TIDMAQX
RNS Number : 7992J
Aquis Exchange PLC
16 April 2020
16 April 2020
Aquis Exchange PLC
("Aquis", the "Company" or the "Group")
Final results for the year ended 31 December 2019
Aquis Exchange PLC (AQX.L), the exchange services group, is
pleased to announce its audited results for the year ended 31
December 2019.
Highlights:
-- Revenue increased 73% to GBP6.9m (2018: GBP4.0m)
-- Adjusted EBITDA loss of GBP0.2m(1) (2018: GBP2.1m loss(2)
)
-- Loss after tax decreased 77% to GBP0.8m (2018: GBP3.4m loss)
-- Cash and cash equivalents at 31 December 2019 of GBP11.0 m
(31 December 2018: GBP11.6m)
-- Market share of pan-European continuous trading increased
to 4.62% during 4Q19 (2018: 3.8%)
-- Market at Close (MaC) order type gained significant traction:
the market share of total pan-European closing auctions rose
from 0.36% in August to 3.52% in December
-- Aquis was the first MTF to achieve dual-trading status in
European equities, in preparation for Brexit
Post period highlights
-- Completed the milestone acquisition of NEX Exchange (now "Aquis
Stock Exchange" or "AQSE"), marking entry into Primary Listings
-- Completed the listing of the first business onto Aquis Stock
Exchange under new ownership, heavily oversubscribed and with
significant institutional support shown
-- Trading continued to be in line with market expectations
-- COVID-19:
* Aquis' technology systems are dealing efficiently
with higher market volumes
* The exchange is being run remotely
* The longer term economic impact remains difficult to
predict
(1) Includes the application of the new accounting standard IFRS
16: Leases
(2) Not adjusted for the new accounting standard IFRS 16:
Leases
Alasdair Haynes, Chief Executive Officer of Aquis,
commented:
"Against a challenging market backdrop, Aquis delivered
substantial operational and financial progress during 2019. It is
very pleasing to see our adjusted EBITDA figure reaching near
break-even, as revenues continue to grow across all business
divisions and the MaC leads the field among closing auction
alternatives in the market.
"Last month we were delighted to complete our acquisition of NEX
Exchange, now renamed the Aquis Stock Exchange, and to list our
first company on to it a few weeks later. Developing this market
into a future-facing, disruptive home for quality growth businesses
will be a key focus for us during the year ahead.
"Notwithstanding the impact of the COVID-19 pandemic, our aim is
to take the Group to the next level of operational, financial and
strategic success in 2020. We look forward to continuing to build
value for all our stakeholders."
This announcement contains inside information for the purposes
of EU Regulation 596/2014.
Enquiries:
Aquis Exchange PLC Tel: +44 (0)20 3597
6321
Alasdair Haynes, CEO
Jonathan Clelland, CFO and COO
Belinda Keheyan, Head of Marketing Tel: +44 (0)20 3597
6329
Liberum Capital Limited (Nominated Adviser Tel: +44 (0)20 3100
and Broker) 2000
Clayton Bush
Chris Clarke
Edward Thomas
Kane Collings
Alma PR (Financial PR Adviser) Tel: +44 (0)20 3405
0205
Caroline Forde aquis@almapr.co.uk
Susie Hudson
Rebecca Sanders-Hewett
Notes to editors:
Aquis Exchange PLC is an exchange services group, which operates
pan-European cash equities trading businesses (Aquis Exchange),
growth and regulated primary markets (Aquis Stock Exchange/AQSE)
and develops/licenses exchange software to third parties (Aquis
Technologies).
Aquis Exchange is authorised and regulated by the UK Financial
Conduct Authority and France's Autorité des Marchés Financiers to
operate Multilateral Trading Facility businesses in the UK and in
EU27 respectively. Aquis operates a lit order book and does not
allow aggressive non-client proprietary trading, which has resulted
in lower toxicity and signalling risk on Aquis than other trading
venues in Europe. According to independent studies, trades on Aquis
are less likely to lead to price movement than on other lit
markets. Aquis uses a subscription pricing model which works by
charging users according to the message traffic they generate,
rather than a percentage of the value of each stock that they
trade.
Aquis Stock Exchange (AQSE) is a stock market providing primary
and secondary markets for equity and debt products. It is
authorised as a Recognised Investment Exchange, which allows it to
operate a regulated listings venue.
Aquis Technologies is the software and technology division of
Aquis Exchange PLC. It creates and licenses cutting-edge,
cost-effective matching engine and trade surveillance technology
for banks, brokers, investment firms and exchanges.
Aquis Exchange PLC (AQX.L) is listed on the Alternative
Investment Market of the LSE (AIM) market. For more information,
please go to www.aquis.eu
Chairman's Statement
Overview
2019 was Aquis Exchange PLC's ("Aquis" or the "Company") first
full year as a listed company on the AIM market and our raised
market profile has assisted the growth that Aquis achieved during
the year. Despite market-wide uncertainties and reduced equity
volumes, Aquis delivered a significant increase in its market share
of the pan-European equity market to 4.62% of the overall
pan-European market of continuous trading during 4Q19. In addition,
Aquis' world-class exchange trading and surveillance technology
continued to garner interest across multiple asset classes.
2019 also saw the announcement of the proposed acquisition of
NEX Exchange Limited, now branded as Aquis Stock Exchange ("AQSE"),
which was approved by the Financial Conduct Authority ("FCA") and
completed in March 2020. The acquisition adds a new dimension to
Aquis whilst being in line with its overall strategy to be a
disruptor in the exchange world and to build a leading technology
driven exchange business.
Board and Governance
The Board continued to evolve during the year. Glenn Collinson
was appointed at the start of 2019. Glenn's background as an
engineer and his years of developing and marketing technology
products, as well as his listed company experience have already
been invaluable to the business. David Vaillant joined as
Non-Executive Chairman of Aquis' new French subsidiary. David
brings corporate and institutional banking skills to the Aquis
Group, as well as a sound knowledge of French financial markets and
regulations. In this Annual Report the "Group" shall include Aquis
and Aquis Exchange Europe SAS while the "broader Group" shall also
include NEX Exchange.
The Board decided to retain the services after the acquisition
of AQSE of Michael Berkeley, previously a Non-Executive Director of
NEX Exchange Ltd, to ensure that legacy AQSE governance and
knowledge is maintained and to provide continuity. Michael Berkeley
has been appointed Chairman of AQSE and will meet with the Aquis
Board as appropriate to ensure effective communication is
maintained between the boards. Upon completion of the acquisition,
Glenn Collinson stepped down from the Aquis Exchange PLC Board to
become a Non-Executive Director of AQSE. Mark Goodliffe has also
joined the Board of AQSE and continues as a NED on the Aquis
Board.
The Board remains committed to high standards of corporate and
regulatory governance. Up until November 2019, all Aquis Board
members and senior managers were approved by the FCA. This year saw
preparation for the end of the approved persons regime and the
introduction of the Senior Management and Certification Regime
("SM&CR") by the FCA which became effective from December 2019.
This has increased the accountability of the senior managers, as
well as certain members of the Aquis Board and ensured that
individuals have clearly prescribed responsibilities which are now
assigned to them. All Board members are aware of their additional
responsibilities under both UK and European regulations and
guidelines with regards to the oversight of financial market
infrastructures.
Culture and Stakeholder Engagement
Aquis remains driven by its visionary, founder-led management
team who are committed to maintaining its strong corporate culture.
The Aquis Board determined how best to engage with stakeholders in
2019 to further embed the culture and ascertain stakeholder
feedback. It decided to place particular focus on employees and
shareholders during the year.
I, as the Chair, was appointed as the representative of the
Board to liaise with employees. I met with the majority of
employees of the firm, either one on one or in small groups of 3 or
4 during the year. These groups were open two-way discussions and
were an opportunity for employees to express their views directly
to a member of the Board. The firm's whistleblowing policy, an
important part of the new SM&CR regime was also explained to
employees during each discussion.
The firm also undertook its first employee engagement survey.
The overall survey feedback was very positive, setting a solid
foundation for future years and has provided useful information to
support the Board's responsibility to establish and maintain a
collaborative, inclusive and quality-driven culture at Aquis, and
identified some areas for improvement.
The Board also set a target for a sub-set of Board members to
meet the majority of shareholders during the course of the year.
Given the relatively small number of shareholders of Aquis, I as
the Chair, accompanied by either the Senior Independent Director,
Richard Bennett or Glenn Collinson, met with every shareholder with
a holding of more than 2% during the year, as well as with a
selection of smaller shareholders.
As Aquis grows and pushes forward with its disruptive agenda
against a backdrop of increasing regulation and a new presence in
continental Europe, it needs to invest in attracting and
maintaining high quality, experienced, innovative and positive
individuals who can support the Group's evolution and promote its
cultural values. The acquisition of AQSE means a number of new
staff members joined the Aquis team in March of 2020 and we look
forward to integrating them into the organisation. Equally, current
and new staff took on responsibilities for the French entity and
have worked hard to get the French office ready for Brexit.
Corporate Sustainability
The Board recognises its broader responsibility to create
sustainable growth and we are making progress in integrating
sustainability and diversity objectives into our strategic plan and
our cultural thinking. Some detail of these objectives and how we
plan to work towards them are available in this annual report. We
will continue to monitor and give updates on our progress.
Our focus for the year ahead
The Board continues to be focused on ensuring the business
delivers on its strategy, managing risks, building sustainability
and developing an appropriate framework for growth. However, Brexit
and the COVID-19 pandemic continue to bring uncertainty to the
entire market.
The business remains well prepared for Brexit with regulatory
approvals and an established presence in France, which should allow
uninterrupted service regardless of the impact of Brexit.
As a technology Group, Aquis has already embraced flexible
working practices and, with our financial market responsibilities,
we had well established remote working policies and disaster
recovery plans. These have now been put into practice as a result
of COVID-19 and the market is successfully operating remotely in a
time of extreme market volatility.
Our first priority is the well-being of our staff who have, to
date, coped admirably in a completely remote environment. The Board
does not underestimate the fact that this may need to be sustained
for a prolonged period of time but communication from top to bottom
of the organisation is facilitated by the fact that the Aquis Group
is a small organisation.
Nonetheless, we remain committed to our long-term goal of
improving the quality of trading experiences whilst maintaining
transparency for the benefit of the end investor. The recently
enforced changes in working practices for all of our stakeholders
may bring permanent changes that will need to be managed carefully
and could result in both threats and opportunities in trading and
issuer services.
Aquis has always been a disruptor and maintaining flexibility
around strategy therefore remains very important as we look to the
future. The firm is in close contact with its customers and
suppliers. This is initially to ensure business continuity and
stability but on a more forward-looking basis to be alert to
changes that Aquis can respond to at a more strategic level.
On behalf of the Board and all shareholders, I would like to
thank all staff for their hard work during the year and
particularly for their resilience and adaptability during the
recent weeks of COVID 19 work practice restrictions and
extraordinary market turmoil.
Niki Beattie
Non-Executive Chairman
Chief Executive's Report
Despite turbulent economic conditions, 2019 has been a period of
excellent progress and we achieved 4.6% market share of the
pan-European market of continuous trading during 4Q19, and ended
the year reporting a 73% growth in revenue to GBP6.9 million.
Alongside this progress, we achieved a key milestone for the
business when we announced the strategic acquisition of NEX
Exchange Limited now branded as Aquis Stock Exchange ("AQSE").
Our strong revenue growth was driven primarily by rising
subscription fees as a result of higher trading levels and an
increase in the number of members, supplemented by growth from the
technology and data divisions. Our success continues to be driven
by the compelling nature of our subscription model and the strength
of our industry-leading exchange software platform. We offer a
faster and more reliable trading venue to both liquidity providers
and market participants, and the benefits are clearly now flowing
through into improved financial results.
The 77% decrease in loss after tax, from a GBP3.4 million loss
in 2018 to GBP862k in 2019, is a significant step towards achieving
overall profitability.
