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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Aquis Exchange Plc | LSE:AQX | London | Ordinary Share | GB00BD5JNK30 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 391.00 | 386.00 | 396.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security,commodity Exchanges | 19.93M | 4.68M | 0.1702 | 22.97 | 107.6M |
From Apr 2019 to Apr 2024
TIDMAQX
RNS Number : 3720T
Aquis Exchange PLC
20 March 2019
20 March 2019
Aquis Exchange PLC
("Aquis", the "Company" or the "Group")
Final results for the year ended 31 December 2018
Strong performance with revenue doubled to GBP4m
Aquis Exchange PLC (AQX.L) is pleased to announce its audited results for the year ended 31 December 2018.
Highlights:
Hot Features
Premium
-- Revenue increased 100% to GBP4.0 million (2017: GBP2.0 million)
-- Adjusted EBITDA* loss of GBP2.7 million (2017: GBP3.3 million
loss)
-- Cash and cash equivalents of GBP11.6 million (2017: GBP4.0
million)
-- Successful listing on AIM completed on 14 June 2018, raising
GBP12.0 million for the Company
-- Trading Members on Aquis Exchange grew from 24 to 27 during
the period
-- Market share of overall pan-European continuous trading grew
over the period to 3.8% 4Q18 (1.9% 4Q17), and strengthened
further in the year to date
-- Aquis has continued to grow its software licence activities
across a number of asset classes
-- Post period end trading is in line with market expectations
* Excludes exceptional costs relating to the IPO
Alasdair Haynes, Chief Executive Officer of Aquis, commented:
"2018 was a transformational year for Aquis. Revenue has doubled in comparison to the prior year, reaching GBP4.0 million, and we finished the period with close to a 4% market share of overall pan-European continuous trading. The exchange has grown both its number of trading members and the average value of monthly subscriptions and, alongside this, interest in Aquis' world-class exchange trading and surveillance technology continues to increase. Our IPO has accelerated us in our journey to transform the European equity trading landscape and provided a secure platform for future growth.
Despite the near term challenges presented by Brexit, we are confident we are well positioned for the period ahead, particularly given that we now have a presence in France established to allow uninterrupted service in any eventuality. We also believe we are well placed to benefit from additional regulation, given our robust and agile business model, our lean cost structure and our technology leadership. The Board is confident there remains enormous potential for our exchange model to disrupt further incumbent trading models and win more market share across Europe."
This announcement contains inside information for the purposes of EU Regulation 596/2014.
Enquiries:
Aquis Exchange PLC Tel: +44 (0) 20 3597
6321
Alasdair Haynes, CEO
Jonathan Clelland, CFO and COO Tel: +44 (0)20 3597
Belinda Keheyan, Head of Marketing 6329
Liberum Capital Limited (Nominated Adviser Tel: +44 (0) 20 3100
and Broker) 2000
Clayton Bush
Chris Clarke
Edward Thomas
Kane Collings
Alma PR (Financial PR Adviser) Tel: +44 (0)20 3405
0209
Rebecca Sanders-Hewett aquis@almapr.co.uk
Caroline Forde
Susie Hudson
Notes to editors:
Aquis Exchange is an independent, pan-European cash equities trading venue with a unique, subscription based, pricing model. Aquis Exchange uses its own highly-performant trading technology, which is developed in-house. Aquis Exchange's technology is also available for licencing to third parties via the Company's software division, Aquis Technologies.
Aquis Exchange is authorised and regulated by the Financial Conduct Authority to operate a multilateral trading facility. The Company was launched in November 2013 to introduce competition and innovation to the market.
http://www.aquis.eu
Chairman's Statement
Overview
2018 was a significant milestone for Aquis with its successful initial public offering (IPO) on AIM in June. The new funds raised have positioned the firm for its next stage of development and provided a secure platform for future growth. We are only at the start of our journey as a listed company but we can already see that the flotation has positively raised the profile of the Company.
Aquis continued to transform the European equity trading landscape during the year. As we celebrated 5 years since the launch of the exchange, we saw average market share increase to 3.8% (4Q18) from 1.9% (4Q17) of all European equity trading thanks to a record number of messages being routed to the platform by current and new clients. Meanwhile, interest in Aquis' world-class exchange trading and surveillance technology is growing.
People and Culture
Employees
Aquis is driven by a visionary founder-led management team of dynamic and committed individuals. On behalf of the Board and all shareholders, I would like to thank them for all of their hard work during the year and their contribution to the Company's successful listing and continued growth.
The culture has been instilled by the founders and the Board from the outset. All the personnel work in a close-knit environment, which facilitates assimilation and monitoring of the culture.
Board
The structure of the Board changed significantly during the year. The IPO created an opportunity for directors who had previously held seats related to their initial shareholdings to step down and for the Board to consider the mix of skills required for the future development of the business and its responsibilities as a listed company.
Four directors, Sean Melnick, Donall McCann, Izabela Olszewska and Jaroslaw Grzywinski, resigned at IPO and we thank them for their contribution in helping Aquis to establish a firm foothold as a European trading venue and reach the point of listing. Richard Bennett and Mark Spanbroek remained on the Board and Richard became Senior Independent Director and Chair of the newly formed Nominations and Remuneration Committee. In March, we welcomed Mark Goodliffe as a member of the Board and Chairman of the Audit and Risk Committee. Mark is the UK Chief Financial Officer of Rea Holdings plc and an independent Non-Executive Director and Chairman of the Audit Committee of CME Trade Repository Limited.
We also initiated a search for a non-executive director with technology expertise, particularly with knowledge of developing and licensing technology. The search culminated at the end of 2018 ready for Glenn Collinson to be appointed at the start of the 2019. Glenn's background as an engineer and his years of developing and marketing technology products will be invaluable to the business, as will his experience of serving on the boards of both listed and private companies.
Governance
The Board aspires to high standards of corporate governance. It has adopted the key principles of the UK Corporate Governance Code. As a UK regulated entity all Aquis Board members and senior managers must also be approved by the Financial Conduct Authority (FCA) under the Approved Persons Regime. All Board members are aware of their additional responsibilities under both UK and European regulation and guidelines with regards to the oversight of financial market infrastructures.
