TIDMUVEN
RNS Number : 2745L
Uvenco UK plc
30 September 2016
30 September 2016
Uvenco UK plc
Final Results
Uvenco UK plc ("Uvenco", the "Company" or the "Group") today
announces its final audited results for the year ended 31 March
2016.
The 2016 Annual Report is being despatched to shareholders today
and will also be available shortly from the Company's website,
www.uvenco.co.uk
Financial Highlights
-- Revenues decreased by 5.3% (2015 - decreased by14%)
-- Adjusted loss before finance income and charges,
depreciation, exceptional items, amortisation, share option charges
and tax of GBP498,298 (2015 - loss of GBP1,110,277)*
-- Loss before taxation of GBP3,658,540 (2015 - loss of GBP4,383,595)
-- Net assets of GBP516,702 (2015 - GBP1,017,329) following
intangible impairment of GBP316,599 (2015 - GBP448,532) and fixed
asset impairments of GBP1,155,939 (2015 - 485,000)
-- Gross profit has increased from 53.9% to 54.0%
-- Net cash outflow from operating activities of GBP786,862
after exceptional items. (2015 - GBP1,613,034)
-- Administration expenses, before exceptional items,
amortisation and share option charges but including depreciation,
decreased by 12.7% to GBP9,683,683 (2015 - GBP11,087,636)**. Total
administration expenses reduced by 8.8% to GBP11,629,826 (2015 -
GBP12,755,675).
-- Net debt has decreased from GBP3.7m at 27 March 2015 to
GBP2.5m at 31 March 2016. Following the refinancing announced on 12
August 2016 net debt has decreased to approximately GBP1.0m.
*- Arrived at from taking the Loss before tax, finance income
and charges, exceptional items, amortisation and share option
charges of GBP1,412,210 from the Statement of Comprehensive Income
and adding back depreciation of GBP913,913
** - As set out on the Statement of Comprehensive Income
Enquiries
Uvenco UK plc Tel No. 020 8879 8300
Sergei Kornienko
Peter Goodman
Stockdale Securities Tel No. 020 7601 6100
Tom Griffiths
Richard Johnson
chairman's statement
I present the audited financial statements for the 12 month
period ended 31 March 2016. It has been another difficult year of
significant change and reshaping of the business in which the
refinancing and restructuring of the Group's Balance Sheet has
again been the over-riding priority. We have reduced the losses,
reduced the debt and, following the refinancing in August 2016,
have produced a considerably stronger balance sheet. Revenues
reduced by 5% in the period but losses reduced considerably.
However, we were still consuming cash, albeit at a much slower
rate.
Despite these persistent challenges the Group continues to look
to the future with the resolve that often results from tough times.
More hard decisions have been made, and actions taken and we
continue to benefit from the strong support of so many of our key
stakeholders.
Financials
Turnover was down 5.3% to GBP15,317,468 (2015: GBP16,167,197)
producing an operating loss before amortisation and share option
charges and exceptional costs of GBP1,412,210 (2015: Loss
GBP2,378,510).
The loss before taxation for the period was GBP3,658,540(2014 -
Loss GBP4,383,595).
Adjusted loss before finance income and charges, depreciation,
exceptional items, amortisation, share option charges and tax was
GBP498,298 (2015: loss GBP1,110,277). Following exceptional costs
of GBP1,787,391 (2015 - GBP1,432,835) the post-tax loss was
GBP3,522,608 (2015: Loss GBP4,068,329).
Gross margins remained constant at 54.0% (2015: 53.9%) while our
distribution and administration costs before exceptional, share
option charges and amortisation decreased by 12.7% to GBP9,683,683
(2015: GBP11,087,636).
Total administration costs for the period were GBP11,629,826
(2015 - GBP12,755,675).
Net finance charges decreased to GBP300,187 (2015: GBP337,046)
and net borrowings at 31 March 2016 had decreased to GBP2,505,994
(2015: GBP3,724,145).
This result for the year falls well behind the performance
announced in April 2016 of an improved second half to our financial
year. This divergence has resulted from write-downs that have been
necessary to ensure that our balance sheet does not over-state the
underlying value of the assets and liabilities given the going
concern position detailed in this report.
Audit
Given the difficulties of the year to March 2015 I would like to
emphasise that these financial statements carry an audit report
which is unqualified with the exception of reference to the
comparative consolidated income and cash flow statements as
referred to in the qualification in the 2015 financial statements.
This is an important progression in the rebuilding of the company
and we are optimistic that this will result in a softening of the
approach to credit taken by some of our suppliers. The
strengthening of our accounts function announced in last year's
report is beginning to have the desired effect.
Equity raising
Significant improvements were made during the year to our
balance sheet which are as detailed below.
In May 2015, GBP100,000 was raised through the placing of
1,000,000 new shares at 10 pence per share with certain directors
and senior management of the Company.
In December 2015 the following equity transactions took
place:
- The Company raised GBP2,694,645 additional equity through the
issue of 37,446,451 new shares. Of the total, GBP1,050,000 was
subscribed for by new and existing investors at 5 pence per share
to provide working capital for the Group, with the balance raised
through the conversion of loan
- notes and other creditor balances at 10 pence per share to
further strengthen the Group's balance sheet.
- 2.3m shares were issued to Unicum Holdings Limited at 10 pence
per share for the purchase of vending machine assets.
- 1m shares were issued to Jeremy Hamer at 10p a share to settle
contractual remuneration due in respect of the year ended 31 March
2015.
In February 2016 we announced the conversion of a further
GBP70,199 of loan notes at 10 pence per share resulting in the
issue of 701,987 shares. Of the original GBP1,622,456 of redeemable
or convertible loan notes in either 2015 or 2018 all but GBP80,166
have now converted to equity, together with any accrued but unpaid
interest and redemption premium.
Further details of these subscriptions are available on our
website.
Post balance sheet event
On 12 August 2016, post year-end, the Group bought itself out of
its indebted position with its lender. The company owed the bank
GBP2.4m which it settled in full for GBP1m borrowed from Reward
Corporate Finance Ltd ('Reward'). All borrowing is now based around
the GBP1.3m borrowed from Reward. It is the Group's intention to
re-finance as soon as we are able at a lower rate of interest,
following the three month minimum period of the Reward
agreement.
Full details are available in note 30.
Name Change
On 31 May 2016 we announced the name change of Snacktime plc to
Uvenco UK plc (AIM ticker: UVEN).
Operations and Strategy
Since 1 April 2016 the business has undergone a profound period
of change. In May 2016 we launched the rebranding to Uvenco UK
offering a new single identity. Although Snack in the Box and
Drinkmaster continue operating under their own names and
sub-brands, the main and core part of the business is now a single
name. Our new website (www.uvenco.co.uk) gives a feel for the
momentum and direction of our business.
Our vision is summarised in the hashtag we use
"#beingnumberone". We aim to be the market leader in terms of both
the quality of our service and our constant innovation.
The core vending service is delivered through three depots which
are aggregated to form the vending division: London, Midlands and
North. These depots each are accountable for their own divisional
profit and loss. Regional Depot Managers now clearly understand
their target which is to deliver EBITDA which is 15% of Revenue,
after accounting for Group costs. We are developing our reporting
processes so that we have visibility of the profitability of every
customer and every machine. This will enable us to manage the
business with a tailored and individual approach. We focus our
attention on the best performing machines which generate the
highest gross profit. We repair and service them as a priority in
order to keep continuity of the revenue flow. This enables us to
maintain a two hour service response commitment with these priority
customers.
The geographic density of our machines is one of the key drivers
of our business. For years we have duplicated routes with hot
beverage machines operated separately from snack machines. This has
led to inefficiency sometimes with two operators visiting the same
location on the same day. We have now merged the majority of such
locations into combined routes with one person servicing both
machines. This merger will be completed by the end of this year
across all three depots.
A new position of Customer Care Manager has been introduced in
every depot to focus on existing customer relations and better
retention. We are striving to achieve a high level of customer
satisfaction.
We are driving innovation with new machines and new technology.
We are ready to welcome a new generation of "Move" machines into
the UK which incorporate the latest innovations such as touch
screen technology. Machines at our public locations now accept
credit cards, Apple and Google Pay. Telemetry allows us to
understand machine performance remotely and in real time. Our new
smartphone app - 24U is being tested now and is able to deliver the
product without the customer even touching the machine.
The next few years will be a period of "big data" management. We
will get to know our customers by name, offer them the products
they love to buy, offer them free coffees and send them birthday
greetings. This is a usual way of managing customer relationships
in the retail environment but will be completely new for our
industry.
We have consolidated our approved supplier base from 411
approved suppliers during FY15 to 321 during FY16. At the same time
we have introduced a multi-source and more competitive supply chain
for products where historically we bought from one supplier.
Naturally this has resulted in better terms and better pricing not
just of vending ingredients but of all supplies such as IT,
logistics, spares and professional services.
Next year we will make decisions about ERP and CRM updates.
While the operating activity is now managed by the newly
appointed Head of Operations, the sales teams now report directly
to the CEO. The same divisional approach has encouraged competition
between our three regional sales teams. We have recently
strengthened the teams with three new members in London and the
Midlands, as well as two telesales managers located in the North.
Our focus now is to stop the decline in revenue and turn the
business around to a position of revenue growth.
People
In December 2015 Michael Maltby assumed responsibility as
Interim CFO and Company Secretary. Michael's consultancy ended in
June 2016 and I would like to thank him for his contribution. Peter
Goodman has succeeded him as Company Secretary and CFO
designate.
Finally I would like to thank all of our staff, new and
continuing, who have supported us through yet another period of
intense change. As stated above the pressures of managing a
business with a challenging working capital position are enormous
and this has made everybody's role that much harder. It is a credit
to each one of them that we continue.
Current Trading & prospects
The environment for the Group continues to be challenging and we
remain focussed on delivering consistent quality products while
managing costs, from "clean, full and working" machines, whenever a
purchase is desired. That said, we are convinced that the winners
in the vending sector will be those who can harness new
technologies such as wave and pay and telematics which will provide
us with a competitive advantage. With this in mind, we are
encouraged by current trading and look forward to the future with
increasing confidence.
Jeremy Hamer
Chairman
Date: 29 September 2016
BOARD OF DIRECTORS
Executive Directors
Sergei Kornienko, Chief Executive Officer. Sergey Kornienko, has
been the Chief Executive of Uvenco Group, a Russian manufacturer
and operator of vending machines and other retail payment
equipment, since 2009, having been its Chief Financial Officer
since 2007. Prior to this he had been Head of Tax and subsequently
CFO of Unicum Group since 2005. Previously, Sergei had been Chief
Accountant of the Russian branch of IHS Energy (1999-2005) and of
AO Mair (1995-1999) having graduated from the Academy of Finance,
Moscow in 1998 with a PhD in Finance.
Non-Executive Directors
Jeremy Hamer, Chairman, FCA has a unique professional
background, which blends an early successful career in financial
services and then the food industry, with a more recent array of
mergers, acquisitions, fundraising and turnaround experience, with
a prime focus on the AIM market. He currently acts as a
non-executive director across a portfolio of publicly quoted
companies, as well as being an active Board level executive
coach.
Boris Belotserkovsky, is both a Russian and US citizen, he is
Chairman and sole owner of Uvenco (www.uvenco.ru), Russia's leading
vending company. He also has material shareholdings in Oplata LLC
and Transvend CJSC which are both involved in vending. Mr
Belotserkovsky is a President of the Russian National Vending
Association and a Managing Director and a member of the executive
committee of the European Vending Association.
Michael Jackson, MA FCA founded Elderstreet Investments Limited
in 1990 and is its executive chairman. For the past 24 years, he
has specialised in raising finance and investing in the smaller
companies quoted and unquoted sector. From 1983 until 1987 he was a
director and from 1987 until 2006 was chairman of FTSE 100 company
The Sage Group plc. He was also Chairman of PartyGaming plc,
another FTSE 100 company. He is Chairman of Netcall Plc and
Advanced Computer Software Plc. He is also a director of
Elderstreet portfolio companies, Fords Packaging Systems Limited,
Baldwin & Francis Holdings Limited, AngloInfo Limited, and
Access Intelligence plc. Michael studied law at Cambridge
University, and qualified as a chartered accountant with Coopers
& Lybrand before spending five years in marketing for various
US multinational technology companies.
strategic report
PRINCIPAL ACTIVITIES
The principal activities of the Group are the sale and operation
of hot drink and snack vending machines, the operation of free on
loan vending machines via a franchise division and the production
and supply of "in-cup" drinks and associated equipment.
BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The Chairman's statement sets out the review of the business in
the year and future developments.
RISKS AND UNCERTAINTIES
The operation of a public listed company involves a series of
inherent risks and uncertainties across a range of strategic,
commercial, operational and financial areas. The Board has outlined
their perception of particular risks and uncertainties facing the
Group below. These risks and uncertainties could cause the actual
results to vary from those experienced previously or described in
forward looking statements within the annual report:
-- Changing consumer trends
The emphasis of the Group's sales has shifted towards hot
drinks. This has reduced our exposure to the snack market which
could be subject to future regulation relating to healthier eating.
It is in the interests of the brands whose products we stock to
develop either healthier snacks or to amend the recipe of their
existing items to, for example, reduce fat and salt content as
consumer tastes and trends change towards healthier products. The
Group's offering will evolve to meet that demand.