Aquis Exchange
Over the period, our multilateral trading facility ("MTF")
platform delivered significant growth despite challenging economic
and regulatory conditions. The number of trading members grew from
27 to 30 and a number of members increased their activity levels,
leading exchange revenue to increase 71% to GBP5.3m.
Market share of pan-European continuous trading rose from 3.8%
to 4.6% over the period and from 2.6% at the time of the IPO in
June 2018. Our Market at Close ("MaC") order type, launched in
August 2019, made a significant contribution to trading volumes on
the platform. As MaC allows members to enter orders for matching on
the Aquis platform at the closing price of the market, we now
operate across a larger cross-section of all available trading. We
have therefore expanded the basis of the measure of our market
share to include dark pool and closing auction volumes along with
the lit book trading. The market share results referred to above
now incorporate these market activities and the Aquis MaC
volumes.
The Group currently offers clients the ability to trade in
excess of 1,500 stocks and ETFs across 14 European Markets. During
the year the loss of Swiss Equivalence required Aquis to cease
trading Swiss stocks; however, this reduction was partially offset
by the addition of Irish stocks. The significant available
liquidity, approximately 20% of total pan-European equity
liquidity, increased from 15% in 2018 and should underpin future
market share growth.
In March 2019, the Company established a French subsidiary with
full regulatory approval to operate an MTF covering the European
Union. Despite the uncertain political situation in the UK
throughout much of 2019, the Group completed its Brexit plans on
schedule and is now able, both during the transition period and
thereafter, to maintain uninterrupted service.
Two headwinds were faced in the period: the loss of Swiss
Equivalence caused a reduction in our overall market share, and we
saw reduced monthly message traffic from an overall market slowdown
due to political uncertainty. The fact we have delivered such
strong growth despite these developments demonstrates the highly
competitive nature of our exchange business.
Aquis Technologies
In addition to the exchange business, Aquis licenses its leading
exchange related technology to a variety of international financial
services clients across different asset classes. Revenue from
technology licensing in 2019 grew 72% to GBP1.3 million, reflecting
the growing demand for our high-calibre, in-house technology.
Aquis Technologies continues to develop its technology platforms
to support growth across different asset classes
internationally.
Aquis Market Data
Data revenues increased 135% in 2019 to reach GBP340k Market
data is a significant revenue generator for the national exchanges,
and we expect that this revenue stream will become increasingly
significant to Aquis over time.
The Group is continually monitoring European Commission plans
and market demand to introduce a consolidated tape service for the
industry. It is well placed to understand and grow into any such
market developments.
Primary Markets: Aquis Stock Exchange
In July 2019, we announced our plans to acquire 100% of the
share capital of NEX Exchange Limited from CME Group Inc. for the
nominal amount of GBP1 plus the current working capital held by NEX
Exchange Limited, the majority of which comprised regulatory cash
and which amounted to GBP2.87m at the transaction date. T he
Company received approval for the deal from the FCA in March
2020.
The acquired company, rebranded as Aquis Stock Exchange, had 90
companies quoted on its two markets, with a total market
capitalisation of almost GBP2bn as of 11 March 2020. It works with
49 registered brokers and 8 market makers. As previously announced,
we have now entered a consultation period with industry
participants in order to assess opportunities to enhance the market
functionality. For the year ended 31 March 2019, NEX Exchange
Limited delivered revenues of GBP1.5 million and a loss before tax
of GBP2.1 million.
The acquisition has provided us with the ability to operate a
Recognised Investment Exchange (RIE) giving our business the same
status as the large national exchanges in Europe, and providing
further resilience in the face of possible regulatory
headwinds.
Underpinned by the Group's proven technology and a track record
of transparency and innovation, I am confident that we have the
ability to build Aquis Stock Exchange into a competitive and
disruptive primary marketplace, particularly as MiFID II continues
to put the traditional business model of established exchanges
under pressure. I believe that we have a unique opportunity to
build a pan-European, technology-driven, listing exchange for
growth companies, whilst simultaneously positioning ourselves to be
able to overcome several issues faced by small and mid-cap market
participants today.
Further Investment in Research and Development (R&D)
The Group continues to invest in R&D in order to maintain
and enhance the quality of its technology and its ability to be
able to deliver new products and platform enhancements to its
clients. Our proven trading platform has been developed in-house
and is based on proprietary technology which does not rely on third
party software suppliers. I believe this gives us a significant
competitive advantage on functionality, price and ability to
deliver. Aquis' nimble R&D organisation ensures expeditious
product development and, together with Aquis' further investment
into its sales organisation, will allow the Group to react quickly
to dynamic market conditions. We intend to continue to work on
further developments which will foster future growth.
Outlook
There is currently significant macro-economic uncertainty given
the COVID-19 outbreak, however I believe that our strong team and
technology platform should enable us to overcome the challenges
created by the pandemic. Our technology systems are currently
dealing efficiently with the higher market volumes caused by
increased volatility in trading and are effectively operating
remotely. Although the longer-term economic impact is harder now to
predict, such that it is difficult to forecast the effect on the
broader Group for the time being, I remain confident in our unique
proposition and ready to take the broader Group to the next level
of operational, financial and strategic success.
As announced on the 19(th) of December 2019, investment in
Aquis' R&D and sales organisations is intended to be increased
by around GBP1m per annum from 2020 to lay the foundations for
further growth and value creation for shareholders. These
investments should support the aim of broadening and improving our
market position through innovation and excellence. We will continue
to promote the Aquis values of transparency, fairness and
simplicity, enabling our end customers to get better performance
and results.
In addition to tackling the issues of small and mid-cap trading,
our aim in the future will be to deliver robust and sustainable
returns for the benefit of shareholders and all our other
stakeholders in the medium and long term. Despite the unprecedented
situation which we, together with the whole world, now face, our
highly capable and experienced management team remains focused on
serving our clients as we grasp the opportunities ahead and, in
particular, on delivering our shared goals, and our vision for
transformation of primary markets for small and mid-cap stocks.
Alasdair Haynes
Chief Executive
Strategic Report
Overview of the business
Aquis Exchange plc ("Aquis" or "the Company") is a founder-led,
pan-European MTF operator that also provides exchange and
regulatory technology to third parties. In March 2020 it acquired
NEX Exchange Limited ("NEX Exchange"), a Recognised Investment
Exchange ("RIE").
The Company is regulated by the UK Financial Conduct Authority
with a French subsidiary, Aquis Exchange Europe SAS, an investment
firm, that received regulatory approval to operate as an MTF from
the Autorité de Contrôle Prudentiel et de Resolution (ACPR),
effective in March 2019.
The Company was founded in 2012 with the vision to become the
leading technology driven exchange services group and to introduce
competition and innovation to the securities trading market. With
these guiding principles the Group's main focus is to:
-- Capitalise on regulatory and technical shifts in market
infrastructure by providing an exchange which offers deeper
liquidity and transparent, higher quality execution for
intermediaries and investors;
-- Continue to increase the number of members and associated
trading volumes by providing a robust and innovative platform that
responds to their needs;
-- License its proven technology platform to third parties that
require trading or market surveillance technology; and
-- Positively address the current issues in small and mid-cap
trading through the RIE status obtained in March 2020.
Aquis' trading platform is a cash equities trading venue with a
unique subscription-based pricing model based on electronic
messaging traffic and a non-aggressive trading model. This means
that certain types of trading behaviour are not allowed and it
encourages more passive trades to rest in its order book. This
creates greater depth of liquidity and less potential for
information leakage or "toxicity" in the market. The principal
competitors to the trading business are the national exchanges and
other pan-European MTFs / RIEs which charge customers on a per
transaction model and allow fully aggressive trading. Since the
Company commenced trading it has consistently increased its market
share which has grown to reach an average of 4.62% of the overall
pan-European market of continuous trading during 4Q19. The business
is well positioned to benefit from regulatory changes which support
transparent, low toxicity growth on "lit" markets. The regulatory
trends and institutional support for greater transparency in
European equities trading also support future business growth.
The client base of the trading platform consists, principally,
of investment banks and brokers acting on behalf of institutions
such as pension funds and asset managers. The Group's members are
able to trade European securities on a 'lit' market. This means
that the dealing price prior to the trade is transparent to the
whole market. This is in contrast to pricing on dark and grey
markets, where price discovery is only available to the market
post-trade.
Aquis' matching engine and surveillance technology has been
operating successfully for a number of years. It has been developed
for multi-asset class trading and is attracting customers wishing
to license the technology as the trading engine for a broad range
of instruments. The Company's principal technology customers are
new equity exchanges where the market is opening up to competition
as well as crypto currency exchanges, MTF operators across asset
classes and market participants requiring real time market
surveillance. Competitors of the licensing business are other
matching engine providers and surveillance software providers.
Independent studies have verified that Aquis's non-aggressive
trading model has materially lower toxicity than its competitors,
which reduces adverse price movements thereby lowering the implicit
costs of trading for the end investor. This is a significant
positive differentiating factor and underpins our continued growth
potential. We are a strong supporter of the regulatory principles
such as greater transparency for markets that have been introduced
and we are committed to complying with market regulation. We
believe we are well placed to benefit from the anticipated
additional regulation given our robust and agile business model,
our lean cost structure and our technology leadership.
The Board have established clear financial and non-financial
KPIs for senior Executives for the broader Group. The KPIs are
revenue, EBITDA, market share of the exchange platform, quality of
technology and its sustainability and compliance with regulations
and corporate governance.
Financial Review
Growth has been steady across all revenue streams during 2019.
An analysis of revenue is as follows:
Group
-----------------------------------
2019 2018 YoY Growth
GBP GBP %
------------------------------ ---------- ---------- -----------
Revenue analysed by class of
business
Subscription fees 5,285,000 3,100,839 70%
Licence fees 1,269,362 737,530 72%
Data vendor fees 337,632 143,541 135%
6,891,994 3,981,910 73%
------------------------------ ---------- ---------- -----------
The loss before interest, tax, depreciation and amortisation
('EBITDA' loss) for the year decreased 90% to GBP199k compared to a
GBP2.1 million loss in the previous year. The decrease in EBITDA
losses for the 2019 financial year is primarily attributable to
increased exchange revenue as members' subscriptions have risen as
a result of increased trading levels, as well as increased revenue
from new technology licensing contracts that were signed and/or
renewed during the year. The reduction in losses is illustrative of
the significant increases in revenue experienced for a
proportionately smaller increase in costs.
The trade receivables resulting from revenue from licensing
technology contracts attract an IFRS 9 expected credit loss
(impairment) provision on the trade receivables arising from
contract assets. The application of IFRS 9 has resulted in an
expected credit loss reversal during the year of GBP243k (2018:
GBP424k reversal).
The loss before taxation for the 2019 financial year decreased
by 70% to GBP1.1 million compared with a loss of GBP3.7 million in
2018. The loss before taxation is after applying amortisation
charges to internally generated intangible assets, as well as
depreciation and finance charges which reflect the effect of
adopting IFRS 16: Leases for the first time in 2019. The new
standard prescribes a different treatment for operating leases,
whereby companies recognise a lease liability and corresponding
right of use asset on the Statement of Financial Position, as
opposed to a rent expense charge in the Statement of Comprehensive
Income. The lease liability is amortised over the life of the
lease, attracting a finance expense charge amounting to GBP41k for
2019, whereas the right of use asset is depreciated on a
straight-line basis over the life of the lease, attracting a
depreciation charge of GBP173k for 2019. As permitted under the
standard, comparatives for previous years have not been
restated.
The Group believes that the overall 77% decrease in loss after
tax to GBP862k compared to a GBP3.4 million loss after tax in 2018
is a significant step towards achieving overall profitability.
In June 2018, the Company listed on the AIM market of the London
Stock Exchange. The costs incurred for Listing were included as
exceptional costs for the year ended 31 December 2018. There were
no exceptional costs for the year ended 31 December 2019.
The Group's cash and cash equivalents as at 31 December 2019
were GBP11.0 million (2018: GBP11.6 million).