Outlook
We continue to be committed to improving the quality of execution in a transparent environment for the benefit of the end investor. There remains enormous potential for our exchange model to disrupt further incumbent trading models and win more market share across Europe. We hope to do this by exceeding the needs and demands of the end investors and intermediaries.
The funds raised at the IPO will also be used in part to help us grow our technology business by attracting larger, more mature clients as well as strengthening the overall Aquis brand. With increasing regulation for financial market infrastructures and their participants, we need to continue to invest in attracting high quality, experienced and responsible individuals who can support the Company's evolution and continue to promote its cultural values.
The Board will continue to be focused on ensuring that the business delivers on its strategy, managing risks and developing an appropriate framework for growth.
Brexit introduces uncertainty as well as some additional costs and risks (principally regulatory) but change may also bring opportunities. It is estimated that Brexit will increase costs by approximately 5%. The business is well prepared with regulatory approvals and an established presence in France, which should allow uninterrupted service under the various scenarios that might eventuate under Brexit.
The Board will also prepare for the end of the FCA's Approved persons regime, which will be replaced by The Senior Managers and Certification Regime (SM&CR). This will increase the accountability of the senior managers and the Board and ensure that individuals have clearly prescribed responsibilities.
Nicola Beattie
Non-Executive Chairman
Chief Executive Officer's Report
2018 was a transformational year for Aquis. The Company entered 2018 as a private company with approximately 2% market share of pan-European equities continuous trading and exited the year as a public listed company, having successfully listed on the AIM market of the London Stock Exchange on 14 June 2018, with close to 4% market share. Revenue has doubled in comparison to the prior year, reaching GBP4.0 million, and the exchange has grown both its number of trading members and the average value of monthly subscriptions.
This success has been based on our commitment to provide our customers with a comprehensive lit equity trading platform with significant liquidity and the lowest levels of toxicity in Europe. The quality of our technology enables us to provide a high-quality user experience with excellent customer service. These key characteristics, combined with greater brand awareness, has led to strong market share growth.
Aquis Exchange PLC is regulated in the UK by the FCA but with increasing uncertainty over the outcome of Brexit the Company decided to establish a European subsidiary and in January 2019 successfully applied for regulatory approval to operate a Multilateral Trading Facility (MTF) in France through this subsidiary.
Operational Review
Aquis continues to develop its complementary business activities; a pan-European equity lit market, a multi-asset class technology licensing service to an international client base and a market data offering. The Company continued to grow the principal business activities during the year and this is expected to continue. A summary of progress in each activity is outlined below.
Aquis Exchange
The Company currently offers clients the ability to trade in excess of 1,600 stocks and ETFs across 14 European markets.
The Markets in Financial Instruments Directive (MiFID II) took effect from the beginning of 2018. This regulation did have some immediate impact but a lot of the ramifications of MiFID II are still yet to transpire. We anticipate 2019 will be another year of change, with the implications of Brexit and further regulatory reviews. We are a strong supporter of the regulatory principles such as greater transparency for markets, that have been introduced and are committed to complying with market regulation. We believe we are well placed to benefit from additional regulation given our robust and agile business model, our lean cost structure and our technology leadership.
Aquis operates in a dynamic global industry where we will continue to see both new challenges and opportunities ahead. The Company continues to perform strongly in an evolving macroeconomic, regulatory and political environment, including Brexit. With the UK set to leave the EU in March of this year, Aquis has a responsibility to ensure the orderly functioning of our markets and we believe has taken all necessary steps to ensure it can continue to serve its clients wherever they are located.
During the period, Aquis grew its number of trading members from 24 to 27. In addition, a number of members increased their trading volumes resulting in increased monthly subscriptions.
Independent studies have verified that Aquis Exchange has materially lower toxicity than its competitors which lowers the implicit costs of trading for the end investor. This is a significant positive differentiating factor and underpins the growth potential.
Since the successful IPO Aquis has increased its investment in personnel, infrastructure, sales and marketing to help promote future growth of the business.
Aquis Technologies
In addition to the exchange business, Aquis licences its leading exchange related technology to a variety of international financial services clients across different asset classes.
The Company's flexible business structure and in-house technology capabilities enable it to react rapidly and efficiently to diverse market trends and our partnership approach with our customers continues to enable us to understand their needs against a changing regulatory and market backdrop and to develop our products and services to help our clients with the challenges they face.
Aquis Market Data
Aquis Exchange has provided market data free of charge to trading members and data vendors since the trading venue was launched in November 2013. From 1 July 2018, the Company began charging market data vendors GBP2,000 per month for data from Aquis' exchange and it now has 12 paying Members. Market data is a significant revenue generator for the national exchanges and we believe this revenue stream will become increasingly meaningful over time
Research and Development
The Company continues to invest in R&D in order to maintain and enhance the quality of its technology and its ability to be able to deliver new products and platform enhancements to its clients. Our proven trading platform has been developed in-house and is based on proprietary technology which does not rely on third party software suppliers. We believe this gives us a significant competitive advantage on functionality, price and ability to deliver. The structure contributes to expedited product development and it provides the Company with the ability to react quickly to dynamic market conditions. All developments are expensed as incurred and we will continue to work on further developments which are expected to enhance customer growth.
Outlook
In summary, our strategic goal remains to become the leading exchange services group through delivering best in class exchange trading opportunities underpinned by our commitment to first class client services. Our highly capable and experienced management team remains focused on the opportunities ahead particularly delivering our short and medium term market share, client and financial growth targets.
We entered 2019 confident we can continue to develop both our exchange and technology businesses to achieve our strategic goal. We will continue to invest to maintain and enhance our market position through innovation and development and promote the Aquis transparent low toxicity market place which will enable our customers to get better performance and results. In addition, we believe this approach will deliver strong shareholder returns over the next few years.
Alasdair Haynes
Chief Executive Officer
Strategic Report
Overview of the business
Aquis Exchange is a founder-led, pan-European Multilateral Trading Facility ("MTF") operator and exchange and regulatory technology developer and service provider. The Company is regulated by the UK Financial Conduct Authority.