-- Liquidity Risk
Whilst the Group's borrowing has reduced considerably during the
period, day to day cash management still remains our priority while
the operating cash generation of the Group is rebuilt. Details of
equity raised and the renegotiation of the group's debt is included
in the Chairman's statement.
-- Litigation and dispute risk
From time to time, the Group may be involved in litigation. This
litigation may include, but is not limited to, contractual claims,
personal injury claims, employee claims and environmental claims.
If a successful claim is pursued against the Group, the litigation
may adversely impact the sales, profits or financial performance of
the Group. Any claim, whether successful or not, may adversely
impact on the Company's share price. There is a risk that should
the Group seek redress against another party to its contracts by
way of litigation or other dispute resolution processes, these
processes may incur significant Group resources, the cost of
pursuing such actions may be prohibitive and a successful result is
not assured.
-- General economic conditions
Changes in the general economic climate in which the Group
operates may adversely affect the financial performance of the
Group. Factors which may contribute to that general economic
climate include the level of direct and indirect competition
against the Group, industrial disruption, the rate of growth of the
Group's sectors, interest rates and the rate of inflation. The
directors do not believe that Britain's decision to leave the EU
has had a noticeable impact on the trading of the Group.
-- Covenants compliance
Since the 12 August 2016 covenant compliance has transferred to
our commitments to Reward Invoice Finance Limited ("Reward"). The
key covenant is that their interest charge is paid monthly as it
falls due. If the Group defaults on this commitment Reward are
empowered to foreclose on their loan with immediate effect. This
debt facility has been personally guaranteed by B
Belotserkovsky.
-- Product price changes
The purchase price of products distributed by the Group can
fluctuate from time to time, thereby potentially affecting the
results of operations. Adverse economic conditions and rising input
prices may impact the Group's revenue and, as a result, its
profitability.
The Group endeavours, whenever possible, to pass on price
increases from its suppliers to its customers. The Group mitigates
risks over stock by managing stock levels efficiently and ensuring
they are kept to a minimum.
The Group's exposure to interest rate risk, credit risk and
liquidity risk are detailed in the Financial Instruments section of
the Directors' report.
KEY PERFORMANCE INDICATORS
Key performance indicators are used to measure and control both
financial and operational performance. Revenue growth and
normalised operating margin are tracked to ensure plans are on
track and corrective actions taken where necessary.
Period ended Period ended
31 March 2016 27 March 2015
Revenue growth(1) (5.3%) (14.0%)
Adjusted operating margin(2) (3.3%) (6.9%)
1 Revenue growth = Revenue increase as a percentage of the
previous year per the consolidated statement of comprehensive
income.
2 Adjusted operating margin is calculated by dividing (loss)/profit
before Finance Income and Charges, Tax, Share Option Charges,
Amortisation, Depreciation and Exceptional items by Revenue.
FINANCIAL INSTRUMENTS
At the year end The Group's financial instruments comprise
redeemable and convertible loan notes, a bank term loan and an
overdraft facility, hire purchase and finance leases, cash and
liquid resources, and various items arising directly from its
operations, such as trade receivables and trade payables. The main
purpose of these financial instruments is to finance the Group's
operations. Since 12 August 2016 the Group has exchanged its bank
term loan and overdraft facility, for a term loan and an invoice
discounting facility.
The main risks arising from the Group's financial instruments
are interest rate risk, credit risk and liquidity risk.
Full details of the Group's financial assets and liabilities are
set out in Notes 18 - 20 and Note 25 to the financial
statements.
Liquidity risk
Short term flexibility was available through existing bank
facilities and the netting off of surplus funds. Since 12 August
2016 the flexibility is limited to the headroom provided by the
Reward invoice discounting facility and in overall terms is limited
to GBP1.3 million.
Interest rate risk
The Group's hire purchase contracts and convertible loan are at
a fixed rate of interest and so cash flow is not affected by
interest rate or cash flow risk. The Group was exposed to interest
rate fluctuations on GBP1,8 million of its bank loans which had an
interest rate of 5% above LIBOR. Furthermore, the Group overdraft
balance was exposed to an interest rate of 2.75% above LIBOR. The
Directors have now refinanced the bank loans and overdraft
facilities at a fixed rate of interest of 21% per annum; this is
seen as a temporary measure before we look for more competitive
options in the market place. See Note 30 for details.
Credit risk
The Group's principal financial assets are cash and trade
receivables. The credit risk in relation to trade receivables is
minimised by ensuring that customer relationships are nurtured and
monies are collected as they fall due.
On-going management services fees due from the franchisees are
in many cases secured over franchisees' properties in the event of
non-payment. At the period end a provision of GBP329,960 was made
against trade receivables which relates to historic debts that were
not deemed recoverable.
EXCEPTIONAL ITEMS
Included within the financial statements are exceptional costs
of GBP1,787,391 (2015 - GBP1,432,835).
Full details of exceptional costs are included in Note 5 of the
financial statements.
Exceptional costs in 2015 and 2016 denoted as redundancy costs
are a part of the continued restructuring of the Group.
GOING CONCERN
The directors have drawn up these financial statements on a
going concern basis. The reasons supporting this position are
outlined in the accounting policy Note 1 as well as being referred
to by way of an emphasis of matter in the Auditor's Report.
ACCOUNTING PERIOD
The financial period represents the 52 week and 4 days to 31
March 2016 (prior financial period is 51 weeks and 3 days to 27
March 2015).
APPROVAL
This report was approved by the Board on 29 September 2016 and
is signed on its behalf by
Jeremy Hamer
Chairman
directors' report
The Directors present their report and the audited financial
statements for the period ended 31 March 2016.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Directors'
report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and the company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that period. The
Directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for
companies trading securities on the AIM Market.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the on-going
integrity of the financial statements contained therein.
PROVISION OF INFORMATION TO AUDITORS
Each of the persons who are Directors at the time when this
Directors' report is approved has confirmed that:
-- so far as that Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- each Director has taken all the steps that ought to have been
taken as a Director in order to be aware of any information needed
by the Company's auditor in connection with preparing their report
and to establish that the Company's auditor is aware of that
information.
DIVIDS
The Directors do not recommend payment of a dividend in respect
of the period ended 31 March 2016 (2015: GBPNil).
The Directors who served during the year and their direct
beneficial interest in the issued share capital were:
Ordinary Ordinary
Ordinary shares of GBP0.02 each Shares Shares
2016 2015
B. Belotserkovsky 1,616,400 1,466,400
J. Hamer 1,719,967 80,000
M. Jackson 1,781,971 197,000
S. Kornienko 600,000 -
M. Stone (resigned 30 April 2016) 100,000 -
T. James (Resigned 10 November 2015) - 40,000
G. White (appointed 9 June 2014, resigned
24 July 2015) - -
Of the above holdings the following were held via their
individual SIPP's - J. Hamer 1,719,967 and M. Jackson
1,523,971.
At 31 March 2016, the Belotserkovsky concert party including
Versatel Company Limited, Mrs V. Belotserkovskaya, S.Kornienko,
Uvenco Holdings and Mrs G.White held 40,210,016 ordinary shares in
the company representing 53.9%.
M. Jackson indirectly held a beneficial interest in 4,963,150
and 1,796,296 ordinary shares in the company via his Directorship
and shareholding in Elderstreet Investments Ltd, and Elderstreet
VCT plc respectively M.Jackson also had a beneficial interest in
1,141,588 ordinary shares held by the Trustees of the WE Jackson
Trust of which his 'minor' daughter is a beneficiary. In total
these holdings represent 10.1%.
J. Hamer had a de minimis interest via his shareholding in both
Elderstreet VCT plc (approximately 0.35%) and Unicorn AIM VCT plc
(less than 0.3%).
As at the end of the period the Directors had no interest in
share options although Mrs Veronika Belotserkovsky, wife of Boris
Belotserkovsky,a non-executive Director of the Company, holds
1,816,557 Warrants which are exercisable at 2p per share in
ordinary equity.
The Directors' remuneration is shown in Note 8 to the financial
statements.
capital
The capital structure of the Group consists of debt, which
includes the borrowings, finance leases and redeemable and
convertible loan notes disclosed in Note 19, cash and cash
equivalents, and equity attributable to equity holders of the
parent, comprising issued capital, warrant reserve, merger reserve,
capital redemption reserve and retained earnings as disclosed in
Note 23.
The Group sets the amount of capital it requires in proportion
to risk. The Group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.
SUBSTANTIAL INTERESTS
There were the following substantial interests (3% or more) in
the Company's issued ordinary share capital as at 15 September
2016
Versatel Company Limited* 31.9%
Mrs V. Belotserkovskaya 15.9%
Unicorn Asset Management Limited 12.7%
Elderstreet Investments Limited 6.7%
HSBC Global Custody Nominee (UK) 6.0%
Uvenco Holdings Limited 3.1%
*The Belotserkovsky Concert Party of which Versatel Company
Limited is a part, holds an interest in 53.9% of the Company's
issued ordinary share capital. Versatel Company Limited is deemed
to be a part of the Concert Party as a result of the business
relationship between its owner and Boris Belotserkovsky.
DIRECTORS' INDEMNITIES
The Company has paid GBP5,250 (2015 - GBP2,999) in respect of
Directors' and Officers' indemnity insurance.
REPORT ON CORPORATE GOVERNANCE
The Group is committed to high standards of corporate
governance. The Board is accountable to the Company's shareholders
for good corporate governance. Although the Group is not required
to comply with the UK Corporate Governance Code, this statement
describes how the principles of corporate governance are applied to
the Group.
Directors
The Board of Uvenco UK plc comprises one Executive Director and
three Non-executive Directors. The Board is chaired by J.J.Hamer,
and assisted by the Senior Independent Non-executive Director
M.E.W.Jackson, who has the primary responsibility for running the
Board.
S.Kornienko has executive responsibilities for the remaining
operations, results and strategic development of the Group.
M.Maltby who was acting as Chief Financial Officer and Company
Secretary completed his consultancy contract on 30 June 2016 and
has been succeeded by Peter Goodman. The Board structure ensures
that no individual or group dominates the decision making process
and this is further controlled through a Relationship Agreement
signed in November 2014, a copy of which is available in the
section Rule 9 waiver.
B.Belotserkovsky is not deemed an independent Director due to
his Concert Party controlling 53.9% of the shares currently in
issue. S.Kornienko is deemed to be a member of the Belotserkovskiy
Concert Party. J.J.Hamer and M.E.W.Jackson are considered to be
independent of both the management and the Concert Party and from
any business relationship, which could materially interfere with
their independent judgment.
The Board meets regularly with no less than ten such meetings
held in each calendar year. There is a formal schedule of matters
specifically reserved for the Board however its decisions enable it
to manage overall control of the Group's affairs. All Directors
have access to the services of the Company Secretary and may take
independent professional advice at the Group's expense in the
furtherance of their duties. Management has an obligation to
provide the Board with appropriate and timely information to enable
it to discharge its duties. The Chairman ensures that all Directors
are properly briefed on issues arising at Board meetings.
At the present time the Group does not have a separate
Nominations Committee preferring to deal with any Board
appointments at our regular Board meetings. This would include the
decision to recommend the appointment, or re-appointment, of a
Director.
The Company's Articles of Association ensure Directors retire at
the third Annual General Meeting after the Annual General Meeting
at which they were elected and may, if eligible, offer themselves
for re-election.
M.E.W.Jackson chairs the Audit Committee and J.J.Hamer chairs
the Remuneration Committee. The Non-executive Directors and the
Chairman are members of all the above committees.
Directors' remuneration
The remuneration packages for Executive Directors are structured
to attract, motivate and retain Directors with the experience,
capabilities and ambition required to achieve the Group's strategic
aims. The Remuneration Committee is responsible for determining and
reviewing the annual remuneration packages of Executive
Directors.
The salaries of the Executive Directors are set by the committee
and reviewed annually, taking into account the performance of the
Group, and the individual, and salary increases given to other
Group employees.
Relations with shareholders
The Board attaches a high importance to maintaining good
relationships with shareholders, whether institutional or private
ones. The Board encourages all Directors to attend shareholder
meetings enabling the Board to develop an understanding of the
views of shareholders.
The Company counts all proxy votes and except where a poll is
called, it indicates the level of proxies lodged on each resolution
and the balance for and against the resolution, after it has been
dealt with on a show of hands.
A separate resolution on each substantially separate issue is
proposed at the Annual General Meeting. The Chairman of the Board
and each of the Chairmen of the Audit and Remuneration Committees,
are available to answer questions at the Annual General
Meeting.
Accountability and Audit
The respective responsibilities of Directors and Auditors are
set out in the Annual Report. The Board has established an Audit
Committee. The Audit Committee's primary responsibilities include
monitoring of internal control, approving accounting policies,
agreeing the treatment of major accounting issues, appointment and
remuneration of the external auditors and reviewing the interim and
financial statements before submission to the Board. It meets at
least once a year with the external auditors to review their
findings. At these meetings the Non-executive Directors have the
opportunity to discuss findings with the auditors in the absence of
the Executive Directors.
To follow best practice and in accordance with Ethical Standard
1 issued by the Financial Reporting Council, the external auditors
have discussions with the audit committee on the subject of auditor
independence and have confirmed their independence in writing.
Internal control
The Directors acknowledge that they are responsible for ensuring
that the Group has in place a system of internal controls, which is
both effective and appropriate to the nature and size of the
business.