Group investments, productivity and capital management
The Group has continued to invest in its technology offering
throughout the year. This has included the creation and enhancement
of new order types, enhancements to the surveillance system and
auction systems, as well as technological development to enable the
move into different asset classes. In addition, the Group has made
further investment in personnel resources and increased its
marketing budget as it continues to develop capability and brand
awareness.
The broader Group meets the FCA and ACPR capital adequacy
requirements and intends to invest appropriately to be able to
continue to grow and enhance its business operations.
The Board considers that the investments in personnel have
contributed to the Group's ability to gain new clients, broaden its
customer base and increase revenue. The Board recognises the
importance of continuing to enhance productivity, and the
commitment to future investment, both technically and in terms of
resource training and development. The Group is in the process of
establishing both short- and long-term incentive plans based on
performance for all employees, which are set out in more detail in
the N&RC Report, and which the Board believes align the
employees' interests with the long-term strategic objectives of the
Group.
The Company is required to maintain sufficient capital to meet
its regulatory obligations. These are calculated and updated
annually. At 31 December 2019 the ICAAP requirement amounted to
GBP2.6m (2018: GBP1.8m).
In deciding its investment plans, Group management receive a
detailed analysis of the exchange and client technical
opportunities and related time requirements on a quarterly basis,
and then determine the personnel and other resources that it wishes
to allocate to these opportunities. This information also includes
an estimate of the deployment cost.
Future development of the business
In order to support its long-term vision and in order to
strategically position for continued growth, Aquis has invested
significantly in its business differentiators, the technology
platform, brand and personnel resources. The Group is cognisant of
the importance of such investments to maintain innovation and
strong quality delivery.
G ROUP FINANCIAL STATEMENTS
Consolidated and Company Statement of Comprehensive Income
For the year ended 31
December
2019 Group Company
--------------------------------- ----------------------------------------
2019 2018 2019 2018
Notes GBP GBP GBP GBP
Income Statement
------------------------- ------ ------------ ------------------- ------------------- -------------------
Revenue 10 6,891,994 3,981,910 6,627,994 3,981,910
Impairment credit 11,20 242,585 424,194 242,585 424,194
Administrative expenses 12 (7,333,950) (6,477,652) (7,003,574) (6,477,652)
Operating loss (199,371) (2,071,548) (132,995) (2,071,548)
Investment income 13 41,699 30,139 36,303 30,139
Depreciation and
amortisation 12 (928,191) (611,494) (928,191) (611,494)
Net finance costs 12 (41,115) - (41,115) -
Exceptional costs 14 - (1,011,853) - (1,011,853)
Loss before taxation (1,126,978) (3,664,756) (1,065,998) (3,664,756)
Income tax credit/
(expense) 15 265,254 247,389 265,254 247,389
Loss for the year (861,724) (3,417,367) (800,744) (3,417,367)
------------------------- ------ ------------ ------------------- ------------------- -------------------
Other comprehensive
income
------------------------- ------ ------------ ------------------- ------------------- -------------------
Foreign exchange
differences
on translation of
foreign
operations, net of tax 19,27 1,439 - - -
Other comprehensive loss
for the year 1,439 - - -
Total comprehensive loss
for the year (860,285) (3,417,367) (800,744) (3,417,367)
========================= ====== ============ =================== =================== ===================
Earnings per share
(pence)
Basic
Ordinary shares 16 (3) (20) (3) (20)
Diluted
Ordinary shares 16 (3) (20) (3) (20)
The Statement of Comprehensive Income has been prepared on the
basis that all operations are continuing operations.
Consolidated and Company Statement of Financial Position
As at 31 December
2019 Group Company
--------------------------------------------- ---------------------------------------------
2019 2018 2019 2018
Notes GBP GBP GBP GBP
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Assets
Non-current assets
Intangible assets 17 753,230 637,539 753,230 637,539
Property, plant
and equipment 18 2,013,823 541,933 2,013,823 541,933
Investment in
subsidiaries 19 - - 2,437,766 9,020
Trade and other
receivables 20,23 966,922 841,288 966,922 841,288
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
3,733,975 2,020,760 6,171,741 2,029,780
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Current assets
Trade and other
receivables 20,23 1,654,030 1,822,690 1,645,179 1,822,690
Cash and cash
equivalents 21 11,010,861 11,618,921 8,609,739 11,609,901
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
12,664,891 13,441,611 10,254,918 13,432,591
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Total assets 16,398,866 15,462,371 16,426,659 15,462,371
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Liabilities
Current liabilities
Trade and other
payables 22,23 1,499,574 892,364 1,467,826 892,364
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
1,499,574 892,364 1,467,826 892,364
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Net current assets 11,165,317 12,549,247 8,787,092 12,540,227
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Non-current
liabilities
Lease liabilities 2,23 1,189,694 - 1,189,694 -
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
1,189,694 - 1,189,694 -
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Total liabilities 2,689,268 892,364 2,657,520 892,364
---------------------- ------ ------------------------- ------------------ ------------------------- ------------------
Net assets 13,709,598 14,570,007 13,769,139 14,570,007
====================== ====== ========================= ================== ========================= ==================
Equity
Called up share
capital 24 2,714,956 2,714,956 2,714,956 2,714,956
Share premium
account 25 10,839,981 10,839,981 10,839,981 10,839,981
Other reserves 26 212,691 92,446 212,691 92,446
Retained earnings/
(accumulated losses) (59,469) 922,624 1,511 922,624
Foreign currency
translation reserve 27 1,439 - - -
Total equity 13,709,598 14,570,007 13,769,139 14,570,007
====================== ====== ========================= ================== ========================= ==================
Statements of Changes in Equity
For the year
ended 31
December 2019
Group Notes Share Share Other Retained Foreign Currency Total
Capital premium reserves earnings/ Translation
(Accumulated Reserve
loss)
------ ------------------------ ----------------------------- ---------------------------- --------------------- -------------------------------------- -------------------
GBP GBP GBP GBP GBP GBP
---------------- ------ ------------------------ ----------------------------- ---------------------------- --------------------- -------------------------------------- -------------------
Balance at 1
January
2018 17 23,517,321 - (16,908,527) - 6,608,811
Loss and total
comprehensive
loss for the
year - - - (3,417,367) - (3,417,367)
Issue of share
capital 446,097 10,840,020 - - - 11,286,117
Elimination of
share
premium
account 2,268,842 (23,517,360) - 21,248,518 - -
Recognition of
share
option reserve 26 - - 92,446 - - 92,446
Balance at 31
December
2018 (as
previously
presented) 2,714,956 10,839,981 92,446 922,624 - 14,570,007
Impact of
adopting new
accounting
standards 2 - - - (120,369) - (120,369)
Balance at 1
January
2019
(restated) 2,714,956 10,839,981 92,446 802,255 - 14,449,638
Loss for the
year - - - (861,724) - (861,724)
Foreign
exchange
differences
on translation
of foreign
operations 27 - - - - 1,439 1,439
Movement in
share option
reserve 26 - - 120,245 - - 120,245
Balance at 31
December
2019 2,714,956 10,839,981 212,691 (59,469) 1,439 13,709,598
================ ====== ======================== ============================= ============================ ===================== ====================================== ===================
For the year
ended 31
December 2019
Company Notes Share Share Other Retained Foreign Currency Total
Capital premium reserves earnings/ Translation
(Accumulated Reserve
Losses)
------ ------------------------ ----------------------------- ---------------------------- --------------------- -------------------------------------- --------------
GBP GBP GBP GBP GBP GBP
---------------- ------ ------------------------ ----------------------------- ---------------------------- --------------------- -------------------------------------- --------------
Balance at 1
January
2018 17 23,517,321 - (16,908,527) - 6,608,811
Loss and total
comprehensive
loss for the
year - - - (3,417,367) - (3,417,367)
Issue of share
capital 24 446,097 10,840,020 - - - 11,286,117
Elimination of
share
premium
account 25 2,268,842 (23,517,360) - 21,248,518 - -
Recognition of
share
option reserve 26 - - 92,446 - - 92,446
Balance at 31
December
2018 (as
previously
presented) 2,714,956 10,839,981 92,446 922,624 - 14,570,007
Impact of
adopting new
accounting
standards 2 - - - (120,369) - (120,369)
Balance at 1
January
2019
(restated) 2,714,956 10,839,981 92,446 802,255 - 14,449,638
Loss for the
year - - - (800,744) - (800,744)
Foreign - - - -
exchange 27 - -
differences
on translation
of foreign
operations
Movement in
share option
reserve 26 - - 120,245 - - 120,245
Balance at 31
December
2019 2,714,956 10,839,981 212,691 1,511 13,769,139
================ ====== ======================== ============================= ============================ ===================== ====================================== ==============
Statement of Cash Flows
For the year ended Group Company
31 December 2019
---------------------------------------- ----------------------------------------
2019 2018 2019 2018
Notes GBP GBP GBP GBP
--------------------- ------ ------------------- ------------------- ------------------- -------------------
Cash flows from
operating
activities
Cash generated by
operations 28 385,606 (4,021,908) 438,105 (4,021,908)
Tax refunded 15 265,254 469,604 265,254 469,604
Finance expense on
lease liabilities 2,23 (47,653) - (47,653) -
Net cash inflow from
operating activities 603,207 (3,552,304) 655,706 (3,552,304)
---------------------- ------ ------------------- ------------------- ------------------- -------------------
Investing activities
Recognition of
intangible
assets 17 (562,271) (422,522) (562,271) (422,522)
Purchase of property,
plant and equipment 18 (509,342) (421,934) (509,342) (421,934)
Investment in
subsidiaries 19 - - (2,437,766) (9,020)
Interest received 13 41,699 30,139 36,303 30,139
Net cash used in
investing
activities (1,029,914) (814,317) (3,473,076) (823,337)
---------------------- ------ ------------------- ------------------- ------------------- -------------------
Financing activities
Proceeds from share
issue 25 - 12,000,001 - 12,000,001
Principal portion
of lease liability 2,23 (182,792) - (182,792) -
Net cash generated
from/ (used in)
financing
activities (182,792) 12,000,001 (182,792) 12,000,001
---------------------- ------ ------------------- ------------------- ------------------- -------------------
Net
increase/(decrease)
in cash and cash
equivalents (609,499) 7,633,380 (3,000,162) 7,624,360
Cash and cash
equivalents
at the beginning of
the year 21 11,618,921 3,985,541 11,609,901 3,985,541
Effect of exchange
rate changes on cash
and cash equivalents 27 1,439 - - -
Cash and cash
equivalents
at the end of the
year 21 11,010,861 11,618,921 8,609,739 11,609,901
---------------------- ------ ------------------- ------------------- ------------------- -------------------
Notes to the Financial Statements
1 Basis of preparation and accounting policies
Company information
Aquis Exchange PLC is a public limited company which is
incorporated and domiciled in the United Kingdom. Its registered
office is located at Palladium House, 1-4 Argyll Street, London,
W1F 7LD.
Accounting convention
The Group's consolidated and the Company's financial statements
are prepared in accordance with International Financial Reporting
Standards ("IFRS") and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) as adopted for use in the
European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical
cost basis.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
Going concern
At the time of approving the financial statements, and
notwithstanding the economic uncertainties caused by COVID-19, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and thus continue to adopt the going concern basis of
accounting in preparing the financial statements.
Whilst the Group has made a loss in the year, and after
accounting for the acquisition of NEX Exchange Limited, the
consolidation of the acquired losses and future diminishing losses
of the acquired entity for the foreseeable future, there are
substantial cash reserves, and a positive balance sheet, due to
high levels of investment within the Group. Additionally, the
Directors are confident that the Group will begin to generate
profits in the coming years. There has been a growth in revenue of
73% between the current year and comparative year. Additional
revenue growth is projected for 2020, with profits forecasted for
future years.
Taking the above into account in light of the Group's current
position and principal risks as discussed in the Strategic Report
section of this annual report, the directors have assessed the
prospects of the Group for the foreseeable future and there is no
material uncertainty as to the Group's ability to continue to adopt
the going concern basis of accounting in preparing the financial
statements over a period of at least 12 months from the date of
approval of these financial statements.
Consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiary companies with all
inter-company balances and transactions eliminated. The attribution
to non-controlling interests has not been presented since all
subsidiaries are 100% held.
There were no discontinued operations in any of the periods
presented.
Investments in subsidiary companies' shares, loans and other
contributions are recognised at cost. These are reviewed for
impairment when events indicate that the carrying amount may not be
recoverable and are accounted for in the Company's financial
statements at cost less accumulated impairment losses.
The results of Aquis Exchange Europe SAS have been consolidated
in the group financial statements for the year ended 31 December
2019.
Fair value of financial assets and liabilities measured at
amortised cost
The Directors believe that the carrying amount of financial
assets and financial liabilities measured at amortised cost in the
financial statements approximate their fair value, except for
technology licensing contract assets which are stated net of any
expected credit loss provision in accordance with IFRS 9 as
detailed in Notes 11 and 20.
The Group does not hold any financial assets at fair value
through profit or loss.
Accounting policies
Revenue
Turnover represents amounts receivable for subscription fees and
fees receivable for the licensing of software net of value added
tax.
All revenue is generated by contracts with customers and is
therefore recognised in accordance with IFRS 15.
Revenue for exchange subscription services is recognised in the
accounting year in which the services are rendered, by reference to
the ongoing contractual obligation to provide subscription-based
services.
Revenue from licensing contracts is assessed for each contract
and split into three performance obligations:
-- Project fees and maintenance fees which are recognised over
time as the obligations are met; and
-- Licensing fees which are considered a "right to use" licence
under IFRS 15 and are therefore recognised at a point in time when
control of the licence passes to the customer.
Intangible assets other than goodwill
Internally developed intangible assets arising from the
capitalisation of Research and Development expenditures are
recognised in the financial statements when all of the following
criteria are met:
-- The technical feasibility of completing the intangible asset
so that it will be available for use or sale is established;
-- There is an intention to complete the intangible asset and use or sell it;
-- The Group has the ability to use or sell the intangible asset;
-- The existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset can be
demonstrated;
-- Adequate technical, financial and other resources are
available to complete the development and to use or sell the
intangible asset; and
-- The Group has the ability to measure reliably the expenditure
attributable to the intangible asset during its development.
Where the above criteria are not met, costs incurred in research
and development are recognised in the Statement of Comprehensive
Income as incurred.
Intangible assets have been recognised in the financial
statements as the Group has concluded that it has been able to
reliably measure the expenditure attributable to the intangible
asset during its development.
Amortisation is recognised so as to write off the cost or
valuation of the assets, less their residual values over their
useful lives, on the following basis:
-- The development of trading platforms has been amortised straight line over 3 years.
Property, plant and equipment
All property, plant and equipment are stated at historical cost
less depreciation or impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Subsequent expenditure is included in the asset's carrying
amount or is recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be
measured reliably. All other repair and maintenance costs are
charged to the income statement during the financial period in
which they are incurred.
Depreciation is recognised so as to write off the cost or
valuation of assets, less their residual values, over their useful
lives on the following basis:
-- Fixtures, fittings and equipment: 5 years straight line.
-- Computer equipment: 3 years straight line.
Impairment of tangible and intangible assets
At each reporting end date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Fair value measurement
The carrying amounts of financial assets and liabilities with a
maturity of less than one year (including trade and other
receivables, cash and cash equivalents, trade and other payables)
are assumed to approximate their fair values because of the short
period to maturity and credit risk.
Cash and cash equivalents
Cash and cash equivalents include cash at bank.
Financial assets
All regular way purchases or sales of financial assets are
recognised and derecognised on a trade date basis. Financial assets
are initially measured at fair value plus transaction costs and are
subsequently measured in their entirety at either amortised cost or
fair value, depending on the classification of the financial
assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured
subsequently at amortised cost:
-- The financial asset is held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows; and
-- The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured
subsequently at fair value through other comprehensive income:
-- The financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and
selling the financial assets; and
-- The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently
at fair value through profit or loss (FVTPL). In 2019, the Group
did not hold any Financial Assets measured at FVTPL.
Trade and other receivables
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. Other receivables are
defined as amounts due that are outside the ordinary course of
business. If collection is expected in one year or less (or in the
normal operating cycle of the business if longer), they are
classified as current assets. If not, they are presented as
non-current assets.
Contract assets
Contract assets are recognised for licensing fees recognised at
inception of a licensing contract but not yet billed under IFRS 15.
Contract assets are initially measured at fair value and
subsequently measured at amortised cost and are stated net of any
expected credit loss provision (ECL) recognised in accordance with
IFRS 9, as detailed in Note 10. Contract assets are presented on
the Statement of Financial Position as trade receivables.
Rent deposit asset
As detailed in Note 2, the Group has adopted IFRS 16 with effect
from 1 January 2019. Under the standard, a rent deposit is
accounted for as a financial asset if:
-- The collateral provided to the lessor is not a payment
relating to the right to use the underlying assets and hence is not
a lease payment as defined;
-- The rent deposit asset is a financial asset and is initially
recognised at fair value and subsequently measured at amortised
cost;
-- The difference between the nominal amount and fair value of
the rent deposit at the commencement date represents an additional
lease payment which is prepaid and is included in initial carrying
amount of the Right of Use (ROU) asset; and
-- The prepaid ROU portion is subsequently measured in terms of
IFRS 16 i.e. is depreciated over the term of the lease.
Further disclosures are provided in Note 2 and Note 23.
Impairment of financial assets
The Group has considered the impact of the application of an
expected credit loss model when calculating impairment losses on
both current and non-current contract assets (presented within
trade and other receivables). In applying IFRS 9 the Group must
consider the probability of a default occurring over the
contractual life of its trade receivables and contract asset
balances on initial recognition of those assets. Note 11 details
the Group's credit risk assessment procedures.
Financial liabilities
All financial liabilities are measured subsequently at amortised
cost using the effective interest method. The effective interest
method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and
points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where
appropriate) a shorter period, to the amortised cost of a financial
liability.
In 2019 the Group did not hold any Financial liabilities beyond
Trade and other payables, Accrued Expenses and the lease
liabilities recognised under IFRS 16 as described in note 23.
Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade and other payables are
not interest bearing and are initially recognised at fair
value.
Accrued expenses
Accrued expenses are recognised at fair value and are recognised
in the accounting period in which those transactions, events, or
circumstances occur.
Equity instruments
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new ordinary shares or
options are charged against the share premium account.
Taxation
The tax expense/(credit) represents the sum of the tax currently
payable/(repayable) and deferred tax.
Current tax
The current income tax charge/ (credit) is calculated on the
basis of the tax laws enacted or substantively enacted at the
balance sheet date in the country where the company operates and
generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future measurable taxable profit will be
available against which the temporary differences can be
utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense, unless those costs are required to be
recognised as part of the cost of inventories or non-current
assets.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
Retirement benefits
Pension obligations
The Group has defined contribution plans. A defined contribution
plan is a pension plan under which the Group pays fixed
contributions into a separate entity. The Group has no legal or
constructive obligations to pay further contributions if the fund
does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods.
The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as
an employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Share-based payments
Equity-settled share-based payments are measured at fair value
at the date of grant by reference to the fair value of the equity
instruments granted using the US Options Binomial model. The fair
value determined at the grant date is expensed on a straight-line
basis over the vesting period, based on the estimate of shares that
will eventually vest. A corresponding adjustment is made to
equity.
When the terms and conditions of equity-settled share-based
payments at the time they were granted are subsequently modified,
the fair value of the share-based payment under the original terms
and conditions and under the modified terms and conditions are both
determined at the date of the modification. Any excess of the
modified fair value over the original fair value is recognised over
the remaining vesting period in addition to the grant date fair
value of the original share-based payment. The share-based payment
expense is adjusted if the modified fair value is less than the
original fair value.
Cancellations or settlements (including those resulting from
employee redundancies) are treated as an acceleration of vesting
and the amount that would have been recognised over the remaining
vesting period is recognised immediately.
Leases
As disclosed in Note 2, the Group has adopted IFRS 16: Leases
from its effective date of 1 January 2019.
The Group assesses whether a contract is or contains a lease at
inception of the contract. The Group recognises a right of use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets (such as tablets and personal
computers, small items of office furniture and telephones). For
these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are
consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. Lease payments
included in the measurement of the lease liability comprise:
-- Fixed lease payments (including in-substance fixed payments),
less any lease incentives receivable;
-- Variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement
date;
-- The amount expected to be payable by the lessee under residual value guarantees;
-- The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
-- Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the
consolidated statement of financial position and is subsequently
measured by increasing the carrying amount to reflect interest on
the lease liability (using the effective interest method) and by
reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding
adjustment to the related right-of-use asset) whenever:
-- The lease term has changed or there is a significant event or
change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a
revised discount rate.
-- The lease payments change due to changes in an index or rate
or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the
revised lease payments using an unchanged discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
-- A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified
lease by discounting the revised lease payments using a revised
discount rate at the effective date of the modification.
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any
initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses. The right-of-use
assets are presented as a separate line in the consolidated
statement of financial position and are depreciated over the term
of the lease. The Group applies IAS 36 to determine whether a
right-of-use asset is impaired and accounts for any identified
impairment loss as described in the 'Property, Plant and Equipment'
policy. Variable rents that do not depend on an index or rate are
not included in the measurement the lease liability and the
right-of-use asset.
Foreign exchange
Functional and presentation currency
Items included in the financial statements of the Group are
measured using the currency of the primary economic environment in
which the entity operates ('the functional currency'). The
financial statements are presented in UK Pound Sterling (GBP),
which is the Group's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies
at year end exchange rates are recognised in profit or loss.
All foreign exchange gains and losses recognised in the income
statement are presented net within 'administrative expenses'.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the reporting date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in a
foreign exchange translation reserve (attributed to non-controlling
interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the
Group's entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign
operation or a partial disposal of an interest in a joint
arrangement or an associate that includes a foreign operation of
which the retained interest becomes a financial asset), all of the
exchange differences accumulated in a foreign exchange translation
reserve in respect of that operation attributable to the owners of
the Group are reclassified to profit or loss.
Research and development
Expenditure on development is capitalised in the year in which
it is incurred. This represents wage costs of various personnel
involved in developing the exchange platform and surveillance
system. This asset is subsequently amortised as explained in the
Intangible Assets accounting policy note.
2 Adoption of new and revised standards and changes in
accounting policies
New IFRS Standards that are effective for the current year
Impact of initial application of IFRS 16: Leases
In the current year, the Group has applied IFRS 16 (as issued by
the IASB in January 2016) that is effective for annual periods that
begin on or after 1 January 2019.
IFRS 16 introduces new or amended requirements with respect to
lease accounting. It introduces significant changes to lessee
accounting by removing the distinction between operating and
finance lease and requiring the recognition of a right-of-use asset
and a lease liability at commencement for all leases, except for
short-term leases and leases of low value assets. Details of these
new requirements are described in the group accounting policy for
leases in Note 1. The impact of the adoption of IFRS 16 on the
Group's consolidated financial statements is described below.
In applying IFRS 16 for the first time, the group has used the
following practical expedients permitted by the standard:
a. Reliance on previous assessments on whether leases are onerous;
b. The accounting for operating leases with a remaining lease
term of less than 12 months as at 1 January 2019 as short-term
leases;
c. The exclusion of initial direct costs for the measurement of
the right-of-use asset at the date of initial application, and
d. The use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract is
or contains a lease at the date of initial application. Instead,
for contracts entered into before the transition date the group
relied on its assessment made applying IAS 17 and IFRIC 4
determining whether an arrangement contains a Lease.
Impact on opening position for 2019 arising on adoption of IFRS
16
The Group has adopted IFRS 16 retrospectively from 1 January
2019 but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in
the standard. The reclassifications and the adjustments arising
from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 January 2019. The weighted average lessee's
incremental borrowing rate applied to the lease liabilities on 1
January 2019 was 3.15%.