The Company was founded in 2012 with the vision to become the leading technology driven exchange services group and to introduce competition and innovation to the securities trading market. With these guiding principles the Company's main focus is to:
-- Capitalise on regulatory and technical shifts in market infrastructure
by providing an exchange which offers deeper liquidity and
transparent, higher quality execution for intermediaries and
investors;
-- Continue to increase the number of members and associated
trading volumes by providing a robust and innovative platform
that responds to their needs; and
-- License its proven technology platform to third parties that
require trading or market surveillance technology.
Aquis' trading platform is a cash equities trading venue with a unique subscription-based pricing model based on electronic messaging traffic. The principal competitors to the trading business are the national exchanges and other pan-European MTFs / Recognised Investment Exchanges (RIEs) which charge customers on a per transaction model. Since the Company commenced trading it has consistently increased its market share which has grown to reach an average of approximately 3.8% of the overall pan-European market of continuous trading during 4Q18.
The client base of the trading platform consists principally of investment banks and brokers acting on behalf of institutions such as pension funds and asset managers. The Company's members are able to trade European securities on a 'lit' market. This means that the dealing price prior to the trade is transparent to the whole market. This is in contrast to pricing on dark and grey markets, where price discovery is only available to the market post-trade.
Aquis' matching engine and surveillance technology is already established through its daily use as the system that drives Aquis' trading platform. It has been developed for multi-asset class trading and is attracting customers wishing to licence the technology as the trading engine for a broad range of instruments. Its principal customers are new equity exchanges where the market is opening up to competition as well as crypto currency exchanges, MTF operators across asset classes and market participants requiring real time market surveillance. Competitors of the licensing business are other matching engine providers and surveillance software providers.
Review of the business
The Company continued to grow the principal business activities during the year and this is expected to continue. The key performance indicators of the exchange business: market share, numbers of members and revenue all increased during the year. The significant available liquidity, approximately 15% of overall pan-European equity liquidity, was maintained and should underpin the future anticipated member and market share growth. As investment managers conform to the new best execution obligations placed on them by MiFID II, their trading strategies should increasingly direct intermediaries to take advantage of the available liquidity at Aquis. The available liquidity provides the Company with a strong base to attract a wider membership from across Europe and to facilitate increased trading volumes.
During the year the market experienced high market volatility on a number of occasions, which the high-performance technology system managed without incident. Further enhancements have been made to the core technology during the year which has been important not only to the continuing success of Aquis Exchange's daily exchange activities but also enables the Company to offer state of art technology solutions and market surveillance capabilities to other market participants. International interest across a number of asset classes in the Company's ability to provide outsourced technology solutions for other market participants has increased materially during the year and additional resource has been recruited to support this expansion.
A key factor that contributed to the development of the business activities was the strength, experience and commitment of our staff. Staff turnover remains below market norms.
Financial Review
The adjusted loss for the year before exceptional items and tax decreased to GBP2,683,042 compared to GBP3,276,770 in the previous year; this is mainly attributable to increased exchange revenue as members' subscriptions have risen as a result of increased trading levels and new revenue from technology licensing offset by additional costs as the Company continues to invest in personnel and technological resources.
In June 2018 the Company listed on the AIM market of the London Stock Exchange. The costs incurred for Listing have been included as exceptional costs.
The adjusted loss reflects the effect of adopting IFRS 15 accounting for licensing contracts and IFRS 9 impairment provisions on trade receivables. The application of these standards has resulted in a impairment release (credit) during the year of GBP424,194.
The Company's cash and cash equivalents as at 31 December 2018 were GBP11.6 million.
Future development of the business
Aquis has invested heavily in the business differentiators, technology platform, brand and market reputation and personnel resources and is committed to continue this investment to ensure it maintains its reputation for innovative, effective quality delivery. The Company has established a strong position with its clients and the wider investment community which should support the growth of the business in the medium term. In addition, Aquis Technology has achieved a very strong reputation in the market, and this will also support growth across assets classes and internationally.
In reaching an average of approximately 3.8% of the pan-European market of equity continuous trading in 4Q18 Aquis has established itself as a viable alternative to other European exchanges. The quality of the exchange offering (in particular the depth of liquidity and low toxicity) which is attractive to both investment banks and brokers but also to the institutional investor community offers Aquis the opportunity to continue to grow market share.
In addition the business is well positioned to benefit from regulatory changes which support transparent, low toxicity growth on "lit" markets. The regulatory trends and institutional support for greater transparency in European equities trading also supports future business growth.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
2018 2017
Notes GBP GBP
Revenue 5 3,981,910 2,014,590
Expenses (7,089,146) (5,291,360)
Gross loss (3,107,236) (3,276,770)
Impairment credit 5 424,194 -
------------ -----------
Adjusted loss (2,683,042) (3,276,770)
Exceptional items 6 (1,011,853) -
Operating loss 8 (3,694,895) (3,276,770)
Investment revenues 11 30,139 9,961
Loss before taxation (3,664,756) (3,266,809)
Income tax credit 12 247,389 222,215
Loss and total comprehensive
income for the year 25 (3,417,367) (3,044,594)
Earnings per share (pence) 13
Basic
Ordinary shares (21) -
A shares - (515)
B shares - (161)
Diluted
Ordinary shares (20) -
A shares - (515)
B shares - (161)
The income statement has been prepared on the basis that all operations
are continuing operations.
