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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Octagonal Plc | LSE:OCT | London | Ordinary Share | GB00BWWCHQ23 | ORD 0.05P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMOCT
RNS Number : 6616P
Octagonal PLC
04 September 2017
For immediate release
4 September 2017
Octagonal plc
("Octagonal" or the "Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEARED 31 MARCH 2017
NOTICE OF ANNNUAL GENERAL MEETING
POTENTIAL CAPITAL REORGANISATION
The Company has today published its report and Accounts for the year ended 31 March 2017, a copy of which is being posted to Shareholders along with a Notice of AGM. The AGM will be held at 2(nd) Floor, 2 London Wall Buildings, London EC2M 5PP at 11.00 a.m. on 27 September 2017.
At the above AGM, the company will seek shareholder approval to re-organise the Company's capital by writing off the Company's Share premium account and Deferred shares in order to provide the Company with sufficient Retained Earnings to declare and pay a dividend.
CHAIRMAN'S STATEMENT
I am pleased to present the annual report and accounts for the year ended 31 March 2017.
It has been a very progressive year for Octagonal Plc ("Octagonal" or the "Company") encompassing full 12 months trading of its wholly owned subsidiary Global Investment Strategy UK Ltd ("GIS"). GIS has again exceeded expectations for both revenue and profits. This performance is a testament to the quality of the business, the focus and dedication of management and the wider team.
Some of the key highlights for GIS, the Group's operating business,
-- GIS traded significantly above 2016 - Revenue up 33.3% to GBP5.6m (2016: GBP4.2m) -- GIS increased operating margin to 39.4% (2016: 25.6%)
-- GIS increased pre-tax profits by 48% to GBP1.60m (2016: GBP1.08m) after exceptional charges of GBP0.61m.
Business overview
Our business's core focus is on providing global settlement and safe custody services to investors worldwide, priding ourselves on customer satisfaction through personalised service delivered by experienced industry individuals. Additionally the business looks to leverage off it operational capabilities to increase its product offerings and services to new and existing clients.
Our business model has maintained its focus on driving profitability and longer-term shareholder value through several key areas:
(i) growing revenues organically through seeking new clients and identifying and implementing new services to existing and new clients,
(ii) improving margins through investing in technology, creating efficiencies and a drive to reduce frictional costs etc. This focus is continuing to bear fruit with revenue improvements and margin gains.
(iii) expanding GIS's FCA regulatory permissions to enhance group revenues and profitability through developing new business lines.
Financial review
For the year ending 31 March 2017 GIS has delivered results above expectations and overall the Group has achieved revenues of GBP5.6 million (2016: GBP4.2 million) and operating profit of GBP1.926m (2016: GBP0.788m) a year on year increase of 33% and 144% respectively.
Profit before taxation was GBP1.31m (2016: GBP0.79m) included an exceptional impairment charge of GBP0.6m during the year against two of GIS's pre-RTO non-core legacy investments.
Gross margins showed an increase to 72% (2016: 69%) with operating margin also increasing to 34.4% (2016: 18.8%). Operating costs attributable to just Octagonal PLC amounted to only GBP173,000 (2016: GBP265,000).
Synergis Capital PLC contributed negatively GBP117,000 to group earnings before taxation as a result of our contribution to operating costs, though this had no impact on cash reserves due to third party investment in this enterprise.
Cash reserves increased to GBP3.8m (2016: GBP1.5m).
This has clearly demonstrated the Group's ability to be cash generative and profitable in such environments and positions the Group to grow and improve margins and profitability as markets return, we hope, to traditional patterns post recent global political events.
At the year end the Group had cash balances in excess of GBP3.8m (2016: GBP1.5m), which represent more than adequate cash reserves for our current operations with Net Assets of GBP6.6 million (2016: GBP5.4 million). GIS generates the majority of its income in USD, with costs divided between Euro, principally for banking costs, and GBP for overheads.
As previously stated, we do not envisage long term implications of BREXIT having a material impact on our business as our strong USD income is mostly derived outside the EU.
We remain very optimistic that the measures we have put in place will see this business grow further this year and increase profitability.
Future Developments
The business has continued to see growth in both revenues and new client generation over this period. The Group remains focused on growing the core settlement and safe custody business organically and diversifying into new areas that will improve our customer's experience, but also generate long term value for shareholders, whilst improving efficiencies and driving cost savings through the implementation of fintech functionality.
The new services we implemented last year have been working well and we hope to see increased revenue generation from Wealth Management, enhanced FX, Futures and Option trading activity in the current year.
GIS was in April this year approved by the FCA as an Authorised Payment Institution (API), to provide regulated payments service solutions to clients. This paves the way for the group to expand its ancillary services to its existing customers, but also to utilise these permissions to expand its product offering to attract new clients. As an API GIS can apply to establish a physical presence in any European Economic Area State to provide these services.
Our majority owned subsidiary Synergis Capital PLC has made significant progress and we will be updating shareholders separately on the progress that has been made in the near future. The principle activities of this enterprise will be to offer the investing community the opportunity to buy secured fixed rate bonds, either directly or via their IFA. The proceeds of which will be invested in commercial asset backed lending and investment grade assets. The company has attracted outside investment in excess of GBP1m, which has enabled us to recruit an excellent team of professionals to help support this dynamic fintech proposition, and also enable the group to leverage off its operational capabilities once again to further expand its product offerings. In the financial year to 31(st) March 2017 the groups earnings were impacted negatively by GBP117,000 as a result of our contribution to costs, though this had no impact on the groups cash reserves due to the investments made by third parties.
Our application to SFC for permission to offer type 1 and 2 regulated activities in Hong Kong and the business plan has been completed following certain board members of GIS meeting the regulatory requirements for the status as Responsible Officer. The executive board of GIS have made visits to Hong Kong to complete the mandatory regulatory exams, which were achieved successfully.
Relationships have also been established with local and regional banks to help support this business activity. The board see this as a very exciting activity for the group, but do not expect to see a significant contribution to revenue or earnings in the current financial year.
Both Synergis Capital PLC, our retail deposit bond offering, and our operations in Hong Kong offer exciting challenges for our team in the year ahead and we look forward to sharing the progress of these entities in the near future.
The Wealth management team of GIS has increased in the year to 31 March 2017 and we are now seeing a contribution to revenues in the current financial year. The board remain committed to increasing support for this activity. Enhanced FX, futures and option activity contributed marginally to revenues in the year to March 2017 though we expect to see a greater financial contribution in the current year. These remain ancillary services provided to existing clients only.
The Group has had a strong full year performance and the prospects for the coming year remain positive and the Board is confident of growing revenues and operating profitability.
Finally, I would like to thank the Board and the team as a whole who have worked exceptionally well in delivering these results and strengthening the business to deliver greater returns for shareholders in the year ahead.
