Ultimate Sports Group PLC Final Results and Notice of AGM

Date : 06/28/2019 @ 7:00AM
Source : UK Regulatory (RNS & others)
Stock : Ultimate Sports Group Plc (USG)
Quote : 23.8  0.0 (0.00%) @ 8:00AM

Ultimate Sports Group PLC Final Results and Notice of AGM

Ultimate Sports (LSE:USG)
Historical Stock Chart

2 Months : From Jun 2019 to Aug 2019

Click Here for more Ultimate Sports Charts.

TIDMUSG

RNS Number : 7244D

Ultimate Sports Group PLC

28 June 2019

28 June 2019

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 2018. 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 24 July 2019 at 11.30am. Copies of the Notice of AGM together with the Annual Report for the year ended 31 December 2018 will be posted to shareholders and be available to view on the Company's website www.ultimatesportsgroup.me.

The financial information set out in this announcement does not constitute statutory accounts as defined in the Companies Act 2006.

The Group Statement of Comprehensive Income, Group Statement of Financial Position, Group Statement of Changes in Equity, Group Statement of Cash Flows and associated notes have been extracted from the Group's 2018 statutory financial statements upon which the auditor's opinion is unqualified and does not include any statement under section 498 of the Companies Act 2006.

Those financial statements will be delivered to the Registrar of Companies following the release of this announcement.

This announcement and the annual report and accounts are available on the Company's website www.ultimatesportsgroup.me . A copy of the report and accounts will be sent to shareholders who have elected to receive a printed copy with details of the annual general meeting in due course.

Chairman's Statement and Chief Executive's Review

We are reporting a total comprehensive loss from continuing activities of GBP144,485 before tax against a total comprehensive loss before tax and discontinued activities for the prior year of GBP780,192. There were no discontinued activities in the year ended 31 December 2018, whilst in the prior year there was a profit from discontinued activities after tax of GBP53,567. USG's consolidated cash balances as at 31 December 2018 were GBP535,329 (2017- GBP129,611) The directors are not recommending the payment of a dividend.

FUNDRAISE

As set out in the circular to shareholders issued in February 2018, the Company raised GBP537,500 (before legal and other professional expenses) by the issue of 10,750,000 new shares at 5p per share following approval obtained from shareholders at the General Meeting in March 2018.

SUBSTANTIAL SHAREHOLDERS

The Company welcomes the involvement of Mr Richard Bernstein as a strategic shareholder following on from the fundraising concluded in March 2018. The Company also entered into an agreement with Mr Bernstein pursuant to which he will seek to introduce the Company to potential investment or acquisition opportunities. To date Mr Bernstein has carried out and continues to undertake initial due diligence on potential introductions at his own expense with follow up work undertaken by the Company.

PANTHEON LEISURE PLC ("PANTHEON ")

USG holds 85.87% of the issued share capital of Pantheon which in turn owns 100% of the operating business of a Sport and Leisure division which trades as Sport in Schools Ltd and The Elms Sport in Schools ("ESS").

Pantheon as a group made a profit of GBP32,817 for the year ended 31 December 2018 (2017 (profit - GBP2,950).

SPORT IN SCHOOLS LIMITED

On a turnover of GBP1,546,733 (2017- GBP1,368,710) ESS contributed a much- improved divisional profit of GBP100,754 (2017 - GBP28,255). The improved result is a combination of increased turnover by virtue of additional schools engaged, increased income from existing schools due to an increase in government subsidies, improved weather conditions resulting in less working days lost in 2018 and tighter control of overheads.

CORPORATE GOVERNANCE CODE

In accordance with changes to AIM Rules regarding corporate governance our Annual Report & Accounts and Company website reflect compliance with (and any departures from) the Guidance set out in the QCA Corporate Governance Code.

PROSPECTS

We continue to pursue, from a firm financial base, a strategy of developing the business of ESS and to carefully appraise all acquisition opportunities, including those proposed by Mr Bernstein.

R L Owen (Chairman)

G M Simmonds (Chief Executive)

* *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) 
 Catherine Leftley/Gaby Jenner                 +44 (0)20 7236 1177 
Cantor Fitzgerald Europe (Nomad and Broker) 
 David Foreman                                 +44 (0)20 7894 7000 
 

Consolidated statement of comprehensive income for the year ended 31 December 2018

 
                                                     2018         2017 
                                          Notes      GBP          GBP 
 
 
 Continued activities 
 Revenue                                    6      1,547,006    1,369,193 
 Cost of sales                                     (725,638)    (769,310) 
                                                 -----------  ----------- 
 
 Gross profit                                        821,368      599,883 
 Administrative expenses                           (965,943)    (833,533) 
                                                 -----------  ----------- 
 
 Operating Loss before exceptional 
  items                                            (144,575)    (233,650) 
 
   Exceptional item and non- 
   recurring costs                          8              -    (563,325) 
                                                 -----------  ----------- 
 
   Operating loss                           9      (144,575)    (796,975) 
 
 Finance income                            11            718            - 
 Finance costs                             12          (628)      (3,714) 
 Other gains and losses                    13              -       20,497 
                                                 -----------  ----------- 
 Loss before taxation                              (144,485)    (780,192) 
 