The lease liability recognised on 1 January 2019 was as
follows:
1 January
2019
GBP
--------------------------------------------------------------- ----------
Operating lease commitments discounted using the rate
implicit in the lease at the date of the initial application
(3.15% p.a.) 1,561,096
Add: finance lease liabilities recognised as at 31 December
2018 -
(Less): short-term leases recognised on a straight-line
basis as expense -
(Less): low-value leases recognised on a straight-line
basis as expense -
(Less): contracts reassessed as service agreements -
Add/(less): adjustments as a result of a different treatment
of extension and termination options -
Add/(less): adjustments relating to changes in the index
or rate affecting variable payments -
Lease liability recognised as at 1 January 2019 1,561,096
------------------------------------------------------------------ ----------
Of which:
Current 182,792
Non-current 1,378,304
1,561,096
--------------------------------------------------------------- ----------
The associated right-of use asset was measured at the amount
equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the
balance sheet as at 31 December 2018. There were no onerous lease
contracts that would have required an adjustment to the right-
of-use assets at the date of initial application.
The recognised right-of-use assets relate to the following types
of assets:
01 January
31 December 2019 2019
GBP GBP
--------------------------------- ----------------- -----------
Property
Of which:
Non-current portion of right of
use asset 1,097,827 1,270,993
Current portion of right of use
asset 173,166 173,166
1,270,993 1,444,159
--------------------------------- ----------------- -----------
The change in accounting policy affected the following items in
the statement of financial position on 1 January 2019:
01 January 2019
GBP
--------------------------------- ----------------
Decrease in rent deposit asset (61,043)
Increase in right of use assets 1,444,159
Increase in lease liabilities (1,561,096)
Decrease in accruals 57,611
Net impact on retained earnings (120,369)
--------------------------------- ----------------
Impact on operating loss:
Operating losses increased by GBP16k as a result of the change
in accounting policy for the year ended 31 December 2019. The
Impact on the Consolidated and Company Statement of Comprehensive
Income for the year ended 31 December 2019 is as follows:
31 December 2019
GBP
-------------------------------------- ---------------------------------------------------------------------
Depreciation expense (included in (173,166)
expenses)
Rent expense (included in expenses) 230,445
Finance costs (included in expenses) (41,115)
Operating loss 16,164
Income tax expense -
Decrease in operating loss for the 16,164
year after tax
-------------------------------------- ---------------------------------------------------------------------
The application of IFRS 16 has an impact on the Consolidated and
Company Statement of Comprehensive Income in that the charges have
been included in depreciation and amortisation costs rather than as
in previous years in administrative expenses. In addition, the
application of IFRS 16 has an impact on the Comprehensive Statement
of Cash Flows of the Group. Under IFRS 16, lessees must
present:
a. Short-term lease payments, payments for leases of low-value
assets and variable lease payments not included in the measurement
of the lease liability as part of operating activities;
b. Cash paid for the interest portion of a lease liability as
either operating activities or financing activities, as permitted
by IAS 7 (the Group has opted to include interest paid as part of
financing activities); and
c. Cash payments for the principal portion for a lease
liability, as part of financing activities.
Under IAS 17, all lease payments on operating leases were
presented as part of cash flows from operating activities.
Consequently, the net cash generated by operating activities has
increased by GBP230k, being the lease payments, and net cash used
in financing activities has increased by the same amount.
The adoption of IFRS 16 did not have an impact on net cash
flows.
The impact on the statement of cash flows for the year ended 31
December 2019 is as follows:
31 December 2019
GBP
-------------------------------------- -----------------------------------------------------------------
Finance expense on lease liability (47,653)
Net cash generated from operating (47,653)
activities
-------------------------------------- -----------------------------------------------------------------
Principal portion of lease liability (182,792)
Net cash generated from/ (used in)
financing activities (182,792)
-------------------------------------- -----------------------------------------------------------------
The adoption of IFRS 16 did not have an impact on net cash
flows.
There is no material impact on other comprehensive income and
the basic and diluted EPS as a result of the implementation of IFRS
16.
The Group's leasing activities and how these are accounted
for
Aquis Exchange PLC leases its business offices in London. The
rental contract is for a fixed period of 5 years from inception of
the lease (4 May 2017) with the option to extend for a further 5
years which the Directors are reasonably certain will be exercised.
The lease terms contain rent free periods which have been
considered in determining the rate implicit in the lease and hence
the Group's incremental borrowing cost. The lease agreement does
not impose any covenants, but leased assets may not be used as
security for borrowing purposes. Aquis Exchange Europe SAS has no
long-term leases of high value, and hence the leased offices in
London is the only lease included in the calculation of the lease
liability and right of use assets for the Group.
Until the 2018 financial year, leases of property, plant and
equipment were classified as either finance or operating leases.
Payments made under operating leases (net of any incentives
received from the lessor) were charged to profit or loss on a
straight-line basis over the period of the lease.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the
following Standards and Interpretations, which have not yet been
applied in these financial statements, were in issue and adopted by
the EU. The Directors do not expect that the adoption of the
Standards listed below will have a material impact on the financial
statements of the Group in future periods:
IFRS 17 Insurance Contracts
IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor and its Associate
or Joint Venture
(amendments)
---------------------------------------
Amendments to IFRS 3 Definition of a business
---------------------------------------
Amendments to IAS 1 and IAS Definition of material
8
---------------------------------------
Conceptual Framework Amendments to References to the
Conceptual Framework in IFRS
Standards
---------------------------------------
3 Critical accounting estimates and judgements
In applying the group's accounting policies, which are described
in Note 1, the Directors are required to make judgements, estimates
and assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements
The following are the critical judgements, apart from those
involving estimations (which are presented separately below), that
the Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in financial statements.
Capitalisation of internally generated intangible assets
resulting from Research and Development
Internally generated intangible assets have been capitalised
because, in management's judgement, the criteria for capitalisation
under IAS 38 have been met. These assets are amortised over a
straight line 3-year period.
Judgements in determining the timing of satisfaction of
performance obligations
In making their judgement, the directors considered the detailed
criteria for the recognition of revenue set out in IFRS 15, and in
particular, whether revenue is recognised at a point in time or
over time. Following an assessment of the technology licensing
contract portfolio, and the obligations that Aquis has under each
contract, the Directors are satisfied that obligations contained
therein be split into the following performance obligations, and
that the revenue from each licensing contract should be assessed
individually. The identified performance obligations and the timing
of revenue recognition on delivering the licence contracts as
follows:
-- Implementation/ project fees: these are upfront,
non-refundable fees that a customer pays in order to obtain the
user agreement. Even if the user acceptance certificate is never
issued, the implementation fee cannot be reclaimed and so the
revenue is guaranteed and can be recognised at the time of invoice
as Aquis becomes unconditionally entitled to payment.
-- Licensing fees: The customer is liable to pay the monthly
licensing fee from the date of signing the user acceptance
agreement (contract inception date). At this point in time Aquis
has fulfilled its promise to deliver the licence (i.e. the system
has been deployed in the client's production environment) and this
performance obligation is fulfilled. The licensing fees are thus
recognised at the point in time the contract is signed.
-- Maintenance fees: fees to maintain the system are recognised
over the course of the licensing contract as Aquis fulfils its
performance obligation to maintain the system.
Changes in identification of performance obligations could
impact the timing of revenue recognition for licensing contract
assets and is thus a critical accounting judgement.
Critical accounting estimates
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the reporting date that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Expected credit loss of contract assets
An impairment for the expected credit loss of contract assets
that arise as a result of applying IFRS 15 to licensing revenue is
required under IFRS 9. This impairment is an accounting estimate
which is calculated based on the Directors' best estimates of the
probability of default and loss given default. The quantification
of the assumptions and stresses for the year are disclosed in Note
11 and 20 of the financial statements.
In arriving at these estimates, the Directors have assessed the
range of possible outcomes using reasonable and supportable
forward-looking information, which is based on assumptions for the
future movement of different economic drivers and how these drivers
will affect each other.
Aquis' assessment of the credit risk associated with a licensing
customer is conducted at inception of the contract (but before the
user agreement is signed) and includes factors that are specific to
the customer, general economic conditions and an assessment of both
the current as well as the forecast direction of these
conditions.
The credit risk assessment is conducted by means of a take-on
assessment which comprises of a series of relevant criteria for a
licensing contract that are scored according to the specific
circumstances of the customer, with scores for each parameter
typically ranging from 1-4. The assessment evaluates the
following:
-- Level of funding;
-- Regulatory approvals;
-- Market, industry and business model;
-- Macro-economic forecasts;
-- Corporate governance/ Group management;
-- Whether the client is revenue generating;
-- Level of client profitability;
-- Contract length and the associated range of economic scenarios therein;
-- Payment history; and
-- External credit ratings.
The above assessment will determine the customer category upon
inception of the contract, and the inputs to the expected credit
loss model is determined thereon.
The credit risk assessment and associated inputs to the expected
credit loss model (probability of default and loss given default)
are critical assessments that could impact both the provision for
expected credit losses as well as the movement in the provision
reflected in the income statement. The Directors do not consider
there to be a risk of material changes to these estimates in future
periods.
4 Corporate information
Aquis Exchange PLC (the 'Group') is licensed to operate a
multilateral trading facility (MTF) enabling members to trade
across fourteen European markets and to provide exchange software
under licence.
5 Financial risk management
The Group seeks to protect its financial performance and the
value of its business from exposure to adverse changes in capital
commitments, as well as credit, liquidity and foreign exchange
risks.
The Group's financial risk management approach is not
speculative. The Group's Audit, Risk and Compliance Committee
provides assurance that the governance and operational controls are
effective to manage risks within the Board-approved risk appetite,
supporting a robust Group risk management framework.
The Group's objectives when managing these risks are detailed
below.
Capital risk management and capital commitments
Risk Description Risk management approach
There is a risk that group The Group's objectives when managing
entities may not maintain sufficient capital are to safeguard the group's
capital to meet their obligations. ability to continue as a going
The Group comprises regulated concern so that it can provide
entities. It considers that: returns for shareholders and benefits
- Increases in the capital for other stakeholders.
requirements of its regulated
companies, or In order to maintain a strong
-Negative yields on its investments capital structure, the group may
of cash, or issue new shares, return capital
-A scarcity of equity (driven to shareholders or sell assets
by its own performance or financial to ensure capital adequacy requirements
market conditions) are met.
either separately or in combination
are the principal risks to The group adopts the following
managing its capital. policies and procedures in order
to manage its capital requirements:
-Regular monitoring of its current
and expected levels of liquidity
to ensure that it has sufficient
funds for working capital requirements;
and
-Regular monitoring of the Return
on Assets (ROA).
-----------------------------------------
The ROA is the amount of net loss returned as a percentage of
total assets.
Group 2019 2018
GBP GBP
-------------------------------- ----------- ------------
Loss for the year (861,724) (3,417,367)
Total assets as at 31 December 16,398,867 15,462,371
Return on assets (%) -5% -22%
-------------------------------- ----------- ------------
There was no capital expenditure contracted for at the end of
the reporting year that had not been provided for.
Externally imposed capital requirements to which the group is
subject to have been assessed and complied with in the year. An
assessment of the excess of regulatory capital for the Group is as
follows:
Group 2019 2018
GBP GBP
--------------------------------- ------------------- -------------
Total equity 13,709,598 14,570,007
Regulatory capital requirements 2,062,772 1,832,432
Excess 11,646,826 12,737,575
--------------------------------- ------------------- -------------
Credit risk
Risk Description Risk management approach
The Group's credit risk relates The Directors make a judgement on the
to its customers being unable credit quality of the group's customers
to meet their obligations based upon the customers' financial
to the Group either in part position, the recurring nature of billing
or in full, as well as credit and collection arrangements and, historically,
risk from third parties such a low incidence of default.
as clearing agents and counterparties.