We will accompany these results with notice of a General Meeting, where the Board will be seeking shareholders approval to take steps to enable the Company to declare its first dividend this year and seek approval for the option to buy back its own shares for cancelation, where the Board see this as beneficial to shareholders.
John Gunn
Chairman
3 September 2017
The full report and accounts and a copy of the Notice of AGM are available to download from the Company's website: www.octagonalplc.com and are being posted to Shareholders.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.octagonalplc.com or contact:
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+44 (0) 20
Octagonal Plc 7048 9400
John Gunn, CEO
Beaumont Cornish Limited (Nominated
Adviser and Broker) +44 (0) 20
James Biddle / Roland Cornish 7628 3396
www.beaumontcornish.com
Extracts of the Report and Accounts are set out below:
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF OCTAGONAL PLC
We have audited the financial statements of Octagonal plc for the year ended 31 March 2017, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes . The relevant financial reporting framework that has been applied in their preparation is the Companies Act 2006 and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As explained more fully in the statement of directors' responsibilities set out on page 10, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's and the parent Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non--financial information in the Group Strategic Report and the Directors' Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
-- the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 March 2017 and of the Group's profit for the year then ended;
-- the Group and Parent Company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; and
-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit, the information given in the Chairman's Statement, Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. No material misstatements in the Chairman's Statement, Strategic Report and the Director's Report have been identified.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-- the Parent Company financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Jonathan Bradley-Hoare (Senior statutory auditor)
for and on behalf of Welbeck Associates
Chartered Accountants and Statutory Auditors
30 Percy Street
London, United Kingdom
W1T 2DB
3 September 2017
GROUP INCOME STATEMENT 2017 2016
YEAR TO 31 MARCH 2017 Notes GBP'000 GBP'000
------------------------------------- ----- -------- --------
Revenue 6 5,596 4,202
Cost of sales (1,617) (1,289)
Gross profit 3,979 2,913
Administrative expenses (2,053) (2,125)
Operating profit 7 1,926 788
Other gains and losses 10 (613) -
Finance income - 4
Finance costs - (1)
Profit before tax 1,313 791
Tax 11 (311) (188)
Profit for the year 1,002 603
Attributable to:
Shareholders in the parent company 1,035 603
Non-controlling interests (33) -
-------------------------------------- ----- -------- --------
1,002 603
------------------------------------- ----- -------- --------
Earnings per share attributable
to owners of the parent company
Basic and diluted (pence per
share)
From continuing and total operations 12 0.185 0.135
There are no recognised gains or losses in either period other than the profit for the year and therefore no statement of comprehensive income is presented
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company pro t and loss account. The total comprehensive loss for the parent company for the year was GBP139,000 (2016: GBP864,000).
The accounting policies and notes are an integral part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 MARCH 2017 GROUP COMPANY
------------------ ------------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- -------- -------- -------- --------
Non-Current assets
Goodwill 2,869 2,869 - -
Other intangible assets 50 - - -
Property, plant and equipment 62 55 - -
Investment in subsidiaries - - 9,137 9,137
Deferred tax asset 65 - - -
3,046 2,924 9,137 9,137
----------------------------------------------------- -------- -------- -------- --------
Current assets
Investments held at fair value through profit
and loss 126 689 - -
Trade and other receivables 327 705 73 112
Cash and cash equivalents 3,813 1,552 - 1
4,266 2,946 73 113
--------
Current liabilities
Trade and other payables 286 270 474 375
Current tax liabilities 389 213 - -
Borrowings - 2 - -
675 485 474 375
----------------------------------------------------- -------- -------- -------- --------
Net assets 6,637 5,385 8,736 8,875
------------------------------------------------------ -------- -------- -------- --------
Equity
Share capital 1,104 1,104 1,104 1,104
Share premium account 3,669 3,669 3,669 3,669
Reverse acquisition reserve 679 679 - -
Merger reserve - - 6,555 6,555
Investment reserve - - 110 110
Share option and warrant reserve - - - -
Retained earnings 1,148 (67) (2,702) (2,563)
------------------------------------------------------ -------- -------- -------- --------
Equity attributable to owners of the Company 6,600 5,385 8,736 8,875
Non-controlling interests 37 - - -
------------------------------------------------------ -------- -------- -------- -------- Total equity 6,637 5,385 8,736 8,875 ------------------------------------------------------ -------- -------- -------- --------
These financial statements were approved by the Board of Directors on 31 August 2017.
Signed on behalf of the Board by:
John Gunn
Director Company number: 06214926
The accounting policies and notes are an integral part of these financial statement
Equity
attributable
GROUP STATEMENT OF Reverse to owners
CHANGES Share acquisition Retained of the Non-controlling Total
IN EQUITY capital Share Premium reserve earnings Company interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- ------------- ------------- ---------- ------------- ---------------- -------
Balance at 1 April 2015 2,613 - - (670) 1,943 - 1,943
Total comprehensive
income for the year - - - 603 603 - 603
Adjustment for reverse
acquisition (1,552) 2,109 679 - 1,236 - 1,236
Proceeds of share issues 43 1,657 - - 1,700 - 1,700
Share issue costs - (97) - - (97) - (97)
Balance at 31 March
2016 1,104 3,669 679 (67) 5,385 - 5,385
Total comprehensive
income for the year - - - 1,035 1,035 (33) 1,002
Adjustment arising from
change in
non-controlling
interest - - - 180 180 70 250
Balance at 31 March
2017 1,104 3,669 679 1,148 6,600 37 6,637
The accounting policies and notes are an integral part of these financial statements.