 Taxation                                  14              -       17,572 
                                                 -----------  ----------- 
 Loss after taxation from continuing 
  activities                                       (144,485)    (762,620) 
 
 Profit for the year from discontinued 
  activities                                7              -       53,567 
                                                 -----------  ----------- 
                                                   (144,485)    (709,053) 
                                                 -----------  ----------- 
 
 Attributable to: 
 Equity holders of the parent 
  company                                          (149,121)    (709,470) 
 Non-controlling interests                             4,636          417 
                                                 -----------  ----------- 
                                                   (144,485)    (709,053) 
                                                 -----------  ----------- 
 
 Other comprehensive loss 
 Losses on available-for-sale 
  investments taken to equity                              -      (1,838) 
 
 Taxation on items taken directly 
  to equity                                14              -          331 
 
 Other comprehensive loss                                  -      (1,507) 
                                                 -----------  ----------- 
 
 Comprehensive loss attributable 
  to: 
 Equity holders of the parent 
  company                                          (149,121)    (710,977) 
 Non-controlling interests                             4,636          417 
 
 Total comprehensive loss                          (144,485)    (710,560) 
                                                 ===========  =========== 
 

Loss per share (basic and diluted)

 
 Loss from operations per share    15   (0.0051)p   (0.0319)p 
 Other comprehensive loss per 
  share                                     -       (0.0001)p 
                                       ----------  ---------- 
 Total comprehensive loss per 
  share                                 (0.0051)p   (0.0320)p 
                                       ==========  ========== 
 

Consolidated statement of financial position as at 31 December 2018

 
 
 
                                            Notes      2018          2017 
 
                                                        GBP           GBP 
 Non-current assets 
 Goodwill and other intangibles             17           59,954        60,054 
 Property, plant and equipment              19           13,168        12,923 
 Total non-current assets                                73,122        72,977 
                                                   ------------  ------------ 
 
 Current assets 
 Trade and other receivables                20           89,760        68,981 
 Cash and cash equivalents                              535,329       129,611 
                                                   ------------  ------------ 
 Total current assets                                   625,089       198,592 
                                                   ------------  ------------ 
 
 Total assets                                           698,211       271,569 
 
 Current liabilities 
 Trade and other payables                   21          239,911       173,661 
 Borrowings                                 24                -         2,000 
                                                   ------------  ------------ 
 Total current liabilities                              239,911       175,661 
                                                   ------------  ------------ 
 
 Total liabilities                                      239,911       175,661 
 
 
 Net assets                                             458,300        95,908 
 
 Equity 
 Share capital                              25        2,388,664     2,281,164 
 Share premium account                                  782,031       393,454 
 Merger reserve                                         325,584       325,584 
 Retained earnings                                  (2,979,116)   (2,840,795) 
 Equity attributable to shareholders 
  of the parent company                                 517,163       159,407 
 
 Non- controlling interests                            (58,863)      (63,499) 
 
 Total Equity                                           458,300        95,908 
                                                   ============  ============ 
 
 
 Consolidated                                                                  To 
 statement                                                                   equity 
 of changes in                                                              holders 
 equity                                             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 
   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) 
 
   Reserves at 
   1 January 
   2018          2,281,164    393,454    325,584         -   (2,840,795)     159,407          (63,499)      95,908 
 
   Issue of 
   new shares      107,500    430,000          -         -             -     537,500                 -     537,500 
 
   Share issue 
   costs                 -   (41,423)          -         -             -    (41,423)                 -    (41,423) 
 
   Share based 
   payments              -          -          -         -        10,800      10,800                 -      10,800 
 
   Loss for 
   the year              -          -          -         -     (149,121)   (149,121)             4,636   (144,485) 
 At 31 
  December 
  2018           2,388,664    782,031    325,584         -   (2,979,116)     517,163          (58,863)     458,300 
                ==========  =========  =========  ========  ============  ==========  ================  ========== 
 

Company statement of financial position as at 31 December 2018

 
                                    Notes      2018          2017 
                                                GBP           GBP 
 Non-current assets 
 Investment in subsidiaries          18         505,755       516,468 
 Property, plant and equipment       19               -             1 
                                           ------------  ------------ 
 Total non-current assets                       505,755       516,469 
                                           ------------  ------------ 
 
 Current assets 
 Trade and other receivables         20         361,793       342,203 
 Cash and cash equivalents                      413,656        81,459 
                                           ------------  ------------ 
 Total current assets                           775,449       423,662 
                                           ------------  ------------ 
 
 Total assets                                 1,281,204       940,131 
 
 Current liabilities 
 Trade and other payables            21         319,715       284,317 
 Total current liabilities                      319,715       284,317 
                                           ------------  ------------ 
 
 
 Total liabilities                              319,715       284,317 
 
 Net assets                                     961,489       655,814 
 
 Equity 
 
 Share capital                       25       2,388,664     2,281,164 
 Share premium account                          782,031       393,454 
 Merger reserve                                 325,584       325,584 
 Retained earnings                          (2,534,790)   (2,344,388) 
 
 Total equity                                   961,489       655,814 
                                           ============  ============ 
 