The Board, through the Audit Committee, has reviewed the
operation and effectiveness of the systems of internal control
throughout the accounting year and the period to the date of
approval of the financial statements, although it should be
understood that such systems are designed to provide reasonable but
not absolute assurance against material misstatement or loss. The
Group's system of controls include:
-- A comprehensive budgeting system with annual budgets approved by the Directors;
-- Monthly monitoring of actual results against budget and a review of variances;
-- Close involvement of Directors who approve all significant transactions;
-- Internal management rules which include financial and
operating control procedures for all management of the Group;
-- Identification and appraisal by the Board of the major risks
affecting the business and the financial controls;
-- Bank facilities and other treasury functions are monitored
and policy changes approved by the Board.
The Board has considered the need for an internal audit function
and concluded that this would not be appropriate at present due to
the size of the Group.
FINANCIAL INSTRUMENTS
Details of the Group's financial instruments are included within
the Strategic Report on page 11.
EMPLOYEE INVOLVEMENT
The Group aims to improve the performance of the organisation
through the development of its employees. Their involvement is
encouraged by means of team working and improving communications
throughout the Group.
The Group could be adversely impacted if it failed to manage
health and safety effectively. The Board of the Group believes the
safety of its employees, contractors and suppliers is fundamentally
important. A Group compliance programme is in place which ensures
that all legal obligations are adhered to. Health and safety is
discussed at the monthly Board meetings.
DISABLED EMPLOYEES
The Group is committed to equality of employment and its
policies reflect a disregard of factors such as disability in the
selection and development of employees. The Group is involved in
various initiatives which promote a positive understanding of
disability and the integration of the disabled into the
workforce.
POST BALANCE SHEET EVENTS AND FUTURE DEVELOMENTS
On 12 August 2016 this year the company refinanced its banking
facilities. Full details of post balance sheet events are disclosed
in Note 30 of the financial statements.
Future developments are discussed in detail in the chairman's
statement.
AUDITORS
BDO LLP have expressed their willingness to continue in office
as auditor and a resolution proposing their reappointment will be
submitted at the forthcoming Annual General Meeting.
This report was approved by the Board on 29 September 2016 and
is signed on its behalf by
Jeremy Hamer
Chairman
report of the independent auditor
PERIOD ended 31 March 2016
INDEPENT AUDTOR'S REPORT TO THE MEMBERS OF UVENCO UK PLC
We have audited the financial statements of Uvenco UK plc for
the year ended 31 March 2016 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Company
Statements of Changes in Equity, the Consolidated Statement of
Financial Position and Company Balance Sheet, the Consolidated
Statement of Cash Flows, and the related notes. The financial
reporting framework that has been applied in the preparation of the
Consolidated financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been
applied in preparation of the parent Company financial statements
is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and auditors
As explained more fully in the statement of Directors'
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Financial Reporting
Council's (FRC's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the FRC's website at
www.frc.org.uk/auditscopeukprivate.
Basis for qualified opinion in respect of the prior year
comparatives
In our audit report for the year ended 27 March 2015 we stated
that we had been unable to obtain sufficient appropriate audit
evidence over the categorisation of transactions in the Group
Statement of Comprehensive Income and the Group Statement of Cash
Flows and the related notes. As a result the figures in these
statements and related notes for the current period may not be
comparable to the corresponding figures.
Qualified opinion on financial statements
In our opinion, except for the possible effects of matters
described in the Basis for qualified opinion paragraph above
relating to the comparative figures:
-- the financial statements give a true and fair view of the
state of the Group's and the parent company's affairs as at 31
March 2016 and of the group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company's financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Emphasis of Matter - going concern
In forming our opinion on the financial statements, we have
considered the adequacy of the disclosures made in Note 1 to the
financial statements concerning the Group's ability to continue as
a going concern. The Group has entered in to an agreement for a
debt facility with Reward Invoice Finance Limited ('Reward') which
may be terminated by the lender from August 2017 by giving one
month's notice. In addition, further funds may be required during
the next 12 months to finance the Group's working capital
requirements should the Group not meet its cash flow forecasts. The
Directors have received a letter of intent from Mr Belotserkovsky
that Partner Invest LLC, a company owned and controlled by the
Belotserkovsky family, intends to provide funds up to a maximum of
GBP750,000 should the company require such funds. In addition, Mr
Belotserkovsky has provided a personal guarantee in respect of the
debt facility and a letter of intent not to call in any amounts
that may be required to be paid under that guarantee for a period
until at least 30 September 2017. However, the facility with Reward
can be called in should there be a material deterioration in trade,
the facility may not be replaced or extended before August 2017 and
the letter of intent from Mr Belotserkovsky is not legally binding.
These factors indicate the existence of material uncertainties
which may cast significant doubt about the Group's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Group was unable
to continue as a going concern.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion the information given in the strategic report and
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Christopher Pooles
For and on behalf of BDO LLP, statutory auditor
Reading
Date 29 September 2016
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC30512)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
PERIOD ended 31 March 2016
Notes 2016 2016 2016 2016 2015 2015 2015 2015
------ ------------- ------------- ------------ ------------- ------------- ------------- ------------ -------------
Loss before Amortisation Exceptional Total Loss before Amortisation Exceptional Total
Exceptional & Share Items (Note Exceptional & Share Items
Items Option 5) Items Option
Amortisation Charges Amortisation Charges
& Share & Share
Option Option
Charges Charges
GBP GBP GBP GBP GBP GBP GBP GBP
------ ------------- ------------- ------------ ------------- ------------- ------------- ------------ -------------
REVENUE 3 15,317,468 - - 15,317,468 16,167,197 - - 16,167,197
Cost of sales (7,045,995) - - (7,045,995) (7,458,071) - - (7,458,071)
------------- ------------- ------------ ------------- ------------- ------------- ------------ -------------
GROSS PROFIT 8,271,473 - - 8,271,473 8,709,126 - - 8,709,126
Administration
expenses (9,683,683) (158,752) (1,787,391) (11,629,826) (11,087,636) (235,204) (1,432,835) (12,755,675)
------------ ------------- ------------- -------------
LOSS FROM 5 (1,412,210) (158,752) (1,787,391) (3,358,353) (2,378,510) (235,204) (1,432,835) (4,046,549)
OPERATIONS
Finance income 6 - - - - 20 - - 20
Finance costs 7 (300,187) - - (300,187) (337,066) - - (337,066)
------------- ------------- ------------ ------------- ------------- ------------- ------------ -------------
LOSS BEFORE
TAXATION (1,712,397) (158,752) (1,787,391) (3,658,540) (2,715,556) (235,204) (1,432,835) (4,383,595)
Income tax
credit 11 135,932 315,266
------------- -------------
LOSS AFTER TAXATION AND TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
THE OWNERS OF THE PARENT
Loss per share attributable to the
owners of the parent (3,522,608) (4,068,329)
============= =============
Basic and 12 (8.13) (16.92)
diluted pence pence
loss per share
All operations are continuing. The Notes on pages 25 to 62 form
part of these financial statements.
Consolidated STATEMENT OF Changes in equity
PERIOD ended 31 March 2016
Issued Share Capital Share Convertible
share premium Merger redemption option debt option Warrant Retained
GROUP capital account reserve reserve reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at
31 March
2014 326,980 8,347,383 6,817,754 1,274,279 355,592 147,306 2,236,130 (16,808,736) 2,696,688
Share
option
expense - - - - 18,971 - - - 18,971
Issue of
shares in
the
year 316,000 2,054,000 - - - - - - 2,370,000
Transfer
of merger
reserve - - (6,817,754) - - - - 6,817,754 -
Retained
loss for
the year - - - - - - - (4,068,329) (4,068,329)
Balance at
27 March
2015 642,980 10,401,383 - 1,274,279 374,562 147,306 2,236,130 (14,059,311) 1,017,329
---------- ----------- ------------ ----------- -------- ------------ ---------- ------------- ------------
Issue of
shares in
the
year 440,000 684,444 - - - - - - 1,124,444
Loan notes
converted 408,968 1,635,875 - - - (147,306) - - 1,897,537
Retained
loss for
the year - - - - - - - (3,522,608) (3,522,608)
Balance at
31 March
2016 1,491,948 12,721,702 - 1,274,279 374,562 - 2,236,130 (17,581,919) 516,702
========== =========== ============ =========== ======== ============ ========== ============= ============
The Notes on pages 25 to 62 form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
PERIOD ended 31 March 2016
Notes 2016 2015
GBP GBP
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 13 3,532,250 4,802,133
Intangible assets 14 771,581 1,246,932
Deferred tax asset 16 - 49,656
4,303,831 6,098,721
------------- -------------
CURRENT ASSETS
Inventories 17 888,144 1,122,301
Trade and other receivables 18 1,865,737 1,936,606
Cash and cash equivalents 291,874 701,082
3,045,755 3,759,989
------------- -------------
TOTAL ASSETS 7,349,586 9,858,710
============= =============
LIABILITIES
CURRENT LIABILITIES
Borrowings 19 (1,422,072) (3,298,089)
Trade and other payables 20 (3,796,440) (3,925,920)
Provisions 21 - (63,939)
(5,218,512) (7,287,948)
------------- -------------
NON CURRENT LIABILITIES
Borrowings 19 (1,375,795) (1,127,138)
Deferred tax liability 16 (238,577) (426,295)
------------- -------------
(1,614,372) (1,553,433)
TOTAL LIABILITIES (6,832,885) (8,841,381)
------------- -------------
NET CURRENT LIABILITIES (2,172,757) (3,527,959)
------------- -------------
NET ASSETS 516,702 1,017,329
============= =============
EQUITY - ISSUED SHARE CAPITAL ATTRIBUTABLE
TO THE OWNERS OF THE PARENT COMPANY
Share capital 22 1,491,948 642,980
Share premium account 23 12,721,702 10,401,383
Merger reserve 23 - -
Capital redemption reserve 23 1,274,279 1,274,279
Share option reserve 23 374,562 374,562
Convertible debt option
reserve 23 - 147,306
Warrant reserve 23 2,236,130 2,236,130
Retained deficit 23 (17,581,919) (14,059,311)
TOTAL EQUITY 516,702 1,017,329
============= =============
These financial statements were approved by the Board of
Directors and authorised for issue
on 29 September 2016.They were signed on its behalf by:
Jeremy Hamer Sergei Kornienko
The Notes on pages 25 to 62 form part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD ended 31 March 2016
Cash Flow Statement
2016 2015
CASH FLOW FROM OPERATING ACTIVITIES GBP GBP
Loss Before Tax (3,658,540) (4,383,595)
------------ ------------
Exceptional items 1,787,391 1,432,835
Loss before taxation and exceptional
items (1,871,149) (3,884,292)
------------ ------------
Finance costs 300,187 337,066
Finance income - (20)
Loss on disposal of fixed assets 26,287 1,163
Depreciation of property, plant
and equipment 913,913 1,268,232
Amortisation of intangible assets 158,753 211,617
Impairment of intangible and tangible
assets 1,472,538 933,533
Share based payment expense - 18,970
Operating cash inflow/(outflow)
pre-exceptional costs 1,000,529 (180,199)
------------ ------------
Exceptional items (1,787,391) (1,432,835)
Operating cash outflow (786,862) (1,613,034)
------------ ------------
Decrease in inventories 234,155 161,228
Decrease in receivables 70,869 738,305
Increase in payables 4,352 219,995
(Decrease) in provisions (63,939) (106,553)
Cash generated from operations (541,425) (600,059)
------------ ------------
Interest paid (209,220) (337,066)
Income taxes - -
Net cash expenditure from operating
activities (750,645) (937,125)
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Interest received - 20
Proceeds on disposal of property,
plant and equipment - 15,595
Purchase of property, plant and
equipment (596,235) (409,385)
Net cash used in investing activities (596,235) (393,770)
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of borrowings (219,055) (1,120,304)
Net finance lease payments (86,197) (54,870)
Proceeds from issue of shares (net
of issue costs) 1,124,444 2,370,000
Net cash generated from financing
activities 819,192 1,194,826
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (527,688) (136,069)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning
of year 184,071 320,140
------------ ------------
Cash and cash equivalents at the
end of the year (343,617) 184,071
============ ============
Cash and cash equivalents comprise:
Cash 291,874 701,082
Overdrafts (635,491) (517,011)
------------ ------------
(343,617) 184,071
============ ============
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ended 31 March 2016
1 Presentation of financial statements
General information
Uvenco UK plc is a public limited company incorporated in
England and Wales under the Companies Act (registered number
06135746). The Company is domiciled in the United Kingdom and its
registered address is 17 Rufus Business Centre, Ravensbury Terrace,
London, SW18 4RL. The Company's shares are traded on the AIM market
of the London Stock Exchange.
Basis of preparation
These consolidated financial statements are presented on the
basis of International Financial Reporting Standards (IFRS) as
adopted by the European Union and interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC)
and have been prepared in accordance with AIM rules and the
Companies Act 2006, as applicable to companies reporting under
IFRS.
These consolidated financial statements have been prepared in
accordance with the accounting policies set out in Note 2.
All companies in the Group use sterling as presentational and
functional currency. The financial period represents the 52 week
and 4 days to 31 March 2016 (prior financial period is 51 weeks and
3 days to 27 March 2015).
Going concern
Accounting standards require the Directors to consider the
appropriateness of the going concern basis when preparing the
financial statements and if necessary to explain how they have
reached their conclusion. The Directors have taken notice of the
Financial Reporting Council guidance 'Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies.
The Group made a loss before tax of GBP3.7 million for the year
ended 31 March 2016 and had net current liabilities of GBP2.2
million and net assets of GBP0.5 million as at that date.