Share
option
COMPANY STATEMENT OF CHANGES Share Merger Investment and warrant Retained
IN EQUITY capital Share Premium Reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------- --------- ----------- ------------- --------- -------
Balance at 1 April 2015 878 1,713 - - 318 (1,699) 1,210
Total comprehensive expense
for the year - - - 110 - (864) (754)
Issue of share capital 226 2,053 6,555 - (318) - 8,516
Share issue costs - (97) - - - - (97)
Balance at 31 March 2016 1,104 3,669 6,555 110 - (2,563) 8,875
Total comprehensive expense
for the year - - - - - (139) (139)
Balance at 31 March 2017 1,104 3,669 6,555 110 - (2,702) 8,736
The accounting policies and notes are an integral part of these financial statement
GROUP AND COMPANY STATEMENTS
OF CASH FLOWS GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- --------
OPERATING ACTIVITIES
Profit/(loss) for the year
before taxation 1,313 791 (173) (897)
Adjusted for:
Finance expense - 1 - -
Finance income - (4) - (2)
Depreciation 21 18 - -
Shares issued in settlement
of fees - - - 46
Investment impairment 613 - - -
Loss/(gain) on disposal
of investments - - - (9)
Operating cash flows before
movements in working capital 1,947 806 (173) (862)
(Increase)/Decrease in
trade and other receivables 167 308 73 255
Increase/(decrease) in
trade and other payables 149 117 (24) 232
Net cash from / (used in)
operations 2,263 1,231 (124) (375)
Tax paid (200) - - -
Net cash from / (used in)
operating activities 2,063 1,231 (124) (375)
--------------------------------- -------- -------- -------- --------
INVESTING ACTIVITIES
Purchase of property, plant
and equipment (28) (8) - -
Development costs (50) - - -
Purchase of investments (50) (50) - (1,500)
Payment to shareholders
as part of reverse acquisition
(Note 14) - (1,500) - -
Disposal of investments - - - 78
Loan to a related party - (76) - -
Related party repayment
of loan 76 - - -
Finance income received - 4 - 2
Net cash used in investing
activities (52) (1,630) - (1,420)
--------------------------------- -------- -------- -------- --------
FINANCING ACTIVITIES
Net proceeds from share
issues - 1,603 - 1,650
Non-controlling interest
investment 250 - - -
Increase in interco loan - - 123 -
Interest paid - (1) - -
Net cash from financing
activities 250 1,602 123 1,650
--------------------------------- -------- -------- -------- --------
Net (decrease)/increase
in cash and cash equivalents 2,261 1,203 (1) (145)
Cash and cash equivalents
at beginning of year 1,552 349 1 146
Cash and cash equivalents
at end of year 3,813 1,552 - 1
--------------------------------- -------- -------- -------- --------
The accounting policies and notes are an integral part of these financial statements.
NOTES TO THE ACCOUNTS
1 GENERAL INFORMATION
The Company is incorporated and domiciled in
England and Wales as a public limited company
and operates from its registered office 2nd
Floor, 2 London Wall Buildings, London, England,
EC2M 2SJ. Octagonal plc's shares are listed
on the AIM of the London Stock Exchange. The
Group's main activity is that of a financial
services business offering a wide range of services
to institutional, family office and high net
worth clients.
2 STATEMENT OF COMPLIANCE
The financial statements comply with IFRS as
adopted by the European Union. The following
new and revised Standards and Interpretations
have been adopted in the current period by the
Company for the first time and do not have a
material impact on the group.
IFRS Disclosures of interests in other entities
12 -
A number of new standards and amendments to
standards and interpretations have been issued
but are not yet effective and not early adopted.
None of these are expected to have a significant
effect on the financial statements of the Company.
3 Accounting Policies
The principal accounting policies adopted and
applied in the preparation of the Group and
Company Financial statements are set out below.
These have been consistently applied to all
the years presented unless otherwise stated:
BASIS OF ACCOUNTING
The financial statements of Octagonal plc (the
"Company") and its subsidiaries (the "Group")
have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted
for use in the European Union ("EU") applied
in accordance with the provisions of the Companies
Act 2006.
IFRS is subject to amendment and interpretation
by the International Accounting Standards Board
("IASB") and the International Financial Standards
Interpretations Committee ("IFRS IC") and there
is an ongoing process of review and endorsement
by the European Commission. The consolidated
financial statements have been prepared on the
historical cost basis except for certain financial
instruments that are measured at fair value
at the end of each reporting period, as explained
in the accounting policies below.
In accordance with reverse acquisition accounting
convention the comparative information for the
group for 2015 relates to the business of GIS.
GOING CONCERN
Any consideration of the foreseeable future
involves making a judgement, at a particular
point in time, about future events which are
inherently uncertain. The ability of the Group
to carry out its planned business objectives
is dependent on its continuing ability to raise
adequate financing from equity investors and/or
the achievement of profitable operations.
Nevertheless, at the time of approving these
Financial Statements and after making due enquiries,
the Directors have a reasonable expectation
that the Group has adequate resources to continue
operating for the foreseeable future. For this
reason they continue to adopt the going concern
basis in preparing the Financial Statements.
BASIS OF CONSOLIDATION
The Group's consolidated financial statements
incorporate the financial statements of Octagonal
Plc (the "Company") and entities controlled
by the Company (its subsidiaries). Subsidiaries
are entities over which the Group has the power
to govern the financial and operating policies
generally accompanying a shareholding of more
than one half of the voting rights. The existence
and effect of potential voting rights that are
currently exercisable or convertible are considered
when assessing whether the Group controls another
entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the
Group. They are de-consolidated from the date
that control ceases.
The Company acquired Global Investment Strategy
UK Limited on 30 June 2015 through both cash
consideration and a share-for-share exchange.
As the shareholders of GIS have control of the
legal parent, Octagonal plc, the transaction
has been accounted for as a reverse acquisition
in accordance with IFRS 3 "Business Combinations".
Inter-company transactions, balances and unrealised
gains on transactions between Group companies
are eliminated. Profits and losses resulting
from inter-company transactions that are recognised
in assets are also eliminated. Accounting policies
of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted
by the Group.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring
the accounting policies used into line with
those used by the Group.
All intra-group transactions, balances, income
and expenses are eliminated on consolidation.
Business Combinations
The acquisition of subsidiaries is accounted
for using the acquisition method under IFRS
3. The cost of the acquisition is measured at
the aggregate of the fair values, at the date
of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued by
the Group in exchange for control of the acquiree,
plus any costs directly attributable to the
business combination. The acquiree's identifiable
assets, liabilities and contingent liabilities
that meet the conditions for recognition under
IFRS 3 are recognised at their fair value at
the acquisition date, except for non-current
assets (or disposal groups) that are classified
as held for resale in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued
Operations, which are recognised and measured
at fair value less costs to sell.
Goodwill arising on acquisition is recognised
as an asset and initially measured at cost,
being the excess of the cost of the business
combination over the Group's interest in the
net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after
reassessment, the Group's interest in the net
fair value of the acquirer's identifiable assets,
liabilities and contingent liabilities exceed
the cost of the business combination, the excess
is recognised immediately in the income statement.
revenue recognition
The Group's Revenue includes commission income,
corporate advisory fees and other ancillary
fees.
Revenue is measured at the fair value of the
consideration received or receivable.
Fees for advisory engagements for which the
work is substantially complete or which are
at a stage where work for which separate payment
is due is substantially complete, and which
will become due but are not yet invoiced are
recorded on a right to consideration basis.
Where such fees are contingent on the outcome
of a transaction they are only accounted for
after the transaction has completed.
Management fees and interest are credited to
income in the period in which they relate.
foreign currencies
At each year end date, monetary assets and liabilities
that are denominated in foreign currencies are
retranslated at the rates prevailing on the
year end date. Non-monetary items carried at
fair value that are denominated in foreign currencies
are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary
items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement
of monetary items, and on the retranslation
of monetary items, are included in the income
statement. Exchange differences arising on the
retranslation of non-monetary items carried
at fair value are included in profit or loss
for the period, except for differences arising
on the retranslation of non-monetary items in
respect of which gains and losses are recognised
directly in equity. For such non-monetary items,
any exchange component of that gain or loss
is also recognised directly in equity.