There was no other comprehensive income or deficit in the year or
the preceding financial year.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
2018 2017 (Restated)
Notes GBP GBP
Non-current assets
Intangible assets 14 637,539 664,018
Property, plant and equipment 15 541,933 282,492
Investments 16 9,020 -
Other receivables 18 841,288 276,534
2,029,780 1,223,044
Current assets
Trade and other receivables 18 1,822,690 1,453,922
Current tax recoverable - 222,215
Cash and cash equivalents 11,609,901 3,985,541
13,432,591 5,661,678
Total assets 15,462,371 6,884,722
Current liabilities
Trade and other payables 20 892,364 275,911
Net current assets 12,540,227 5,385,767
Total liabilities 892,364 275,911
Net assets 14,570,007 6,608,811
Equity
Called up share capital 22 2,714,996 17
Share premium account 23 10,839,981 23,517,321
Other reserves 24 92,446 -
Retained earnings 25 922,584 (16,908,527)
Total equity 14,570,007 6,608,811
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share Share Other Retained earnings Total
capital premium reserves
account
Notes GBP GBP GBP GBP GBP
As restated for the period
ended 31 December 2017:
Balance at 1
January 2017 17 23,517,321 - (15,407,444) 8,109,894
Loss and total
comprehensive
income for
the year - - - (3,044,594) (3,044,594)
Balance at 31
December
2017 17 23,517,321 - (18,452,038) 5,065,300
Year ended 31
December
2017:
Effect of
change in
accounting
policy - - - 1,543,511 1,543,511
Balance at 31
December
2017 17 23,517,321 - (16,908,527) 6,608,811
Year ended 31
December
2018:
Loss and total
comprehensive
income for
the year - - - (3,417,367) (3,417,367)
Issue of share
capital 22 446,097 10,840,020 - - 11,286,117
Elimination of
Share Premium
account 22 2,268,882 (23,517,360) - 21,248,478 -
Recognition of share
option
reserve - - 92,446 - 92,446
Balance at 31
December 2018 2,714,996 10,839,981 92,446 922,584 14,570,007
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2017 (Restated)
Notes GBP GBP GBP GBP
Cash flows from operating activities
Cash absorbed by operations 31 (4,021,908) (3,003,077)
Tax refunded/(paid) 469,604 -
Net cash outflow from operating
activities (3,552,304) (3,003,077)
Investing activities
Increase in intangible assets (422,522) (440,461)
Purchase of property, plant and
equipment (421,934) (300,740)
Investment in subsidiaries (9,020) -
Interest received 30,139 9,961
Net cash used in investing
activities (823,337) (731,240)
Financing activities
Proceeds from issue of shares 12,000,001 -
Net cash generated from/(used
in) financing activities 12,000,001 -
Net increase/(decrease) in cash
and cash equivalents 7,624,360 (3,734,317)
Cash and cash equivalents at
beginning of year 3,985,541 7,719,858
Cash and cash equivalents
at end of year 11,609,901 3,985,541
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2018
1 Accounting policies
Company information
The company is a public limited company which is incorporated
and domiciled in England and Wales. Its registered office is
located at Palladium House, 1-4 Argyll Street, London, W1F 7LD
1.1 Accounting convention
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and interpretations
issued by the IFRS Interpretations Committee (IFRS IC) as adopted
for use in the European Union and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical
cost basis.
The principal accounting policies applied in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.
The comparative balance sheet, cash flows and certain note disclosures
have been restated owing to the change in accounting policy and
application. This is further explained within note 25.
1.2 Going concern
At the time of approving the financial statements, the directors
have a reasonable expectation that the company has adequate resources
to continue in operational existence for the foreseeable future.
Thus they continue to adopt the going concern basis of accounting
in preparing the financial statements.
Whilst the company has made a loss in the year, there are substantial
cash reserves, and a positive balance sheet, due to high levels
of investment within the company.
Additionally, the directors are confident that the company will
begin to generate profits in the coming years. There has been
a growth in revenue of 100% between the current year and comparative
year. Additional revenue growth is projected for 2019, with profits
forecast for future years.
1.3 Revenue
Turnover represents amounts receivable for subscription fees
and fees receivable for the licensing of software net of value
added tax.
All revenue is generated by contracts with customers and is therefore
recognised in accordance with IFRS 15, which the Company has
applied for the first time this year.
Revenue for exchange subscription services is recognised in the
accounting year in which the services are rendered, by reference
to the ongoing contractual obligation to provide subscription-based
services.
Revenue from licensing contracts is assessed for each contract
and split into two performance obligations: - Project fees and
maintenance fees which are recognised over time as the obligations
are met; and - Licensing fees which are considered a "right to
use" license under IFRS 15 and are therefore recognised at a
point in time when control of the license passes to the customer.
1.4 Intangible assets other than
goodwill
Property, plant and equipment are initially measured at cost
and subsequently measured at cost or valuation, net of depreciation
and any impairment losses.
Internally developed intangible assets are recognised in the
financial statements when all of the following criteria are met:
* the technical feasibility of completing the
intangible asset so that it will be available for use
or sale is established
* there is an intention to complete the intangible
asset and use or sell it
* the Company has the ability to use or sell the
intangible asset
* the existence of a market for the output of the
intangible asset or the intangible asset itself or,
if it is to be used internally, the usefulness of the
intangible asset can be demonstrated
* adequate technical, financial and other resources are
available to complete the development and to use or
sell the intangible asset
* the Company has the ability to measure reliably the
expenditure attributable to the intangible asset
during its development.
Where the above criteria are not met, costs incurred in research
and development are recognised in the Statement of Comprehensive
Income as incurred.
Intangible assets have been recognised in the financial statements
as the Company has concluded that it has been able to reliably
measure the expenditure attributable to the intangible asset
during its development.
Amortisation is recognised so as to write off the cost or valuation
of the assets less their residual values of their useful lives
on the following basis: The development of trading platforms
has been amortised straight line over 3 years.
Development of Trading Platforms - 3 years straight line
1.5 Property, plant and equipment
All property, plant and equipment is stated at historical cost
less depreciation or impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Subsequent expenditure is included in the asset's carrying amount
or is recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the company and the cost of the item can
be measured reliably. All other repair and maintenance costs
are charged to the income statement during the financial period
in which they are incurred.
Depreciation is recognised so as to write off the cost or valuation
of assets less their residual values over their useful lives
on the following basis:
Fixtures, fittings and equipment 5 years straight line
Computer equipment 3 years straight line
1.6 Non-current investments
Interests in subsidiaries, associates and jointly controlled
entities are initially measured at cost and subsequently measured
at cost less any accumulated impairment losses. The investments
are assessed for impairment at each reporting date and any impairment
losses or reversals of impairment losses are recognised immediately
in profit or loss.