Company statement of changes in equity

 
                               Share          Share                       Retained 
                               capital        premium   Merger reserve     earnings        Total 
                                GBP            GBP           GBP             GBP           GBP 
 
 
   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 1 January 
   2018                          2,281,164    393,454          325,584   (2,344,388)       655,814 
 
 
   Issue of new 
   shares                          107,500    430,000                -             -       537,500 
 
 
   Share issue costs                     -   (41,423)                -             -      (41,423) 
 
 Share based payments                    -          -                -        10,800        10,800 
 
 
   Loss for the 
   year                                  -          -                -     (201,202)     (201,202) 
 
 At 31 December 
  2018                          2,388,664     782,031          325,584   (2,534,790)       961,489 
                         =================  =========  ===============  ============  ============ 
 

Consolidated statement of cash flows for the year ended 31 December 2018

 
                                               Note             2018                       2017 
                                                                 GBP                        GBP 
 
 Cash flow from all operating activities 
 
 Loss before taxation from continuing 
  activities                                                          (144,485)                 (780,192) 
 Profit before taxation from discontinued 
  activities                                   32c                            -                    53,567 
                                                     --------------------------  ------------------------ 
                                                                      (144,485)                 (726,625) 
 
 Adjustments for: 
 Finance income                                                           (718)                         - 
 Finance expense                                                            628                     3,714 
 Impairment and amortisation of intangible 
  assets                                                                    100                   520,792 
 Share based payments                                                    10,800                         - 
 Other gains and losses                                                       -                 (103,097) 
 Depreciation                                                             7,507                    26,145 
 Loss/ (profit) on disposed tangible 
  assets                                                                      1                  (30,865) 
 
 Operating cash flow before working 
  capital movements                                                   (126,167)                 (309,936) 
 (Increase)/decrease in receivables                                    (20,779)                    28,720 
 Increase/(decrease) in payables                                         66,250                  (48,886) 
 
 Net cash absorbed by operations                                       (80,696)                 (330,102) 
                                                     --------------------------  ------------------------ 
 
 Taxation                                                                     -                    17,241 
                                                     --------------------------  ------------------------ 
 
 Cash flow from investing activities 
 Finance income                                                             718                         - 
 Property, plant and equipment acquired                                 (7,753)                   (9,820) 
 Intangible asset development costs                                           -                  (16,300) 
 Proceeds on sale of property, plant 
  and equipment                                                               -                    33,187 
 Net proceeds on sale of business                                             -                    82,600 
 Proceeds on disposal of available 
  for sale investments                                                        -                    48,334 
 Net cash (absorbed)/from investing 
  activities                                                            (7,035)                   138,001 
                                                     --------------------------  ------------------------ 
 
 Cash flow from financing activities 
 Finance expense                                                          (628)                   (3,714) 
 Funds from share issue                                                 496,077                   224,687 
 Repayment of borrowings                                                (2,000)                  (45,939) 
 Net cash from financing activities                                     493,449                   175,034 
                                                     --------------------------  ------------------------ 
 
 Net increase in cash and cash equivalents 
  in the year                                  32b                      405,718                       174 
 
 Cash and cash equivalents at the 
  beginning of the year                                                 129,611                   129,437 
 
 Cash and cash equivalents at the 
  end of the year                                                       535,329                   129,611 
                                                     ==========================  ======================== 
 

Company statement of cash flows for the year ended 31 December 2018

 
                                               Notes     2018         2017 
                                                          GBP          GBP 
 
 Cash flow from operating activities 
 
 Loss before tax                                       (201,202)   (1,020,317) 
 
 Adjustments for: 
 Finance income                                         (17,218)      (16,500) 
 Finance expense                                               -         3,714 
 Share based payments                                     10,800             - 
 Other gains                                                   -       (1,034) 
 Provision for impairment in value 
  of investments in subsidiaries                          10,713        90,103 
 
   Provision for intra group indebtedness                 78,765       889,245 
 Depreciation and write offs                                   -        18,592 
 Loss/(profit) on disposed tangible 
  assets                                                       1      (30,865) 
 
 Operating cash flow before working 
  capital movements                                    (118,141)      (67,062) 
 
 Increase in receivables                                (81,855)     (242,954) 
 Increase in payables                                     35,398         1,244 
 
 Net cash absorbed by operations                       (164,598)     (308,772) 
                                                      ----------  ------------ 
 
 Cash flow from investing activities 
 Finance income                                              718             - 
 Proceeds on sale of property, plant 
  & equipment                                                  -        33,187 
 Proceeds on sale of investments for 
  resale                                                       -         2,721 
                                                      ----------  ------------ 
 Net cash inflow from investing activities                   718        35,908 
                                                      ----------  ------------ 
 
 Cash flow from financing activities 
 
 Funds from share issue                                  496,077       224,687 
 Finance expense                                               -       (3,714) 
 Hire purchase repayments                                      -      (42,439) 
 
 Net cash from financing activities                      496,077       178,534 
 Net increase /(decrease) in cash 
  and cash equivalents in the year              32b      332,197      (94,330) 
 
 Cash and cash equivalents at the 
  beginning of the year                                   81,459       175,789 
 
 Cash and cash equivalents at the 
  end of the year                                        413,656        81,459 
                                                      ==========  ============ 
 

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 strategic report on pages 5 to 7.

