six months 1,647 770
Six months to one year 125 121
One to two years 259 198
Two to five years 588 641
More than five years 1,043 1,152
3,662 2,882
The above borrowings are analysed on the balance sheet as follows:
2016£'000 2015£'000
Loans and other borrowings (current) 1,613 787
Finance leases (current) 159 104
Loans and other borrowings (non-current) 1,448 1,541
Finance leases (non-current) 442 450
3,662 2,882
Borrowings are secured on certain assets of the Group, and interest was charged at rates of between 2.5% and 3.2% during
the year. Including interest that is expected to be paid, the maturity of borrowings (including finance leases) is as
follows:
2016£'000 2015£'000
Less than six months 1,690 828
Six months to one year 165 145
One to two years 331 270
Two to five years 742 811
More than five years 1,218 1,368
4,146 3,422
The above borrowings including interest that is expected to be paid are analysed as follows:
2016£'000 2015£'000
Loans and other borrowings (current) 1,674 851
Finance leases (current) 182 123
Loans and other borrowings (non-current) 1,814 1,964
Finance leases (non-current) 476 484
4,146 3,422
The maturity of other financial liabilities, excluding loans and borrowings, carried at amortised cost is as follows:
2016£'000 2015£'000
Less than six months 2,590 2,013
19 Deferred tax
Movements in deferred tax provisions are outlined below:
Accelerated tax depreciation Othertiming differences Losses Total
£'000 £'000 £'000 £'000
At 1 January 2016 (432) (36) 133 (335)
Recognised during the year 47 45 (133) (41)
At 31 December 2016 (385) 9 - (376)
Previous year movements were as follows:
Accelerated tax depreciation Othertiming differences Losses Total
£'000 £'000 £'000 £'000
At 1 January 2015 (373) 22 351 -
Recognised during the year (59) (58) (218) (335)
At 31 December 2015 (432) (36) 133 (335)
In addition, there are unrecognised net deferred tax assets as follows:
2016£'000 2015£'000
Tax losses carried forward 583 619
Excess of depreciation over capital allowances 3 5
Short term temporary differences 8 9
Net unrecognised deferred tax asset 594 633
Deferred tax assets and liabilities have been calculated using the rate of corporation tax expected to apply when the
relevant temporary differences reverse. Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the balances net.
The unrecognised elements of the deferred tax assets have not been recognised because there is insufficient evidence that
they will be recovered because such losses are within entities that are not expected to yield future profits.
20 Share capital
Authorised
2016Number 2016£'000 2015Number 2015£'000
Ordinary shares of £0.0000001 each 100,100,000 - 100,100,000 -
A shares of £0.49999995 each 50,000 25 50,000 25
B shares of £0.49999995 each 50,000 25 50,000 25
Deferred shares of £0.00000001 each 4,999,999,500,000 50 4,999,999,500,000 50
100 100
Issued and fully paid
2016Number 2016£'000 2015Number 2015£'000
Ordinary shares of £0.0000001 each 6,207,074 - 6,207,074 -
Deferred shares of £0.00000001 each 4,999,994,534,696 50 4,999,994,534,696 50
50 50
Treasury shares
During the previous year the Company acquired 60,000 of its own Ordinary shares for total consideration of £180,000. This
brought the total number of Ordinary shares held in treasury to 2,121,116 with an aggregate nominal value of less than £1.
There were no similar transactions in 2016.
Rights attaching to deferred shares & A and B shares
The Deferred shares carry no rights to participate in the profits of the Company and carry no voting rights. After the
distribution of the first £10 billion in assets in the event of a return of capital (other than a purchase by the Company
of its own shares), the Deferred shares are entitled to an amount equal to their nominal value.
The Company has no A and B shares in issue. These shares have conversion rights allowing them to convert into Ordinary
shares on a pre-determined formula. All A and B shares previously in issue have been converted into Ordinary shares.
21 Reserves
All movements on reserves are disclosed in the consolidated statement of changes in equity.
The following describes the nature and purpose of each reserve within owners' equity:
Reserve Nature and purpose
Share premium Amount subscribed for share capital in excess of nominal value
Fair value reserve Cumulative net unrealised gains and short-term losses arising on the revaluation of the Group's available for sale investments
Retained earnings Cumulative net gains and losses recognised in the consolidated income statement
22 Business combinations (2015)
The Group acquired Impetus Automotive Limited (an automotive consultancy business) on 26 March 2015 for total consideration
of £1.18 million comprising cash and the settlement of certain liabilities of IAL's former parent company.