AVAILABLE FOR SALE INVESTMENTS
Available for sale ("AFS") financial assets
include equity investments and debt securities.
Equity investments classified as AFS are those
that are neither classified as held for trading
nor designated at fair value through profit
or loss. Debt securities in this category are
those that are intended to be held for an indefinite
period of time and that may be sold in response
to needs for liquidity or in response to changes
in the market conditions. Purchases and sales
of AFS financial assets are recognised and derecognised
on a trade date basis.
Investments are initially measured at fair value
plus directly attributable incidental acquisition
costs. Subsequently, they are measured at fair
value in accordance with IAS 39. This is either
the bid price or the last traded price, depending
on the convention of the exchange on which the
investment is quoted.
Gains and losses on measurement are recognised
in other comprehensive income except for impairment
losses and foreign exchange gains and losses
on monetary items denominated in a foreign currency,
until the assets are derecognised, at which
time the cumulative gains and losses previously
recognised in other comprehensive income are
recognised in the income statement.
The Group assesses at each year end date whether
there is any objective evidence that a financial
asset or group of financial assets classified
as AFS has been impaired. An impairment loss
is recognised if there is objective evidence
that an event or events since initial recognition
of the asset have adversely affected the amount
or timing of future cash flows from the asset.
A significant or prolonged decline in the fair
value of a security below its cost shall be
considered in determining whether the asset
is impaired.
When a decline in the fair value of a financial
asset classified as AFS has been previously
recognised in other comprehensive income and
there is objective evidence that the asset is
impaired, the cumulative loss is removed from
other comprehensive income and recognised in
the income statement. The loss is measured as
the difference between the cost of the financial
asset and its current fair value less any previous
impairment.
INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT
AND LOSS
All investments determined upon initial recognition
as held at Fair Value through Profit or Loss
("FVTPL") were designated as investments held
for trading. Investment transactions are accounted
for on a trade date basis. Assets are de-recognised
at the trade date of the disposal. Assets are
sold at their fair value, which comprises the
proceeds of sale less any transaction cost.
The fair value of the financial instruments
in the balance sheet is based on the quoted
bid price at the balance sheet date, with no
deduction for any estimated future selling cost.
Unquoted investments are valued by the directors
using primary valuation techniques such as recent
transactions, last price and net asset value.
Changes in the fair value of investments held
at FVTPL and gains and losses on disposal are
recognised in the consolidated statement of
comprehensive income as "Net gains on investments".
Investments are initially measured at fair value.
Subsequently, they are measured at fair value
in accordance with IAS 39. This is either the
bid price or the last traded price, depending
on the convention of the exchange on which the
investment is quoted.
The Company determines the fair value of its
Investments based on the following hierarchy:
LEVEL 1 - Where financial instruments are traded
in active financial markets, fair value is determined
by reference to the appropriate quoted market
price at the reporting date. Active markets
are those in which transactions occur in significant
frequency and volume to provide pricing information
on an on-going basis.
LEVEL 2 - If there is no active market, fair
value is established using valuation techniques,
including discounted cash flow models. The inputs
to these models are taken from observable market
data including recent arm's length market transactions,
and comparisons to the current fair value of
similar instruments; but where this is not feasible,
inputs such as liquidity risk, credit risk and
volatility are used
LEVEL 3 - Valuations in this level are those
with inputs that are not based on observable
market data.
GOODWILL
Goodwill arising on consolidation represents
the excess of the cost of acquisition over the
Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate
or jointly controlled entity at the date of
acquisition and is included as a non-current
asset.
Goodwill is tested annually, or more regularly
should the need arise, for impairment and is
carried at cost less accumulated impairment
losses. Any impairment is recognised immediately
in the income statement and is not subsequently
reversed.
Goodwill is allocated to cash generating units
for the purpose of impairment testing.
On disposal of a subsidiary the attributable
amount of goodwill is included in the determination
of the profit or loss on disposal.
In accordance with IAS 36 the Group values Goodwill
at the lower of its carrying value or its recoverable
amount, where the recoverable amount is the
higher of the value if sold and its value in
use. In addition IAS 38 requires intangible
assets with finite useful lives to follow the
same impairment testing as Goodwill including
the use of value in use calculations.
taxation
The tax expense represents the sum of the tax
currently payable and deferred tax.
The tax currently payable is based on taxable
profit for the year. Taxable profit differs
from net profit as reported in the income statement
because it excludes items of income or expense
that are taxable or deductible in other years
and it further excludes items that are never
taxable or deductible. The Group's liability
for current tax is calculated using tax rates
that have been enacted or substantively enacted
by the year end date.
Deferred tax is the tax expected to be payable
or recoverable on temporary differences between
the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable
profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary
differences and deferred tax assets are recognised
to the extent that it is probable that taxable
profits will be available against which deductible
temporary differences can be utilised. Such
assets and liabilities are not recognised if
the temporary difference arises from the initial
recognition of goodwill or from the initial
recognition (other than in a business combination)
of other assets and liabilities in a transaction
that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for
taxable temporary differences arising on investments
in subsidiaries and associates, and interests
in joint ventures, except where the Group is
able to control the reversal of the temporary
difference and it is probable that the temporary
difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is
reviewed at each year end date and reduced to
the extent that it is no longer probable that
sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates
that are expected to apply in the period when
the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income
statement, except when it relates to items charged
or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
set off current tax assets against current tax
liabilities and where they relate to income
taxes levied by the same taxation authority
and the Group intends to settle its current
tax assets and liabilities on a net basis.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND
INTANGIBLE ASSETS EXCLUDING GOODWILL
At each financial year end date, the Group reviews
the carrying amounts of its tangible and intangible
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 the asset does not generate cash
flows that are independent from other assets,
the Group estimates the recoverable amount of
the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite
useful life is tested for impairment annually
and whenever there is an indication that the
asset may be impaired.
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 and the impairment loss is recognised
as an expense immediately.
When an impairment loss subsequently reverses,
the carrying amount of the asset or cash-generating
unit is increased to the revised estimate of
its recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognised for the asset
or cash-generating unit in prior years. A reversal
of an impairment loss is recognised as income
immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation
increase.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at
cost, less depreciation, less adjustments for
impairment, if any.
Significant improvements are capitalised, provided
they qualify for recognition as assets. The
costs of maintenance, repairs and minor improvements
are expensed when incurred.
Tangible assets retired or withdrawn from service
are removed from the balance sheet together
with the related accumulated depreciation. Any
profit or loss resulting from such an operation
is included in the income statement.