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

   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 2018 have been prepared under the historical cost convention 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.

For the purpose of the preparation of these consolidated financial statements, the group has applied all standards and interpretations that are effective for accounting periods beginning on or after 1 January 2018. The adoption of new standards and interpretations in the year has not had a material impact of the group's financial statements.

IFRS 15

The group has adopted IFRS 15 retrospectively in its consolidated financial statements for the year ended 31 December 2018. IFRS 15 replaces all existing revenue requirements in IFRS and sets out principles for recognising revenue that must be applied using a 5-step model. Revenue should only be recognised when (or as) control of goods or services is passed to the customer, when distinct 'performance obligations' are met, at the amount to which the entity expects to be entitled. The group has completed its assessment of IFRS and has not identified any material differences between the group's current revenue recognition policy and the requirements of IFRS 15.

Future standards in place but not yet effective.

No new standards, amendments or interpretations to existing standards that have been published and that are mandatory for the Group's accounting periods beginning on or after 1 January 2019, or later periods, have been adopted early. The following standards and amendments are not yet applied at the date of authorisation of these financial statements:

   --      IFRS 16 - Leases (effective 1 January 2019) 
   --      Annual Improvements to IFRS Standards 2015 - 2017 Cycle (effective 1 January 2019) 
   --      IAS 12 - Income taxes (effective 1 January 2019) 
   --      Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020) 
   --      Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020) 

Except for IFRS 16, see below, the group does 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 2018, the group would recognise an asset and liability in respect of leases of approximately GBP79,000.

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 in administrative expenses and is not subsequently reversed.

   3.            Significant accounting policies 
   (d)           Plant and equipment 

Plant and equipment is 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, 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.

   3.            Significant accounting policies (continued) 
   (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 requires 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 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 have been fully impaired as an exceptional item in 2017 (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 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.

 
                                      Sports and       Social 
 Year ended 31 December 2018            leisure     media website   Consolidated 
                                         GBP            GBP             GBP 
 
 Revenue                               1,546,733              273      1,547,006 
                                     ===========  ===============  ============= 
 
 Segment operating profit/(loss)*        100,754         (32,399)         68,355 
                                     ===========  =============== 
 
 Group operating expenses**                                            (212,930) 
                                                                   ------------- 
 
 Operating loss                                                        (144,575) 
 Finance revenues less finance 
  costs                                                                       90 
 
 Loss before taxation                                                  (144,485) 
 Taxation                                                                      - 
 Loss after taxation from 
  continuing activities                                                (144,485) 
 
                                      Sports and       Social 
 Year ended 31 December 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) 
                                     ===========                   ============= 
 

*Segment operating profit in relation to Sports and Leisure is after charges for depreciation of GBP7,507 (2017: GBP7,553). Segment operating losses in relation to the social media website is after charges for amortisation and impairment of GBPNil (2017: GBP520,792).

** '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 GBP68,824 (2017: GBP53,370) form part of these costs as opposed to forming part of the segmental costs of the sports and leisure division.

 
 Financial position at 31                    Sports           Social 
  December 2018                            and leisure     media website     Consolidated 
                                              GBP               GBP              GBP 
 Segment assets                                 86,555               1,388         87,943 
                                         =============  ================== 
 
 Non segmental assets                                                             610,268 
                                                                            ------------- 
 
 Consolidated total assets                                                        698,211 
                                                                            ============= 
 
 Segmental liabilities                         203,071           -                203,071 
                                         =============  ================== 
 
 Non segmental corporate liabilities                                               36,840 
                                                                            ------------- 
                                                                                  239,911 
 
 Capital additions                               7,753                   - 
 Depreciation/amortisation                       7,507                   - 
  and impairment 
                                         =============  ================== 
 
 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                                 7,553             520,792 
                                         =============  ================== 
 

Non segmental assets include group cash balances of GBP535,329 (2017: GBP129,611), goodwill of GBP59,954 (2017: GBP59,954), other assets and receivables of GBP14,985 (2017: GBP24,444). Non segmental liabilities include trade and other payables of GBP36,840 (2017: GBP13,042).

Sports and leisure segment assets include GBPnil (2017: GBP2,727) from discontinued activities. Segment liabilities include GBPnil (2017: GBP8,638) from discontinued activities.

   7.             Discontinued activities 
 
                                                2018                  2017 
                                                 GBP                   GBP 
 Revenue                                                -                11,015 
 Cost of sales and expenses                             -              (40,048) 
                                            ----------------   -------------------- 
 Operating loss                                         -              (29,033) 
 Net proceeds on disposal                               -               82,600 
                                            ----------------   -------------------- 
                -                                                      53,567 
    -------------------                                       -------------------- 
 Football Partners Limited ceased small-sided football league activities 
  in December 2016 and disposed of its trade for GBP100,000 in 2017. 
 