A subsidiary is an entity controlled by the company. Control
is the power to govern the financial and operating policies of
the entity so as to obtain benefits from its activities.
1.7 Impairment of tangible and intangible
assets
At each reporting end date, the company reviews the carrying
amounts of its tangible assets to determine whether there is
any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the company estimates
the recoverable amount of the cash-generating unit to which the
asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately
in profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated
as a revaluation decrease.
1.8 Fair value measurement
The carrying amounts of financial assets and liabilities with
a maturity of less than one year (including trade and other receivables,
cash and cash equivalents, trade and other payables) are assumed
to approximate their fair values because of the short period
to maturity and credit risk.
1.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand and cash at bank.
1.10 Financial assets
Financial assets are recognised in the company's statement of
financial position when the company becomes party to the contractual
provisions of the instrument.
Financial assets are classified into specified categories. The
classification depends on the nature and purpose of the financial
assets and is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction
costs.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets. The company's loans
and receivables comprise 'trade and other receivables', and 'cash
and cash equivalents' in the statement of financial position.
Trade and other receivables
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. Other receivables
are defined as amounts due that are outside the ordinary course
of business. If collection is expected in one year or less (or
in the normal operating cycle of the business if longer), they
are classified as current assets. If not, they are presented
as non-current assets.
Impairment of financial assets
Financial assets, other than those at fair value through profit
or loss, are assessed for indicators of impairment at each reporting
end date.
Financial assets are impaired where there is objective evidence
that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights
to the cash flows from the asset expire, or when the company
transfers the financial asset and substantially all the risks
and rewards of ownership to another entity.
IFRS 9
The Company has adopted IFRS 9 with effect from 1 January 2018.
In applying this standard the Company has considered the impact
of the application of an expected credit loss model when calculating
impairment losses on its trade and other receivables (both current
and non-current), In applying IFRS 9 the Company must consider the
probability of a default occurring over the contractual life of
its trade receivables and contract asset balances on initial recognition
of those assets.
1.11 Financial liabilities
Financial liabilities are classified as either financial liabilities
at fair value through profit or loss or other financial liabilities.
Other financial liabilities
The company does not have any financial liabilities "at fair
value through profit or loss".
The company has the following as non-derivative financial liabilities;
'trade and other payables' and 'accrued expenses'.
Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment
is due within one year or less (or in the normal operating cycle
of the business if longer). If not, they are presented as non-current
liabilities. Trade and other payables are not interest bearing
and are initially recognised at fair value.
Accrued expenses
Accrued expenses are recognised at fair value, and are recognised
in the accounting period in which those transactions, events,
or circumstances occur
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company's obligations are discharged, cancelled, or upon expiry.
1.12 Equity instruments
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new ordinary shares or options are
charged against the share premium account.
1.13 Taxation
The tax expense/(credit) represents the sum of the tax currently
payable/(repayable) and deferred tax.
Current tax
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the balance sheet
date in the country where the company operates and generates
taxable income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid
to the tax authorities.
Deferred tax
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the nancial statements.
Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the balance
sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability
is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future measurable taxable pro t will
be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on
a net basis.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense, unless those costs are required to
be recognised as part of the cost of inventories or non-current
assets.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the company is demonstrably committed to terminate the employment
of an employee or to provide termination benefits.
1.15 Retirement benefits
Pension obligations
The company has defined contribution plans. A defined contribution
plan is a pension plan under which the company pays fixed contributions
into a separate entity. The company has no legal or constructive
obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods.
The company has no further payment obligations once the contributions
have been paid. The contributions are recognised as an employee
benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available.
1.16 Share-based payments
Equity-settled share-based payments are measured at fair value
at the date of grant by reference to the fair value of the equity
instruments granted using the US Options Binomial model. The
fair value determined at the grant date is expensed on a straight-line
basis over the vesting period, based on the estimate of shares
that will eventually vest. A corresponding adjustment is made
to equity.
When the terms and conditions of equity-settled share-based payments
at the time they were granted are subsequently modified, the
fair value of the share-based payment under the original terms
and conditions and under the modified terms and conditions are
both determined at the date of the modification. Any excess of
the modified fair value over the original fair value is recognised
over the remaining vesting period in addition to the grant date
fair value of the original share-based payment. The share-based
payment expense is not adjusted if the modified fair value is
less than the original fair value.
Cancellations or settlements (including those resulting from
employee redundancies) are treated as an acceleration of vesting
and the amount that would have been recognised over the remaining
vesting period is recognised immediately.
1.17 Leases
Leases are accounted for in accordance with IAS 17 and IFRIC
4. The company currently only has operating leases which are
accounted for as follows:
Operating leases
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as operating
leases. Payments, including prepayments, made under operating
leases (net of any incentives received from the lessor) are charged
to the statement of comprehensive income in equal amounts over
the period of the lease
1.18 Foreign exchange
Functional and presentation currency
Items included in the financial statements of the company are
measured using the currency of the primary economic environment
in which the entity operates ('the functional currency'). The
financial statements are presented in UK Pound Sterling (GBP),
which is the company's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation
of monetary assets and liabilities denominated in foreign currencies
at year end exchange rates are generally recognised in profit
or loss.
All foreign exchange gains and losses recognised in the income
statement are presented net within 'administrative expenses'.
1.19 Research and development
Expenditure on research and development is capitalised in the
year in which it is incurred. This represents wages costs of
various personnel involved in developing the exchange platform
and surveillance system. This asset is subsequently amortised
as explained in note 1.4.
2 Adoption of new and revised standards and changes in accounting
policies
The following IFRS interpretations became effective during the
financial year beginning on 1 January 2018.
* IFRS 9, 'Financial instruments', published in July
2014, replaces the existing guidance in IAS 39
Financial Instruments: Recognition and Measurement.