Aquis' assessment of the credit risk
associated with a licensing customer
is conducted at inception of the contract
(but before the user agreement is signed)
and includes factors that are specific
to the customer, general economic conditions
and an assessment of both the current
as well as the forecast direction of
these conditions. Based on this assessment,
the prospective customer is assigned
to a customer category with an appropriate
risk rating.
Aquis' credit risk management processes
are applied to all trade receivables
and are calculated using a lifetime
ECL method, as detailed in Note 11.
There were no debts written off or
past-due as at 31 December 2019.
------------------------------------------------
Liquidity risk
Risk Description Risk management approach
The Group's operations are The group maintains sufficient liquid
exposed to liquidity resources to meet its financial obligations
risk to the extent that they as and when they become due in the
are unable to meet ordinary course of business. Management
their daily payment obligations. monitors forecasts of the Group's cash
flow quarterly through an assessment
of cash resources that are in excess
of regulatory capital requirements.
The group is solvent with net current
assets in excess of GBP11.4 million
(2018: GBP12.5 million), with the majority
of the debtor's book being short term
in nature. The Group is also funded
entirely by equity, with no external
debt funding obligations to be met.
---------------------------------------------
The following tables detail the Group and Company's remaining
contractual maturity for its non-derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based
on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group or Company can be required to
pay. There is no exposure to interest rate changes since the group
and company have no external debt obligations, and the interest
rate on the lease liability is the rate implicit in the lease and
as such is not subject to change over the term of the lease.
Group 1 Year 2-5 years 5+ years Total
31 December 2019 GBP GBP GBP GBP
-------------------------- ------------------------- ------------------- ---------------- -------------------
Trade and other payables 1,499,574 - - 1,499,574
Lease Liabilities 188,610 692,685 497,037 1,378,304
1,688,184 692,685 497,037 2,877,878
-------------------------- ------------------------- ------------------- ---------------- -------------------
31 December 2018
-------------------------- ------------------------- ------------------- ---------------- -------------------
Trade and other payables 892,364 - - 892,364
Lease Liabilities - - - -
892,364 - - 892,364
-------------------------- ------------------------- ------------------- ---------------- -------------------
Company 1 Year 2-5 years 5+ years Total
31 December 2019
-------------------------- ------------------------- ------------------- ---------------- -------------------
Trade and other payables 1,467,826 - - 1,467,827
Lease Liabilities 188,610 692,658 497,037 1,378,304
1,656,436 692,658 497,037 2,846,130
-------------------------- ------------------------- ------------------- ---------------- -------------------
31 December 2018
-------------------------- ------------------------- ------------------- ---------------- -------------------
Trade and other payables 892,364 - - 892,364
Lease Liabilities - - - -
892,364 - - 892,364
-------------------------- ------------------------- ------------------- ---------------- -------------------
Both the Group and the Company have no derivative financial
liabilities.
Foreign exchange
Risk Description Risk management approach
The Group operates in the In order to mitigate the impact of unfavourable
UK and Europe, with Sterling currency exchange rate movements on
as its principal currency consolidated earnings and net assets,
of operation. The group companies Aquis Exchange Europe SAS maintains
invoice revenues and incur the majority of its net assets (primarily
the majority expenses in GBP. comprising regulatory cash) in a Sterling
An immaterial amount of expenses denominated bank account so as to minimise
are incurred in Euros in relation fluctuations in the GBP/EUR exchange
to the French office. As a rate on a consolidated basis.
result, foreign exchange risk
arises mainly from the translation
of the Group's foreign currency
earnings, assets and liabilities
into its reporting currency,
Sterling.
An immaterial amount of cash
held by Aquis Exchange Europe
SAS is held in a euro denominated
bank account, with the remaining
cash held in a Sterling denominated
bank account, hedging the
group against foreign exchange
fluctuations in cash and cash
equivalents. Since the net
asset value of the Aquis Exchange
Europe SAS is predominantly
comprised of cash, there is
negligible exposure to foreign
exchange rate fluctuations.
------------------------------------------------
6 Operating segments
Whilst Aquis Exchange PLC provides customers with two products
(the exchange and licensing contracts), the Group does not operate
these divisions separately but rather as a unit under the same
management, operated by the same departments and at the same
offices. As such the Group only has one operating segment.
7 Employees
The average number of persons (including Executive Directors)
employed by the Group during the year was:
Group 2019 2018
Number Number
----------------------------- ------- -------
Management 5 4
Operations 5 4
Business Development 3 3
Marketing 1 1
IT 18 16
Finance 2 1
Compliance and Surveillance 3 3
37 32
----------------------------- ------- -------
Their aggregate remuneration was comprised of:
Group 2019 2018
GBP GBP
----------------------- ----------- ----------
Wages and salaries 3,763,905 3,184,145
Social security costs 436,448 525,376
Other pension costs 274,154 207,751
4,474,507 3,917,272
----------------------- ----------- ----------
Company 2019 2018
GBP GBP
----------------------- ----------- ----------
Wages and salaries 3,565,268 3,184,145
Social security costs 365,363 525,376
Other pension costs 274,154 207,751
4,204,785 3,917,272
----------------------- ----------- ----------
8 Retirement benefit scheme
Defined contribution schemes
The group operates a defined contribution pension scheme for all
qualifying employees. The assets of the scheme are held separately
from those of the Group in an independently administered fund.
The total costs charged to income in respect of defined
contribution plans are GBP274,154 (2018: GBP207,751).
9 Directors remuneration
Group 2019 2018
GBP GBP
---------------------------------------------------- --------- --------
Remuneration for qualifying services 809,741 840,789
----------------------------------------------------- --------- --------
Remuneration disclosed above include the following
amounts paid to the highest paid director:
Remuneration for qualifying services 301,352 341,132
----------------------------------------------------- --------- --------
10 Revenue
An analysis of the Group's revenue is as follows:
Group Company
---------------------- ----------------------
2019 2018 2019 2018
GBP GBP GBP GBP
--------------------------- ---------- ---------- ---------- ----------
Revenue analysed by class
of business
Subscription fees 5,285,000 3,100,839 5,021,000 3,100,839
Licence fees 1,269,362 737,530 1,269,362 737,530
Data vendor fees 337,632 143,541 337,632 143,541
6,891,994 3,981,910 6,627,994 3,981,910
--------------------------- ---------- ---------- ---------- ----------
Revenues from customers attributable to the United Kingdom and
the rest of the world is as follows:
Group Company
---------------------- ----------------------
2019 2018 2019 2018
GBP GBP GBP GBP
---------------------------- ---------- ---------- ---------- ----------
Revenue analysed by region
United Kingdom 5,200,390 2,951,033 5,200,390 2,951,033
Rest of World 1,691,604 1,030,877 1,427,604 1,030,877
6,891,994 3,981,910 6,627,994 3,981,910
---------------------------- ---------- ---------- ---------- ----------
No revenue from customers whose revenue is solely attributed to
a single foreign country is material.
Subscription fees and data vendor fees:
Subscription fees and data vendor fees are accounted for under
IFRS 15 and are all recognised at point in time as they reflect
variable revenue determined on a monthly basis.
The Group recognises subscription fees, data vendor fees, and
connectivity fees when the customer conformance test is
satisfactorily concluded, and an acceptance certificate is issued.
This is then verified by the customer starting to utilise the
platform, which is the point in time that the Group determines that
that the customer has obtained control of the goods.
The Group determines the transaction price based primarily on
the competitive landscape. In the case of subscription,
connectivity and data fees, invoices are raised monthly in arrears
and there is no obligation for a refund, return or any other
similar obligation. There is no constrained variable consideration
in any customer contracts, and the transaction price is allocated
in full at a single point in time when the customer obtains control
of the goods.
Licence fees:
Aquis Exchange PLC provides technology services under licence to
clients. The services comprise the provision of an exchange
platform and / or a surveillance system and may also include
support services comprising basic infrastructure support or
additional services (including with the SaaS model, for example
with some surveillance clients). The duration of the licences
varies between 1 and 5 years and will consist of an implementation
fee, and, post implementation, a monthly licence fee for the
duration of the contract. The monthly fees also cover system
maintenance and system upgrades that typically occur every 12 - 18
months. The licensing contracts are accounted for under IFRS 15 and
any corresponding contract assets are subject to IFRS 9
provisioning, as disclosed further in Note 11.
The revenue from licensing contracts with customers has been
categorised reflecting the nature, amount, customer categorisation
(see also Note 11), contract duration and uncertainty of revenue
and cash flows. Revenue from licensing contracts is assessed for
each contract and is recognised as and when each performance
obligation is satisfied.
The Group determines the transaction price of the licensing
contract based primarily on the competitive landscape. For
licensing contracts, the Group has assessed the probability of
being required to make a return / refund by analysing each client
individually. The transaction price is allocated according to the
Group's obligations to the client over the course of the licence
period. There is no constrained variable consideration in any
customer contracts.
Performance obligation Recognition of revenue upon completion
(PO)
PO1: Implementation Implementation/ project fees are upfront,
fees non-refundable fees that a customer pays
in order to obtain the user agreement.
Even if the user acceptance certificate
is never issued, the implementation fee
cannot be reclaimed and so the revenue
is guaranteed and can be recognised at
the time of invoice as Aquis becomes unconditionally
entitled to payment.
------------------------------------------------------
PO2: Licensing fees At a point in time upon signing the user
acceptance agreement, as the Group has
fulfilled its promise to deliver the licence
(i.e. the system has been deployed in the
client's production environment). A corresponding
contract asset (trade receivable) is recognised
to reflect the customers obligation to
pay the monthly licensing fee over the
remaining term of the contract.
------------------------------------------------------
PO3: Maintenance fees Over the course of the licensing contract
as the performance obligation to maintain
the system is settled over time as the
customer benefits from using the system.
------------------------------------------------------
The aggregate amount of the transaction price per customer
category that has been allocated to the performance obligations for
the year is as follows:
Group 2019 2018
GBP GBP GBP GBP GBP GBP GBP GBP
Category 1 2 3 4 1 2 3 4
----------- -------- ---------------- -------- -------- -------- -------- ---------------- ----------------
PO1 135,000 - - 50,000 60,000 50,000 - -
PO2 171,000 - 203,707 247,680 323,100 182,280 - -
PO3 740 128,995 18,287 4,453 95,850 16,809
306,740 128,995 221,994 302,133 478,950 249,089 - -
---------- -------- ---------------- -------- -------- -------- -------- ---------------- ----------------
Customer risk category definitions: 1 - High, 2 - Moderately
High, 3 - Moderately Low and 4 - Low. The licensing fees line item
also includes connectivity fees for licensing contract customers
that are recognised at a point in time as they reflect variable
revenue determined on a monthly basis.
11 Impairment
Aquis Exchange PLC enters into technology licensing contract
assets with customers that are subject to IFRS 9 provisioning based
on management estimates of the collectability of contracts over
their useful life and is re-assessed annually. The movement in the
provision balance is as follows:
Group 2019 2018
GBP GBP
---------------------------------- ---------- ----------
Balance of impairment provisions
at the beginning of the year 695,834 1,120,028
Impairment credit (242,585) (424,194)
Balance of impairment provisions
at the end of the year 453,249 695,834
----------------------------------- ---------- ----------
During contract negotiation Aquis assesses the potential credit
risk of a prospective client prior to committing to the contract.
Aquis' assessment of the credit risk associated with a licensing
customer is conducted at inception of the contract (but before the
user agreement is signed) and includes factors that are specific to
the customer, general economic conditions and an assessment of both
the current as well as the forecast direction of these conditions.
Based on this assessment, the prospective customer is assigned to a
customer category with an appropriate risk rating. Aquis reassesses
the risk ratings annually and undertakes another assessment to
determine if macro-economic factors could have a bearing on the
success of the client and the recoverability of the outstanding
debt. Aquis credit risk management processes are applied to all
trade receivables and are calculated using a lifetime expected
credit loss method.
The portfolio of technology contracts held by Aquis having
probabilities of default evolve over time, since the credit risk of
the contracts is directly linked to the success of the customers'
business including their ability to raise capital, which itself
changes with time.
