Ultimate Sports Group PLC Final Results and Notice of AGM

Date : 06/28/2018 @ 2:54PM
Source : UK Regulatory (RNS & others)
Stock : Ultimate Sports Group Plc (USG)
Quote : 14.65  0.0 (0.00%) @ 1:00AM

Ultimate Sports Group PLC Final Results and Notice of AGM

Ultimate Sports (LSE:USG)
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TIDMUSG

RNS Number : 9505S

Ultimate Sports Group PLC

28 June 2018

28 June 2018

Ultimate Sports Group PLC

("USG" or the "Company" or the "Group")

Final Results and Notice of AGM

Ultimate Sports Group PLC, the AIM listed investment vehicle, is pleased to announce its results for the year ended 31 December 2017. The Company also gives notice that its Annual General Meeting ('AGM') will be held at the Hellenic Centre 16/18 Paddington Street, London W1U 5AS on 29 August 2018 at 11.30am. Copies of the Notice of AGM together with the Annual Report for the year ended 31 December 2017 will be posted to shareholders and be available to view on the Company's website www.ultimatesportsgroup.me.

Chairman's Statement and Chief Executive's Review

Our continuing trading activities - primarily through our subsidiary Sport in Schools Limited (also known as The Elms Sport in Schools) - resulted in a combined turnover of GBP1,369,193 (2016 - GBP1,248,490) and an operating loss, before non-recurring and exceptional items, of GBP233,650 (2016 - GBP287,433).

The UltimatePlayer.me online platform is fully functional and operating satisfactorily. Whilst Ultimate Player took steps last year to expand the reach of its online platform, it became clear that it would require a substantial budget to cover marketing, promotion and advertising to secure its commercial viability. With that in mind, your directors decided that it was appropriate to write off non-recurring and exceptional items relating to the development costs of the platform amounting to GBP563,325.

During the second half of 2017 your directors concluded that further funding was required for the company to promote its activities and seek to expand its horizons. Due to the limited marketability of the company's shares, any further fund raising for the company was unlikely to be achieved by share placings with private investors. Accordingly, your directors decided that any requirement for additional funds would need to be sourced by a party taking a strategic stake.

In December 2017, an initial meeting was held with Mr Richard Bernstein. There followed in rapid succession a series of meetings, which, despite turbulent market conditions, resulted in a successfully negotiated transaction. Mr Bernstein offered and the company accepted (with shareholder approval) Mr Bernstein's proposal to take a strategic stake in the company. In addition, the company entered into an agreement with Mr Bernstein pursuant to which Mr Bernstein will seek to introduce the company to potential investment or acquisition opportunities.

The details of the entire transaction - which raised new funds of GBP537,500 before expenses - were announced in February 2018 and approved by shareholders at a General Meeting in March 2018.

Going forward your directors will continue to focus on the development of Sport in Schools Limited and carefully look for and appraise any and all acquisition opportunities, including those proposed by Mr Bernstein. In addition, Ultimate Player will explore new avenues designed to make its online platform commercially viable.

We are pleased that this strategy can be conducted from a firm financial base.

R L Owen (Chairman)

G M Simmonds (Managing Director)

27 June 2018

Consolidated statement of comprehensive income for the year ended 31 December 2017

 
                                                   2017        2016 
                                        Notes      GBP          GBP 
 
 Continued activities 
 Revenue                                  6      1,369,193   1,248,490 
 Cost of sales                                   (769,310)   (717,020) 
                                               -----------  ---------- 
 
 Gross profit                                      599,883     531,470 
 Administrative expenses                         (833,533)   (818,903) 
                                               -----------  ---------- 
 
 Operating Loss before exceptional 
  items                                          (233,650)   (287,433) 
  Exceptional item and non- 
   recurring costs                        8      (563,325)   (141,763) 
                                               -----------  ---------- 
  Operating loss                          9      (796,975)   (429,196) 
 
 Finance income                          11              -       1,602 
 Finance costs                           12        (3,714)     (3,972) 
 Other gains and losses                  13         20,497           - 
                                               -----------  ---------- 
 Loss before taxation                            (780,192)   (431,566) 
 
 Taxation                                14         17,572       6,836 
                                               -----------  ---------- 
 Loss after taxation from continuing 
  activities                                     (762,620)   (424,730) 
 
 Profit/((loss) for the year 
  from discontinued activities            7         53,567   (158,747) 
                                               -----------  ---------- 
                                                 (709,053)   (583,477) 
                                               -----------  ---------- 
 
 Attributable to: 
 Equity holders of the parent 
  company                                        (709,470)   (566,581) 
 Non-controlling interests                             417    (16,896) 
                                               -----------  ---------- 
                                                 (709,053)   (583,477) 
                                               -----------  ---------- 
 
 Other comprehensive loss 
 Losses on available-for-sale 
  investments taken to equity                      (1,838)     (3,275) 
 
 Taxation on items taken directly 
  to equity                              14            331         618 
 
 Other comprehensive loss                          (1,507)     (2,657) 
                                               -----------  ---------- 
 
 Comprehensive loss attributable 
  to: 
 Equity holders of the parent 
  company                                        (710,977)   (569,238) 
 Minority interest                                     417    (16,896) 
 
 Total comprehensive loss                        (710,560)   (586,134) 
                                               ===========  ========== 
 

Loss per share (basic and diluted)

 
 Loss from operations per share    15   (0.0319)p   (0.0318)p 
 Other comprehensive loss per 
  share                                 (0.0001)p   (0.0001)p 
                                       ----------  ---------- 
 Total comprehensive loss per 
  share                                 (0.0320)p   (0.0319)p 
                                       ==========  ========== 
 

The notes below form part of these financial statements.

Consolidated statement of financial position as at 31 December 2017

 
                                          Notes      2017          2016 
 
                                                      GBP           GBP 
 Non current assets 
 Goodwill and other intangibles            17          60,054       564,546 
 Property, plant and equipment             19          12,923        31,570 
 Total non-current assets                              72,977       596,116 
                                                 ------------  ------------ 
 
 Current assets 
 Available-for-sale investments            20               -        25,998 
 Trade and other receivables               21          68,981        97,702 
 Cash and cash equivalents                            129,611       129,437 
                                                 ------------  ------------ 
 Total current assets                                 198,592       253,137 
                                                 ------------  ------------ 
 
 Total assets                                         271,569       849,253 
 
 Current liabilities 
 Trade and other payables                  22         173,661       222,547 
 Borrowings                                25           2,000        17,377 
                                                 ------------  ------------ 
 Total current liabilities                            175,661       239,924 
                                                 ------------  ------------ 
 
 Non-current liabilities 
 Borrowings                                25               -        30,562 
                                                 ------------  ------------ 
 Total non-current liabilities                              -        30,562 
                                                 ------------  ------------ 
 
 Total liabilities                                    175,661       270,486 
 
 Net assets                                            95,908       578,767 
 
 Equity 
 Share capital                             26       2,281,164     2,048,664 
 Share premium account                                393,454       393,454 
 Merger reserve                                       325,584       325,584 
 Fair value reserve                                         -       (1,507) 
 Retained earnings                                (2,840,795)   (2,123,512) 
 Equity attributable to shareholders' 
  of the parent company                               159,407       642,683 
 
 Non- controlling interests                          (63,499)      (63,916) 
 
 Total Equity                                          95,908       578,767 
                                                 ============  ============ 
 

The financial statements were approved and authorised for issue by the board on 27 June 2018 and signed on its behalf by:

R L Owen

Director

G Simmonds

Director

Company registration number 03882621

The notes below form part of these financial statements.