IFRS 9 includes revised guidance on the
'classification and measurement' of financial
instruments, including a new expected loss model for
calculating 'impairment' on financial assets and a
new general hedge accounting requirements. It also
carries guidance on recognition and de-recognition of
financial instruments from IAS 39. IFRS 9 is
effective for annual reporting periods beginning on
or after 1 January 2018 with early adoption
permitted. The Company has adopted IFRS 9 with effect
from 1 January 2018. In applying this standard the
Company has considered the impact of the application
of an expected credit loss model when calculating
impairment losses on its trade and other receivables
(both current and non-current), In applying IFRS 9
the Company must consider the probability of a
default occurring over the contractual life of its
trade receivables and contract asset balances on
initial recognition of those assets. The Company does
consider that these estimates will result in
increased impairment and has reflected this in the
Financial Statements.
* IFRS 15, 'Revenue from Contracts with Customers',
IFRS 15 Revenue has replaced IAS 18 Revenue and IAS
11 Construction Contracts. It applies to all
contracts with customers except leases, financial
instruments and insurance contracts. IFRS 15
establishes the principles that an entity shall apply
to report useful information to users of financial
statements about their nature, amount, timing and
uncertainty of revenue and cash flows arising from a
contract with a customer. The new revenue standard
supersedes all current revenue recognition
requirements under IFRS. The Company has adopted a
modified retrospective application for annual periods
beginning on or after 1 January 2018. This standard
was adopted on its mandatorily effective date, and
the standard has been applied on a cumulative basis,
recognising the cumulative effect, if any, of
initially applying the standard as an adjustment to
the opening balance of retained earnings. The company
will continue to assess individual customer contracts
for separate performance obligations to allocate the
correct transaction price where necessary and
therefore has assessed the impact of the new revenue
standard to be immaterial.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the
following Standards and Interpretations, which have not yet been
applied in these financial statements, were in issue and adopted
by the EU:
* IFRS 16, 'Leases', addresses the measurement,
classification and recognition of leases. The
complete version of IFRS16 was issued in January
2016. It will result in almost all leases being
recognised on the balance sheet, as the distinction
between operating and finance leases is removed. The
standard is effective for accounting periods
beginning on or after 1 January 2019. Early adoption
is permitted. Adoption of IFRS 16 will result in the
Company recognising right of use assets and lease
liabilities for all contracts that are, or contain, a
lease. For leases currently classi ed as operating
leases, under current accounting requirements the
Company does not recognise related assets or
liabilities, and instead spreads the lease payments
on a straight-line basis over the lease term,
disclosing in its annual nancial statements the total
commitment.
At 31 December 2018 operating lease commitments amounted to GBP768,150.
Further work will be carried out in the course of 2019 to determine
the right-of-use assets and lease liabilities to be recognised
on 1 January 2019, during which the Company's lease pro le is
likely to change. Instead of recognising an operating expense
for its operating lease payments, the Company will instead recognise
interest on its lease liabilities and amortisation on its right
of use assets.
3 Critical accounting estimates and judgements
In the application of the company's accounting policies, the
directors are required to make judgements, estimates and assumptions
about the carrying amount of assets and liabilities that are
not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ
from these estimates.
Critical judgements
Useful lives of property, plant and equipment
The cost of property, plant and equipment is depreciated over
its estimated useful economic life. Management estimates the
useful economic lives of this property, plant and equipment and
intangible assets to be 3 years and 5 years respectively. Changes
in the expected level of usage and technological developments
could impact on the useful economic lives and the residual values
of these assets; therefore, future depreciation charges could
be revised. The carrying amount of the company's property, plant
and equipment and intangible assets in the statement of financial
position is disclosed in note 12 of the financial statements.
Capitalisation of internally generated intangible assets
Internally generated Intangible assets have been capitalised
because in management's judgement the criteria for capitalisation
under IAS 38 has been met. These assets are amortised straight
line over a 3 year period.
Critical accounting estimates
Expected Credit Loss of trade receivables: An impairment for the
expected credit loss of trade receivables is required under IFRS9.
This impairment is an accounting estimate which is calculated based
on the Directors' best estimates of the probability of default and
subsequent loss given default. The total provision and the credit
for the year are disclosed in note 5 of the financial statements.
In arriving at these estimates the Company has assessed the range
of possible outcomes within the next financial year in respect of
the carrying values of the assets and liabilities affected and believes
it has arrived at a prudent and accurate assessment.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised, if the revision affects only that
period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing
a material adjustment to the carrying amount of assets and liabilities
are outlined above.
4 Corporate information
Aquis Exchange PLC ("the company") is licensed to operate a multilateral
trading facility (MTF) enabling members to trade across fourteen
European markets and to provide exchange software under licence.
5.1 Revenue
An analysis of the company's revenue is as follows:
2018 2017
GBP GBP
Revenue analysed by class of business
Subscription Fees 3,100,839 1,706,000
Licence Fees 737,530 308,590
Data Vendor Fees 143,541 -
3,981,910 2,014,590
Subscription fees and data vendor fees are all recognised at point
in time as they reflect variable revenue determined on a monthly
basis.
Licence fees have been calculated in accordance with IFRS 15. The
Company has decided to apply the standard retrospectively by recognising
the cumulative effect of initially applying the standard at the date
of initial application in retained earnings using the simplified
transition method with no restatement of comparatives.
The revenue from licensing contracts with customers has been categorised
reflecting the nature, amount, customer categorisation, contract
duration and uncertainty of revenue and cash flows.
Category 1 clients are companies in an early stage of business development
and Category 2 clients are companies which have been operating successfully
for a minimum of 3 years.
2018 2018
Category 1 Category 2
GBP GBP
IFRS 15 Licensing
Performance obligation 1 (contract life):
project fees and maintenance 155,850 40,310
Performance obligation 2 (point in time):
licensing 323,100 182,280
Other short-term licensing income -26,499
478,950 249,089
5.2 Impairment credit
2018 2017
GBP GBP
Impairment credit 424,194 -
The impairment credit reflects the IFRS 9 provision release for technology
licensing contracts. This release is based on management estimates
of the collectability of contracts over their useful life and is re-assessed
annually.
During potential contract assessment and negotiation Aquis assess the
potential credit risk of a prospective client
prior to committing to the contract. Aquis credit risk management processes
are applied to all trade receivables
and are calculated using a lifetime ECL method.