   8.    Exceptional item and non- recurring costs 
 
 
                                               2018      2017 
                                              GBP        GBP 
 Exceptional item: 
  Development cost - full impairment            -       462,073 
 Non- recurring costs: 
  Website expenditure and amortisation         -        101,252 
                                               -        563,325 
                                            =======  ========== 
 
   9.       Operating loss 
 
 
                                            2018     2017 
 The operating loss is stated              GBP       GBP 
  after charging /(crediting): 
 
 Auditors' remuneration - audit 
  services                                18,900    20,875 
 Operating lease rentals - land 
  and buildings                           17,635    13,507 
 Depreciation of property, plant 
  and equipment                            7,753    26,145 
 Amortisation - Website development            -    58,719 
 Impairment - Website development              -   462,073 
                                         =======  ======== 
 

Included in the audit fee for the group is an amount of GBP7,000 (2017: GBP6,700) in respect of the Company.

The auditors received fees of GBP1,630 (2017: 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 
                                         2018        2017 
                                          GBP         GBP 
 Wages and salaries                    1,152,825   1,128,737 
 Social security costs                    58,061      67,549 
 Pension contributions                    12,634       7,019 
 Share based payment                      10,800           - 
                                       1,234,320   1,203,305 
                                      ==========  ========== 
 

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

 
                                               No.     No. 
 Administration, sales and coaching 
  staff                                       94       115 
                                          ========  ====== 
 

(b) Directors' remuneration

 
 
                                                       2018     2017 
 An analysis of directors' remuneration (who are 
  the key management personnel) is set out below:       GBP      GBP 
 Salary and consultancy fees                          21,250   32,859 
                                                     =======  ======= 
 
 
 Executive directors                                  16,250   32,859 
 Non-executive directors                               5,000        - 
                                                     -------  ------- 
                                                      21,250   32,859 
                                                     =======  ======= 
 

The total cost of key management personnel being the executive directors and including employers' national insurance was GBP21,250 (2017: GBP32,859).

The following amounts were paid for the services of the directors in the year:

 
 
                        2018            2017 
                         GBP             GBP 
                     Salaries        Salaries 
                    and benefits    and benefits 
 R L Owen                 13,750          15,996 
 G Simmonds                    -          16,863 
 D Hillel                  2,500               - 
 J Zucker                  2,500               - 
 D J Coldbeck              2,500               - 
                  --------------  -------------- 
                          21,250          32,859 
                  --------------  -------------- 
 

There were no directors' benefits (2017- GBP17,859).

   11.          Finance income 
 
                                            2018     2017 
                                            GBP      GBP 
 Interest revenue - bank deposits            718        - 
                                           -----    ----- 
 
   12.          Finance costs 
 
                                            2018          2017 
                                             GBP           GBP 
 Bank overdraft interest                            628       - 
 Interest on obligations under 
  hire purchase agreements                            -   3,714 
                                     ------------------  ------ 
                                                    628   3,714 
                                     ------------------  ------ 
 
   13.          Other gains and losses 
 
                                        2018      2017 
                                         GBP      GBP 
 Profit on disposal of available 
  for sale investments                      -     20,497 
                                           ---   ------- 
 

Investments in AIM listed companies were disposed of in 2017 giving rise to gains of GBP20,497 before fair value adjustments of GBP1,838 recognised in the Statement of Other Comprehensive Income in that year.

   14.          Taxation 
 
                                            2018       2017 
                                             GBP       GBP 
 Deferred tax (credit)/charge 
 Origination and reversal of 
  temporary differences                         -        (331) 
 
 Total deferred tax (credit)/(charge            -        (331) 
 Research and development tax 
  credits                                       -     (17,241) 
                                               ---   --------- 
 
   Tax credit in income statement               -     (17,572) 
                                               ===   ========= 
 

No income tax charge arises based on the loss for the year (2017: nil).

The group has unutilised tax losses of GBP6,443,000 (2017: GBP6,311,000) which includes GBP2,380,000 (2017: GBP2,364,000) 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

 
 
                                                            2018       2017 
                                                            GBP         GBP 
 Loss on ordinary activities before taxation             (144,485)   (724,787) 
                                                        ==========  ========== 
 
 Loss on ordinary activities before taxation 
  at the standard rate of UK corporation 
  tax of 19% (2017: 19.25%)                               (27,452)   (139,521) 
 
 Effects of: 
 Expenses not deductible for tax purposes                    5,370           - 
 Share based payments                                        2,052           - 
 Dividend income                                             3,943           - 
 Temporary differences in respect of depreciation 
  and capital allowances not reflected in 
  deferred tax                                                (79)      97,121 
 Unutilised tax losses not recognised as 
  a deferred tax asset                                      16,166      42,400 
 Adjustment on available-for-sale investments                    -       (331) 
 Research and development tax credits                            -    (17,241) 
                                                        ----------  ---------- 
 Tax credit                                                      -    (17,572) 
                                                        ==========  ========== 
 

In 2017 claims for tax credits in relation to research and development costs were made giving rise to cash credits of GBP17,241.

   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 GBP149,121 (2017: GBP709,470) and on the weighted average number of shares in issue during the year, which was 29,174,996 (2017: 22,211,434).

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 GBP149,121 (2017: GBP710,977).

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 2018 on 307,500 ordinary shares and on 1,500,000 share warrants.

   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 GBP144,485 (2017-loss: GBP709,053) includes a loss of GBP201,202 (2017-loss: GBP1,020,317) dealt with in the accounts of the company.