Tangible assets are depreciated on straight-line
method based on the estimated useful lives from
the time they are put into operations, so that
the cost is diminished over the lifetime of
consideration to estimated residual value as
follows:
Office equipment - Over 5 years
Other Fixtures & Fittings - Over 10 years
Leasehold property- Over period of the lease
Other Motor Vehicles - Over 4 years
INTANGIBLES
Expenditure on internally developed intangible
asset is capitalised if it can be demonstrated
that:
- there is an intention to complete the development,
- adequate resources are available to complete
the development,
- it is probable that the asset will generate
future economic benefits, and
- expenditure on the project can be measured
reliably.
Capitalised development costs are amortised
over the periods the group expects to benefit
from using the asset developed. The amortisation
expense is included within the cost of sales
line in the consolidated Statement of comprehensive
income.
Development expenditure not satisfying the above
criteria and expenditure on the research phase
of internal projects are recognised in the consolidated
statement of comprehensive Income as incurred.
TRADE RECEIVABLES, loans and other receivables
Trade receivables, loans and other receivables
that have fixed or determinable payments that
are not quoted in an active market are classified
under 'loans and receivables'. Loans and receivables
are initially measured at fair value and subsequently
measured at amortised cost using the effective
interest method, less any impairment. Interest
income is recognised by applying the effective
interest rate, except for short term receivables
when the recognition of interest would be immaterial.
Other receivables, that do not carry any interest,
are measured at their nominal value as reduced
by any appropriate allowances for irrecoverable
amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand
and demand deposits and other short-term highly
liquid investments that are readily convertible
to a known amount of cash and are subject to
an insignificant risk of changes in value. Bank
overdrafts that are repayable on demand and
form an integral part of the Group's cash management
are included as a component of cash and cash
equivalents.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments
are classified according to the substance of
the contractual arrangements entered into. Financial
liabilities are classified as either financial
liabilities at fair value through profit or
loss ("FVTPL") or 'other financial liabilities'.
There were no financial liabilities 'at FVTPL'
during the current, or preceding, period.
An equity instrument is any contract that evidences
a residual interest in the assets of the Group
after deducting all of its liabilities.
OTHER FINANCIAL LIABILTIES, BANK AND SHORT TERM
BORROWINGS
Interest-bearing bank loans and overdrafts are
recorded at the proceeds received, net of direct
issue costs. Finance charges are accounted for
on an accruals basis in profit or loss using
the effective interest rate method and are added
to the carrying amount of the instrument to
the extent that they are not settled in the
period in which they arise. Other short term
borrowings being intercompany loans and unsecured
convertible loan notes issued in the year are
recognised at amortised cost net of any financing
or arrangement fees.
TRADE PAYABLES
Trade payables are initially measured at fair
value and subsequently measured at amortised
cost using the effective interest method, less
provision for impairment.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are
recorded at the proceeds received, net of incremental
costs attributable to the issue of new shares.
An equity instrument is any contract that evidences
a residual interest in the assets of a company
after deducting all of its liabilities. Equity
instruments issued by the Company are recorded
at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed
for shares at nominal value.
The share premium account represents premiums
received on the initial issuing of the share
capital. Any transaction costs associated with
the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Any bonus issues are also deducted from share
premium.
The merger reserve represents the premium on
the shares issued less the nominal value of
the shares, being the difference between the
fair value of the consideration and the nominal
value of the shares.
The reverse acquisition reserve arises from
the acquisition of Global Investment Strategy
UK Limited by the Company and represents the
total amount by which the fair value of the
shares issued in respect of the acquisition
exceed their total nominal value.
The investment reserve represents the fair value
adjustment to the investment in subsidiary in
connection with the reverse acquisition.
The warrant reserve represents the fair value,
calculated at the date of grant, of warrants
unexercised at the balance sheet date.
Retained earnings include all current and prior
period results as disclosed in the statement
of comprehensive income.
REVERSE ACQUISITION
The acquisition of Global Investment Strategy
UK Limited on 30 June 2015 was accounted for
using the reverse acquisition method. The following
accounting treatment was applied in respect
of the reverse acquisition:
* The assets and liabilities of the legal subsidiary
were recognised and measured in the consolidated
financial statements at their pre-combination
carrying amounts without restatement to fair value;
* The identifiable assets and liabilities of the legal
parent (the accounting acquiree) are recognised in
accordance with IFRS 3 at the acquisition date.
Goodwill is recognised in accordance with IFRS 3;
* The retained earnings and other equity balances
recognised in the consolidated financial statements
are those of the legal subsidiary (the accounting
acquirer) immediately before the business
combination.
The amount recognised as issued equity instruments
in the consolidated financial statements is
determined by adding the fair value of the legal
parent (which is based on the number of equity
interests deemed to have been issued by the
legal subsidiary) determined in accordance with
IFRS 3 to the legal subsidiary's issued equity
immediately before the business combination.
However, the equity structure (that is, the
number and type of equity instruments issued)
shown in the consolidated financial statements
reflects the legal parent's equity structure,
including the equity instruments issued by the
legal parent to effect the combination. The
equity structure of the legal subsidiary (accounting
acquirer) is restated using the exchange ratio
established in the acquisition agreement to
reflect the number of shares issued by the legal
parent (the accounting acquiree) in the reverse
acquisition.
4 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Group's accounting
policies, which are described in note 3, the
Directors are required to make judgements, estimates
and assumptions about the carrying amounts 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.
The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period. Judgements
and estimates that may affect future periods
are as follows:
GOING CONCERN
The Directors consider that, based upon financial
projections, the Company will be a going concern
for the next twelve months. For this reason,
The directors have, at the time of approving
the financial statements, a reasonable expectation
that the Company has adequate resources to continue
in existence for the foreseeable future. Thus
they continue to adopt the going concern basis
of accounting in preparing the financial statements.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Group holds investments that have been designated
as available for sale on initial recognition.
Where practicable the Group determines the fair
value of these financial instruments that are
not quoted (Level 3), using the most recent
bid price at which a transaction has been carried
out. These techniques are significantly affected
by certain key assumptions, such as market liquidity.
Other valuation methodologies such as discounted
cash flow analysis assess estimates of future
cash flows and it is important to recognise
that in that regard, the derived fair value
estimates cannot always be substantiated by
comparison with independent markets and, in
many cases, may not be capable of being realised
immediately.
5 SEGMENTAL INFORMATION
A segment is a distinguishable component of the
Group or Company's activities from which it may
earn revenues and incur expenses, whose operating
results are regularly reviewed by the Group's
chief operating decision maker to make decisions
about the allocation of resources and assessment
of performance and about which discrete financial
information is available.
As the chief operating decision maker reviews
financial information for and makes decisions
about the Group's activities as a whole, the
directors have identified a single operating
segment, that of corporate broking and advisory
services. The Group operates in a single geographical
segment which is the UK.