Consolidated statements of changes in equity

 
                                                                                 To 
                                                                               equity 
                                                                              holders 
                                                      Fair                     of the 
                      Share      Share     Merger     value     Retained       parent    Non-controlling 
                     capital     premium   reserve   reserve     earnings     company        interest        Total 
                       GBP        GBP        GBP       GBP         GBP          GBP            GBP            GBP 
 Balance at 1 
  January 
  2016              1,526,164    401,039   325,584     1,150   (1,569,380)     684,557               951     685,508 
 Issue of new 
  shares              522,500     18,000         -         -             -     540,500                 -     540,500 
 Share issue 
  costs                     -   (25,585)         -         -             -    (25,585)                 -    (25,585) 
 Released on sale 
  of 
  available for 
  sale 
  investments               -          -         -   (3,275)             -     (3,275)                 -     (3,275) 
 Deferred tax on 
  items 
  taken directly 
  to equity                 -          -         -       618             -         618                 -         618 
 
 Adjustment for 
  non-controlling 
  interest                  -          -         -         -             -           -          (47,971)    (47,971) 
 Share based 
  payment                   -          -         -         -        12,449      12,449                 -      12,449 
 Loss for the 
  year                      -          -         -         -     (566,581)   (566,581)          (16,896)   (583,477) 
 Reserves at 1 
  January 
  2017              2,048,664    393,454   325,584   (1,507)   (2,123,512)     642,683          (63,916)     578,767 
 Issue of new 
  shares              232,500          -         -         -             -     232,500                 -     232,500 
 Share issue 
  costs                     -          -         -         -       (7,813)     (7,813)                 -     (7,813) 
 Released on sale 
  of 
  available for 
  sale 
  investments               -          -         -     1,838             -       1,838                 -       1,838 
 Deferred tax on 
  items 
  taken directly 
  to equity                 -          -         -     (331)             -       (331)                 -       (331) 
 Loss for the 
  year                                                           (709,470)   (709,470)               417   (709,053) 
 At 31 December 
  2017              2,281,164    393,454   325,584         -   (2,840,795)     159,407          (63,499)      95,908 
                   ==========  =========  ========  ========  ============  ==========  ================  ========== 
 

Company statement of financial position as at 31 December 2017

 
                                   Notes      2017          2016 
                                               GBP           GBP 
 Non current assets 
 Investment in subsidiaries         18         516,468       606,571 
 Property, plant and equipment      19               1        20,915 
                                          ------------  ------------ 
 Total non-current assets                      516,469       627,486 
                                          ------------  ------------ 
 
 Current assets 
 Available-for-sale investments     20               -         1,688 
 Trade and other receivables        21         342,203       971,993 
 Cash and cash equivalents                      81,459       175,789 
                                          ------------  ------------ 
 Total current assets                          423,662     1,149,470 
                                          ------------  ------------ 
 
 Total assets                                  940,131     1,776,956 
 
 Current liabilities 
 Trade and other payables           22         284,317       283,073 
 Borrowings                         25               -        13,877 
                                          ------------  ------------ 
 Total current liabilities                     284,317       296,950 
                                          ------------  ------------ 
 
 Non-current liabilities 
 Borrowings                         25               -        28,562 
                                          ------------  ------------ 
 Total non-current liabilities                       -        28,562 
                                          ------------  ------------ 
 
 Total liabilities                             284,317       325,512 
 
 Net assets                                    655,814     1,451,444 
 
 Equity 
 
 Share capital                      26       2,281,164     2,048,664 
 Share premium account                         393,454       393,454 
 Merger reserve                                325,584       325,584 
 Retained earnings                         (2,344,388)   (1,316,258) 
 
 Total equity                                  655,814     1,451,444 
                                          ============  ============ 
 

The financial statements were approved and authorised for issue by the board on 27 June 2018 and signed on its behalf by:

R L Owen

Director

G Simmonds

Director

Company registration number 03882621

The notes below form part of these financial statements.

Company statement of changes in equity

 
                            Share        Share                       Retained 
                           capital       premium   Merger reserve     earnings       Total 
                             GBP          GBP           GBP             GBP           GBP 
 
 At 1 January 
  2016                      1,526,164    401,039          325,584   (1,034,493)     1,218,294 
 
 Issue of new 
  shares                      522,500     18,000                -             -       540,500 
 
 Share issue costs                  -   (25,585)                -             -      (25,585) 
 
 Loss for the 
  year                              -          -                -     (294,214)     (294,214) 
 
 Share based payment                -          -                -        12,449        12,449 
 At 1 January 
  2017                      2,048,664    393,454          325,584   (1,316,258)     1,451,444 
 
 Issue of new 
  shares                      232,500          -                -             -       232,500 
 
 Share issue costs                  -          -                -       (7,813)       (7,813) 
 
 Loss for the 
  year                              -          -                -   (1,020,317)   (1,020,317) 
 
 At 31 December 
  2017                      2,281,164    393,454          325,584   (2,344,388)       655,814 
                       ==============  =========  ===============  ============  ============ 
 

Consolidated statement of cash flows for the year ended 31 December 2017

 
                                               Note        2017                2016 
                                                            GBP                GBP 
 
 Cash flow from all operating activities 
 
 Loss before taxation from continuing 
  activities                                                (780,192)            (431,566) 
 Profit/(loss) before taxation from 
  discontinued activities                      33c             53,567            (158,747) 
                                                     ----------------  ------------------- 
                                                            (726,625)            (590,313) 
 
 Adjustments for: 
 Finance income                                                     -              (1,602) 
 Finance expense                                                3,714                3,972 
 Impairment and amortisation of intangible 
  assets                                                      520,792               57,089 
 Other gains and losses                                     (103,097)                    - 
 Depreciation                                                  26,145               53,406 
 Profit on sale of tangible assets                           (30,865)                    - 
 Share based payments                                               -               12,448 
 
 Operating cash flow before working 
  capital movements                                         (309,936)            (465,000) 
 Increase in receivables                                       28,720               84,552 
 Decrease in payables                                        (48,886)            (162,567) 
 
 Net cash absorbed by operations                            (330,102)            (543,015) 
                                                     ----------------  ------------------- 
 
 Taxation                                                      17,241                7,454 
                                                     ----------------  ------------------- 
 
 Cash flow from investing activities 
 Finance income                                                     -                1,602 
 Property, plant and equipment acquired                       (9,820)              (4,001) 
 Intangible asset development costs                          (16,300)            (134,614) 
 Acquisition of non- controlling 
  interest                                                          -             (47,970) 
 Proceeds on sale of property, plant                           33,187                    - 
  and equipment 
 Net proceeds on sale of business                              82,600                    - 
 Proceeds on disposal of available                             48,334                    - 
  for sale investments 
 Net cash from investing activities                           138,001            (184,983) 
                                                     ----------------  ------------------- 
 
 Cash flow from financing activities 
 Finance expense                                              (3,714)              (3,972) 
 Funds from share issue                                       224,687              514,915 
 Repayment of borrowings                                     (45,939)             (18,877) 
 Net cash from financing activities                           175,034              492,066 
                                                     ----------------  ------------------- 
 
 Net increase/(decrease) in cash 
  and cash equivalents in the year             33b                174            (228,478) 
 
 Cash and cash equivalents at the 
  beginning of the year                                       129,437              357,915 
 
 Cash and cash equivalents at the 
  end of the year                                             129,611              129,437 
                                                     ================  =================== 
 

A statement of cash flows from discontinued activities is set out in note 33c.