Subsequent to the balance sheet date the Group paid off its
existing bank loan and overdraft of GBP2.4m for a discount of
GBP1.0 million and re-financed with borrowings from Reward Invoice
Finance Limited ("Reward") for additional working capital (see Note
30). The total Group debt has therefore reduced significantly to
approximately GBP1.3 million. Provided the terms of the agreement
are complied with the current debt facility will remain in place
until August 2017. However, the agreement may be terminated by the
Company by giving one month's notice, at any time after October
2016, should alternative finance be found.
Management have prepared a cash flow forecast for the period to
31 December 2017. Whilst the Directors have continued to reduce the
operating costs of the Group and improve the performance of the
vending estate there is limited cash headroom in the forecast.
Should the Group's operating performance and net cash inflows fall
behind forecast a further injection of working capital may be
required.
Management have agreed to provide a further equity injection of
GBP0.1million, to be matched by additional financing from Reward
under the terms of that agreement, should the Group require it.
In order to satisfy themselves that the going concern basis
remains appropriate the Directors have taken into account the
personal guarantee given by the Group's majority shareholder Mr
Belotserkovsky to Reward, in respect of the new financing facility,
should a breach in the terms of that facility occur. Mr
Belotserkovsky has undertaken not to call in any amounts due to him
by the Group, should that guarantee be called upon, for a period up
to at least 30 September 2017. Finally, Mr Belotserkovsky has
provided a letter of intent that Partner Invest LLC, a company
owned and controlled by his family will make available up to a
maximum of GBP750,000 to provide additional funds to the Company
should such funds be required. The board are also considering
further options to realise cash from the Group's asset base should
it be required to fund further working capital requirements.
Due to the fact that the facility with Reward can be called in
should there be a material deterioration in trade, that the
facility may not be able to be replaced or extended beyond August
2017 and that the letter of intent from Mr Belotserkovsky,
including the intention to provide additional funds for working
capital from Partner Invest LLC, is not legally binding, this
indicates the existence of material uncertainties that may cast
significant doubt on the Group's ability to continue as a going
concern and, therefore, that it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
However, the Directors are of the opinion that the Group can
continue to operate within the facilities available and that these
will be either replaced or extended in the timeframe available and
that the letter of intent can be relied on if necessary.
Accordingly, they consider the Group will continue as a going
concern, meeting its liabilities as they fall due. The financial
statements have therefore been prepared on a going concern
basis.
The following new standards have been adopted during
the year
The new standards, amendments and interpretations to existing
standards that were published by the IASB and endorsed by the EU
that are applicable for the Group are as follows:
-- Disclosure Initiative: Amendments to IAS 1 (effective 1
January 2016)
-- Annual improvements to IFRSs
The adoption of the above new standards has not had a material
impact on the financial statements during the year ended 31 March
2016.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not effective for the year ended 31 March 2016
and therefore have not been applied in preparing these accounts.
The effective dates shown are for periods commencing on the date
quoted.
-- IFRS 15 Revenue from Contracts with Customers (effective 1
January 2018) - not EU endorsed
-- IFRS 9 Financial Instruments (effective 1 January 2018) - not
EU endorsed
-- IFRS 16 Leases (effective 1 January 2019 - not EU
endorsed
-- Clarification of Acceptable Methods of Depreciation
and Amortisation: Amendments to IAS16 and IAS38 (effective1January
2016) - EU endorsed 1 January 2016
-- Equity Method in Separate Financial Statements (Amendments
to IAS 27) (effective 1 January 2016) - EU endorsed 1 January
2016
-- Disclosure Initiative: Amendments to IAS 1 (effective
1 January 2016) - EU endorsed 1 January 2016
-- Disclosure Initiative: Amendments to IAS 7 (effective
1 January 2017) - not EU endorsed
At the date of authorisation of these financial statements,
the directors have considered the standards and interpretations
which have not been applied in these financial statements,
were in issue but not yet effective (and in some cases
had not yet been adopted by the EU) and only IFRS 15 'Revenue
from Contracts with Customers', IFRS 16
'Leases' and IFRS 9 'Financial Instruments' were considered to
be relevant. The directors are still assessing whether the
application of IFRS9, IFRS 15 and IFRS16, once effective,
will have a material impact on the results of the Group.
Adoption of the other standards and interpretations referred to
above is not expected to have a material impact on the results of
the Group. Application of these standards may result in some
changes in presentation of information within the Company's
financial statements.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The Group makes estimates and assumptions concerning
the future. The principal areas where judgement was exercised are
as follows:
-- An impairment of intangible and tangible fixed assets has the
potential to significantly impact upon the Group's statement of
comprehensive income for the year. In order to determine whether
impairments are required the Directors estimate the recoverable
amount of the intangibles. This calculation is based on the cash
flow forecasts applicable to the Group of cash-generating units for
the following financial year extrapolated over an eight year period
assuming no growth. A discount factor, based upon the Group's
weighted average cost of capital is applied to obtain a current
value ('value in use'). The fair value less costs to sell of the
cash generating unit is used if this results in an amount in excess
of value in use. Any potential impairment is allocated first
against intangible fixed assets and then against tangible fixed
assets.
Estimated future cash flows for impairment calculations are
based on management's expectations of future volumes and margins
based on plans and best estimates of the productivity of the income
generating unit in their current condition. Future cash flows
therefore exclude benefits from major expansion projects requiring
future capital expenditure.
Future cash flows are discounted using a discount rate based on
the Group's weighted average cost of capital. The weighted average
cost of capital is impacted by estimates of interest rates, equity
returns and market related risks. The Group's weighted average cost
of capital is reviewed on an annual basis. See note 15 for more
details.
-- Property, plant and equipment includes the value of the
vending machine estate. The Directors annually assess both the
residual value of these assets and the expected useful life of such
assets.
-- The Directors have estimated the useful economic lives of
intangible assets. The economic lives and the amortisation rates
are reviewed annually by the Directors.
-- The Group receives branding fees to contribute to the
installation and refurbishment of vending machines. The Directors
are required to assess the amounts receivable at each reporting
date and whether all the conditions have been met. Where conditions
have been met these are recognised within income.
-- The sales from vending machines disclosed are recognised at
the point of sale to the customer. At each year end, the Directors
are required to make an estimate of sales where the vending machine
has not been emptied or inspected at the period end date.
2 significant accounting policies
-- The convertible loan notes disclosed in Note 19 have been
split between the debt and equity element in accordance with IAS
32. This requires calculating the present value of the debt element
using an effective interest rate. 12% was assumed to be an
effective interest rate that would be charged on a similar loan by
a third party.
-- The dilapidation provisions are the directors best estimate
of the costs of making good premises under the terms of the
property lease agreements.
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the Group's financial statements.
a) Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and its subsidiary undertakings. The
merger method of accounting was adopted in respect of the Group
reconstruction involving Uvenco UK Plc and SnackTime UK Limited.
The acquisitions of Snack in a Box Limited and Vendia UK Limited
were accounted for using acquisition accounting in accordance with
IFRS 3 "Business Combinations (Revised)".
Intra-group revenues and profits are eliminated on consolidation
and all revenue and profit figures relate to external transactions
only.
b) Revenue recognition
Revenue is measured by reference to the fair value of
consideration received or receivable by the Group for goods and
services supplied, excluding VAT and trade discounts. Revenue for
goods sold from vending machines is recognised at the date of sale.
Revenue in respect of installation and refurbishment of branded
vending machines (brand fees) is recognised at the date of
installation or refurbishment. Franchising fees are recognised when
the franchisee starts trading.
c) Income tax
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting periods, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This
involves comparison of the carrying amount of assets and
liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, or on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax liabilities are provided for in full. Deferred tax
assets and liabilities are calculated without discounting, at tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (tax laws)
that have been enacted or substantively enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the income statement,
except where they relate to items that are charged or credited
directly to equity in which case the related deferred tax is also
charged or credited directly to equity.
Tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as
deferred tax assets. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be
available against which the asset can be recognised and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
d) Cost of sales
Cost of sales represents amounts payable for supplies of
products for resale.
e) Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment provisions.
Depreciation is provided to write off the cost, less the
estimated residual value of property, plant and equipment by equal
instalments over their estimated useful economic lives as
follows:
Leasehold improvements - over the term of the lease
Plant & machinery - 10 - 25% straight line basis
Fixtures, fittings & equipment - 25% straight line basis
Motor vehicles - 25% straight line basis
Buildings - 2 - 4% straight line basis
Material residual value estimates are updated as required, but
at least annually, whether or not the asset is revalued.
Impairment reviews of property, plant and equipment are
undertaken if there are indications that the carrying values may
not be recoverable or that the recoverable amounts may be less than
the asset's carrying value.
f) Intangible assets
In accordance with 'IFRS 3 Business Combinations (Revised)', an
intangible asset acquired in a business combination is deemed to
have a cost to the Group of its fair value at the acquisition
date.
After initial recognition, intangible assets are carried at
deemed cost less any accumulated amortisation and any accumulated
impairment losses. Impairment reviews are conducted annually from
the first anniversary following acquisition, where indicators of
impairment arise.
Brands are amortised to the income statement over their
estimated economic life on a reducing balance basis. The average
useful economic life of brands has been estimated at 10-15 years.
The customer relationships are amortised on a straight line basis
over its 15 year useful economic life.
g) Impairment of assets
Assets that are subject to amortisation are reviewed for
impairment annually and when events or circumstances suggest that
the carrying amount may not be recoverable, an impairment loss is
recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Goodwill is allocated to cash-generating units ('CGU') for the
purpose of impairment testing to the extent that it is possible to
allocate goodwill to a CGU on a non-arbitrary basis. A CGU is
identified at the lowest aggregation of assets that generate
largely independent cash inflows, and that which is looked at by
management for monitoring and managing the business.
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in the statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss is recognised immediately in the
statement of comprehensive income, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase. Impairment
losses on goodwill are not reversed.
The gain or loss arising on the disposal of an asset is
determined as the difference between the disposal proceeds and the
carrying amount of the asset and is recognised in the income
statement. Goodwill was fully impaired in the year ended 31 March
2014.
h) Leases
Where a lease is entered into which entails taking substantially
all the risks and rewards of ownership of an asset, the lease is
treated as a Finance lease. The asset is recorded in the balance
sheet as an item of property, plant and equipment and is
depreciated over the shorter of its estimated useful life or the
term of the lease.
Future instalments under such leases, net of finance charges,
are included within payables. Rentals payable are apportioned
between the finance element, which is charged to the income
statement, and the capital element, which reduces the outstanding
obligation for future instalments. Land and building elements of
lease agreements are separately assessed in accordance with IAS
17.
All other leases are treated as operating leases and the rentals
payable are charged on a straight line basis to the income
statement over the lease term.
i) Inventories
Inventories are stated at the lower of purchase cost from third
parties and net realisable value on a first in first out basis.
Costs of ordinarily interchangeable items are assigned using the
first in, first out cost formula.
j) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
k) Share-based payments
The Group has applied the requirements of IFRS 2 'Share-based
payment', as amended by IFRIC Interpretation 2 - IFRS 2 Group and
Treasury share transactions.
The Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at fair
value (excluding the effect of non market-based vesting conditions)
at the date of grant. Where services are from employees fair value
is determined indirectly by reference to the fair value of the
instrument granted. The fair value determined at the grant date of
the equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any
cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital.
Fair value is measured based upon a Black-Scholes pricing
model.
l) Financial instruments
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes a party
to the contractual provisions of the instrument. Financial
liabilities are recorded initially at fair value, net of direct
issue costs as an expense in the income statement with a
corresponding credit to equity.
Financial liabilities are subsequently recorded at amortised
cost using the effective interest method, with interest-related
charges recognised as an expense in finance costs in the income
statement. Finance charges, including premiums payable on
settlement or redemption and direct issue costs, are charged to the
income statement on an accruals basis using the effective interest
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they
arise.
A financial liability is derecognised only when the obligation
is extinguished, that is, when the obligation is discharged or
cancelled or expires.
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual terms of the instrument.
Bank borrowings
Bank loans and overdrafts are initially recorded at fair value.
Finance charges including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals
basis to the income statement using the effective interest method
and are added to the carrying value of the instrument to the extent
that they are not settled in the period in which they arise.
Convertible Loan
Convertible loan notes, as disclosed in Note 19, have been split
between debt and equity elements in accordance with IAS 32.
Trade payables
Trade payables are not interest bearing and are stated at their
fair value on initial recognition. They are then accounted for
using the effective interest rate method.
The Group classifies all its financial assets into one of the
following categories, depending on the purpose for which the asset
was acquired. The Group's accounting policy for each category is as
follows:
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They arise principally through the provision of goods and
services to customers (trade receivables), but also incorporate
other types of contractual monetary asset.
Trade receivables are initially recognised by the Group and
carried at original invoice amount less an allowance for any
uncollectible or impaired amounts. An estimate for doubtful debts
is made when collection of the full amount is no longer probable.
Bad debts are written off when they are identified as being bad.
Other receivables are recognised at fair value.
Cash and cash equivalents in the statement of financial position
comprise cash at bank, cash in hand and short term deposits with an
original maturity of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Group's cash
management are included as a component of cash and cash equivalents
for the purposes of the consolidated cash flow statement.
Impairment is recognised if there is objective evidence that the
balance will not be recovered.