6 ANALYSIS OF TURNOVER
An analysis of turnover by class
of business is as follows:
2017 2016
GBP'000 GBP'000
---------------------------------- -------- --------
Commissions 3,908 3,260
Share sales - -
Corporate finance and advisory 1 130
Special charges and recharges 1,687 812
-------------------------------------- -------- --------
5,596 4,202
-------------------------------------- -------- --------
7 OPERATING PROFIT
2017 2016
GBP'000 GBP'000
----------------------------------------- -------- --------
Operating loss is stated after charging:
Staff costs as per Note 9 below 917 918
Depreciation of property, plant and
equipment 20 18
Operating lease rentals 198 134
Write downs of VAT receivable - 56
Net foreign exchange (gain)/loss (20) (11)
--------------------------------------------- -------- --------
8 auditors' remuneration
The analysis of auditors' remuneration is as
follows:
2017 2016
GBP'000 GBP'000
--------------------------------------- --------- ---------
Fees payable to the Group's auditors
for the audit of the Group's annual
accounts 20 14
20 14
------------------------------------------- --------- ---------
9 staff costs
The average monthly number of employees (including
executive directors) for the continuing operations
was:
2017 2016
No. No.
Group total staff 13 13
2017 2016
GBP'000 GBP'000
--------------------------- -------------- -------------
Wages and salaries 859 865
Social security costs 58 53
917 918
------------------------------- -------------- -------------
Directors' emoluments were as follows:
2017 2017 2017 2016
Directors Other emoluments Total Total
fees
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------------ ------------------------- -------------- --------------
CURRENT DIRECTORS
Grant Roberts 12 - 12 9
John Gunn 12 282 294 223
Nilesh Jagatia 18 8 26 10
Samantha Esqulant 12 94 106 34
Martin Davison 12 - 12 9
PREVIOUS DIRECTORS
Jason Charles
Berry - - - 45
David Lenigas - - - 45
Donald Strang - - - 50
66 384 450 425
--------------------------- ------------------ ------------------------- -------------- --------------
With the exception of Samantha Esqulant the
fees for all the current directors were invoiced
by companies of which they were directors and
controlling shareholders.
10 OTHER GAINS AND LOSSES
2017 2016GBP'000
GBP'000
---------------------------------- ---------- -------------
Impairment of investments 613 -
11 taxation
2017 2016
GBP'000 GBP'000
-------------------------------------- --------- ---------
Current tax charge 376 188
Deferred tax (release) / charge (65) -
------------------------------------------- --------- ---------
311 188
------------------------------------------- --------- ---------
Reconciliation of tax charge:
Continuing
operations
-------------------------------------- --------------------
2017 2016
GBP'000 GBP'000
-------------------------------------- --------- ---------
Profit before tax 1,313 791
------------------------------------------- --------- ---------
Tax at the UK corporation tax rate
of 20% (2016: 20%) 263 158
Effects of:
Tax effect of expenses that are not
deductible in determining taxable
profit: 29 28
Short term timing differences (1) 2
Unutilised tax losses 20 -
Tax charge for period 311 188
------------------------------------------- --------- ---------
The total taxation charge in future periods
will be affected by any changes to the corporation
tax rates in force in the countries in which
the Group operates.
12 EARNINGS PER SHARE
The basic earnings per share is based on the
profit/(loss) for the year divided by the weighted
average number of shares in issue during the
year. The weighted average number of ordinary
shares for the year ended 31 March 2016 assumes
that all shares have been included in the computation
based on the weighted average number of days
since issue.
2017 2016
------------------------------------- ------------ -----------
Profit attributable to owners of
the Group GBP1,035,000 GBP603,000
------------------------------------- ------------ -----------
Weighted average number of ordinary
shares in issue for basic and fully
diluted earnings* 560,226,886 448,057,989
------------------------------------------ ------------ -----------
EARNINGS PER SHARE (PENCE PER
SHARE)
BASIC AND FULLY DILUTED*: 0.185p 0.135p
------------------------------------------ ------------ -----------
13 GOODWILL
Goodwill arose on the acquisition of Global Investment
Strategy UK Limited ("GIS") by the Company in
2015.
2017 2016
GBP'000 GBP'000
------------------------------------ ---------- ---------
At 1 April 2,869 -
Arising on acquisition of GIS - 2,869
At 31 March 2,869 2,869
-------------------------------------- ---------- ---------
The amount of GBP2,869,000 of Goodwill relates to the Goodwill arising on the reverse acquisition of GIS.
Goodwill is monitored by management at the level of the operating segment. The recoverable amount is determined based on value-in-use calculations which uses cash flow projections based on financial budgets approved by the Directors covering a five-year period, and a discount rate of 12% per annum.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates of 10% which is based on the average growth for 5 years covered by the projections. The Directors believe that any reasonably possible change in key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.
The Directors have reviewed the carrying value of Goodwill as at 31 March 2017 and consider that no impairment provision is required.
The Directors continue to review Goodwill on an on-going basis and where necessary in future periods will request external valuations to further support the valuation basis.
14 OTHER INTANGIBLE ASSETS
System
development
costs Total
GBP'000 GBP'000
---------------------------- ------------ -------
As at 1 April 2015 and 2016 - -
Additions 50 50
As at 31 March 2017 50 50
--------------------------------- ------------ -------
15 PROPERTY, plant AND EQUIPMENT
Office Fixtures Short Motor Group
Equipment and term leasehold Vehicles Total
fittings property
Cost GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----------- ----------- ---------------- ---------- --------
As at 1 April
2015 28 12 - 63 103
Additions 2 - 6 - 8
As at 31 March
2016 30 12 6 63 111
Additions 26 2 - - 28
As at 31 March
2017 56 14 6 63 139
---------------------- ----------- ----------- ---------------- ---------- --------
Depreciation
----------------- ----------- ----------- ---------------- ---------- --------
As at 1 April
2015 12 10 - 16 38
Charge for the
year 4 - 2 12 18
As at 31 March
2016 16 10 2 28 56
Charge for the
year 9 2 2 8 21
As at 31 March
2017 25 12 4 36 77
---------------------- ----------- ----------- ---------------- ---------- --------
Net book value
----------------- ----------- ----------- ---------------- ---------- --------
As at 31 March
2017 31 2 2 27 62
---------------------- ----------- ----------- ---------------- ---------- --------
As at 31 March
2016 14 2 4 35 55
---------------------- ----------- ----------- ---------------- ---------- --------
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
2017 2016
GBP'000 GBP'000
------------------------ ---------- ---------
Motor vehicles - 11
16 INVESTMENT IN subsidiarY UNDERTAKINGS
The Company's investments in its subsidiary undertakings
are as follows
2017 2016
COMPANY GBP'000 GBP'000
----------------------------------------- -------- --------
Cost and net book value
At 1 April 9,137 -
Reclassified from available for
sale investments - 804
Additions - 8,223
Fair value adjustment - 110
------------------------------------------ -------- --------
As at 31 March 9,137 9,137
------------------------------------------ -------- --------
16 INVESTMENT IN subsidiarY UNDERTAKINGS (continued)
All principal subsidiaries of the Group are consolidated
into the financial statements. At 31 March 2017
the subsidiaries were as follows:
Subsidiary undertakings Country Principal Holding Holding
of registration activity %
-------------------------- ----------------- ------------ --------- -------
*Global Investment Financial Ordinary
Strategy UK Limited UK services shares 100%
**Synergis Capital Financial Ordinary
Limited UK services shares 72%
-------------------------- ----------------- ------------ ------------- -------
*Directly held **Indirectly held
Synergis Capital was incorporated during the
year as a private limited company to provide
commercial asset backed lending, financed by
an investment bond. In July 2017 Synergis Capital
was converted into a PLC.