The notes below form part of these financial statements.

Company statement of cash flows for the year ended 31 December 2017

 
                                              Notes      2017         2016 
                                                          GBP          GBP 
 
 Cash flow from operating activities 
 
 Loss before tax                                      (1,020,317)   (294,213) 
 
 Adjustments for: 
 Finance income                                          (16,500)    (16,500) 
 Finance expense                                            3,714       3,972 
 Other gains                                              (1,034)           - 
 Provision for impairment in value 
  of investments in subsidiaries                           90,103      10,765 
 Provision for intra group indebtedness                   889,245           - 
 Depreciation                                              18,592      27,888 
 Profit on sale of tangible assets                       (30,865)           - 
 Share based payments                                           -      12,448 
 
 Operating cash flow before working 
  capital movements                                      (67,062)   (255,640) 
 
 Decrease/(increase) in receivables                     (242,954)   (269,926) 
 Increase in payables                                       1,244      41,993 
 
 Net cash absorbed by operations                        (308,772)   (483,573) 
                                                     ------------  ---------- 
 
 Cash flow from investing activities 
 
 Investment acquired                                            -    (47,000) 
 Proceeds on sale of property, plant                       33,187           - 
  & equipment 
 Proceeds on sale of investments for                        2,721           - 
  resale 
                                                     ------------  ---------- 
 Net cash inflow/(outflow) from investing 
  activities                                               35,908    (47,000) 
                                                     ------------  ---------- 
 
 Cash flow from financing activities 
 
 Funds from share issue                                   224,687     514,915 
 Finance expense                                          (3,714)     (3,972) 
 Hire purchase repayments                                (42,439)    (13,877) 
 
 Net cash from financing activities                       178,534     497,066 
 Net decrease in cash and cash equivalents 
  in the year                                  33b       (94,330)    (33,507) 
 
 Cash and cash equivalents at the 
  beginning of the year                                   175,789     209,296 
 
 Cash and cash equivalents at the 
  end of the year                                          81,459     175,789 
                                                     ============  ========== 
 

The notes below form part of these financial statements

Notes to the group and parent company financial statements

   1.            General information 

Ultimate Sports Group Plc is a public company limited by shares, domiciled and incorporated in England and Wales and its activities are as described in the chairman's statement and directors' report on page 2 and page 4 respectively.

These financial statements are prepared in pounds sterling being the currency of the primary economic environment in which the group operates.

Basis of Preparation

The condensed Group financial statements for the year ended 31 December 2017 included in this report do not constitute statutory accounts. The condensed Group financial statements are extracted from the Group's statutory financial statements for the year ended 31 December 2017. The auditor has reported on those statutory financial statements; their report was unqualified and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation.

While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.

The condensed Group financial statements have been prepared on a basis consistent with that adopted in the previous year's published financial statements and in accordance with IFRSs.

The Group expects to publish statutory financial statements for the year ended 31 December 2017 that comply with both IFRSs as adopted for use in the European Union and IFRSs as compliant with the Companies Act 2006 and Article 4 of the EU IAS Regulations based on the information presented in this announcement.

The condensed financial statements were approved by the Board on 27 June 2018.

Audited statutory accounts for the year ended 31 December 2016 have been delivered to the registrar of companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not contain a statement under 498(2) or 498(3) of the Companies Act 2006, but did contain a paragraph of emphasis of matter relating to going concern without qualifying their report.

   2.            Basis of Accounting 

The consolidated financial statements of the group and the financial statements of the parent company for the year ended 31 December 2017 have been prepared under the historical cost convention except for the revaluation of available-for-sale investments to fair value and are in accordance with International Financial Reporting standards ("IFRS") as adopted by the EU. These policies have been applied consistently except where otherwise stated.

Future standards in place but not yet effective:

At the date of authorisation of these financial statements, the following Standards were effective for annual periods beginning on or after 1 January 2018:

   --              IFRS 9 - Financial Instruments 
   --              IFRS 15 - Revenue from Contracts with Customers 

At the date of authorisation of these financial statements, the following Standards were effective for annual periods beginning on or after 1 January 2019:

   --              IFRS 16 - Leases 

The following amendments to Standards are all effective for annual periods beginning on or after 1 January 2018:

   --              IFRS 2 - Classification and measurement of share-based payment transactions 
   --              IFRS 4 - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts 

Except for IFRS 16, see below, the directors do not believe that there will be a material impact on the financial statements from the adoption of these standards / interpretations

IFRS 16 requires the recognition of an asset and liability by introducing a lessee accounting model. As at 31 December 2017, the group has an asset and liability in respect of leases accounted for on the basis of IFRS 16 of approximately GBP80,000.

There were no material changes in the financial statements as a result of adopting new or revised accounting standards during the year.

   3.            Significant accounting policies 
   (a)          Basis of consolidation 

The financial statements of the group incorporate the financial statements of the company and entities controlled by the company, which are its subsidiary undertakings. Control is achieved where the company has the power to govern the financial and operating policies of its subsidiary undertakings so as to benefit from their activities.

Details of subsidiary undertakings are set out in note 18.

All intra-group transactions and balances have been eliminated in preparing the consolidated financial statements.

   (b)          Revenue 

Revenue arises from the disposal of available-for-sale investments and income from sports and leisure activities undertaken by the company and its subsidiary undertakings. In the case of sports and leisure activities it represents invoiced and accrued amounts for services supplied in the year, exclusive of value added tax and trade discounts.

   (c)           Intangible assets 

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 subsidiary entities at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the group's cash generating units expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, associate or jointly controlled entity, the amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRS's has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

Development costs are expensed in arriving at the operating profit or loss for the year unless the directors are satisfied as to the technical, commercial and financial viability of individual project. In this situation, the expenditure is recognised as an asset and is reviewed for impairment on an annual basis.

Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Development costs recognised as an asset are amortised over a 10 year life, which commenced in September 2015 with the initial launch of the website.

   (d)          Plant and equipment 

Plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less their estimated residual value over their expected useful lives.

The rates applied to these assets are as follows:

 
 Plant & equipment   25% & 10% straight line 
 Motor vehicles      33.3% straight line 
 
   (e)          Operating leases 

Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against revenue as and when incurred.

   (f)           Deferred taxation 

Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance is not discounted.

The recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences.

    (g)         Trade receivables 

Trade receivables are recognised at fair value. A provision for impairment of trade receivables is established where there is objective evidence that the company or group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or liquidation and default or delinquency of payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within administrative expenses. When a trade receivable is uncollectable it is written off against the allowance account for trade receivables.

   (h)          Investments 

Investments are classified as available for sale, and are measured at fair value. Gains or losses in changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.

Fair value of quoted investments is based on current bid prices. If an investment is suspended from trading, fair value is based on quoted bid prices on the first day that trading recommences following suspension.

Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company balance sheet.

   (i)           Cash and cash equivalents 

Cash and cash equivalents include cash in hand and deposits held at call with banks. Bank overdrafts are shown as borrowings within current liabilities.

   (j)           Financial liabilities and equity 

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Ordinary shares are classified as equity. Incremental costs directly attributable to new shares are shown in equity as a deduction from the proceeds.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest method.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position.

   4.            Critical accounting judgements and key sources of estimation uncertainty 

The preparation of the group's financial statements require the directors to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on the director's best knowledge of the relevant facts and circumstances. Information about such judgements and estimation is contained in the accounting policies and/or notes to the financial statements.

Deferred tax asset

At the present time the directors' do not consider that there is sufficient certainty regarding the utilisation of tax losses available in the group. As a result, no deferred tax asset has been recognised.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill is the deemed cost on first time application of IFRS.