The fair values of assets and liabilities acquired and resulting goodwill are summarised below:
Book value£'000 Fair value adjustments£'000 Fair values£'000
Intangible assets 95 - 95
Property, plant and equipment 185 - 185
Cash and cash equivalents 234 - 234
Trade and other receivables 3,042 - 3,042
Trade and other payables (note (a)) (2,754) - (2,754)
Net assets acquired 802 - 802
Goodwill recognised 380
Consideration (settled in cash) 1,182
Note (a): the creditors of IAL noted above include the debt obligations held in another former Impetus group company, which
Volvere settled as part of the acquisition. The consideration of £1.18 million includes a debt settlement of £1.08
million. Costs of undertaking the transaction amounting to £0.07 million were charged to the income statement as
administrative expenses.
The cash flows associated with the acquisition were as follows:
Book value£'000
Consideration (settled in cash) 1,182
Purchase of intellectual property 65
Cash acquired (234)
Net cash outflow 1,013
Goodwill arose on the acquisition because of value inherent in the acquired business' staff and reputation, neither of
which are considered to be separately identifiable intangible assets under IFRS 3 (Revised).
23 Operating leases
The Group has one lease for a property occupied by a subsidiary. The lease is of the tenant repairing type with a rent
review due in 2020 and it ends during 2025. The total future values of minimum lease payments are due as follows:
Land and buildings2016£'000 Other 2016£'000 Land and buildings2015£'000 Other2015£'000
Not later than one year 144 269 170 108
Later than one year and not later than five years 552 166 658 51
Later than five years 499 - 543 -
1,195 435 1,371 159
24 Share-based payments
The Company has operated two share-based payment schemes, an approved EMI equity-settled share-based remuneration scheme
for certain employees and an unapproved equity-settled share scheme for certain management. Under the EMI scheme, the
options vested on achievement of employee-specific targets subject to a compulsory 2.5 or 3 year vesting period and can be
exercised for a further 7.5 or 7 years after vesting. All options issued have now either lapsed or been exercised, such
that there are no options in issue as at 31 December 2016 (2015: nil).
All options in issue were fully vested prior to 1 January 2015, hence there is no share based payment charge in 2016 or
2015, in respect of share options issued by the company.
During the year certain employees purchased a newly-issued class of shares in one of the company's subsidiaries. The
rights attaching to this new class of shares vest on a number of criteria over a 2 year period following issue, including
that they require employees to continue in employment. The shares issued have restricted rights, and the company that
issued the shares has first option to repurchase them in certain scenarios.
This gave rise to a share-based payments charge in the income statement of £7,000 (2015: nil) based on an independent
valuation exercise prepared for the company. Detailed disclosures regarding the share-based payments charge have not been
included in the financial statements as the amounts involved are immaterial.
25 Related party transactions
Details of amounts payable to Directors, and parties related to the directors, are disclosed in note 4. There were no
other transactions with key members of management, and no other transactions with related parties.
26 Contingent liabilities
The Group had no material contingent liabilities as at the date of these financial statements.
27 Non-controlling interests
The non-controlling interests of £1,406,000 (2015: £1,046,000 ) relate to the net assets attributable to the shares not
held by the Group at 31 December 2016 in the following subsidiaries:
Name of subsidiary 2016£'000 2015£'000
NMT Group Limited 74 74
Impetus Automotive Limited 205 -
Shire Foods Limited 1,127 972
1,406 1,046
Summarised financial information (before intra-group eliminations) in respect of those subsidiaries with material
non-controlling interests is presented below.
Impetus Automotive Limited Shire Foods Limited
2016£'000 2016£'000 2015£'000
Non-current assetsCurrent assetsNon-current liabilitiesCurrent liabilities 2094,624-(3,726) 5,4015,735(1,890)(3,221) 5,5914,569(1,988)(3,023)
Provisions (87) (379) (277)
Net assets (equity) 1,020 5,646 4,872
Attributable to:
Group 815 4,519 3,900
Non-controlling interests 205 1,127 972
1,020 5,646 4,872
Revenue 17,372 15,190 15,476
Profit for the year after tax (stated after intra-group managementand interest charges) 942 773 888
Profit for the year attributable to non-controlling interests 184 155 177
28 Post balance sheet events
There are no significant events warranting disclosure in these financial statements.
- ENDS -
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