The credit risk of Aquis' technology clients ranges from those
that are in infant start up stages (riskier) to those that are
highly liquid and solvent conglomerates (little to no risk), and
the Directors assign a probability of default to each customer as a
quantification of this risk and how it evolves over the life of the
contract. The loss given default is also quantified on a
customer-by-customer basis and is done through an assessment of the
recovery rate the Directors anticipate will be applied to the
customer in the event of liquidation. Currently the low number of
technology clients allows Aquis to assess each contract
individually on the appropriate probability of default level,
including any future macro-economic changes, the sensitivity to
these potential changes and the impact that these may have.
The GBP453,249 expected credit loss provision for the year
(2018: GBP695,834) has been calculated with reference to
estimations based on the probability of default and a loss given
default as described above, and has been analysed for each
individual contract taking into account the nature, amount,
customer categorisation, contract duration and uncertainty of
revenue and cash flows.
As at 31 December 2019, the average contract duration for the
portfolio of technology contracts is 2.5 years. Since the contracts
are short-to-medium term in nature (and credit risk assessments are
reperformed upon contract renewal), the Directors are therefore
comfortable that a range of economic scenarios are captured within
the customer category risk assessment as the resulting key inputs
assigned upon inception will be so close to the median of a range
of economic scenarios that they are, in substance, equal. The
Directors have, however, assessed the impact of changes in credit
losses and their sensitivity to changes in these significant
assumptions as a result of macro-economic developments. In order to
quantify the impact of movement in credit losses that occur as a
result of macro-economic developments, the Directors have flexed
the probability of default associated with each client category in
three scenarios: a base case (maintaining status quo), a worst case
(an increase in the probability of default of 10% from the base
case), and a best case (a decrease in the probability of default of
10% from the base case).
The range of outcomes is detailed in the table below:
Worst Case Best Case
Group (+10%) Base Case (-10%)
At 31 December 2019 GBP GBP GBP
---------------------- ----------------------------- --------------------------- ---------------------------
Impairment provision 989,668 453,249 134,599
---------------------- ----------------------------- --------------------------- ---------------------------
12 Administrative expenses
Operating loss is stated after charging:
Group Company
----------------------- ----------------------
2019 2018 2019 2018
Administrative expenses GBP GBP GBP GBP
--------------------------- ----------- ---------- ---------- ----------
Fees payable to the
Group's auditor for
the audit of the Group's
financial statements 86,291 52,500 57,250 52,500
Share-based payments
(see below) 120,245 92,446 120,245 92,446
Exchange loss/(gains) (7,483) 3 (7,483) 3
Employee costs 4,474,507 3,917,272 4,204,785 3,917,272
Other administrative
expenses 2,660,390 2,415,431 2,628,777 2,415,431
7,333,950 6,477,652 7,003,574 6,477,652
--------------------------- ----------- ---------- ---------- ----------
Other administrative expenses comprise marketing fees, data
centre and other service fees incurred in the ordinary course of
business.
Treatment of Stock Options
There is one approved EMI scheme. Options vest in 3 equal
tranches, one, two and three years after grant. The options expire
after 10 years.
No new stock options under the EMI scheme were granted during
the year, because on the 30th of November 2019 the group deferred
the issue of 2019 share options until March 2020.
Of the options granted in previous periods, none were exercised
or expired and 3,718 were forfeited during the year.
In accordance with IFRS 2, the group has estimated the fair
value of options granted in previous periods using a US binomial
option valuation model and spread the estimated value against the
Profit and Loss account over the life of the vesting period. The
options exercise price for these options granted in prior years is
GBP2.69 per share to be settled in cash at the date of exercise.
The weighted average remaining contractual life of options
outstanding at the end of the reporting period amounted to 1 years
5.5 months.
The valuation method used to estimate the fair value of the
awards was the US binomial method with an average expiry duration
of 5 years, volatility of 24 and risk-free interest rate of
1.1067%.
Details of the EMI scheme are as follows:
-- Outstanding at the beginning of the period 564,124
-- Granted during the period -
-- Forfeited during the period (3,718)
-- Exercised during the period -
-- Expired during the period -
-- Outstanding at the end of the period 560,406
-- Exercisable at the end of the period 186,802
All options are exercisable at a price of GBP2.69 and the
weighted average remaining contractual life is estimated to be 5
years.
Loss before taxation is stated after charging:
Group Company
-------------------------- --------------------------
2019 2018 2019 2018
Depreciation, amortisation and finance GBP GBP GBP GBP
costs
---------------------------------------- -------- ---------------- -------- ----------------
Depreciation of property, plant
and equipment 481,611 162,493 481,611 162,493
Amortisation of intangible assets 446,580 449,001 446,580 449,001
----------------------------------------- -------- ---------------- -------- ----------------
928,191 611,494 928,191 611,494
Net finance expense (Note 23) 41,115 - 41,115 -
969,306 611,494 969,306 611,494
---------------------------------------- -------- ---------------- -------- ----------------
Total expenses were as follows:
Group Company
---------------------- ----------------------
2019 2018 2019 2018
Total expenses GBP GBP GBP GBP
---------------- ---------- ---------- ---------- ----------
Expenses 8,303,256 7,089,146 7,972,881 7,089,146
----------------- ---------- ---------- ---------- ----------
13 Investment income
Group Company
---------------- ----------------
2019 2018 2019 2018
Interest income GBP GBP GBP GBP
----------------- ------- ------- ------- -------
Bank deposits 41,699 30,139 36,303 30,139
------------------ ------- ------- ------- -------
14 Exceptional items
Group Company
------------------------------- ------------------------------
2019 2018 2019 2018
GBP GBP GBP GBP
------------------- ----------------- ------------ ---------------- ------------
Exceptional costs - (1,011,853) - (1,011,853)
-------------------- ----------------- ------------ ---------------- ------------
The costs incurred for listing were included as exceptional
costs for the year ending 31 December 2018. There were no
exceptional costs for the year ending 31 December 2019.
15 Income tax
Group Company
---------------------- ----------------------
2019 2018 2019 2018
Current tax GBP GBP GBP GBP
--------------------------- ---------- ---------- ---------- ----------
Adjustments in respect of
prior periods (265,254) (247,389) (265,254) (247,389)
---------------------------- ---------- ---------- ---------- ----------
There were no deferred tax assets or liabilities recognised as
at 31 December 2019 (2018: nil deferred tax assets and
liabilities).
The credit for the year can be reconciled to the loss per the
income statement as follows:
Group Company
2019 2018 2019 2018
GBP GBP GBP GBP
----------------------------------- ---------- ------------------- ------------ -------------------
Loss for the year before
taxation (861,724) (3,664,756) (1,065,998) (3,664,756)
------------------------------------ ---------- ------------------- ------------ -------------------
Expected tax credit based
on a corporation tax rate
of 19.00% (163,728) (696,304) (202,540) (696,304)
Effect of expenses not deductible
in determining taxable profit 33,784 188,180 72,596 188,180
Unutilised tax losses carried
forward 183,880 537,478 183,880 537,478
Permanent capital allowances
in excess of depreciation (52,765) (29,355) (52,765) (29,355)
Depreciation on assets
not qualifying for tax
allowances (1,171) - (1,171) -
Research and development
tax credit (265,254) (247,389) (265,254) (247,389)
Taxation credit for the
year (265,254) (247,389) (265,254) (247,390)
------------------------------------ ---------- ------------------- ------------ -------------------
The Company has estimated losses of GBP18,386,969 (2018:
GBP18,180,329) available for carry forward against future trading
profits.
16 Earnings per share
Group Company
------------------------- -------------------------
2019 2018 2019 2018
-------------------------------------- ----------- ------------ ----------- ------------
Number of Shares
Weighted average number of ordinary
shares for basic earnings per share 27,149,559 16,433,338 27,149,559 16,433,338
Weighted average number of ordinary
shares for diluted earnings per
share 27,713,683 17,086,835 27,713,683 17,086,835
Earnings
Loss for the year from continued
operations (861,724) (3,417,367) (800,744) (3,417,367)
Basic and diluted earnings per
share (pence)
Basic earnings per ordinary share (3) (21) (3) (21)
Diluted earnings per ordinary share (3) (20) (3) (20)
-------------------------------------- ----------- ------------ ----------- ------------
Basic earnings per share is in respect of all activities of the
Group and diluted earnings per share takes into account the
dilution effects which would arise on conversion or vesting of all
outstanding share options and share awards under the Employee Share
Incentive Plan (SIP).
17 Intangible assets
Group Company
Developed Developed
trading platforms trading platforms
GBP GBP
----------------------------------------- --------------------------- ---------------------------
Cost
As at 31/12/2017 1,070,533 1,070,533
Additions- internally generated 422,522 422,522
As at 31/12/2018 1,493,055 1,493,055
Additions- internally generated 562,271 562,271
As at 31/12/2019 2,055,326 2,055,326
----------------------------------------- --------------------------- ---------------------------
Accumulated amortisation and impairment
As at 31/12/2017 406,515 406,515
Charge for the year 449,001 449,001
As at 31/12/2018 855,516 855,516
Charge for the year 446,580 446,580
As at 31/12/2019 1,302,096 1,302,096
----------------------------------------- --------------------------- ---------------------------
Carrying amount
As at 31/12/2019 753,230 753,230
----------------------------------------- --------------------------- ---------------------------
As at 31/12/2018 637,539 637,539
----------------------------------------- --------------------------- ---------------------------
18 Property, plant and equipment
Group Fixtures, Computer Non-current Total
fittings Equipment Right of Use
and equipment Asset
GBP GBP GBP GBP
------------------------------ --------------- ----------- ---------------------------------- ----------
Cost
As at 31/12/2017 233,669 1,182,823 - 1,416,492
Additions 12,794 409,140 - 421,934
As at 31/12/2018 246,463 1,591,963 - 1,838,426
Additions 3,034 506,308 - 509,342
Recognition of IFRS 16 Right
of Use Asset - - 1,444,159 1,444,159
As at 31/12/2019 249,497 2,098,270 1,444,159 3,791,927
------------------------------ --------------- ----------- ---------------------------------- ----------
Accumulated depreciation
and impairment
As at 31/12/2017 28,801 1,105,199 - 1,134,000
Charge for the year 48,801 113,692 - 162,493
As at 31/12/2018 77,602 1,218,891 - 1,296,493
Charge for the year 49,970 258,475 173,166 481,611
As at 31/12/2019 127,572 1,477,366 173,166 1,778,104
------------------------------ --------------- ----------- ---------------------------------- ----------
Carrying amount
As at 31/12/2019 121,925 620,905 1,270,993 2,013,823
------------------------------ --------------- ----------- ---------------------------------- ----------
As at 31/12/2018 168,861 373,072 - 541,933
------------------------------ --------------- ----------- ---------------------------------- ----------
Company Fixtures, Computer Non-current Total
fittings Equipment Right of Use
and equipment Asset
-------------------------- --------------- ----------- ---------------------------------- ----------
Cost
As at 31/12/2017 233,669 1,182,823 - 1,416,492
Additions 12,794 409,140 - 421,934
As at 31/12/2018 246,463 1,591,963 - 1,838,426
Additions 3,034 506,308 - 509,342
Recognition of IFRS 16
Right of Use Asset - - 1,444,159 1,444,159
As at 31/12/2019 249,497 2,098,270 1,444,159 3,791,927
-------------------------- --------------- ----------- ---------------------------------- ----------
Accumulated depreciation
and impairment
As at 31/12/2017 28,801 1,105,199 - 1,134,000
Charge for the year 48,801 113,692 - 162,493
As at 31/12/2018 77,602 1,218,891 - 1,296,493
Charge for the year 49,970 258,475 173,166 481,611
As at 31/12/2019 127,572 1,477,366 173,166 1,778,104
-------------------------- --------------- ----------- ---------------------------------- ----------
Carrying amount
As at 31/12/2019 121,925 620,905 1,270,993 2,013,823
-------------------------- --------------- ----------- ---------------------------------- ----------
As at 31/12/2018 168,861 373,072 - 541,933
-------------------------- --------------- ----------- ---------------------------------- ----------
19 Investment in subsidiaries
2019 2018
Company GBP GBP
---------------------------- ---------- ------
Investment in subsidiaries 2,437,766 9,020
----------------------------- ---------- ------
Details of the company's subsidiaries at 31 December 2019 are as
follows:
Country of Ownership interest Voting power
Name of undertaking incorporation (%) held (%) Name of business
Aquis Exchange European Equities
Europe SAS France 100 100 Exchange
---------------- ------------------- ------------- ------------------
The registered office of Aquis Exchange Europe SAS is 231 rue
Saint Honoré, 75001 Paris, France.