Details of the impairment review calculation are given in note 17.

Impairment of investment in subsidiary undertakings

The company holds listed investments through various subsidiary undertakings. The values of these investments have been assessed based on their current quoted market value. These values have been used to estimate the recoverable value of the subsidiary undertakings. Where the estimated recoverable value of the company's investments in these subsidiary undertakings is less than the carrying value, the investment has been written down to the estimated recoverable value.

Impairment of intangible assets

The carrying value of intangible assets comprising unamortised website costs are determined by reference to an assessment of future income generated by the UltimatePlayer.me platform. Having regard to the Board's decision to delay future plans for further website development, all unamortised costs be fully impaired in the year as an exceptional item (note 8).

   5.            Going concern 

The directors have prepared financial forecasts covering the 12 months following approval of these financial statements, which show the Group, following the issue of new shares raising GBP537,500, can continue to carry on trading within its existing finance facilities over that period.

In view of the above, the directors consider it appropriate to prepare the financial statements on a going concern basis.

   6.            Business segment analysis 

Segmental information with regard to continuing and non- continuing activities is disclosed below and is based on the different business activities in the group.

All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.

 
 Year ended 31 December             Sports and       Social 
  2017                                leisure     media website   Consolidated 
                                       GBP            GBP             GBP 
 
 Revenue                             1,368,710              483      1,369,193 
                                   ===========  ===============  ============= 
 
 Segment operating profit/(loss)        28,255        (587,536)      (559,281) 
                                   ===========  =============== 
 
 Group operating expenses*                                           (237,694) 
                                                                 ------------- 
 
 Operating loss                                                      (796,975) 
 Other gains and losses                                                 20,497 
 Finance revenues less finance 
  costs                                                                (3,714) 
 
 Loss before taxation                                                (780,192) 
 
 Taxation relating to the 
  social media website                                                  17,572 
                                                                 ------------- 
 Loss after taxation from 
  continuing activities                                              (762,620) 
 
 Discontinued activities                53,567                          53,567 
                                   -----------                   ------------- 
                                      (53,567)                       (709,053) 
                                   ===========                   ============= 
 
 Year ended 31 December             Sports and       Social 
  2016                                leisure     media website   Consolidated 
                                       GBP            GBP             GBP 
 
 Revenue                             1,246,888            1,602      1,248,490 
                                   ===========  ===============  ============= 
 
 Segment operating profit/(loss)       122,535        (164,256)       (41,721) 
                                   ===========  =============== 
 
 Group operating expenses*                                           (387,475) 
 
 Operating loss                                                      (429,196) 
 Other gains and losses                                                      - 
 Finance revenues less finance 
  costs                                                                (2,370) 
 
 Loss before taxation                                                (431,566) 
 
 Taxation relating to the 
  social media website                                                   6,836 
                                                                 ------------- 
 Loss after taxation from 
  continuing activities                                              (424,730) 
 
 Discontinued activities             (158,747)                       (158,747) 
                                   -----------                   ------------- 
                                     (158,747)                       (583,477) 
                                   ===========                   ============= 
 

* 'Group operating expenses' represent the costs of running the group as a whole. The directors consider that the costs of running Pantheon Leisure Plc of GBP53,370 (2016: GBP54,677) form part of these costs as opposed to forming part of the segmental costs of the sports and leisure division.

 
 
 Financial position at 31 
  December 2017 
                                           Sports          Social 
                                         and leisure    media website   Consolidated 
                                            GBP             GBP             GBP 
 Segment assets                               55,714            1,846         57,560 
                                       =============  =============== 
 
 Non segmental assets                                                        214,009 
                                                                       ------------- 
 
 Consolidated total assets                                                   271,569 
                                                                       ============= 
 
 Segment liabilities                         158,457            4,162        162,619 
                                       =============  =============== 
 
 Non segmental corporate liabilities                                          13,042 
                                                                       ------------- 
                                                                             175,661 
 
 Capital additions                             9,820           16,300 
 Depreciation/amortisation 
  and impairment                               7,552          520,792 
                                       =============  =============== 
 
 Financial position at 31 
  December 2016                                                         Consolidated 
                                            GBP             GBP             GBP 
 Segment assets                               77,264          519,065        596,329 
                                       =============  =============== 
 
 Non segmental assets                                                        252,924 
                                                                       ------------- 
 
 Consolidated total assets                                                   849,253 
                                                                       ============= 
 
 Segment liabilities                         197,053           19,168        216,221 
                                       =============  =============== 
 
 Non segmental corporate liabilities                                          54,265 
                                                                       ------------- 
                                                                             270,486 
                                                                       ============= 
 
 Capital additions                             4,001          134,614 
 Depreciation charge                          53,406           57,089 
                                       =============  =============== 
 
 

Non segmental assets include group cash balances of GBP129,611 (2016: GBP129,437), plant and equipment of GBPNil (2016: GBP20,915), goodwill of GBP59,954 (2016: GBP59,954), other assets and receivables of GBP24,444 (2016: GBP42,618). Non segmental liabilities include trade and other payables of GBP13,042 (2016: GBP54,265), hire purchase liabilities attributable to the parent company of GBPNil (2016: GBP42,439).

Segment assets include GBP2,727 (2016: GBP6,013) from discontinued activities. Segment liabilities include GBP8,638 (2016: GBP65,937) from discontinued activities.

   7.            Discontinued Operations 
 
                                         2017              2016 
                                         GBP               GBP 
 Revenue                                     11,015          373,935 
 Cost of sales and expenses                (40,048)        (532,682) 
                                  -----------------  --------------- 
 Operating loss                            (29,033)        (158,747) 
 Net proceeds on disposal                    82,600                - 
                                  -----------------  --------------- 
                                             53,567        (158,747) 
                                  -----------------  --------------- 
 Football Partners Limited ceased small-sided football league 
  activities in December 2016 and subsequently disposed of its 
  trade for GBP100,000. 
 
   8.    Exceptional item and non- recurring costs 
 
                                            2017       2016 
                                            GBP        GBP 
 Exceptional item:                         462,073         - 
  Development cost - full impairment 
 Non recurring costs: 
  Website expenditure and amortisation     101,252   141,763 
                                           563,325   141,763 
                                         =========  ======== 
 
   9.            Operating loss 
 
                                              2017     2016 
 The operating loss is stated after           GBP      GBP 
  charging / (crediting): 
 
 Auditors' remuneration - audit services     20,875   25,840 
 Operating lease rentals - land and 
  buildings                                  13,507   10,905 
 Depreciation of property, plant 
  and equipment                              26,145   53,406 
 Amortisation - Website development          58,719   57,089 
 Impairment - Website development           462,073        - 
                                           ========  ======= 
 

Included in the audit fee for the group is an amount of GBP6,700 (2016: GBP6,000) in respect of the Company.

The auditors received fees of GBP1,250 (2016: GBP1,250) in respect of the provision of services in connection with advice relating to the group's interim results, and general advice.