The Group's loans and receivables comprise trade and other
receivables and cash and cash equivalents in the statement of
financial position.
m) Equity instruments
Equity instruments, which are detailed below, issued by the
Group are recorded at the proceeds received, net of direct costs
except for warrants, share options and convertible loans which are
recorded at fair value at the time of issue.
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares.
-- "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue.
-- "Merger reserve" represents an amount arising on the
consolidation which was accounted for in accordance with FRS 6.
-- "Capital redemption reserve" which arose on the redemption of shares.
-- "Retained earnings" represents retained profits.
-- "Share option reserve" relates to the Company's share option scheme detailed in Note 24.
-- "Convertible debt option reserve" represents the equity
element of the convertible loan notes in Note 19.
-- "Warrants reserve" represents the fair value at the time the warrants were issued.
n) Pensions
The Group did not contribute to personal pension plans for the
Directors. Contributions were made to defined contribution pension
schemes for certain employees. The amount charged to the Income
Statement in the year represents the amount payable in respect of
that year.
o) Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer.
p) Exceptional Costs
It is the Group's policy to show items that it considers are
non-recurring and of a significant nature separately on the face of
the Consolidated Statement of Comprehensive Income in order to
assist the reader to understand the financial statements. The Group
defines exceptional costs as items that are material in respect of
their size and nature, for example, a major restructuring of the
activities of the Group.
Summary details of exceptional costs are shown in Note 5.
q) Provisions
The Group recognises a provision where a legal or constructive
obligation exists at the balance sheet date and a reliable estimate
can be made of the likely outcome.
3 revenue
The total turnover of the company for the year has been derived
from the principal activities.
The geographical analysis of the company's turnover is as
follows:
2016 2015
GBP'000 GBP'000
United Kingdom 15,153,076 16,167,197
European Union excluding United
Kingdom 107,392 -
Other export 57,000 -
15,317,468 16,167,197
=========== ===========
4 auditor's remuneration
The analysis of auditor's remuneration is as follows:
2016 2015
GBP GBP
Fees payable to the Company's auditors
for the
audit of the Company's annual financial
statements
Total audit fees 55,000 55,000
Fees payable to the Group's auditors
for other
services to the Group
The audit of the Company's subsidiaries
pursuant to legislation 55,000 88,700
Other services in relation to taxation 15,300 14,850
All other services 19,500 6,180
89,800 109,730
144,800 164,730
======== ========
5 loss from operations
2016 2015
GBP GBP
This is stated after charging/(crediting):
Depreciation of property, plant
and equipment
- owned by the Group 855,281 1,221,584
- held under finance leases 58,632 46,649
Loss on disposal of property, plant
and equipment 26,287 1,163
Exceptional costs 1,787,391 1,432,835
Amortisation of intangible assets 158,752 211,617
Rentals under operating leases:
- Land and building 115,470 115,452
- Plant and machinery 544,894 515,034
========== ==========
Exceptional costs comprise of:
2016 2015
GBP GBP
Restructuring and redundancy costs 169,225 419,930
Property costs relating to relocation 22,319 56,951
Professional fees on restructuring 91,659 22,422
Impairment of fixed assets 1,155,939 485,000
Impairment of intangible assets 316,599 448,532
Refinancing costs 31,650 -
Exceptional costs included in administration 1,787,391 1,432,835
========== ==========
costs and operating loss
Exceptional costs in 2016 denoted as restructuring and
redundancy costs are connected with the continued restructuring of
the Group.
6 finance income
2016 2015
GBP GBP
Bank interest receivable - 20
======= =====
7 finance costs
2016 2015
GBP GBP
Interest on bank loans and overdrafts 172,006 229,571
Interest on convertible loan notes 95,966 78,304
Interest on obligations under finance
leases 32,215 29,191
300,187 337,066
-------- --------
8 directors' remuneration
The emoluments of the Directors for the period were as
follows:
Salary Fees Total Total
2016 2015
GBP GBP GBP GBP
Non-Executive Directors
J Hamer 30,000 - 30,000 107,500
M Jackson - 20,000 20,000 20,000
G White 5,000 - 5,000 15,833
M Slinkert - - - 12,000
Executive Directors
T James 94,875 - 94,875 148,000
M Stone 124,000 - 124,000 66,361
Directors' remuneration 253,875 20,000 273,875 369,694
---------- ----------- ----------- --------
NIC 25,158 33,105
Total 299,033 402,799
=========== ========
Boris Belotserkovsky and Sergei Kornienko took no salary in FY16
(2015; Nil).
Jeremy Hamer was an executive director in the period ended 27
March 2015 but in the period ended 31 March 2016 has moved to a
non-executive capacity. On 11 December 2015 Jeremy Hamer received 1
million ordinary shares at 10p per share representing the
GBP100,000 contractual fee due to him for his services on the
November 2014 subscription.
Key management personnel in this regard are considered to be
only the Company's Directors.
During the period ended 31 March 2016 pension contributions of
GBPNil (2015 - GBPNil) were paid in respect of Directors and there
were no directors in the company pension scheme (2015 - Nil).
Directors' interests in share options
During the period Jeremy Hamer and Tim James have both foregone
500,000 EMI share options with exercise prices of 28.5p and 26p
respectively. As part of his termination agreement Mark Stone
waived all entitlements to share options.
The mid-market price of the ordinary shares on 31 March 2016 was
4.9 pence and the range during the year was 4.9 pence to 9.25
pence.
No Directors exercised any options during the year.
9 staff numbers and costs
The average monthly number of people employed by the Group
(including Executive Directors) during the year, analysed by
category, were as follows:
2016 2015
Operational staff 144 186
Administrative staff 45 34
189 220
===== =====
The aggregate payroll costs were as follows:
2016 2015
GBP GBP
Wages, salaries and fees 4,335,782 5,140,529
Social security costs 401,793 615,572
Share based payment (see Note 24) - 18,970
Pension costs 126,097 56,786
4,863,672 5,831,857
10 segment information
The Group has three main reportable segments:
-- Vending - Vending activities which includes the aggregation
of the Group's three Vending depots
-- Franchising - The marketing and franchising of operations in
the provision of snack solutions
-- Specialist drinks - The manufacture and sale of single
portion beverages called 'Drinkpacs' together with the sale of
associated food and drink products.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products and services. They are managed
separately because each business requires different technology and
marketing strategies.
Measurement of operating segment profit or loss, assets and
liabilities
The accounting policies of the operating segments are the same
as those described in the summary of significant accounting
policies.
The Group evaluates performance on the basis of profit or loss
from operations but excluding non-recurring profits/losses, such as
exceptional items, goodwill amortisation, and the effects of
share-based payments.
Inter-segment sales are priced on the same basis as sales to
external customers, with an appropriate discount being applied to
encourage use of group resources at a rate acceptable to local tax
authorities. This policy was applied consistently throughout the
period.
Segment assets exclude tax assets and assets used primarily for
corporate purposes. Segment liabilities exclude tax liabilities.
Details are provided in the reconciliation from segment assets and
liabilities to the Group position.
Specialist
SEGMENTAL 2016 drinks Franchising Vending Total
2016 2016 2016 2016
GBP GBP GBP GBP
Revenue
Total revenue 2,355,143 1,400,321 11,933,406 15,688,870
Inter-segmental revenue - - (371,402) (371,402)
----------- ------------ ------------ ------------
Group's revenue per consolidated
statement of comprehensive
income 2,355,143 1,400,321 11,562,004 15,317,468
=========== ============ ============ ============
Depreciation (192,784) (55,495) (665,634) (913,913)
Amortisation - 209,548 (368,300) (158,752)
Impairment - - (1,472,538) (1,472,538)
=========== ============ ============ ============
Segment operating profit/(loss)
before (48,403) 428,186 35,065 414,848
exceptional items
Segment operating profit/(loss)
before exceptional items
but after impairment charges (48,403) 428,186 (1,437,473) (1,057,690)
Exceptional costs included within administration expenses
and finance expense (Note 5) (314,853)
Head office costs (1,985,810)
Share-based payments -
Finance expense (300,187)
Finance income -
Group loss before tax (3,658,540)
============
Specialist
SEGMENTAL 2015 drinks Franchising Vending Total
2015 2015 2015 2015
GBP GBP GBP GBP
Revenue
Total revenue 2,814,249 1,425,016 13,040,967 17,280,232
Inter-segmental revenue - - (1,113,036) (1,113,036)
----------- ------------ ------------ ------------
Group's revenue per consolidated
statement of comprehensive
income 2,814,249 1,425,016 11,927,931 16,167,196
=========== ============ ============ ============
Depreciation (198,042) (51,703) (1,018,488) (1,268,233)
Amortisation (39,843) (59,049) (112,725) (211,617)
Impairment (485,000) - (448,532) (933,532)
=========== ============ ============ ============
Segmental operating loss/(profit)
before (468,336) 356,067 (1,351,978) (1,464,247)
exceptional items
=========== ============ ============ ============
Segmental operating (loss)/profit
before exceptional items
but after impairment charges (953,336) 356,067 (1,800,510) (2,397,779)
Exceptional costs included within administration
expenses and finance expense (Note 5) (499,303)
Head office costs (1,130,497)
Share-based payments (18,970)
Finance expense (337,066)
Finance income 20
Group loss before tax (4,383,595)
============
Specialist
SEGMENTAL 2016 drinks Franchising Vending Head office Total
2016 2016 2016 2016 2016
GBP GBP GBP GBP GBP
Additions to
non-current assets 63,291 - 762,944 - 826,235
----------- ------------ ------------ ------------ ------------
Reportable segment
assets 886,219 147,359 5,360,414 955,595 7,349,587
----------- ------------ ------------ ------------ ------------
Tax assets - - - - -
----------- ------------ ------------ ------------ ------------
Total Group assets 886,219 147,359 5,360,414 955,595 7,349,587
=========== ============ ============ ============ ============
Reportable segment
liabilities (474,338) (197,886) (4,520,760) (1,099,643) (6,292,626)
=========== ============ ============ ============ ============
Loans and borrowings (excluding leases,
loan notes and overdrafts) (1,831,884)
Deferred tax
liabilities (238,577)
Total Group liabilities (5,852,142)
============
Specialist
SEGMENTAL 2015 drinks Franchising Vending Head office Total
2015 2015 2015 2015 2015
GBP GBP GBP GBP GBP
Additions to non-current
assets 180,319 21,459 205,244 2,363 409,385
----------- -------------- ------------ ------------ ------------
Reportable segment
assets 1,223,080 267,995 6,892,655 1,425,324 9,809,054
----------- -------------- ------------ ------------ ------------
Tax assets - - 49,656 - 49,656
----------- -------------- ------------ ------------ ------------
Total Group assets 1,223,080 267,995 6,942,311 1,425,324 9,858,710
=========== ============== ============ ============ ============
Reportable segment
liabilities (543,426) (244,220) (3,753,857) (1,822,644) (6,364,147)
=========== ============== ============ ============ ============
Loans and borrowings (excluding leases, loan
notes and overdrafts) (2,050,939)
Deferred tax liabilities (426,295)
Total Group liabilities (8,841,381)
============
As at 31 March 2016 there were GBPnil non-current assets held
outside of the United Kingdom (2015: GBPNil).
11 taxation
2016 2015
GBP GBP
Deferred tax
Origination and reversal of timing
differences (94,022) (72,662)
Deferred tax (income)/expense relating
to change in rate (41,910) 3,921
Adjustments in respect of prior
periods - (246,525)
Tax credit on ordinary activities (135,932) (315,266)
========== ==========
Factors affecting tax credit for the period:
The tax assessed for the year differs from the standard rate of
corporation tax in the UK of 20% (2015: 21%). The differences are
explained below:
2016 2015
GBP GBP
TAX RECONCILIATION
Loss per accounts before taxation (3,658,540) (4,383,595)
------------ ------------
Tax on loss on ordinary activities
at standard
rate of 20% (2015 - 21%) (732,108) (920,555)
Expenses not deductible for tax
purposes 96,898 (24,164)
Fixed asset timing differences (27,386) 3,675
Unrecognised deferred tax 484,754 833,715
Change in rate 41,910 39,095
Adjustments to deferred tax for
prior years - (247,032)
Total tax credit for the period (135,932) (315,266)
============ ============
There were no factors that may significantly affect future tax
charges.
12 loss per share
The calculation of basic loss per share is calculated on the
basis of the result for the year after tax, divided by the weighted
average number of shares in issue for the period ended 31 March
2016 of 43,332,623 (2015 -24,040,521).
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all potential dilutive ordinary. Potential dilutive
ordinary shares arise from share options and convertible loans. For
these, a calculation is performed to determine the number of shares
that could have been acquired at fair value (determined as the
average annual market share price of the Company's shares) based on
the monetary value of the exercise price attached to outstanding
share options. Thus the dilutive weighted average number of shares
considers the number of shares that would have been issued assuming
the exercise of the share options. If these are proved to be
anti-dilutive (increase the potential earnings per share) they are
omitted from the calculation. As the Group has made a loss in the
current year the options, warrants and convertible loan notes are
therefore anti-dilutive and diluted earnings per share is therefore
not provided for the current year.