The ECL has been calculated with reference to estimations based on
a probability of default (PD) and a loss
given default (LGD) analysed for each individual contract taking into
account the nature, amount, customer
categorisation, contract duration and uncertainty of revenue and cash
flows
There were no changes to the estimation methodology over the year
The credit recognised during the year is the movement between the opening
(restated) provision and the closing estimated provision.
There is no impact on transition as there would be no trade receivables
generated and therefore no impairment
under the previous standards.
6 Exceptional items 2018 2017
GBP GBP
Exceptional costs (1,011,853) -
Exceptional costs relate to the costs incurred for the IPO.
7 Operating segments
The company only has one operating segment.
8 Operating loss
2018 2017
GBP GBP
Operating loss for the year is stated after charging/(crediting):
Exchange losses/(gains) 3 (61)
Fees payable to the company's auditor for
the audit of the company's financial statements 52,500 15,000
Depreciation of property, plant and equipment 162,493 83,706
Amortisation of intangible assets 449,001 406,515
Share-based payments (see below) 92,446 -
On the 14(th) June 2018 the company issued 564,124 share options
to eligible employees as part of an approved
Employee Share Option Scheme. In accordance with IFRS 2 the Company
has estimated the value of these
options using a US binomial option valuation model and spread the
estimated value against the Profit and
Loss account over the life of the vesting period.
There is one approved EMI scheme. Options vest in 3 equal tranches,
one, two and three years after grant. The options expire after 10
years.
No options vested or were exercised, expired or forfeited during
the period.
The options exercise price is GBP2.69 per share. The weighted average
remaining contractual life of options outstanding at the end of the
reporting period amounted to 2 years 5.5 months.
The valuation method used to estimate the fair value of the awards
was the US binomial method with an average expiry duration of 5 years,
volatility of 24 and risk free interest rate of 1.1067%.
9 Employees
The average monthly number of persons
(including directors) employed
by the company during the year was:
2018 2017
Number Number
Management 4 4
Operations 4 4
Business
Development 3 3
Marketing 1 1
IT and Finance 17 16
Compliance and
Surveillance 3 3
32 31
Their aggregate remuneration
comprised:
2018 2017
GBP GBP
Wages and
salaries 3,184,145 2,208,402
Social
security
costs 525,376 323,021
Pension costs 207,751 95,690
3,917,272 2,627,113
10 Directors'
remuneration
2018 2017
GBP GBP
Remuneration
for
qualifying
services 840,789 593,150
Remuneration
disclosed
above include
the following
amounts paid
to the
highest paid
director:
Remuneration
for
qualifying
services 341,132 231,940
11 Investment
income
2018 2017
GBP GBP
Interest income
Bank deposits 30,139 9,961
12 Income tax
expense
2018 2017
GBP GBP
Current tax
Adjustments
in respect
of prior
periods (247,389) (222,215)
12 Income tax
expense
The charge for the year can be
reconciled to the loss per the
income statement as follows:
2018 2017
GBP GBP
Loss before
taxation (3,664,756) (3,266,809)
Expected tax
credit based
on a
corporation
tax rate of
19.00% (696,304) (628,861)
Effect of
expenses not
deductible
in
determining
taxable
profit 188,180 8,225
Unutilised
tax losses
carried
forward 537,478 663,238
Permanent
capital
allowances
in excess
of
depreciation (29,355) (58,716)
Depreciation
on assets
not
qualifying
for tax
allowances - 16,114
Research and
development
tax credit (247,389) (222,215)
Taxation
credit for
the year (247,389) (222,215)
The company has estimated
losses of GBP18,180,329 (2017:
GBP16,132,673)
available for carry forward
against future trading profits.
13 Earnings per 2018 2017
share
GBP GBP
Number of shares
Weighted
average
number of
ordinary
shares
for basic
earnings per
share 16,433,338 1,670,701
Earnings
Loss for the
period from
continued
operations (3,417,367) (3,044,594)
13 Earnings per share (pence) 2018 2017
Basic and diluted earnings per share
Basic earnings per ordinary share (21) -
Basic earnings per A share - (515)
Basic earnings per B share - (161)
Diluted earnings per ordinary share (20) -
Diluted earnings per A share - (515)
Diluted earnings per B share - (161)
14 Intangible assets
Developed Trading
Platforms
GBP
Cost
At 1 January 2017 630,072
Additions 440,461
At 31 December 2017 1,070,533
Additions - internally generated 422,522
At 31 December 2018 1,493,055
Amortisation and impairment
Charge for the year 406,515
At 31 December 2017 406,515
Charge for the year 449,001
At 31 December 2018 855,516
Carrying amount
At 31 December 2018 637,539
At 31 December 2017 664,018
15 Property, plant and equipment
Fixtures, Computer Total
fittings equipment
and equipment
GBP GBP GBP
Cost
At 1 January 2017 - 1,115,752 1,115,752
Additions 233,669 67,071 300,740
At 31 December 2017 233,669 1,182,823 1,416,492
Additions 12,794 409,140 421,934
At 31 December 2018 246,463 1,591,963 1,838,426
Accumulated depreciation and impairment
At 1 January 2017 - 1,050,294 1,050,294
Charge for the year 28,801 54,905 83,706
At 31 December 2017 28,801 1,105,199 1,134,000
Charge for the year 48,801 113,692 162,493
At 31 December 2018 77,602 1,218,891 1,296,493
Carrying amount
At 31 December 2018 168,861 373,072 541,933
At 31 December 2017 204,868 77,624 282,492
16 Investments
Current Non-current
2018 2017 2018 2017
GBP GBP GBP GBP
Investments in subsidiaries - - 9,020 -
The company has not designated any financial assets that are
not classified as held for trading as financial assets at fair
value through profit or loss.
Fair value of financial assets carried at amortised cost
Except as detailed below the directors believe that the carrying
amounts of financial assets carried at amortised cost in the
financial statements approximate to their fair values.