   17.          Goodwill, intangibles and development costs 
 
                                      2018           2018        2018      2017 
                                      GBP            GBP          GBP       GBP 
                                                   Goodwill 
                                    Website        and other 
                                   development    intangibles    Total     Total 
 
 Cost at 1 January                     587,187         60,054   647,241   630,941 
 Additions in the year                       -              -         -    16,300 
                                 -------------  -------------  --------  -------- 
 Cost at 31 December                   587,187         60,054   647,241   647,241 
                                 -------------  -------------  --------  -------- 
 
 Amortisation at 1 January             587,187              -   587,187    66,395 
 Charged in the year                         -              -         -    58,719 
 Impairment write off                        -            100       100   462,073 
                                 -------------  -------------  --------  -------- 
 Amortisation at 31 December           587,187            100   587,287   587,187 
                                 -------------  -------------  --------  -------- 
 
 Carrying value at 31 December               -         59,954    59,954    60,054 
                                 =============  =============  ========  ======== 
 

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 intangible assets costing GBP100 in 2013 following the acquisition of a subsidiary. The asset has been fully impaired and written off in 2018.

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 2019 and 2020; 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 in 2017, to delay future plans for further website development, unamortised development costs were fully impaired and written off as an exceptional item in the prior year (see note 8).

   18.          Investments in Subsidiaries 
 
 Company                               2018        2017 
 Cost                                   GBP         GBP 
 Shares                              1,947,932   1,947,932 
 Loan notes                            220,000     220,000 
                                    ----------  ---------- 
 Total cost at beginning 
  and end of year                    2,167,932   2,167,932 
                                    ==========  ========== 
 
 Provision for impairment 
 At 1 January                        1,651,464   1,561,361 
 Increase of provision in 
  year                                  10,713      90,103 
                                    ----------  ---------- 
 At 31 December                      1,662,177   1,651,464 
                                    ==========  ========== 
 
 Carrying value at 31 December         505,755     516,468 
                                    ==========  ========== 
 

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. The registered office for all the companies listed below is at 30 City Road, London EC1Y 2AB.

 
                                    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 &       Dormant 
  ***                                                      Wales 
 The Elms Group Limited          Ordinary 85.87%        England &       Inactive 
  ***                                                      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 
   19.          Property, plant and equipment 
 
                              Plant and 
 Group                         equipment   Motor Vehicles     Total 
                                 GBP            GBP            GBP 
 Cost 
 At 1 January 2017               148,443           83,662     232,105 
 Additions                         9,820                -       9,820 
 Disposals                      (63,691)         (83,662)   (147,353) 
 Cost at 31 December 2017         94,572                -      94,572 
 Additions                         7,753                -       7,753 
 Disposals                       (1,848)                -     (1,848) 
 At 31 December 2018             100,477                -     100,477 
 
 Depreciation 
 At 1 January 2017               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 
 Charge for the year               7,507                -       7,507 
 Disposals                       (1,847)                      (1,847) 
                             -----------  ---------------  ---------- 
 At 31 December 2018              87,309                -      87,309 
                             ===========  ===============  ========== 
 
 Carrying value 
 At 31 December 2018              13,168                -      13,168 
                             ===========  ===============  ========== 
 
 At 31 December 2017              12,923                -      12,923 
                             ===========  ===============  ========== 
 
 
                              Plant and 
 Company                       equipment   Motor Vehicles    Total 
                                 GBP            GBP           GBP 
 Cost 
 At 1 January 2017                 1,848           83,662     85,510 
 Disposals                             -         (83,662)   (83,662) 
 Cost at 31 December 2017          1,848                -      1,848 
 Disposals                       (1,848)                -    (1,848) 
                             -----------  ---------------  --------- 
 At 31 December 2018                   -                -          - 
                             -----------  ---------------  --------- 
 
 Depreciation 
 At 1 January 2017                 1,847           62,748     64,595 
 Disposals                             -         (81,340)   (81,340) 
 Charge for year                       -           18,592     18,592 
                             -----------  ---------------  --------- 
 At 31 December 2016               1,847                -      1,847 
 Disposals                       (1,847)                -    (1,847) 
 At 31 December 2017                   -                -          - 
                             -----------  ---------------  --------- 
 
 Carrying value 
 At 31 December 2018                   -                -          - 
                             ===========  ===============  ========= 
 
 At 31 December 2017                   1                -          1 
                             ===========  ===============  ========= 
 

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

Depreciation charged on assets subject to hire purchase agreements in the year was GBPNil. (2017: GBP18,592). The net book value of these assets at the end of the year and at the end of last year was GBPNil.

   20.     Receivables and loan notes 

Non-current assets

Company

In 2018, amounts due within one year included GBP220,000 of loan notes (2017 - 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 
                                              2018     2017     2018      2017 
                                              GBP      GBP       GBP       GBP 
 Trade receivables                           62,768   24,371         -         - 
 Other receivables                           18,681   17,375    10,166 
 Amounts due from subsidiary undertakings         -        -   347,102   318,053 
 Prepayments and deferred expenditure         8,311   27,235     4,525    24,150 
                                             89,760   68,981   361,793   342,203 
                                            =======  =======  ========  ======== 
 

The average credit period given for trade receivables at the end of the year is 15 days (2017:6 days). Trade receivables are stated net of a provision for irrecoverable amounts of GBPNil (2017: GBPNil).

Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total GBP1,454,629 (2017: GBP1,375,864).

The total charge in the year in respect of irrecoverable receivables in the group accounts was GBPNil (2017: 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 
 2018           62,768 
 2017           24,371 
            ========== 
 
   21.          Trade and other payables 
 
                                                 Group              Company 
                                            2018      2017      2018      2017 
                                             GBP       GBP       GBP       GBP 
 Trade payables                              9,760       982         -         - 
 Other payables                             24,672     1,216         -         - 
 Taxes and social security                  99,459    74,981         -         - 
 Amounts due to subsidiary undertakings          -         -   287,793   273,573 
 Accruals and deferred income              106,020    96,482    31,922    10,744 
                                           239,911   173,661   319,715   284,317 
                                          ========  ========  ========  ======== 
 

The average credit period taken for trade payables at the end of the year is 8 days (2017: 1 day).

   22.          Bank overdraft 

Sport in Schools Limited has a bank overdraft facility secured by a guarantee of up to GBP50,000 by Ultimate Sports Group Plc. The overdraft is repayable on demand.

   23.          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 2017                            (331)          331       - 
 
 Credited in the income statement               331            -     331 
 Charged directly to equity                       -        (331)   (331) 
 At 31 December 2018 and 31 December 
  2017                                            -            -       - 
                                        ===========  ===========  ====== 
 
   24.          Borrowings 

There were no borrowings outstanding at 31 December 2018 (2017- GBP2,000)

   25.     Issued and fully paid share capital 
 
 
                                 Number of     Number of      Number of 
                                  ordinary      ordinary      deferred 
 Ordinary shares                 10p shares     1p shares     9p shares      GBP 
 At 1 January 2017                20,486,638       -             -        2,048,664 
 Shares issued in the year         2,325,000       -             -          232,500 
                             ---------------  -----------  ------------ 
 At 1 January 2018                22,811,638       -             -        2,281,164 
 Subdivision of ordinary 
  shares                        (22,811,638)   22,811,638    22,811,638           - 
 New shares issued in the 
  year                              -          10,750,000        -          107,500 
                             ---------------  -----------  ------------ 
 At 31 December 2018                -          33,561,638    22,811,638   2,388,664 
                             ===============  ===========  ============  ========== 
 

Following a capital reorganisation in March 2018 in which each existing share of 10p each was subdivided into one new ordinary share of 1p each and 1 deferred share of 9p each, the company raised GBP537,500 before costs from a placing at a price of 5p per share resulting in the issue of a further 10,750,000 ordinary shares of 1p each.

Ordinary shares of 1p each:

Shareholders are entitled to receive dividends or distributions in the event of a winding up with rights to attend and vote at general meetings.

Deferred shares of 9p each:

Shareholders are entitled to receive 0.1p for each GBP999,999 of dividends or other distributions in the event of a winding up with no rights to attend and vote at general meetings.

At 31 December 2018 the company's issued shares carry no rights to fixed income.

The market price of the company's shares at 31 December 2018 was 20.00p and the price range during the financial year was 8.50p and 20.88p.

26. Share warrants and options

Warrants

In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants were issued exercisable at a price of 10p and 25p respectively per new ordinary share.

Further details are given in note 30.

Options

In January 2011 the company adopted an unapproved share option scheme details of which are given in note 30

To date the company has granted options to acquire 577,500 ordinary shares 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 options to acquire 307,500 ordinary shares in issue.

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:

 
                                     2018           2017 
                                        GBP           GBP 
 Within one year 
 Land and buildings                    10,868         16,358 
 Other                                   5,636             - 
 Between two and five years 
 Land and buildings                    43,472         47,193 
 Other                                   6,417             - 
 After five years 
 Land and buildings                    24,453         35,321 
                              ----------------  ------------ 
                                       90,846         98,872 
                              ----------------  ------------ 
 
   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.       Related parties 

Details of the remuneration of directors is 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 the key management personnel of the group.

Simmonds & Co

The group made payments of GBP26,500 (2017-GBP38,904) 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 2018 (2017 - GBPNil).

In March 2017, G Simmonds was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to these new warrants are given in note 30.

R Owen

The company paid for office facilities to R Owen of GBP13,611 (2017- GBP 23,686). No amounts were due to R Owen at the 31 December 2018 (2017- Nil).

In March 2018, R Owen was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to these new warrants are given in note 30.

   30.          Share-based payment transactions 

Warrants

In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants were issued exercisable at a price of 10p and 25p respectively per new ordinary share.