   10.          (a) Staff Costs 
 
 Employee benefit costs were as follows:            Group 
                                              2017        2016 
                                               GBP         GBP 
 Wages and salaries                         1,128,737   1,185,972 
 Social security costs                         67,549      80,716 
 Pension contributions                          7,019       8,169 
 Share based payment                                -      12,448 
                                            1,203,305   1,287,305 
                                           ==========  ========== 
 

The average numbers of employees, including directors during the year, was as follows:-

 
                                       No.    No. 
 Administration, sales and coaching 
  staff                                  91     80 
                                      =====  ===== 
 

(b) Directors' remuneration

 
                                              2017     2016 
 An analysis of directors' remuneration        GBP      GBP 
  (who are the key management personnel) 
  is set out below: 
 Salary and consultancy fees                 32,859   106,951 
                                            =======  ======== 
 
 Executive directors: 
 Salaries                                    15,000    40,000 
 Car benefits                                17,859    23,951 
 Consultancy fees                                 -    30,500 
                                            -------  -------- 
                                             32,859    94,451 
                                            =======  ======== 
 Non-executive directors: 
 Salaries and benefits                            -     8,750 
 Consultancy fees                                 -     3,750 
                                            -------  -------- 
                                                  -    12,500 
                                            =======  ======== 
 
 
                                         2017      2016 
 Directors consultancy fees comprise:     GBP      GBP 
 
 G Simmonds and Simmonds & Co                 -   22,500 
 D Hillel                                     -    8,000 
 D J Coldbeck                                 -    3,750 
                                        -------  ------- 
       -                                          34,250 
 =======                                         ======= 
 

The total cost of key management personnel being the executive directors and including employers' national insurance was GBP32,859 (2016: GBP94,451).

 
 The following amounts were paid            2017        2017      2016 
  for the services of the directors 
  in the year: 
                                            GBP         GBP       GBP 
                                         Salaries 
                                        and benefits   Total     Total 
 R L Owen                                     15,996   15,996    41,403 
 G Simmonds                                   16,863   16,863    45,048 
 D Hillel                                          -        -     8,000 
 J Zucker                                          -        -     6,250 
 D J Coldbeck                                      -        -     6,250 
                                      --------------  -------  -------- 
                                              32,859   32,859   106,951 
                                      ==============  =======  ======== 
 
   11.          Finance income 
 
 
                                     2017     2016 
                                     GBP      GBP 
 Interest revenue - bank deposits    -        102 
 Dividends received                  -        1,500 
                                    -------  ------ 
  -                                           1,602 
 =======                                     ====== 
 
   12.          Finance costs 
 
 
                                       2017    2016 
                                       GBP     GBP 
 Interest on obligations under hire 
  purchase agreements                  3,714   3,972 
                                      ======  ====== 
 
   13.          Other gains and losses 
 
 
                                       2017       2016 
                                       GBP        GBP 
 Profit on disposal of available for 
  sale investments (note 20)           20,497     - 
 
 
   14.          Taxation 
 
                                          2016       2016 
                                          GBP        GBP 
 Deferred tax (credit)/charge 
 Origination and reversal of temporary 
  differences                             (331)      618 
 
 Total deferred tax (credit)/(charge      (331)      618 
 Research and development tax credits     (17,241)   (7,454) 
                                         ---------  -------- 
  Tax credit in income statement          (17,572)   (6,836) 
                                         =========  ======== 
 

No income tax charge arises based on the loss for the year (2016: nil).

The group has unutilised tax losses of GBP6,311,000 (2016: GBP7,315,000) which includes GBP2,364,000 (2016: GBP2,982,000) in relation to the company's subsidiary undertakings. Where it is anticipated that future taxable profits will be available to utilise these losses a deferred tax asset or a reduction in deferred tax liability is recognised as appropriate.

Factors affecting the tax charge in the year

 
                                                      2017       2016 
                                                     GBP         GBP 
 
 Loss on ordinary activities before taxation         (724,787)   (590,313) 
                                                    ==========  ========== 
 
 Loss on ordinary activities before taxation 
  at the standard rate of UK corporation 
  tax of 19.25% (2016: 20%)                          (139,521)   (118,063) 
 
 Effects of: 
 Expenses not deductible for tax purposes            -           3,016 
 Dividend income                                     -           (300) 
 Temporary differences in respect of depreciation 
  and capital allowances not reflected in 
  deferred tax                                       97,121      21,140 
 Unutilised tax losses not recognised as 
  a deferred tax asset                               42,400      94,207 
 Adjustment on available-for-sale investments        (331)       618 
 Research and development tax credits                (17,241)    (7,454) 
 
 Tax credit                                          (17,572)    (6,836) 
                                                    ==========  ========== 
 

In recognition of the effects on taxation arising from the revaluation of the group's available-for-sale investments, a deferred tax adjustment to the provision by GBP331 (2016: GBP618) has been made and reflected as an adjustment to equity. During the year claims for tax credits in relation to research and development costs were made giving rise to cash credits of GBP17,241. These claims related to expenditure incurred to December 2015.

   15.          Loss per share 

Basic loss per share has been calculated on the group's loss attributable to equity holders of the parent company of GBP709,470 (2016: GBP566,581) and on the weighted average number of shares in issue during the year, which was 22,211,434 (2016:17,809,583).

Comprehensive loss per share is based on the same number of shares and on the comprehensive loss for the year attributable to the equity holders in the parent company of GBP710,977 (2016: GBP569,238).

In view of the group loss for the year, share warrants and options to subscribe for ordinary shares in the company are anti-dilutive and therefore diluted earnings per share information is not presented. There are options outstanding at 31 December 2017 on 210,000 ordinary shares.

   16.          Loss for the financial year 

As permitted by Section 400 of the Companies Act 2006, the profit and loss account for the company is not presented as part of these financial statements.

The consolidated loss for the year of GBP709,053 (2016: loss: GBP583,477) includes a loss of GBP1,020,317 (2016: loss GBP294,214) dealt with in the accounts of the company.

   17.          Goodwill, intangibles and development costs 
 
                              2017           2017           2017      2016 
                              GBP            GBP            GBP       GBP 
                                             Goodwill 
                              Website         and other 
                               development    intangibles   Total     Total 
 
 Cost at 1 January            570,887        60,054         630,941   496,327 
 Additions in the year        16,300         -              16,300    134,614 
                             -------------  -------------  --------  -------- 
 Cost at 31 December          587,187        60,054         647,241   630,941 
                             -------------  -------------  --------  -------- 
 
 Amortisation at 1 January    66,395         -              66,395    9,306 
 Charged in the year          58,719         -              58,719    57,089 
 Impairment write off         462,073        -              462,073   - 
                             -------------  -------------  --------  -------- 
 Amortisation at 31 
  December                    587,187        -              587,187   66,395 
                             -------------  -------------  --------  -------- 
 
 Carrying value at 31 
  December                    -              60,054         60,054    564,546 
                             =============  =============  ========  ======== 
 

Goodwill of GBP59,954 included above relates to the acquisition of Pantheon Leisure Plc which is included at its deemed cost on first time application of IFRS.

The Group acquired GBP100 of intangible assets in 2013 at the time of acquisition of a subsidiary.

Goodwill acquired in a business combination is allocated, at acquisition, to cash generating units ("CGUs") that are expected to benefit from that business combination. The carrying amount of goodwill relates wholly to the leisure activities business segment.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding forecast revenues and operating costs. Management have taken into account the following two elements:

(i) Based on current assessments of the Sport in Schools activities made by the directors, they consider that revenues will continue to grow in 2018 and 2019; and

(ii) Operational costs are monitored and controlled

Development costs

Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. As a result of the decision taken by the Board to delay future plans for further website development, unamortised development costs have been fully impaired and written off as an exceptional item (see note 8).