Period ended 31 March Period ended 27 March
2016 2015
Weighted Weighted
average Amount average Amount
no. of per share no. of per share
Loss shares (pence) Loss shares (pence)
(GBP) (GBP)
Loss attributable
to ordinary
shareholders (3,522,608) 43,332,623 (8.13) (4,068,329) 24,040,521 (16.92)
13 property, plant and equipment
Land Plant Fittings
and Leasehold and Motor and
Buildings improvements machinery vehicles equipment Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 April
2014 528,679 190,299 13,124,130 8,819 497,644 14,349,571
================ ========== ============= ============ ========= ========== ============
Additions - 2,390 370,386 21,459 15,150 409,385
Disposals - (109,209) (4,956,917) - (222,681) (5,288,807)
At 27 March
2015 528,679 83,480 8,537,599 30,278 290,113 9,470,149
================ ========== ============= ============ ========= ========== ============
Additions - - 663,644 61,990 100,601 826,235
Disposals - - (1,184,241) - - (1,184,241)
At 31 March
2016 528,679 83,480 8,017,002 92,268 390,714 9,112,143
================ ========== ============= ============ ========= ========== ============
Depreciation
At 1 April
2014 52,556 135,290 7,612,838 5,610 380,538 8,186,832
================ ========== ============= ============ ========= ========== ============
Charge for
the year 14,615 11,019 1,152,766 19,162 70,670 1,268,232
Impairment
charge - - 485,000 - - 485,000
Disposals - (109,209) (4,940,159) - (222,681) (5,272,049)
At 27 March
2015 67,171 37,100 4,310,445 24,772 228,527 4,668,015
================ ========== ============= ============ ========= ========== ============
Charge for
the year 15,313 12,052 827,730 19,598 39,220 913,913
Impairment
charge - - 1,155,939 - - 1,155,939
Disposals - - (1,157,974) - - (1,157,974)
At 31 March
2016 82,484 49,152 5,136,140 44,370 267,747 5,579,893
================ ========== ============= ============ ========= ========== ============
Net Book Value
At 31 March
2016 446,195 34,328 2,880,862 47,898 122,967 3,532,250
================ ========== ============= ============ ========= ========== ============
At 27 March
2015 461,508 46,380 4,227,154 5,506 61,586 4,802,134
---------------- ---------- ------------- ------------ --------- ---------- ------------
At 1 April
2014 476,123 55,009 5,511,292 3,209 117,106 6,162,739
---------------- ---------- ------------- ------------ --------- ---------- ------------
The net book value of assets held under finance leases or hire
purchase contracts, included above, are as follows:
2016 2015
GBP GBP
Plant and machinery 313,055 415,711
Motor vehicles 48,898 -
361,953 415,711
======== ========
14 intangible assets
Goodwill Customer Brands Total
Relationships
GBP GBP GBP GBP
Cost
At 27 March 2015
and 31 March 2016 9,546,375 1,116,087 4,957,883 15,620,345
========== ============== ========== ===========
Amortisation
At 1 April 2014 9,546,375 876,362 3,290,527 13,713,264
Amortisation charge
for the year - 74,406 137,211 211,617
Impairment charge for
the year - 37,410 411,122 448,532
At 27 March 2015 9,546,375 988,178 3,838,860 14,373,413
---------- -------------- ---------- -----------
At 28 March 2015 9,546,375 988,178 3,838,860 14,373,413
Amortisation charge
for the year - 74,406 84,346 158,752
Impairment charge for
the year - 53,503 263,096 316,599
At 31 March 2016 9,546,375 1,116,087 4,186,302 14,848,764
========== ============== ========== ===========
Net book value
At 31 March 2016 - - 771,581 771,581
========== ============== ========== ===========
At 27 March 2015 - 127,909 1,119,023 1,246,932
========== ============== ========== ===========
At 31 March 2014 - 239,725 1,667,356 1,907,081
========== ============== ========== ===========
Current estimates of useful economic lives of intangible assets
are as follows:
Goodwill Indefinite (now fully impaired)
Customer relationships Amortised over 15 years
Snack In The Box brands Amortised over 15 years
Vendia brands Amortised over 10 years
The remaining useful life of the Vendia brands is 7.6 years
15 impairment review
The Group tests for impairment where there are indications that
intangible assets may be impaired. The recoverable amounts of all
the above CGUs have been determined from value in use calculations
based on cash flow projections from formally approved budgets for
2016/17, which are then extrapolated over 5 years and a terminal
value applied to the year 5 cash flow. The major assumptions are as
follows:
Specialist
drinks Franchise Vending
% % %
2016
Pre-tax discount rate 14.6 14.6
Growth rates in periods 2-5 0 0
Terminal value 2.0 2.0
2015
Pre-tax discount rate 15.0 15.0 15.0
Growth rates in periods 2-5 0 0 0
Terminal value 2.0 2.0 2.0
Operating margins have been based on past experience and future
expectations in the light of anticipated economic and market
conditions. Discount rates are based on the Group's weighted
average cost of capital, this is then adjusted to reflect
management's assessment of specific risks related to the cash
generating unit. Growth rates beyond the first five years are based
on economic data pertaining to the region concerned.
The recoverable amount for the CGU is set out below:
-- Vending exceeded its carrying amount by GBPNil (2015 - GBPNil)
-- Franchisee division exceeded its carrying amount by
GBP2,458,000 (2015 - GBP131,000)
An impairment charge of GBP316,599 was recognised against the
remaining intangible assets of the Vending division and a further
impairment of GBP1,155,939 was made against the tangible fixed
assets of the vending division based on the future cash flows of
the CGU not supporting the carrying values.
In the prior year an impairment charge of GBP448,533 was
recognised against the intangible assets of the Vending division
and a further impairment of GBP485,000 was made against the
tangible fixed assets of the specialist drinks division based on
the future cash flows of the CGU not supporting the values within
the financial statements. No intangible assets reside in the
Specialist Drinks CGU at 31 March 2015 or 31 March 2016.
The sensitivity of the Vending division impairment to key
changes in the key assumptions in the recoverable amounts is as
follows:
1% increase 1% decrease
GBP'000 GBP'000
Discount rate 192 (235)
Growth rates in periods 2-5 (156) 160
Terminal value (169) 138
16 Deferred tax
The gross movements on the deferred tax account are as
follows:
2016 2015
GBP GBP
At the start of the year (376,639) (691,905)
Income statement credit 96,152 72,156
Change in tax rate 41,910 (3,921)
Prior year adjustment - 247,031
At the end of the year (238,577) (376,639)
========== ==========
The deferred tax balances arise from temporary differences in
respect of the following:
Provisions
GBP
At 28 March 2015 49,656
Charge to income (49,656)
At 31 March 2016 -
===========
deferred tax provisions
Intangible Tangible
assets assets Total
GBP GBP GBP
At 28 March 2015 249,386 176,909 426,295
Charged to income - current
year (85,563) (60,245) (145,808)
Change in tax rate (24,939) (16,971) (41,910)
At 31 March 2016 138,884 99,693 238,577
=========== ========= ==========
See Note 11 for details of the applicable tax rates applied.
Within the Group as at 27 March 2016 there were deferred tax
assets of GBP1,911,378 (2015 - GBP1,865,465) which have not been
recognised as the Directors do not foresee the utilisation of these
assets in the foreseeable future.
17 Inventories
2016 2015
GBP GBP
Raw materials 153,371 -
Finished goods and goods for resale 734,773 1,122,301
888,144 1,122,301
======== ==========
GBP179,402 of inventory was written down in the current year
(2015 - GBP32,522). The value of inventory consumed and recognised
as an expense was GBP6,690,432 (2015 - GBP6,583,820).
18 trade and other receivables
2016 2015
GBP GBP
Trade receivables 1,528,292 1,671,703
Other receivables, prepayments
and accrued income 337,445 264,903
1,865,737 1,936,606
========== ==========
The recoverability of receivables is not considered to be a
significant issue to the Group. Many of the Group's customers have
a long standing relationship with the Group and debtors are
reviewed on a regular basis, with appropriate credit checks being
carried out on new customers entering into contracts with the
Group.
Some of the trade receivables are past due but not impaired as
at 31 March 2016. The ageing analysis of these trade receivables is
as follows:
2016 2015
GBP GBP
Current 682,295 913,882
One month overdue 621,217 549,913
Two to six months overdue 224,780 129,479
Over six months overdue - 78,429
1,528,292 1,671,703
========== ==========
As at 31 March 2016 trade receivables of GBP329,960 (2015 -
GBP155,709) were past due and impaired. The receivables due at the
end of the financial year relate to trading customers, brands and
franchisees.
19 borrowings
2016 2015
GBP GBP
Secured borrowings at amortised
cost
Bank overdrafts 635,491 517,011
Bank loans 1,831,884 2,050,939
Convertible loan notes 40,083 1,022,119
Redeemable loan notes 40,083 498,634
Finance leases 250,327 336,524
2,797,868 4,425,227
========== ==========
Amounts due for settlement within
12 months
Bank overdrafts 635,491 517,011
Bank loans 560,000 2,050,939
Finance leases 226,581 141,058
Convertible loan notes - 589,081
1,422,072 3,298,089
---------- ----------
Amounts due for settlement after
12 months
Bank loans 1,271,884 -
Convertible loan notes 40,083 433,038
Redeemable loan notes 40,083 498,634
Finance leases 23,745 195,466
1,375,795 1,127,138
---------- ----------
2,797,868 4,425,227
========== ==========
Terms and conditions of outstanding loans at the period end were
as follows:
Interest rate Year of maturity 2016 2015
% GBP GBP
Convertible loan
notes 8% Fixed 2015 - 589,081
Redeemable loan
notes 12% Fixed 2018 40,083 498,634
Convertible loan
notes 7% Fixed 2018 40,083 433,038
2.75% over base
Bank overdraft rate 2016 635,491 184,621
Bank loan 5% over LIBOR 2018 1,831,884 1,464,655
Bank loan 5.25% fixed 2018 - 585,345
Convertible loan stock of GBP511,228 was issued on 4 April 2013.
Fundraising costs of GBP10,514 were offset against the loan stock.
Of this GBP92,143 as treated as equity with the remainder of
GBP433,038 being included in long term borrowings. The convertible
loan stock bears interest at a rate of 7% per annum. The loan stock
is convertible to Ordinary shares at 10 pence per share. The
conversion date is 5 years and 1 day from the date of issue. The
present value of the debt element has been calculated using an
effective interest rate of 12%.
Redeemable loan stock of GBP511,228 was issued on 4 April 2013.
Fundraising costs of GBP12,594 were offset against the loan stock.
The redeemable loan stock bears interest at a rate of 12% per
annum. Also included within the terms of the loan note is a
redemption premium of 6% per annum to a maximum of 30% of the value
of the loan note.
In December 2015 and February 2016, the majority of the loan
stock was converted into equity shares. Please see note 30 for full
details of post balance sheet events.
After the year end the bank loans were renegotiated. Please see
note 30 for full details of post balance sheet events.
The fair value in each case equates to the carrying book value
with the exception of the convertible loan note. All loans are
denominated in sterling.
The analysis below shows the gross cash flows for the bank loan
and loan notes, which may differ to the carrying values of the
liabilities at the balance sheet date.
2016 2015
GBP GBP
Amounts payable under bank loans
& loan notes
Within one year 645,186 3,239,950
1-2 years - -
2-5 years 1,306,033 1,175,364
The bank loans are secured by a fixed and floating charge over
the assets of the company and certain subsidiaries together with
security deeds and share pledges regarding certain other
subsidiaries, in conjunction with an assignment of certain Keyman
insurance policies.
20 trade and other payables
2016 2015
GBP GBP
Due within one year
Trade payables 2,078,914 1,938,087
Social security and other taxes 889,603 780,951
Other payables 62,166 306,705
Accruals and deferred income 765,757 900,177
3,796,440 3,925,920
========== ==========
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and on-going costs. The Directors
consider that the carrying amount of trade payables approximates to
their fair value.
Obligation under finance leases
2016 2015
GBP GBP
Amounts payable under finance leases
Within one year 133,561 159,533
Two to five years 137,055 234,512
Less future finance charges (20,289) (57,521)
--------- ---------
Present value of lease obligations 250,327 336,524
--------- ---------
Amounts due for settlement within
12 months 118,707 141,058
Amounts due for settlement after
2 - 5 years 131,620 195,466
========= =========
Hire purchase and finance lease liabilities are secured upon the
underlying assets.
It is the Group's policy to lease certain parts of its property,
plant and equipment under finance leases. For the period ended 31
March 2016 the average effective borrowing rate was [7%]. Interest
rates are fixed at the contract dates. All leases are on a fixed
repayment basis and no arrangements have been entered into for
contingent rental payments. All lease obligations are denominated
in sterling.
21 provisions
Onerous Leasehold
contracts Legal dispute dilapidation Total
GBP GBP GBP GBP
----------- -------------- -------------- ----------
At 1 April 2014 - 167,209 3,283 170,492
Additions in the
year 8,894 - 24,217 33,111
Utilised in the
year - (139,664) - (139,664)
At 27 March 2015 8,894 27,545 27,500 63,939
Additions in the
year
Utilised in the
year (8,894) (27,545) (27,500) (63,939)
At 31 March 2016 - - - -
=========== ============== ============== ==========
Leasehold dilapidations - Provision was made in last year's
financial statements for the estimated cost of refurbishing a
property in line with the requirement the lease, prior to returning
to the landlord. This property has now been returned to the
landlord and all liabilities have been settled.
Legal dispute - In the prior period provision was made for the
costs of a legal claim made from a former franchisee owner. These
costs have now been settled in full.
Onerous contract - In the prior period a provision was made for
the onerous element of property lease rentals in respect of vacated
premises.