17 AVAILABLE-FOR-SALE INVESTMENTS
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Investments at fair value
at 1 April 689 568 - 873
Purchases 50 50 - -
Accrued interest - 71 - -
Reclassified as investment
in subsidiary - - - (804)
Impairment of investments (613) - - -
Disposals - - - (69)
126 689 - -
Fair value adjustments
to investment - - - -
--------------------------- -------- -------- -------- --------
Fair value of investments
at 31 March 126 689 - -
-------------------------------- -------- -------- -------- --------
Categorised as:
Level 1 Investments 106 416 - -
Level 3 Investments 20 273 - -
-------------------------------- -------- -------- -------- --------
126 689 - -
-------------------------------- -------- -------- -------- --------
Classed as:
Non-current assets - - - -
Current assets 126 689 - -
-------------------------------- -------- -------- -------- --------
126 689 - -
-------------------------------- -------- -------- -------- --------
The table above sets out the fair value measurements
using the IFRS 7 fair value hierarchy. Categorisation
within the hierarchy has been determined on the
basis of the lowest level of input that is significant
to the fair value measurement of the relevant
asset as follows:
Level 1 - valued using quoted prices in active
markets for identical assets.
Level 2 - valued by reference to valuation techniques
using observable inputs other than quoted prices
included within Level 1.
Level 3 - valued by reference to valuation techniques
using inputs that are not based on observable
market data.
There were no transfers between Level 1, Level
2 and Level 3 in either 2017 or 2016.
17 AVAILABLE-FOR-SALE INVESTMENTS (continued)
Measurement of fair value of financial instruments
The Group's management team perform valuations
of financial items for financial reporting purposes,
including Level 3 fair values. Valuation techniques
are selected based on the characteristics of each
instrument, with the overall objective of maximising
the use of market-based information.
Level 3 financial assets
Reconciliation of Level 3 fair value measurement
of financial assets:
GROUP COMPANY
COMPANY 2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- ------- ------- -------
At 1 April 273 202 - 804
Purchases - - - -
Reclassified as Investment
in Subsidiary - - - (804)
Accrued interest - 71 - -
Impairment of investment (253) - - -
---------------------------------- -------- ------- ------- -------
At 31 March 20 273 - -
---------------------------------- -------- ------- ------- -------
Investments held by the Company as Level 3 investments
in 2015 were reclassified to "Investment in Subsidiary"
in the 2016 period. During the 2015 period the
Company held a position in unquoted securities
that did not exert significant influence, as such
they were classified as "Available for Sale" Level
3 financial assets. During the 2016 period the
position held in the unquoted securities changed
to a controlling stake in the investment. As a
result, the classification of the investment moved
from "Available for Sale Investments" to "Investment
in Subsidiary" (Note 16).
CITY GOLF CLUBS LIMITED
The Group holds 50,000 preference shares and 107
ordinary shares in City Golf Clubs Limited ("City
Golf Clubs") together with a loan owing to GIS
in the amount of GBP160,763.34. The loan carries
interest of 16% per annum and is repayable on
demand.
Since the year-end City Golf Clubs Limited has
appointed an administrator and the Directors consider
that the recoverable fair value of the investment
is GBP20,000.
18 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------- ------- ------- -------
Prepayments and accrued
income 9 26 - 13
Trade receivables 91 132 - -
Other receivables 134 360 73 99
Loans receivable 93 187 - -
----------------------------- ------- ------- ------- -------
327 705 73 112
----------------------------- ------- ------- ------- -------
Balances with the related parties are disclosed in note 25.
Also included in loans receivable is an amount of GBP93,000 (2016: GBP111,000) being the balance of an amount due from Amisud S.A. In March 2015 GIS agreed to convert a prior investment in Amisud S.A, an Argentinian based agriculture company, into a debt owed to GIS totalling approximately US$215,000. Amisud S.A is required to repay the debt to GIS in instalments, two of which were received on schedule. As such the Directors feel no impairment charge is required.
No receivables were past due or provided for at the year-end or at the previous year end.
The Directors consider the carrying amount of intercompany loans and other receivables approximates to their fair value.
19 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 3,813 1,552 - 1
3,813 1,552 - 1
------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
20 TRADE AND OTHER PAYABLES
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------- ------- ------- -------
Trade payables 88 131 17 57
Interco loan - - 393 270
Other payables 87 27 - -
Accrued expenses 111 112 64 48
---------------------- ------- ------- ------- -------
286 270 474 375
---------------------- ------- ------- ------- -------
Balances with the related parties are disclosed in note 25.
21 BORROWINGS
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------- ------- ------- -------
Net obligations under
hire purchase contracts
and finance leases - 2 - -
------------------------------ ------- ------- ------- -------
Classified as:
Short term - within one
year - 2 - -
Long term - 1-2 years - - - -
------------------------- ------- ------- ------- -------
- 2 - -
------------------------------ ------- ------- ------- -------
The Directors consider the carrying amount of short term borrowings approximates to their fair value.
1.1 FINANCIAL INSTRUMENTS
22
FINANCIAL ASSETS BY CATEGORY
The IAS 39 categories of financial assets included
in the Statement of financial position and the
headings in which they are included are as follows:
2017 2016
GBP'000 GBP'000
------------------------------------- --------- ---------
Financial assets:
Cash and cash equivalents 3,813 1,552
Available for sale investments 126 689
Loans and receivables 184 319
-------------------------------------- ---- --------- ---------
4,123 2,560
------------------------------------------- --------- ---------
FINANCIAL LIABILITIES BY CATEGORY
The IAS 39 categories of financial liability
included in the Statement of financial position
and the headings in which they are included
are as follows:
2017 2016
GBP'000 GBP'000
--------------------------------------- -------- --------
Financial liabilities at amortised
cost:
Trade and other payables 119 133
Short term borrowings - 2
---------------------------------------- -------- --------
119 135
--------------------------------------- -------- --------
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that
entities in the Group will be able to continue
as a going concern while maximising the return
to stakeholders through the optimisation of
the debt and equity balance. The capital structure
of the Group consists of debt, (previously includes
the borrowings) cash and cash equivalents and
equity attributable to equity holders of the
Parent Company, comprising issued capital, reserves
and retained earnings, all as disclosed in the
Statement of Financial Position.