   18.          Investments in Subsidiaries 
 
 Company                          2017        2016 
                                  GBP         GBP 
 Cost of shares                   1,947,932   1,947,932 
 Loan notes                       220,000     220,000 
                                 ----------  ---------- 
 At 31 December                   2,167,932   2,167,932 
                                 ==========  ========== 
 
 Impairment 
 At 1 January                     1,561,361   1,550,596 
 Increase of provision in year    90,103      10,765 
                                 ----------  ---------- 
 At 31 December                   1,651,464   1,561,361 
                                 ==========  ========== 
 
 Carrying value at 31 December    516,468     606,571 
                                 ==========  ========== 
 

Included in investments is GBP220,000 of loan notes which carry an interest coupon of 7.5% and are repayable on demand at par.

The following companies were subsidiaries at the balance sheet date and the results and year end position of these companies has been included in these consolidated financial statements.

 
                                    Description 
                                   and proportion       Country of 
                                  of share capital     incorporation 
 Subsidiary undertakings               owned          or registration       Nature of business 
 
 Westside Acquisitions           Ordinary 100%       England &          Holding company 
  Limited                                             Wales 
 Reverse Take-Over Investments   Ordinary 100%       England &          Acquisition and development 
  Limited *                                           Wales              of shell companies 
 Westsidetech Limited            Ordinary 100%       England &          Dormant 
                                                      Wales 
 Westside Mining Plc             Ordinary 100%       England &          Investment - inactive 
                                                      Wales 
 Westside Sports Limited         Ordinary 100%       England &          Holding company 
                                                      Wales 
 Ultimate Player Limited         Ordinary 100%       England &          Social media website 
                                                      Wales 
 Football Data Services          Ordinary 100%       England &          Website data services 
  Limited                                             Wales              - inactive 
 FootballFanatix Limited         Ordinary 100%       England &          Social media website 
                                                      Wales              - inactive 
 Pantheon Leisure Plc **         Ordinary 85.87%     England &          Holding company 
                                                      Wales 
 Sport in Schools Limited        Ordinary 85.87%     England &          Sports coaching in 
  ***                                                 Wales              schools 
 Football Partners Limited       Ordinary 85.87%     England &          Non trading 
  ***                                                 Wales 
 The Elms Group Limited          Ordinary 85.87%     England &          Dormant 
  ***                                                 Wales 
 Footballdirectory.co.uk         Ordinary 85.87%     England &          Dormant 
  Limited ****                                        Wales 
 
   *              33(1) /(3) % held indirectly through Westside Acquisitions Limited 
   **           held indirectly through Westside Sports Limited 
   ***         held indirectly through Pantheon Leisure Plc 
   ****       held indirectly through The Elms Group Limited 
 
 Pantheon group of companies         2017             2016 
                                      GBP             GBP 
 Net liabilities                      (49,529)         (52,479) 
 Profit/(loss) for the year              2,950       (119,389) 
 

Figures above incorporate the consolidated results of Pantheon Leisure Plc, Sport in Schools Limited, Football partners Limited and the Elms Group Limited for the year ended 31 December 2017.

   19.          Property, plant and equipment 
 
                             Plant and 
 Group                        equipment   Motor Vehicles     Total 
                                GBP            GBP            GBP 
 Cost 
 At 1 January 2016              144,442           83,662     228,104 
 Additions                        4,001                -       4,001 
 Disposals                            -                -           - 
 Cost at 31 December 2016       148,443           83,662     232,105 
 Additions                        9,820                -       9,820 
 Disposals                     (63,691)         (83,662)   (147,353) 
 At 31 December 2017             94,572                -      94,572 
 
 Depreciation 
 At 1 January 2016              112,269           34,860     147,129 
 Charge for the year             25,518           27,888      53,406 
 Disposals                            -                -           - 
 At 31 December 2016            137,787           62,748     200,535 
 Charge for the year              7,553           18,592      26,145 
 Disposals                     (63,691)         (81,340)   (145,031) 
                            -----------  ---------------  ---------- 
 At 31 December 2017             81,649                -      81,649 
                            ===========  ===============  ========== 
 
 Carrying value 
 At 31 December 2017             12,923                -      12,923 
                            ===========  ===============  ========== 
 
 At 31 December 2016             10,656           20,914      31,570 
                            ===========  ===============  ========== 
 
 
                             Plant and 
 Company                      equipment   Motor Vehicles    Total 
                                GBP            GBP           GBP 
 Cost 
 At 1 January 2016                1,848           83,662     85,510 
 Additions                            -                -          - 
 Disposals                            -                -          - 
 Cost at 31 December 2016         1,848           83,662     85,510 
 Additions                            -                -          - 
 Disposals                            -         (83,662)   (83,662) 
                            -----------  ---------------  --------- 
 At 31 December 2017              1,848                -      1,848 
                            -----------  ---------------  --------- 
 
 Depreciation 
 At 1 January 2016                1,847           34,860     36,707 
 Disposals                            -                -          - 
 Charge for year                      -           27,888     27,888 
                            -----------  ---------------  --------- 
 At 31 December 2016              1,847           62,748     64,595 
 Disposals                            -         (81,340)   (81,340) 
 Charge for the year                              18,592     18,592 
                            -----------  ---------------  --------- 
 At 31 December 2017              1,847                -      1,847 
                            -----------  ---------------  --------- 
 
 Carrying value 
 At 31 December 2017                  1                -          1 
                            ===========  ===============  ========= 
 
 At 31 December 2016                  1           20,914     20,915 
                            ===========  ===============  ========= 
 

The company was party to hire purchase agreements in respect of its motor vehicles during the year.

Depreciation charged on assets subject to hire purchase agreements in the year was GBP18,592 (2016: GBP27,888). The net book value of these assets at the end of the year was GBPNil (2016: GBP20,914).

   20.          Available-for-sale investments 

The group holds the following investments which are stated at fair value:

 
                                                  Group                   Company 
                                             2017      2016         2017             2016 
  Investments admitted to trading on AIM:     GBP      GBP           GBP             GBP 
 Current assets 
 Aeorema Communications Plc                      -     7,650                 -              - 
 SigmaRoc Plc                                     -   18,348                 -          1,688 
 
 Total                                            -   25,998                 -          1,688 
                                            -------  -------  ----------------  ------------- 
 

Investments in AIM listed companies were disposed of in the year giving rise to gains of GBP20,497 before fair value adjustments of GBP1,838 recognised in the Statement of Other Comprehensive Income.

   21.     Receivables and loan notes 

Non-current assets

Company

In 2017, amounts due within one year included GBP220,000 of loan notes (2016 - GBP220,000). The loan notes are convertible into 50 million new shares in Pantheon Leisure Plc (the borrower) at any time before redemption. The loan notes carry an interest coupon of 7.5% and are repayable on demand at par.

Pantheon Leisure Plc is a subsidiary undertaking of Ultimate Sports Group Plc.

The loan notes are included in investments.

Group

The group has no receivables and loan notes classified as non-current assets.

Current assets

 
                                                  Group             Company 
                                              2017     2016     2017      2016 
                                              GBP      GBP       GBP       GBP 
 
 Trade receivables                           24,371   41,763         -         - 
 Other receivables                           17,375   34,612               5,364 
 Amounts due from subsidiary undertakings         -        -   318,053   955,667 
 Prepayments and deferred expenditure        27,235   21,327    24,150    10,962 
                                             68,981   97,702   342,203   971,993 
                                            =======  =======  ========  ======== 
 

The average credit period given for trade receivables at the end of the year is 6 days (2016:9 days). Trade receivables are stated net of a provision for irrecoverable amounts of GBPNil (2016: GBPNil).

Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total GBP1,375,864 (2016: GBP576,722).

The total charge in the year in respect of irrecoverable receivables in the group accounts was GBPNil (2016: GBPNil).