22 share capital
2016 2015
GBP GBP
Allotted, called up and fully
paid equity share capital
At 31 March 2016 (ordinary
shares of GBP0.02 each) 1,491,948 642,980
Type of Share Ordinary
Date of Issue Issue Shares Share Price Cash consideration
Number GBP GBP
As at 1 April
2014 16,349,014 - -
June 2014 Share issue 3,800,000 0.15 570,000
October 2014 Share issue 12,000,000 0.15 1,800,000
_________ _________
At 27 March
2015 32,149,014 2,370,000
_________
May 2015 Share issue 1,000,000 0.1 100,000
December 2015 Share issue 21,000,000 0.05 1,050,000
December 2015 Loan note conversion 16,446,451 0.1 -
December 2015 Share issue 3,300,000 0.1 -
February 2016 Loan note conversion 701,987 0.1 -
_________ _________
At 31 March
2016 74,597,452 - 1,150,000
_________ _________
23 share premium and reserves
Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of
nominal value.
Merger The merger reserve, which arises on consolidation,
represents the difference between the fair value and nominal value
of shares issued on the acquisition of subsidiary companies where
the Company has elected to take advantage of merger relief.
Capital redemption reserve Amounts transferred from share
capital on redemption of issued shares which arose following a
share reorganisation.
Share option reserve Cumulative share option expense recognised.
Convertible debt option reserve Amount of proceeds on issue of
convertible debt relating to the equity component (i.e. option to
convert the debt into share capital).
Warrant Cumulative fair value of warrants in issue.
Retained earnings Cumulative net gains and losses recognised in
the consolidated statement of comprehensive income.
24 equity-settled share option scheme
Options are exercisable at a price equal to the average quoted
market price of the Company's shares at the date of grant or as
agreed by the Directors on the date of the grant. The vesting
period is up to three years. If the options remain unexercised
after a period of ten years from the date of grant the options
expire. Options are forfeited if the option holder leaves the Group
before the options vest.
Details of the share options outstanding during the year are as
follows:
2016 2016 2015 2015
Number Weighted Number Weighted
of share average of share average
options exercise options exercise
price price
(GBP) (GBP)
Outstanding at the beginning
of the year 1,000,000 0.73 1,361,230 0.73
Granted during the year 600,000 0.05 - -
Forfeited/lapsed during
the year (1,000,000) - (361,230) -
Outstanding at the end
of the year 600,000 0.05 1,000,000 0.27
------------ ---------- ---------- ----------
Exercisable at the end - - - -
of the year
============ ========== ========== ==========
The weighted average remaining contractual life of the options
outstanding at the year end, for the options with a weighted
average exercise price of GBP0.05, is 3.7 years. The weighted
average fair value of the options when issued was 2.5p.
2016 2015
IFRS 2 Fair value charge recognised
as an expense - GBP18,970
Average share price 8.1p 10.3p
The inputs into the Black-Scholes option pricing model for each
of the share options issues were as follows:
Issue Date 24-Dec-15
Expected volatility 75%
Expected life 3 years
Risk-free rate 4%
Dividend yield -
Weighted average share
price on the grant date GBP0.08
Exercise price GBP0.05
Expected volatility was determined by calculating the historical
volatility of the Company's share price over the previous three
years. The expected life used in the model has been adjusted, based
on management's best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural
considerations.
Mrs Veronika Belotserkovsky, wife of Boris Belotserkovsky,a
non----executive Director of the Company, holds 1,816,557 8p
Warrants which are exercisable at 2p per share in ordinary
equity.
No share based payment charge has been recognised in the
financial statements as in the opinion of the directors it would be
immaterial.
25 financial instruments
The accounting policies for financial instruments have been
applied to the line items below:
Financial assets by category at amortised cost
2016 2015
GBP GBP
Loans and receivables
Trade receivables 1,528,292 1,671,703
Cash and cash equivalents 291,874 701,082
1,820,166 2,372,785
========== ==========
The maximum credit risk exposure is GBP1,528,292. (2015 -
GBP1,671,703).
Financial liabilities at amortised costs by category
2016 2015
GBP GBP
Current liabilities
Other financial liabilities 4,328,910 7,813,450
Non current liabilities
Other financial liabilities 1,375,795 1,044,219
5,704,705 8,857,669
---------- ----------
Interest rate sensitivity
The Group's policy is to minimise interest rate cash flow risk
exposures on their hire purchase and finance lease arrangements by
fixing the interest rate on the agreements. However, the bank
overdraft has a variable interest rate. The bank loan of GBP1.8 m
has an interest rate of 6% above LIBOR.
The following table illustrates the sensitivity of the net
result for the year and equity to a reasonably possible change in
interest rates of +1% and -1% (2015- +1% / -1%), with effect from
the beginning of the year. These changes are considered to be
reasonably possible based on observation of current market
conditions. The calculations are based on the Group's bank loan and
overdraft, which have variable interest rates, at each balance
sheet date. All other variables are held constant.
2016 2016 2015 2015
GBP GBP GBP GBP
1% -1% 1% -1%
Adjusted net result
for
the year 3,671,298 3,645,785 4,042,650 4,094,009
Adjusted equity 503,945 529,458 991,650 1,043,009
Information on the Group's risk and capital structure is
included within the Directors' Report.
26 operating lease arrangements
At the balance sheet date the Group had commitments for future
minimum lease payments under non-cancellable operating leases which
fall due as follows:
2016 2015
Land
and buildings Plant Land Plant
and machinery Total and buildings and machinery Total
GBP GBP GBP GBP GBP GBP
Within one
year 103,034 460,702 563,736 103,034 485,641 588,675
2 to 5 years 43,758 410,614 454,372 146,792 584,892 731,684
Over 5 years - 28,125 28,125 - 53,438 53,438
146,792 899,441 1,046,233 249,826 1,123,971 1,373,797
=============== ================ ========== =============== ================ ==========
Operating lease payments represent rentals payable by the Group
in respect of its properties and for plant and machinery.
27 related party transactions
Related party transactions describe transactions with Directors,
and companies in which Directors have an interest.
During the year ended 31 March 2016 there were the following
related party transactions involving a Director or a Company
related to a Director:
Loans totalling GBP40,000, together with accrued but unpaid
interest, were converted by J.Hamer into 439,967 ordinary shares at
a price of 10 pence per share (2015 - Nil).
Loans totalling GBP35,000, together with accrued but unpaid
interest, were converted by M.Jackson into 384,971 ordinary shares
at a price of 10 pence per share (2015 - Nil).
Loans totalling GBP450,000, together with accrued but unpaid
interest, were converted by Elderstreet Investments Ltd into
4,963,150 ordinary shares at a price of 10 pence per share (2015 -
Nil).
Loans totalling GBP100,000, together with accrued but unpaid
interest, were converted by the WEJackson Trust into 1,141,588
ordinary shares at a price of 10 pence per share (2015 - Nil).
Loans totalling GBP850,000, together with accrued but unpaid
interest, were converted by the Unicon Asset Management Ltd into
9,475,590 ordinary shares at a price of 10 pence per share (2015 -
Nil).
The following members of the "Concert Party" associated with
Boris Belotserkovsky, but who are not Directors of the company,
purchased new ordinary shares of 2 pence per share;-
Mrs V. Belotserkovskaya 7,000,000 @ a price of 5 pence per share
(2015 - Nil)
Uvenco Holdings Limited 2,300,000 @ a price of 10 pence per
share (2015 - Nil)
Versatel Company Ltd 8,000,000 @ a price of 5 pence per share (2015 - 15.8 million @ 15p)
Mrs G. White - 50,000 @ a price of 10 pence per share (2015
-Nil)
Mrs V.Belotserkovskaya also purchased the 4,843,616 ordinary
shares held by M.Slinkert a former Director of the company.
Unicum Holdings Limited, a company controlled by Boris
Belotserkovsky, a non-executive director of the Company, received
2,300,000 New Ordinary Shares for the supply of GBP230,000 of
vending machines to the Company during 2015,.
Key management costs are disclosed in Note 8 of these financial
statements.
28 capital commitments
There were no capital expenditure commitments as at the year
end.
29 ultimate controlling party
By virtue of his shareholding and relationships with certain
other shareholders in the "Concert Party" Boris Belotserkovsky is
the controlling party of the Group.
Substantial interests in the parent company are disclosed in the
Directors' Report.
30 post balance sheet events
On 12 August 2016 Uvenco UK Plc entered into an agreement to
settle the Group's GBP2.4 million outstanding bank facility for
GBP1.0 million, payable in cash. On the same date the Company,
through its subsidiaries Uvenco Limited, Simply Drinks Limited and
Drinkmaster Limited, has entered into a GBP1.3 million debt
facility agreement ("Reward Agreement") with Reward Invoice Finance
Limited, part of the Reward Finance Group ("Reward"), a Manchester
and Leeds based alternative lender, in order to provide the funds
to satisfy the bank facility settlement, as well as additional
working capital. The terms of the Reward Agreement reflect the
expected short--term nature of the debt and are structured around a
confidential invoice discounting facility, together with a charge
on other balance sheet assets including property and vending
machines. Cash interest of 1.75% per month will be payable monthly
in arrears on the principal outstanding. The loan has a minimum
term of 2 months after which the Group can terminate, whilst Reward
cannot terminate before August 2017, in each case on one month's
notice. Reward have also been granted a personal guarantee by Boris
Belotserkovsky in relation to this facility. Initially the Group
will be borrowing GBP1.3 million, with a further GBP0.1 million
available conditional upon the Company arranging a new equity
investment of GBP0.1 million.
31 Investments
A list of the subsidiary entities are included within note 4 of
the company financial statements.
Company Number: 06135746
UVENCO UK PLC
Company financial statements
PERIOD ended 31 March 2016
company balance sheet
31 March 2016
Company number: 06135746
Notes 2016 2015
GBP GBP
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 3 44,110 58,047
Investments 4 6,866,711 7,534,112
6,910,821 7,592,159
------------- -------------
CURRENT ASSETS
Trade and other receivables 5 1,604,940 2,424,857
1,604,940 2,424,857
------------- -------------
TOTAL ASSETS 8,515,761 10,017,016
============= =============
LIABILITIES
CURRENT LIABILITIES 6 (9,912,273) (11,075,972)
NET CURRENT LIABILITIES (8,307,333) (8,651,115)
------------- -------------
NON CURRENT LIABILITIES
Borrowings 7 (1,352,050) (931,672)
TOTAL LIABILITIES (11,264,323) (12,007,644)
------------- -------------
NET LIABILITIES (2,748,562) (1,990,628)
============= =============
EQUITY - ISSUED SHARE CAPITAL ATTRIBUTABLE
TO THE OWNERS OF THE PARENT COMPANY
Share capital 9 1,491,948 642,980
Share premium account 10 12,721,702 10,401,384
Capital redemption reserve 10 1,274,279 1,274,279
Share option reserve 10 374,563 374,562
Convertible debt option
reserve 10 - 147,306
Warrant reserve 10 2,236,130 2,236,130
Retained deficit 10 (20,847,184) (17,067,269)
TOTAL EQUITY (2,748,562) (1,990,628)
============= =============
These financial statements were approved by the Board of
Directors and authorised for issue
on 29 September 2016. They were signed on its behalf by:
Jeremy Hamer Sergei Kornienko
Director
The Notes on pages 66 to 77 form part of these financial
statements.
company statement of changes in equity
31 March 2016
Company number: 06135746
Issued Share Capital Share Convertible
share premium redemption option debt option Warrant Retained
COMPANY capital account reserve reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at
31 March
2014 326,980 8,347,383 1,274,279 355,593 147,306 2,236,130 (12,034,160) 653,511
----------- ----------- ----------- ----------- ------------ ---------- ------------- ------------
Issure of
shares 316,000 2,054,000 - - - - - 2,370,000
Share
option
expense - - - 18,970 - - - 18,970
Retained
loss for
the
year - - - - - - (5,033,109) (5,033,109)
Balance at
27 March
2015 642,980 10,401,383 1,274,279 374,563 147,306 2,236,130 (17,067,269) (1,990,628)
----------- ----------- ----------- ----------- ------------ ---------- ------------- ------------
Issue of
shares in
the
year 440,000 684,444 - - - - - 1,124,444
Loan notes
converted 408,968 1,635,875 - - - - - 2,044,843
Retained
loss for
the
year - - - - (147,306) - (3,779,915) (3,927,221)
Balance at
31 March
2016 1,491,948 12,721,702 1,274,279 374,563 - 2,236,130 (20,847,184) (2,748,562)
=========== =========== =========== =========== ============ ========== ============= ============
The notes on pages 66 to 77 form part of these financial
statements
notes to the financial statements
31 March 2016
Company number: 06135746
1 accounting policies
a) Basis of accounting
The financial statements have been prepared under the historical
cost convention and with Financial Reporting Standard 100
Application of Financial Reporting Requirements ("FRS 100") and
Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS
101")
In preparing these financial statements the Company has taken
advantage of all disclosure exemptions conferred by FRS 101.
Therefore these financial statements do not include:
-- certain comparative information as otherwise required by EU-endorsed IFRS;
-- certain disclosures regarding the Company's capital;
-- a statement of cash flows;
-- the effect of future accounting standards not yet adopted;
-- the disclosure of the remuneration of key management personnel; and
-- disclosures of related party transactions with other
wholly-owned members of Uvenco UK plc group of companies.
In addition, and in accordance with FRS 101 further disclosure
exemptions have been adopted because equivalent disclosures are
included in the Company's consolidated financial statements. These
financial statements do not include certain disclosures in respect
of:
-- share-based payments;
-- financial instruments.