17 Subsidiaries
Details of the company's subsidiaries at 31 December 2018 are
as follows:
Name of Country of Ownership Voting power Nature of business
undertaking incorporation interest held (%)
(%)
Aquis Exchange European Equities
Europe SAS France 100.00 100.00 Exchange
The registered office of Aquis Exchange Europe SAS is 231 rue
saint honore, 75001 Paris, France.
18 Trade and other receivables
Current Non-current
2018 2017 2018 2017
GBP GBP GBP GBP
Trade receivables 1,518,654 1,204,757 564,754 -
Other receivables 7,953 1,208 276,534 276,534
Prepayments 296,083 247,957 - -
1,822,690 1,453,922 841,288 276,534
19 Trade receivables - credit risk
Fair value of trade receivables
The trade receivables are stated net of any credit impairment
provision as set out previously in Note 5 in accordance with IFRS
9.
2018 2017
GBP GBP
Trade receivables (gross) 2,779,242 2,324,785
Credit impairment (695,834) (1,120,028)
Trade receivables net of impairments 2,083,408 1,204,757
20 Trade and other payables
Current
2018 2017
GBP GBP
Trade payables 153,144 26,926
Accruals 681,010 248,463
Social security and other taxation 10,494 522
Other payables 47,716 -
892,364 275,911
The directors consider that the carrying amount of trade payables
approximates to their fair value.
21 Retirement benefit schemes
Defined contribution schemes
The company operates a defined contribution pension scheme for
all qualifying employees. The assets of the scheme are held separately
from those of the company in an independently administered fund.
The total costs charged to income in respect of defined contribution
plans are GBP207,751 (2017 - GBP95,690).
22 Share capital 2018 2017
GBP GBP
Ordinary share capital
Issued and fully paid
27,149,966 Ordinary shares of 10p
each 2,714,996 -
100,001 Ordinary A shares of 0.001p
each - 1
1,570,700 Ordinary B shares of 0.001p
each - 16
2,714,996 17
During the year, the company issued 220,015 Ordinary A shares
of 0.001p each, and 226,884,029,284 Ordinary B shares of 0.001p
each. The shares were issued at nominal value.
During the year, a variation of rights was passed to reclass all
Ordinary A and B shares as one individual class of Ordinary shares,
and to change their designation to 10p Ordinary shares.
During the year, and following the variation of share designation,
an additional 4,460,967 Ordinary shares were issued with nominal
value 10p per share, and with a premium of GBP2.59 per Ordinary
share.
23 Share premium account
2018 2017
GBP GBP
At beginning of year 23,517,321 23,517,321
Issue of new shares 10,840,020 -
Share capital reduction (23,517,360) -
At end of year 10,839,981 23,517,321
24 Other reserves
2018 2017
GBP GBP
Reserves relating to share-based payments 92,446 -
The reserves relating to share-based payments reflects the estimated
value of the approved Employee Share
Option Scheme estimated using a US binomial option valuation model.
25 Retained earnings
2018 2017
GBP GBP
At the beginning of the year (16,908,527) (13,863,933)
Elimination of Share Premium 21,248,478 -
Loss for the year (3,417,367) (3,044,594)
At the end of the year 922,584 (16,908,527)
Retained earnings at 31 December 2017 have been restated to reflect
applying IAS 38 - accounting for intangibles and adopting IFRS 15
- accounting for revenue from software licences net of credit provisions
IFRS 9. The impact on the reserves is summarised below.
2017
GBP
Retained earnings at 1 January 2018 (18,452,039)
IAS 38 664,019
IFRS 15 (net of IFRS 9) 879,493
Adjusted retained earnings at 1 January 2018 (16,908,527)
26 Operating lease commitments
Lessee
The company leases an office suite under a non-cancellable operating
lease agreement.
Amounts recognised in profit or loss as an expense during the period
in respect of operating lease arrangements are as follows:
2018 2017
GBP GBP
Minimum lease payments under operating leases 187,968 206,864
At the reporting end date the company had outstanding commitments
for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
2018 2017
GBP GBP
Within one year 230,445 230,445
Between two and five years 537,705 691,335
768,150 921,780
27 Capital commitments
There was no capital expenditure contracted for at the end of the
reporting year that had not been provided for.
28 Capital risk management
The company's objectives when managing capital are:
* to safeguard the company's ability to continue as a
going concern so that it can provide returns for
shareholders and benefits for other stakeholders; and
* to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain a strong capital structure, the company
may issue new shares, return capital to shareholders or sell
assets to ensure capital adequacy requirements are met.
The company adopts the following policies and procedures in order
to manage its capital requirements:
* regular monitoring of its current and expected levels
of liquidity to ensure that it has sufficient funds
for working capital requirements; and
* regular monitoring of the Return on Assets (ROA),
maintaining a balance between the higher returns that
might be possible with higher levels of borrowings
and the advantages and security afforded by a sound
capital position.
The ROA is the amount of net loss returned as a percentage of
total assets.
2018 2017
GBP GBP
Loss for the year (3,417,367) (3,044,594)
Total assets 15,462,371 6,884,722
Return on Assets (22%) (44%)
Externally imposed capital requirements to which the company
is subject to have been assessed and complied with in the year.
29 Related party transactions
Remuneration of key management personnel
The remuneration of the directors, who are key management personnel,
is set out below in aggregate for each of the categories specified
in IAS 24 Related Party Disclosures.
2018 2017
GBP GBP
Short-term employee benefits 681,924 463,150
681,924 463,150
DETAILED TRADING AND PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2018
31 Controlling party
In the opinion of the directors, there is no single overall controlling
party.
31 Cash generated from operations
2018 2017 (Restated)
GBP GBP
Loss for the year after tax (3,417,367) (3,044,594)
Adjustments for:
Taxation credited (247,389) (222,215)
Investment income (30,139) (9,961)
Amortisation and impairment of intangible
assets 449,001 406,515
Depreciation and impairment of property,
plant and equipment 162,493 83,706
Equity settled share based payment expense 92,446 -
Other gains / losses on transition of accounting
standards (713,884) 913,439
Movements in working capital:
Increase in trade and other receivables (933,522) (1,222,759)
Increase in trade and other payables 616,453 92,792
Cash absorbed by operations (4,021,908) (3,003,077)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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