As at 31 December, the ageing analysis of trade receivables, all of which are due and not impaired is as follows:

 
             GBP 
             <3 months 
 
 2017        24,371 
 2016        41,763 
            ========== 
 
   22.          Trade and other payables 
 
                                                 Group              Company 
                                            2017      2016      2017      2016 
                                             GBP       GBP       GBP       GBP 
 
 Trade payables                                982    29,102         -         - 
 Other payables                              1,216    48,263         -         - 
 Taxes and social security                  74,981    71,960         -         - 
 Amounts due to subsidiary undertakings          -         -   273,573   273,573 
 Accruals and deferred income               96,482    73,222    10,744     9,500 
                                           173,661   222,547   284,317   283,073 
                                          ========  ========  ========  ======== 
 

The average credit period taken for trade payables at the end of the year is 1 day (2016: 12 days).

   23.          Bank overdraft 

Sport in Schools Limited and Football Partners Limited have bank overdraft facilities of GBP50,000 and GBP20,000 respectively which are secured by guarantees of up to GBP50,000 and GBP20,000 for each company given by Ultimate Sports Group Plc. Both overdrafts are repayable on demand.

   24.          Deferred tax 

The following are the deferred tax liabilities and assets recognised by the group and movements during the current and previous year:

 
                                     Fair value   Tax losses 
  Deferred tax liabilities              gains       offset     Total 
                                        GBP          GBP        GBP 
 
 At 1 January 2016                          287        (287)       - 
 
 Charged in the income statement              -          618     618 
 Credited directly to equity              (618)            -   (618) 
 
 At 31 December 2016                      (331)          331       - 
 
 Credited in the income statement           331            -     331 
 Charged directly to equity                   -        (331)   (331) 
 
 At 31 December 2017                          -            -       - 
                                    ===========  ===========  ====== 
 
   25.          Borrowings 
 
                                           Group           Company 
                                       2017     2016    2017    2016 
                                        GBP     GBP     GBP     GBP 
 Due within one year 
 Interest free loans                   2,000    3,500      -        - 
 Hire purchase finance                     -   13,877      -   13,877 
 
 Total due within one year             2,000   17,377      -   13,877 
                                      ------  -------  -----  ------- 
 
 Due after more than one year 
 Interest free loans                       -    2,000      -        - 
 Hire purchase finance                     -   28,562      -   28,562 
 
 Total due after more than one year        -   30,562      -   28,562 
                                      ------  -------  -----  ------- 
 
 Total borrowings                      2,000   47,939      -   42,439 
                                      ======  =======  =====  ======= 
 
   26.     Issued and fully paid share capital 
 
 Shares of 10p each            Number of shares           GBP 
 
 At 1 January 2016                    15,261,638           1,526,164 
 Shares issued in the year             5,225,000             522,500 
 
 At 1 January 2017                    20,486,638           2,048,664 
 Shares issued in the year             2,325,000             232,500 
 
 At 31 December 2017                  22,811,638           2,281,164 
                             -------------------  ------------------ 
 

In March 2017, the company raised GBP212,500 before costs from a placing at a price of 10p per share resulting in the issue of a further 2,125,000 shares of 10p each.

In June 2017, the company issued a further 200,000 shares at 10p per share in consideration of GBP20,000 of professional fees.

At 31 December 2017 the company's issued shares carry no rights to fixed income.

The market price of the company's shares at 31 December 2017 was 8.5p and the price range during the financial year was 8.5p and 15.0p.

Share options and warrants

On 17 January 2011 the company adopted an unapproved share option scheme details of which are given in note 31.

To date the company has granted 577,500 to key executives and employees engaged in the development of the social network. At the year end and at the date of this report there are 210,000 options to acquire ordinary share.

   27.          Financial commitments 

The group is committed to making the following future minimum lease payments under non-cancellable operating leases which fall due as follows:

 
                                     2017        2016 
                                        GBP        GBP 
 Within one year 
 Land and buildings                 16,358      14,091 
 
 Between two and five years 
 Land and buildings                 47,193      49,732 
 
 After five years 
 Land and buildings                 35,321      46,189 
                              -------------  --------- 
                                    98,872     110,012 
                              -------------  --------- 
 
   28.         Reserves 

Retained earnings represent the cumulative retained profit or loss of the group.

Share premium is the amount subscribed for share capital in excess of nominal value and is a capital reserve required by UK company law.

The merger reserve is a non-statutory reserve and represents the difference between the fair value and nominal value of the shares exchanged for shares on acquisition of Reverse Take-Over Investments Plc which took place in 2003.

The fair value reserve represents the cumulative surplus and deficits on recognition of available-for-sale investments at fair value, less tax attributable to the net surplus.

   29.         Post balance sheet events 

Since the year end, the company raised a further GBP537,500 in March 2018 by an issue of 10,750,000 ordinary shares of 1p each at 5p per share following a reorganisation of the share capital with the sub-division of each 10p ordinary share into one new ordinary of 1p each and one deferred share of 9p each. The funds were raised to increase the working capital of the group.

There are no other post balance sheet events to be disclosed by way of note.

   30.          Related parties 

Details of the remuneration of directors are given in note 10. In addition to the information given in that note, the following provides further details of related party transactions involving the company and its directors.

The directors are considered to be the key management personnel of the group.

Simmonds & Co

The group made payments of GBP38,904 [excluding VAT] (2016 - GBP35,080) as contributions towards office and secretarial costs to Simmonds & Co, Chartered Accountants, a practice in which G Simmonds is sole proprietor. No amounts were due at 31 December 2017 (2016 - GBPNil).

R Owen

The company paid for office facilities of GBP23,686 (2016 - GBP 22,431). No amounts were due to R Owen at the 31 December 2017 (2016- Nil).

   31.          Share-based payment transaction 

At the date of this report, 577,500 share options have been granted to employees or key executives involved in the group's trading operations.

During 2017 185,000 share options lapsed (2016 - 182,500).

At the date of this report there remained share options to acquire 210,000 shares (2016 - 392,500) that are exercisable.

Details of share options granted are:

Share options to acquire 210,000 shares were originally awarded in 2011 and amended in 2012.

Share options to acquire 367,500 shares were awarded to employees and key executives in 2014.

Options are valued using the Black-Scholes option pricing model. The fair value per option granted and the assumptions used in the calculation are as follows:

 
 Grant date                   17 January 2011   6 March 2014      30 April 2014 
 Share price at grant date    25p per share     27.5p per share   27.5p per share 
                             ----------------  ----------------  ---------------- 
 Exercise price               25p per share     27.5p per share   27.5p per share 
                             ----------------  ----------------  ---------------- 
 Shares under option          210,000           167,500           200,000 
                             ----------------  ----------------  ---------------- 
 Expected volatility          17.0%             20.9%             20.9% 
                             ----------------  ----------------  ---------------- 
 Option life (years)          10 years          7 Years           7 Years 
                             ----------------  ----------------  ---------------- 
 Expected life (years)        10 Years          7 Years           7 Years 
                             ----------------  ----------------  ---------------- 
 Risk-free interest rate      2.0%              2.0%              2.0% 
                             ----------------  ----------------  ---------------- 
 Fair value per option        0.4p              0.07p             0.07p 
                             ----------------  ----------------  ---------------- 
 Annual charge under IFRS     GBP8,970          GBP1,586          GBP1,892 
  2 
                             ----------------  ----------------  ---------------- 
 

In accordance with IFRS2, the fair value of the share options issued and recognised as a charge in the accounts for the year is GBPNil (2016 - GBP12,448).