22 Financial instruments (continued)
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group is exposed to a variety of financial
risks which result from both its operating and
investing activities. The Group's risk management
is coordinated by the board of directors, and
focuses on actively securing the Group's short
to medium term cash flows by minimising the exposure
to financial markets.
The main risks the Group is exposed to through
its financial instruments are credit risk and
liquidity risk.
CURRENCY risk management
The Group undertakes transactions denominated
in foreign currencies. Hence, exposures to exchange
rate fluctuations arise. Exchange rate exposures
are managed within approved policy parameters.
The Group does not enter into forward exchange
contracts to mitigate the exposure to foreign
currency risk as amounts paid and received in
specific currencies are expected to largely offset
one another and the currencies most widely traded
are relatively stable. The Directors consider
the balances most susceptible to foreign currency
movements to be the Cash and cash equivalents.
The carrying amount of the Group's foreign currency
denominated monetary assets and monetary liabilities
at the end of the reporting period are as follow:
2017 2016
GBP'000 GBP'000
------------------------ -------- -------- --------- ----------
USD 4,234 (15,669)
HKD - 5,124
EUR 274 1,379
Other 20 2
-------------------------- -------- -------- --------- ----------
Sensitivity analysis
The Group is mainly exposed to USD / GBP and
EUR / GBP exchange rates (2016: USD / GBP, HKD
/ GBP and EUR / GBP exchange rates). The following
table shows the Group's sensitivity to a 5% increase
and decrease in the GBP against these foreign
currencies. The sensitivity analysis includes
only outstanding foreign currency denominated
monetary items and adjusts their translation
at the year end for a 5% in foreign currency
rates:
Profit/(loss) Exchange rate
2017 2016 At 31 March
Effect of 5% decrease GBP'000 GBP'000 2017 2016
in value of GBP
-------------------------- -------- -------- --------- ----------
USD 211 (746) 1.253 1.438
HKD - 244 9.741 11.154
EUR 14 66 1.172 1.263
Effect of 5% increase
in value of GBP
USD (211) 746 1.253 1.438
HKD - (244) 9.741 11.154
EUR (14) (66) 1.172 1.263
-------------------------- -------- -------- --------- ----------
In the Directors' opinion, the sensitivity analysis
is unrepresentative of the inherent exchange
risk because the exposure at the end of the reporting
period does not reflect the exposure during the
year.
22 Financial instruments (continued)
Credit risk management
The Company's financial instruments, which are
subject to credit risk, are considered to be
cash and cash equivalents and trade and other
receivables, and its exposure to credit risk
is not material. The credit risk for cash and
cash equivalents is considered negligible since
the counterparties are reputable banks.
The Group's maximum exposure to credit risk is
GBP4,131,000 (2016: GBP1,871,000) comprising
trade and other receivables and cash.
Liquidity risk management
Ultimate responsibility for liquidity risk management
rests with the Board of Directors, which monitors
the Group's short, medium and long-term funding
and liquidity management requirements on an appropriate
basis. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities.
23 Called up share capital
Deferred
shares of Ordinary shares
0.5p of 0.05p
Number Nominal Number Nominal Share
of shares value of shares value premium
GBP'000 GBP'000 GBP'000
ISSUED AND FULLY
PAID:
At 31 March 2015 56,255,351 281 1,193,098,159 597 1,713
1 for 11 share
consolidation 108,463,469 543 108,463,469 54 -
Ordinary shares
issued in year 451,763,417 226 8,608
Classified as merger
reserve in respect
of reverse acquisition (6,555)
Share issue expenses (97)
------------------------------- ------------ ---------- -------------- --------- ---------
At 31 March 2016
and 2017 164,718,820 824 560,226,886 280 3,669
------------------------------- ------------ ---------- -------------- --------- ---------
The restricted rights of the deferred shares
are such that they have no economic value.
The Company has one class of ordinary shares,
which carry no right of fixed income.
24 EVENTS AFTER THE REPORTING PERIOD
There have been no material events since the
year end.
25 Related party tranSactions
Transactions between the Company and its subsidiaries
which are related parties have been eliminated
on consolidation and are not disclosed in these
financial statements.
key management personnel
The remuneration of the directors and other
key management personnel of the Group is set
out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
Further information about the remuneration of
individual directors of the Company is provided
in Note 9.
2017 2016
GBP'000 GBP'000
------------------------------------------ ---------- ---------
Short term employee benefits 445 440
Termination benefits - 90
----------------------------------------------- ---------- ---------
445 530
----------------------------------------------- ---------- ---------
Short term employee benefits include payments
made to personal service companies of key management
during the year totalled GBP345,000 (2016: GBP279,000).
Balances with the directors at the year end
are:
2017 2016
GBP'000 GBP'000
Directors' remuneration payable 64 9
Loan (payable to) / receivable from
John Gunn (included in other payables
/ other receivables) - 26
transactions with other related parties
During the year the Group charged rent and administration
services to Inspirit Energy Holdings Limited
("Inspirit"), a Company connected to the Group,
by way of John Gunn being a director and substantial
shareholder in Inspirit. The amount due from
Inspirit in respect of rent and services is
summarised as follows:
2017 2016
GBP'000 GBP'000
Total (reversal) / charges in year
(including VAT) (44) 57
Amount due from Inspirit at 31 March
(included in trade and other debtors) 123 99
Inspirit paid GBP34,000 of the outstanding balance
after the year-end.
All balances with related parties are unsecured,
interest free and do not have fixed terms of
repayment.
26 CONTRACTUAL OBLIGATIONS
The Group's future minimum lease payments in
respect of non-cancellable operating leases are
as follows:
2017 2016
GBP'000 GBP'000
---------------------------------- ---------- ---------
Payable within 1 year 130 118
Payable within 2-5 years 43 173
Payable after 5 years - -
---------------------------------- ---------- ---------
173 291
--------------------------------------- ---------- ---------
27 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
The Group had no capital commitments or contingent
liabilities as at the year end (2016: GBPnil).
28 ULTIMATE CONTROLLING PARTY
The Directors regard Mr. J Gunn as being the
ultimate controlling party, by way of his controlling
interest in the issued share capital of the
Company.
Notes:
1. This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Company.
2. The summary accounts set out above do not constitute statutory accounts as defined by Section 428 of the UK Companies Act 2006. The consolidated statement of comprehensive income, the consolidated and company statements of financial position, consolidated and company statement of changes in equity and the consolidated and company statements of cash flows for the year ended 31 March 2016 have been extracted from the Company's 2016 statutory financial statements upon which the auditor's opinion is unqualified. The results for the year ended 31 March 2017 have been extracted from the statutory accounts for that period, which contain an unqualified auditor's report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BIGDCBGGBGRX
(END) Dow Jones Newswires
September 04, 2017 02:00 ET (06:00 GMT)
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