First time application of FRS 100 and 101
In the current year the Company has adopted FRS 100 and FRS 101.
In previous years the financial statements were prepared in
accordance with applicable UK accounting standards. This change in
the basis of preparation has not materially altered the recognition
and measurement requirements previously applied in accordance with
applicable UK accounting standards. Consequently the principal
accounting policies are unchanged from the prior year. The change
in the basis of preparation has enabled the Company to take
advantage of all of the available disclosure exemptions permitted
by FRS 101 in the financial statements, the most significant of
which are summarised above. There have been no other material
amendments to the disclosure requirements previously applied in
accordance with applicable UK accounting standards.
The Company has chosen not to prepare a note to the financial
statements relating to financial instruments as the information is
available in the published financial statements of the Group.
Under Section 408 of the Companies Act 2006 the Company is
exempt from the requirement to present its own profit and loss
account. The loss for the financial period, of the holding Company,
as approved by the Board, was GBP3,779,915 (2015:
GBP5,033,109).
Going concern
Accounting standards require the Directors to consider the
appropriateness of the going concern basis when preparing the
financial statements and if necessary to explain how they have
reached their conclusion. The Directors have taken notice of the
Financial Reporting Council guidance 'Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies.
The Company made a loss of GBP3,779,915 (2015 - GBP5,033,109)
for the period ended 31 March 2016 and had net current liabilities
of GBP8,307,333 at the balance sheet date (2015: GBP8,651,115).
Subsequent to the balance sheet date the Group paid off its
existing bank loan and overdraft of GBP2.4m for a discount of
GBP1.0 million and re-financed with additional borrowings from
Reward Invoice Finance Limited ("Reward") for additional working
capital (see Note 30 of the group financial statements). The total
Group debt has therefore reduced significantly to approximately
GBP1.3 million. Provided the terms of the agreement are complied
with the current debt facility will remain in place until August
2017. However, the agreement may be terminated by the Company by
giving one month's notice, at any time after October 2016, should
alternative finance be found.
Management have prepared a cash flow forecast for the period to
31 December 2017. Whilst the Directors have continued to reduce the
operating costs of the Group and improve the performance of the
vending estate there is limited cash headroom in the forecast.
Should the Group's operating performance and net cash inflows fall
behind forecast a further injection of working capital may be
required.
Management have agreed to provide a further equity injection of
GBP0.1million, to be matched by additional financing from Reward
under the terms of that agreement, should the Group require it.
In order to satisfy themselves that the going concern basis
remains appropriate the Directors have taken into account the
personal guarantee given by the Group's majority shareholder Mr
Belotserkovsky to Reward, in respect of the new financing facility,
should a breach in the terms of that facility occur. Mr
Belotserkovsky has undertaken not to call in any amounts due to him
by the Group, should that guarantee be called upon, for a period up
to at least 30 September 2017. Finally, Mr Belotserkovsky has
provided a letter of intent that Partner Invest LLC, a company
owned and controlled by his family will make available up to a
maximum of GBP750,000 to provide additional funds to the Company
should such funds be required. The board are also considering
further options to realise cash from the Group's asset base should
it be required to fund further working capital requirements.
Due to the fact that the facility with Reward can be called in
should there be a material deterioration in trade, that the
facility may not be able to be replaced or extended beyond August
2017 and that the letter of intent from Mr Belotserkovsky,
including the intention to provide additional funds for working
capital from Partner Invest LLC, is not legally binding, this
indicates the existence of material uncertainties that may cast
significant doubt on the Group's ability to continue as a going
concern and, therefore, that it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
However, the Directors are of the opinion that the Group can
continue to operate within the facilities available and that these
will be either replaced or extended in the timeframe available and
that the letter of intent can be relied on if necessary.
Accordingly, they consider the Group will continue as a going
concern, meeting its liabilities as they fall due. The financial
statements have therefore been prepared on a going concern
basis.
b) Investments
Investments including the shares in subsidiary companies held as
fixed assets are stated at cost less any provision for impairment
in value. In relation to acquisitions, where advantage can be taken
of the merger relief rules, shares issued as consideration for
acquisitions are accounted for a nominal value.
c) Tangible fixed assets
Tangible fixed assets are stated at historical cost less
accumulated depreciation and impairment provisions.
Depreciation is provided to write off the cost, less the
estimated residual value, of property, plant and equipment by equal
instalments over their estimated useful economic lives as
follows:
Fixtures, fittings & equipment - 25% straight line basis
Material residual value estimates are updated as required, but
at least annually, whether or not the asset is revalued.
d) Convertible loan
The convertible loan notes disclosed in Notes 7 have been split
between the debt and equity element. This requires calculating the
present value of the debt element with an effective interest rate
of 12%. 12% was assumed to be an effective interest rate that would
be charged on a similar loan by a third party.
e) Provisions
The Group recognises a provision where a legal or constructive
obligation exists at the balance sheet date and a reliable estimate
can be made of the likely outcome.
f) Share-based payments
The company has applied the requirements of IFRS 2 'Share-based
payment', as amended by IFRIC Interpretation 2 - IFRS 2 Group and
Treasury share transactions.
The Company issues equity-settled share-based payments to
certain employees of its subsidiary. Equity-settled share-based
payments are measured at fair value (excluding the effect of non
market-based vesting conditions) at the date of grant. Where
services are from employees, fair value is determined indirectly by
reference to the fair value of the instrument granted. The fair
value determined at the grant date of the equity settled
share-based payments is expensed on a straight-line basis over the
vesting period, based on the Company's estimate of shares that will
eventually vest. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made
to any expense recognised in prior periods if share options
ultimately exercised are different to that estimated on
vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital
Fair value is measured based upon a Black-Scholes pricing
model.
The Company recognises the cost of the share options granted to
the employees of its subsidiaries as an increase in the cost of
investment with a corresponding increase in equity.
Details of the share option valuation are set out in Note
11.
g) Income tax
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting periods, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This
involves comparison of the carrying amount of assets and
liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, or on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax liabilities are provided for in full. Deferred tax
assets and liabilities are calculated without discounting, at tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (tax laws)
that have been enacted or substantively enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the income statement,
except where they relate to items that are charged or credited
directly to equity in which case the related deferred tax is also
charged or credited directly to equity.
Tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as
deferred tax assets. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be
available against which the asset can be recognised and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
2 staff numbers and costs
The average monthly number of people employed by the Company
(including Executive Directors) during the year, analysed by
category, were as follows:
2016 2015
No No
Administrative staff 8 8
===== =====
The aggregate payroll costs
were as follows: 2016 2015
GBP GBP
Wages, salaries and fees 543,276 424,980
Social security costs 47,410 70,846
Pension costs 33,241 10,151
623,927 505,977
======== ========
Details of the Directors' remuneration can be found on page
37.
3 PROPERTY PLANT AND EQUIPMENT
Fixtures,
fittings
and equipment
GBP
Cost
At 27 March 2015 103,204
Additions -
At 31 March 2016 103,204
--------------
Depreciation
At 27 March 2015 45,157
Charge for the period 13,937
At 31 March 2016 59,094
--------------
Net Book Value at 31 March 2016 44,110
==============
Net Book Value at 27 March 2015 58,047
--------------
4 investments
Investments in shares of subsidiary undertakings:
GBP
At 27 March 2015 7,534,112
Impairment charge for the period (667,401)
At 31 March 2016 6,866,711
==========
All subsidiaries are registered in England and Wales.
Subsidiary Principal Activity Share ownership Relationship
type
SnackTime UK Limited The installation 100% Direct
and operation of
snack vending machines,
vending machine holding
company for the Group.
Snack in The Box Install and offers 100% Direct
Limited ("SITB") compact vending machines
and honesty boxes
to business customers
on a Free-on-loan
basis through a franchise
network.
Drinkmaster Limited The manufacture and 100% Direct
sale of single portion
beverages called
'Drinkpacs' together
with the sale of
associated food and
drink products.
Uvenco Limited The supply and operation 100% Direct
(formerly VMI (Blackburn) of vending machines
Limited) and sale of associated
food and drink products.
Simply Drinks Limited The supply and operation 100% Direct
of vending machines
and sale of associated
food and drink products.
Vendia UK Limited A holding company. 100% Direct
Drinkmaster Holdings A holding company. 100% Indirect
Limited
5 TRADE AND OTHER RECEIVEABLES
2016 2015
GBP GBP
Amounts due within 1 year
Trade debtors 93,211 149,137
Prepayments 134,030 47,365
Other debtors 5,938 366,424
Amounts owed by subsidiary
undertaking 1,371,761 1,861,931
1,604,940 2,424,857
========== ==========
6 current liabilities
2016 2015
GBP GBP
Amounts due within 1 year
Bank overdraft (secured) 62,657 184,621
Bank loan (secured) 560,000 2,050,939
Convertible loan (Note 7) - 589,081
Trade creditors 282,606 167,580
Social security and other taxes 527,706 65,089
Accruals & deferred income 182,160 327,184
Other creditors 27,006 -
Amounts owed to subsidiary
undertakings 8,270,138 7,691,478
9,912,273 11,075,972
========== ===========
7 borrowings
Terms and conditions of outstanding loans at the period end were
as follows:
Interest rate Year of maturity 2016 2015
% GBP GBP
Convertible loan notes 8% Fixed 2015 - 589,081
Redeemable loan notes 12% Fixed 2018 40,083 498,634
Convertible loan notes 7% Fixed 2018 40,083 433,038
2.75% over base
Bank overdraft rate 2016 635,491 184,621
Bank loan 5% over LIBOR 2018 1,831,884 1,464,655
Bank loan 5.25% fixed 2018 - 585,345
The fair value in each case equates to the carrying book value
with the exception of the convertible loan note. All loans are
denominated in sterling. Additional disclosures in respect of the
company's borrowings have been provided in Note 19 of the Group
financial statements.
2016 2015
GBP GBP
Amounts payable under bank loans
& loan notes
Within one year 560,000 3,239,950
1-2 years - -
2-5 years 1,352,050 1,175,364
---------- ----------
Total 1,912,050 4,415,314
========== ==========
The bank loans are secured by a fixed and floating charge over
the assets of the company and certain subsidiaries together with
security deeds and share pledges regarding certain other
subsidiaries, in conjunction with an assignment of certain Keyman
insurance policies.
8 provisions
No provisions against future liabilities were required at the
period end
9 SHARE CAPITAL
2016 2015
GBP GBP
Allotted, called up and fully paid
equity share capital
At 31 March 2016 (ordinary
shares of GBP0.02 each) 1,491,948 642,980
---------- --------
See note 22 of the group financial statements for details of the
share issues in the current and prior period.
10 share premium and reserves
Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal
value.
Share option reserve Cumulative share option expense recognised.
Capital redemption reserve Amounts transferred from share
capital on redemption of issued shares which arose following a
share reorganisation
Convertible debt option reserve Amount of proceeds on issue of convertible debt relating
to the equity component (i.e. option to convert the debt
into share capital).
Warrant reserve Cumulative fair value of warrants in issue.
Retained earnings Cumulative net gains and losses recognised in
the consolidated statement of comprehensive income.
11 equity-settled share option scheme
Details of the company's share option scheme are set out in Note
24 of the consolidated financial statements.
12 related party transactions
Related party transactions describe transactions with Directors,
and companies in which Directors have an interest.
During the year ended 31 March 2016 there were the following
related party transactions involving a Director or a Company
related to a Director:
Loans totalling GBP40,000, together with accrued but unpaid
interest, were converted by J.Hamer into 439,967 ordinary shares at
a price of 10 pence per share (2015 - Nil).
Loans totalling GBP35,000, together with accrued but unpaid
interest, were converted by M.Jackson into 384,971 ordinary shares
at a price of 10 pence per share (2015 - Nil).
Loans totalling GBP450,000, together with accrued but unpaid
interest, were converted by Elderstreet Investments Ltd into
4,963,150 ordinary shares at a price of 10 pence per share (2015 -
Nil)
.
Loans totalling GBP100,000, together with accrued but unpaid
interest, were converted by the WE Jackson Trust into 1,141,588
ordinary shares at a price of 10 pence per share (2015 - Nil).
Loans totalling GBP850,000, together with accrued but unpaid
interest, were converted by the Unicon Asset Management Ltd into
9,475,590 ordinary shares at a price of 10 pence per share (2015
-Nil).
The following members of the "Concert Party" associated with
Boris Belotserkovsky, but who are not Directors of the company,
purchased new ordinary shares of 2 pence per share;-
Mrs V. Belotserkovskaya 7,000,000 @ a price of 5 pence per
share
Uvenco Holdings 2,300,000 @ a price of 10 pence per share
Versatel Company Ltd 8,000,000 @ a price of 5 pence per share (2015 - 15.8 million @ 15p)
Mrs G. White 50,000 @ a price of 10 pence per share
Mrs V.Belotserkovskaya also purchased the 4,843,616 ordinary
shares held by M.Slinkert a former Director of the company.
Unicum Holdings Limited, a company controlled by Boris
Belotserkovsky, a non-executive director of the Company, received
2,300,000 New Ordinary Shares for the supply of GBP230,000 of
vending machines to the Company during 2015,
13 post balance sheet events
Details of post balance sheet events have been disclosed in note
30 to the Group financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DBGDCLUDBGLC
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September 30, 2016 02:01 ET (06:01 GMT)
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