In arriving at the above:-

The expected volatility is based on historical volatility, the expected life is the average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK government bond for a term consistent with the assumed option life.

   32.          Capital management and financial instruments 

The group is mainly equity funded which together with interest free borrowings of GBP2,000 represents the group's capital.

The group's objectives when maintaining capital are:

- To safeguard the entity's ability to continue as a going concern, so that it can begin to provide returns for shareholders and benefits for other stakeholders; and

- To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The group sets the amounts of capital it requires in proportion to risk. The group manages its capital structure and makes adjustments to it in light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Capital for the group comprises all components of equity - share capital of GBP2,281,164 (2016: GBP2,048,664), share premium of GBP385,641 (2016: GBP393,454), other reserves of GBP325,584 (2016: GBP324,077), the retained deficit of GBP2,832,982 (2016: GBP2,123,512) and debts which comprises loans of GBP2,000 (2016: GBP5,500) and hire purchase commitments of GBPNil (2016: GBP42,439).

During the year ended 31 December 2016 the group's strategy was to preserve net cash resources by limiting cash absorbed from losses and through good cash management.

Financial assets and financial liabilities are recognised in the group's balance sheet when the group becomes a party to the contractual provision of the instrument.

At 31 December 2017 and 31 December 2016, there were no material differences between the fair value and the book value of the group's financial assets and liabilities other than the interest free loan which has a carrying value of GBP2,000 and a fair value of approximately GBP1,500. Relevant financial assets and liabilities are set out below.

 
                                                  Group               Company 
                                             2017      2016      2017       2016 
                                              GBP       GBP       GBP        GBP 
 Financial assets 
 Available-for-sale investments                   -    25,998         -       1,688 
 Cash and cash equivalents                  129,611   129,437    81,459     175,789 
 Due from subsidiary undertakings                 -         -   318,053     955,667 
 Trade and other short term receivables      32,571    53,615         -           - 
 
                                            162,182   209,050   399,512   1,133,144 
                                           --------  --------  --------  ---------- 
 Financial liabilities 
  (which are included at amortised cost) 
 Trade and other short term payables          2,198    77,365         -           - 
 Due to subsidiary undertakings                   -         -   273,573     273,573 
 Hire purchase obligations                        -    42,439         -      42,439 
 Loans                                        2,000     5,500         -           - 
 
                                              4,198   125,304   273,573     316,012 
                                           ========  ========  ========  ========== 
 

The group's financial instruments comprise available-for-sale investments, cash and cash equivalents, receivables, payables, loans and hire purchase obligations that arise directly from its operations.

Amounts shown in trade and other short term receivables exclude prepayments and deferred expenditure for the group of GBP27,235 (2016: GBP21,327) and VAT recoverable of GBP9,175 (2016: GBP22,760) for the group and GBP16,292 (2016: GBP10,962) of short term receivables and VAT recoverable of GBP7,430 (2016: GBP5,364) for the company.

Trade and short term payables exclude deferred income and accruals of GBP96,482 (2016: GBP73,222), tax and social security creditors of GBP74,981 (2016: GBP71,960) company for tax and accruals of GBP10,744 (2016: GBP9,500).

The group has not adopted a policy of using financial derivatives and does not rely on the use of interest rate hedges.

In common with other businesses, the group is exposed to risks that arise from its use of financial instruments. There have been no substantive changes to the group's response to financial instrument risk and the methods used to measure them from previous periods.

The main risks arising from the group's financial instruments are market, credit and liquidity risks.

Market risk arises mainly from uncertainty about future prices of available-for-sale investments held by the group. The board monitors movements in the carrying value of its investments on a regular basis. As there are no remaining investments there is no longer any market risk attributable to investments.

Credit risk arises from trade receivables where the party fails to discharge their obligation in relation to the instrument. To minimise this risk, management have appropriate credit assessment methods to establish credit worthiness of new customers and monitor receivables by regularly reviewing aged receivable reports. There is no concentration of credit risk other than in respect to cash held on deposit at the company's bank as set out above.

The amount exposed to risk in respect of trade receivables at 31 December 2017 was GBP24,371 (2016: GBP41,763).

Liquidity risk arises in relation to the group's management of working capital and the risk that the company or any of its subsidiary undertakings will encounter difficulties in meeting financial obligations as and when they fall due. To minimise this risk the liquidity position and working capital requirements are regularly reviewed by management.

The directors do not consider changes in interest rates have a significant impact on the group's cost of finance or operating performance.

As the group's operations are conducted in the United Kingdom, risks associated with foreign currency fluctuations are not relevant.

   33.         Notes to statements of cash flows 
   a)            Analysis of net funds 
 
                              At 1 January               At 31 December 
                                  2017       Cash Flow        2017 
                                   GBP          GBP            GBP 
 Group 
 
 Cash and cash equivalents         129,437         174          129,611 
 
 Borrowings                       (47,939)      45,939          (2,000) 
 
 Net funds                          81,498      46,113          127,611 
                             =============  ==========  =============== 
 
 Company 
 
 Cash and cash equivalents         175,789    (94,330)           81,459 
 
 Borrowings                       (42,439)      42,439                - 
 
 Net funds                         133,350    (51,891)           81,459 
                             =============  ==========  =============== 
 

(b) Reconciliation of net cash flow to movement in net funds

 
                                                    Group   Company 
                                                     GBP       GBP 
 Increase/(decrease) in cash & cash equivalents 
  in the year                                         174   (94,330) 
 Cash outflow on borrowings repaid in 
  the year                                         45,939     42,439 
 
 Movement in net funds/(debt)                      46,113   (51,891) 
                                                  =======  ========= 
 

(c) Statement of cash flows from discontinued activities

 
                                                 2017       2016 
                                                 GBP         GBP 
 Cash flow from discontinued activities 
 
 Profit/(loss) before tax                        53,567   (158,747) 
 
 Adjustments for: 
 Depreciation and impairment of fixed 
  assets                                              -      15,530 
 Gain on disposal of trade                     (82,600)           - 
 
 Movements in working capital 
 (Increase)/decrease in debtors                   (914)      47,593 
 (Decrease)/increase in creditors              (42,084)     101,229 
 
 Cash (absorbed)/generated from operations     (72,031)       5,605 
                                              ---------  ---------- 
 
 Investing activities 
 Net proceeds on disposal of trade               82,600           - 
 
 Net cash used in investing activities           82,600           - 
                                              ---------  ---------- 
 
 Financing activities 
 Repayment of borrowings                        (2,000)     (2,000) 
 
 Net cash used in financing activities          (2,000)     (2,000) 
                                              ---------  ---------- 
 
  Net cash increase in cash and cash 
   equivalents                                    8,569       3,605 
 
 Cash and cash equivalents at the beginning 
  of the year                                  (22,434)    (26,039) 
 
 Cash and cash equivalents at the end 
  of the year                                  (13,865)    (22,434) 
                                              =========  ========== 
 
 

* *S * *

For further information, please visit www.ultimatesportsgroup.me or contact:

 
Ultimate Sports Group PLC 
 Geoffrey Simmonds, Managing Director        +44 (0)20 7935 0823 
St Brides (Financial PR) 
 Isabel de Salis                             +44 (0)20 7236 1177 
Cantor Fitzgerald Europe (Nomad and Joint 
 Broker) 
 Marc Milmo / Catherine Leftley              +44 (0)20 7894 7000 
 

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

FR FPMJTMBATBBP

(END) Dow Jones Newswires

June 28, 2018 09:54 ET (13:54 GMT)



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