20 Trade and other receivables
Current Non-current Total
---------------------- ---------------------------------- ----------------------------
Group 2019 2018 2019 2018 2019 2018
GBP GBP GBP GBP GBP GBP
------------------- ---------- ---------- ---------------- ---------------- ---------------- ----------
Trade receivables 1,481,086 1,518,654 751,629 564,754 2,232,715 2,083,408
Other receivables 6,736 7,953 215,293 276,534 222,029 284,487
Prepayments 166,208 296,083 - - 166,208 296,083
1,654,030 1,822,690 966,922 841,288 2,620,952 2,663,978
------------------- ---------- ---------- ---------------- ---------------- ---------------- ----------
Current Non-current Total
---------------------- ---------------------------------- ----------------------
Company 2019 2018 2019 2018 2019 2018
GBP GBP GBP GBP GBP GBP
------------------- ---------- ---------- ---------------- ---------------- ---------- ----------
Trade receivables 1,472,235 1,518,654 751,629 564,754 2,223,864 2,083,408
Other receivables 6,736 7,953 215,293 276,534 222,029 284,487
Prepayments 166,208 296,083 - - 166,208 296,083
1,645,179 1,822,690 966,922 841,288 2,612,102 2,663,978
------------------- ---------- ---------- ---------------- ---------------- ---------- ----------
The following details the trade receivables that are stated net
of any credit impairment provision, as set out previously in Note
11 in accordance with IFRS 9.
Group Company
---------------------- ----------------------
Trade receivables 2019 2018 2019 2018
GBP GBP GBP GBP
------------------------------------- ---------- ---------- ---------- ----------
Gross trade receivables 2,685,963 2,779,242 2,677,112 2,779,242
Impairment (453,248) (695,834) (453,248) (695,834)
Trade receivables net of provisions 2,232,715 2,083,408 2,223,864 2,083,408
------------------------------------- ---------- ---------- ---------- ----------
The Group has gross trade receivables of GBP133,883 (2018:
GBPnil) with a related impairment provision of GBPnil (2018:
GBPnil) that have an associated credit rating grade of A+/A-1 for
long term and short term counter party credit respectively (source:
S&P). The remainder of the group's trade receivable balances do
not have established credit ratings.
21 Cash and cash equivalents
Group Company
------------------------ -----------------------
2019 2018 2019 2018
GBP GBP GBP GBP
-------------- ----------- ----------- ---------- -----------
Cash at bank 11,010,861 11,618,921 8,609,739 11,609,901
--------------- ----------- ----------- ---------- -----------
Cash and cash equivalents are held with authorised
counterparties of a high credit standing, in secured investments.
Management does not expect any losses from non-performance by the
counterparties holding cash and cash equivalents, and there are no
material differences between their book and fair values.
Cash held by Aquis Exchange Europe SAS is predominately held in
a Sterling denominated bank account, hedging the group against
foreign exchange fluctuations in cash and cash equivalents of the
subsidiary.
22 Trade and other payables
Group Company
-------------------- --------------------
2019 2018 2019 2018
Current GBP GBP GBP GBP
--------------------------- ---------- -------- ---------- --------
Trade payables 130,396 153,144 215,031 153,144
Accruals 1,053,313 681,010 1,034,636 681,010
Social security and other
taxation 173,540 10,494 173,540 10,494
Other payables 142,325 47,716 44,619 47,716
1,499,574 892,364 1,467,826 892,364
--------------------------- ---------- -------- ---------- --------
23 Leases
The Group has adopted IFRS 16 retrospectively from 1 January
2019 but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in
the standard. The reclassifications and the adjustments arising
from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019.
The impact of adopting IFRS 16 for the first time during the
year ended 31 December 2019 (including the effect on the opening
balance on retained earnings since the group has elected to not
restate comparatives for the 2018 reporting period) is detailed in
Note 2.
The impact on the Group's assets and liabilities, and the
related effects on profit and loss, of the Group's leasing
activities (the Group as a lessee) are detailed below.
Right of Use Assets
The right of use asset was measured at the amount equal to the
lease liability, plus prepaid lease payments (being the unamortised
portion of the rent deposit asset). The right of use asset is
depreciated over the term of the lease and was accounted for during
the year ended 31 December 2019 as follows:
Property
GBP
------------------------------------- ----------
Carrying amount at 1 January 2019 1,444,159
Depreciation for the year (173,166)
Carrying amount at 31 December 2019 1,270,993
------------------------------------- ----------
Of which:
Current 173,166
Non-current 1,097,827
1,270,993
------------------------------------- ----------
The non-current and current portions of the right of use asset
are included in 'Property, Plant and Equipment' and Trade and Other
Receivables on the Statement of Financial Position
respectively.
Rent deposit asset
The rent deposit asset (excluding the prepaid right of use
portion which has been included in the calculation of the right of
use asset above) is a financial asset measured at amortised cost
and was accounted for during the year ended 31 December 2019 as
follows:
Rent deposit asset
GBP
------------------------------------------ -------------------
Carrying amount at 1 January 2019 215,491
Finance income on rent deposit asset for
the year 6,538
Carrying amount at 31 December 2019 222,029
------------------------------------------ -------------------
Of which:
Current 6,736
Non-current 215,293
222,029
------------------------------------------ -------------------
The non-current and current portions of the rent deposit asset
are both included in Trade and Other Receivables on the Statement
of Financial Position.
Lease liability
The lease liability is calculated as the net present value of
the fixed payments (including in-substance fixed payments), less
any lease incentives receivable (e.g. any rent-free periods). The
lease payments are discounted using the interest rate implicit in
the lease. The lease liability is measured at amortised cost and
was accounted for during the year ended 31 December 2019 as
follows:
Lease liability
GBP
-------------------------------------------- ----------------
Carrying amount at 1 January 2019 1,561,096
Finance expense on lease liability for the
year 47,653
Lease payments made during the year (230,445)
Carrying amount at 31 December 2019 1,378,304
-------------------------------------------- ----------------
Of which:
Current 188,610
Non-current 1,189,694
1,378,304
-------------------------------------------- ----------------
The non-current and current portions of the lease liability are
included in 'Lease liability' and Trade and Other Payables on the
Statement of Financial Position respectively.
Net finance expense on leases
31 December 2019
GBP
---------------------------------------- -----------------
Finance expense on lease liability 47,653
Finance income on rent deposit asset (6,538)
Net finance expense relating to leases 41,115
---------------------------------------- -----------------
The finance income and finance expense arising from the Group's
leasing activities as a lessee have been shown net where applicable
as is permitted by IAS 32 where criteria for offsetting have been
met.
Amounts recognised in profit and loss
31 December 2019
GBP
--------------------------------------------- -----------------
Depreciation expense on right-of-use assets (173,166)
Finance expense on lease liability (47,653)
Finance income on rent deposit asset 6,538
Net impact of leases on profit or loss (214,281)
--------------------------------------------- -----------------
The property lease (of which there is only one) in which the
Group is the lessee does not contain variable lease payment
terms.
The total cash outflow for leases amounts to GBP230,445 (2018:
GBP230,445).
24 Share Capital
2019 2018
Group GBP GBP
----------------------------------- ---------- ----------
Ordinary share capital
Issued and fully paid
27,149,559 Ordinary shares of 10p
each 2,714,956 2,714,956
2,714,956 2,714,956
----------------------------------- ---------- ----------
25 Share premium account
Group 2019 2018
GBP GBP
------------------------------ ------------------ -------------
At the beginning of the year 10,839,981 23,517,321
Issue of new shares - 10,840,020
Share capital reduction - (23,517,360)
At the end of the year 10,839,981 10,839,981
------------------------------ ------------------ -------------
26 Other reserves
Group Company
----------------- -----------------
2019 2018 2019 2018
GBP GBP GBP GBP
---------------------------------- -------- ------- -------- -------
Reserves relating to share-based
payments 212,691 92,446 212,691 92,446
----------------------------------- -------- ------- -------- -------
27 Foreign currency translation reserve
In March 2019 the Company successfully applied for regulatory
approval to operate a Multilateral Trading Facility (MTF) in France
through a subsidiary, Aquis Exchange Europe SAS. The translation of
the European subsidiary into Sterling, the functional currency of
the Group, results in foreign exchange differences that have been
recognised in Other Comprehensive Income and accumulated in a
separate component of equity as illustrated below.
Group 2019 2018
GBP GBP
------------------------------------------------------- ---------------- ----------------
At the beginning of the year - -
Foreign exchange differences on translation of foreign 1,439 -
operations recognised in OCI
At the end of the year/period 1,439 -
------------------------------------------------------- ---------------- ----------------
28 Cash generated by operations
2019 2018
Group GBP GBP
---------------------------------------------------- ---------- -------------------
Loss for the year after tax (861,724) (3,417,367)
---------------------------------------------------- ---------- -------------------
Adjustments for:
Taxation credited (265,254) (247,389)
Investment income (41,699) (30,139)
Amortisation and impairment of intangible
assets 446,580 449,001
Depreciation and impairment of property, plant
and equipment 481,611 162,493
Equity settled share-based payment expense 120,245 92,446
Other gains/losses (24,020) (713,884)
Gains/losses on transition of accounting standards (120,369) -
Movement in working capital:
Decrease in trade and other receivables 43,026 (933,522)
Increase in trade and other payables 607,210 616,453
Cash generated/(absorbed) by operations 385,606 (4,021,908)
---------------------------------------------------- ---------- -------------------
2019 2018
Company GBP GBP
-------------------------------------------- ---------- -------------------
Loss for the year after tax (800,744) (3,417,367)
-------------------------------------------- ---------- -------------------
Adjustments for:
Taxation credited (265,254) (247,389)
Investment income (36,303) (30,139)
Amortisation and impairment of intangible
assets 446,580 449,001
Depreciation and impairment of property,
plant and equipment 481,611 162,493
Equity settled share-based payment expense 120,245 92,446
Other gains/losses (15,000) (713,884)
Gains/losses on transition of accounting (120,369) -
standards
Movement in working capital:
Decrease in trade and other receivables 51,876 (933,522)
Increase in trade and other payables 575,463 616,453
Cash generated/(absorbed) by operations 438,105 (4,021,908)
-------------------------------------------- ---------- -------------------
29 Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are key management
personnel, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
2019 2018
Group GBP GBP
------------------------------ -------- --------
Short-term employee benefits 602,195 681,924
------------------------------- -------- --------
30 Controlling party
In the opinion of the Directors, there is no single overall
controlling party.
31 Events occurring after the reporting period
On 4 March 2020 the Financial Conduct Authority ('FCA') approved
the acquisition of 100% of NEX Exchange Limited's share capital by
Aquis Exchange PLC for a consideration of GBP2.87m (GBP1 plus
current working capital, the majority of which comprises regulatory
cash). Group financial statements for future periods will include
the consolidation of NEX Exchange Limited from the date of control
transfer (11 March 2020) and related business combination
disclosure.
The Directors have assessed COVID-19 as a non-adjusting post
balance sheet event given that, at the balance sheet date, few
cases had been confirmed and the virus had only just been
identified. It is possible that this may have an adverse effect on
the Group; however, at this stage the Directors are unable to
quantify what the effect could be on the Group's activities.
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 UVSNRRUUSAAR
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