Warrants 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                 13 March 2018   13 March 2018 
 Share price at grant       15p per share   15p per share 
  date 
                           --------------  -------------- 
 Exercise price             10p per share   25p per share 
                           --------------  -------------- 
 Shares under warrant       250,000         250,000 
                           --------------  -------------- 
 Expected volatility        100.0%          100.0% 
                           --------------  -------------- 
 Option life (years)        3 years         3 years 
                           --------------  -------------- 
 Expected life (years)      3 years         3 years 
                           --------------  -------------- 
 Risk-free interest rate    1.25%           1.25% 
                           --------------  -------------- 
 Fair value per option      3.15p           2.8p 
                           --------------  -------------- 
 

In accordance with IFRS2, the fair value of the warrants issued and recognised as a charge in the accounts for the year is GBP10,800. In arriving at this amount, 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.

   30.          Share-based payment transactions (continued). 

Options

At the date of this report, options to acquire 577,500 ordinary shares share have been granted to employees or key executives involved in the group's trading operations. To date options over 270,000 shares have lapsed and there remain options over 307,500 shares that are exercisable.

 
 Grant date                 17 January 2011   6 March 2014      30 April 2014 
 Share price at grant       25p per share     27.5p per share   27.5p per share 
  date 
                           ----------------  ----------------  ---------------- 
 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 
                           ----------------  ----------------  ---------------- 
 

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 (2017 - GBPNil). In arriving at the amount, 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.

   31.          Capital management and financial instruments 

The group is solely equity funded which 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 GBP2,388,664 (2017: GBP2,281,164), share premium of GBP782,031 (2017: GBP393,454), other reserves of GBP325,584 (2017: GBP325,584), the retained deficit of GBP2,979,116 (2017: GBP2,840,795) and debts which comprises loans of GBPNil (2017: GBP2,000).

During the year ended 31 December 2018 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 2018 and 31 December 2017, there were no material differences between the fair value and the book value of the group's financial assets and liabilities. All financial assets and liabilities are measured at amortised cost. Relevant financial assets and liabilities are set out below.

   31.          Capital management and financial instruments (continued). 
 
 
                                                                        Group              Company 
                                                                  2018      2017      2018      2017 
                                                                   GBP       GBP       GBP       GBP 
 Financial assets 
 Cash and cash equivalents                                       535,329   129,611   413,656    81,459 
 Due from subsidiary undertakings                                      -         -   347,102   318,053 
 Trade and other short- term receivables                          70,395    32,571         -         - 
                                                                --------  --------  --------  -------- 
                                                                 605,724   162,182   760,758   399,512 
                                                                --------  --------  --------  -------- 
 Financial liabilities (which are included at amortised cost) 
 Trade and other short- term payables                             34,432     2,198         -         - 
 Due to subsidiary undertakings                                        -         -   287,793   273,573 
 Loans                                                                 -     2,000         -         - 
                                                                  34,432     4,198   287,793   273,573 
                                                                ========  ========  ========  ======== 
 

The group's financial instruments comprise cash and cash equivalents, receivables, payables, loan 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 GBP8,311 (2017: GBP27,235) and VAT recoverable of GBP11,054 (2017: GBP9,175) for the group and for the company GBP4,522 (2017: GBPNil) of short term receivables and VAT recoverable of GBP10,166 (2017: GBP7,430).

Trade and short- term payables exclude deferred income and accruals of GBP106,020 (2017: GBP96,482), tax and social security creditors of GBP99,459 (2017: GBP74,981). For the company - for tax and accruals of GBP31,922 (2017: GBP10,744).

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 2018 was GBP62,768 (2017: GBP24,371).

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.

   32.         Notes to statement of cash flows 
   a)             Analysis of net funds 
 
                              At 1 January               At 31 December 
                                  2018       Cash Flow        2018 
                                   GBP          GBP            GBP 
 Group 
 Cash and cash equivalents         129,611     405,718          535,329 
 Borrowings                        (2,000)       2,000                - 
 Net funds                         127,611     407,718          535,329 
                             =============  ==========  =============== 
 
 Company 
 Cash and cash equivalents          81,459     332,197          413,656 
 Net funds                          81,459     332,197          413,636 
                             =============  ==========  =============== 
 

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

 
 
                                              Group   Company 
                                               GBP      GBP 
 Increase in cash and cash equivalents 
  in the year                               405,718   332,197 
 Cash outflow on borrowings repaid in 
  the year                                    2,000         - 
 
 Movement in net funds                      407,718   332,197 
                                           ========  ======== 
 

(c) Statement of cash flows from discontinued activities

 
                                                    2018       2017 
                                                    GBP        GBP 
 Cash flow from discontinued activities 
 Profit/(loss) before tax                                -     53,567 
 
 Adjustments for: 
 Gain on disposal of trade                               -   (82,600) 
 Movements in working capital 
 Increase in debtors                                     -      (914) 
 Decrease/(Increase) in creditors                   13,865   (42,084) 
 Cash generated/absorbed from operations            13,865   (72,031) 
                                                 ---------  --------- 
 
 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) 
 Net cash used in financing activities                        (2,000) 
                                                 ---------  --------- 
 
   Net cash increase in cash and cash 
   equivalents                                      13,865      8,569 
 Cash and cash equivalents at the beginning 
  of the year                                     (13,865)   (22,434) 
 Cash and cash equivalents at the end 
  of the year                                            -   (13,865) 
                                                 =========  ========= 
 

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 FRMFTMBMTBTL

(END) Dow Jones Newswires

June 28, 2019 02:00 ET (06:00 GMT)



Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.