Company
Registration No. 08062555 (England and Wales)
THE JUST LOANS
GROUP PLC
DIRECTORS' REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
Jeffreys Henry
LLP
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
COMPANY INFORMATION
Directors
Mr Robert
Boot
Mr John Davies
Mr John McLellan
Ms Susanne
Chishti
Sir Eric Peacock
Lord Timothy Razzall
Secretary
Mr Robert Boot
Company number
08062555
Registered office
1 Charterhouse
Mews
London
EC1M 6BB
Auditors
Jeffreys Henry LLP
5-7 Cranwood Street
London
EC1V 9EE
Bankers
Santander Bank Plc
4th
Floor
100 Ludgate Hill
London
EC4M 7RE
Solicitors
DWF Solicitors
Capital House
85 King William Street
London
EC4N 7BL
John Morse Solicitors
St. Helen's House
156, Helens Road
Swansea
SA1 4DG
CONTENTS
|
Chairman's statement |
1 |
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Strategic
report |
2 |
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Directors' report
|
4 |
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Corporate governance
statement |
6 |
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Independent auditors' report |
8 |
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Consolidated statement of comprehensive income |
12 |
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Consolidated statement of financial
position |
13 |
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|
Company statement of financial position |
14 |
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|
Consolidated statement of cash flows |
15 |
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Company statement of cash flows |
16 |
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Consolidated statement of changes in equity |
17 |
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Company statement of changes in equity |
18 |
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Notes to the financial statements
|
19 |
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CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2017
I am pleased to present the
results of the Group for The Just Loans Group Plc and its
subsidiaries (together the "Group") for the 12 months ended 31
December 2017.
I am delighted to report that the
Group achieved revenue for the year of almost £9.7m compared with
£6.0m for the 12 months to 31 December 2016, a 62% increase,
resulting in an reduced operating loss of £16k, compared to an
operating loss of £355k.The Group revenue continues to grow and is
anticipated to double in the current year whilst administrative
costs will remain virtually static. Our proprietary ALFI LMS system
continues to evolve with the addition of new Fintech systems that
become available or are upgraded. This ensures that our system
remains one of the most advanced, highly scalable Fintech, customer
acquisition and management systems in operation thus allowing one
touch of Data.
I am also delighted to report that
loan facility approvals in the first quarter of 2018 are more than
two and a half times the same quarter last year. We had a
substantial inflow of institutional funds in November and December
and this has continued into 2018. We are now confident that the
flow of institutional funds will be more than sufficient to meet
not only the current demand but also the increase in demand
generated by an increase in marketing activity. These substantial
funds were too late to have a significant effect on the results for
2017 and our disappointment for the year is that we did not have
enough funds available for most of the year to meet the demand for
our loan products. If the funds had been available, then we would
have been reporting an even greater increase in income and a much
improved trading result. We are now confident that we have the
necessary funds and continuity of funding to enable us to reach the
critical mass of the loan book necessary for us to achieve
break-even and profit during 2018.
Our Revolving Credit Facility and
Business Builder products have a proven track record and even more
importantly we have a proven record of successful repayment. We
have a rigidly imposed target of zero capital loss and although we
can't claim to be 100% successful in this regard, after having
loaned out nearly £60m, we have an enviable bad debt record of less
than 0.2%. We have a number of new products in the pipeline some of
which will be available during the second quarter of this year but
the same credit assessment process will be used for these new
products.
Our target for 2018 is to double
our loan book and the results for the first quarter show that we
are on target to do so. The increase in loan book and the new
products will require around 10% additional staff but very little,
if any, additional space. Overheads will therefore only show a
relatively marginal increase. The two investments through our Just
Finance Loans and Investments subsidiary, PWE Holdings and City
Fuel Services, are also progressing extremely well and are forecast
to contribute to Group results in 2018.
2018 promises to be an exciting
year for the Group but the success of a company is a result of the
effort and enthusiasm of the management and staff and I would like
to thank all members of staff for the tremendous contribution they
have made in bringing the Group to such an exciting point in its
development.
Sir Eric
Peacock
Chairman
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2017
Principal
activities and fair review of the business
The principal activity of The Just Loans Group Plc ("the Company")
and its subsidiaries (together "the Group") is the provision of
loans and equity investments.
The Directors are pleased with the
progress made to date. The Group made a loss, after the gain on the
bargain purchase of PWE Holdings Plc, of £4,554,415 (2016- Loss of
£4,858,091) for the year to 31 December 2017 which was in line with
expectations given the delay experienced in receipt of additional
funds. All systems are now fully tried and tested though additional
and updated functionality is still being added. The severely
delayed additional funding which is necessary in order to reach the
critical mass required for break-even and profit on a monthly basis
has led to a time lag in results. This delay in fundraising meant
that customer acquisition was held back and for a significant
number of months there was demand for loans that the Group could
not meet. During 2017, the shares were admitted to the Vienna stock
exchange.
Fund Raising
-
In order for the Group to meet its growth
targets it is necessary to raise the funds to be lent out. The
Group signed a £10m facility with the US fund manager SQN Capital
Management in December 15 and a further £10m facility In July 2017;
£18m of these facilities had been drawn down by 31 December 2017
and the remaining £2m in the first quarter of 2018.
-
During the year a further £2.5m was raised of
debenture securities which are traded on the Emerging Companies
Market of the Cyprus Stock.
-
In addition, at the end of 2016, The Company
signed a facility agreement with an institution, who are looking to
raise £50m via a Bond issue designed for institutional Investors.
The proceeds of this Bond issue will be loaned to the Company and
the Bond issue is secured on a basket of loan facilities of the
Company. The processes and procedures of Just Cash Flow were rated
by an independent rating authority for the purpose of the Bond
which was awarded an Investment Grade A with stable outlook. By the
end of December 2017 the Company had received £15.8m of which
£12.5m was received during the last quarter of the year to date the
Company has received £28.7m.
-
In January / February 2017 the Company exchanged
£4,480,000 of debentures for 3,200,000 ordinary shares at a price
of £1.40 per share. An offer of exchange was made to all existing
Group debenture holders but was capped at 3,200,000 shares in order
to stay within the limits of the Prospectus Directive. The shares
are quoted on the Cyprus and Vienna Stock Exchanges.
The Directors realise that there
has been a major cash burn in building the process and platforms of
the business, but they consider that the Group has adequate
resources for ongoing operating expenses due to the revenues now
being generated from its operations. The Group focus will be on
ensuring additional fundraising is in place to ensure the main
trading subsidiaries can achieve the necessary growth for the Group
to reach and pass breakeven. Given the substantial demand for the
Company's offerings and the additional funds referred to above the
Company is targeted to achieve critical mass necessary for
breakeven during 2018.
During the year, Just Finance
Loans & Investments, a wholly owned subsidiary of Just Loans
Plc increased its holdings in Pure World Energy Holdings Plc from
27.5% to 77.5%, resulting in a revaluation of the assets at Group
level.
Principal risks
and uncertainties
The principal risk to the Group is that the borrowers will default
on their interest or capital repayments. The Group is a secured
lender and all loans are backed by security of a minimum 150%
assets of the customer and/or its shareholder directors. The Group
closely monitors the performance of the borrowers and the credit
worthiness of the guarantors but the Group remains subject to the
risk of fraud by the borrower. The Group also faces risks from
economic factors, fluctuations in exchange rates and the ability to
secure future investment. Further discussion on risk and
sensitivity analysis is discussed within Note 4.
Key performance
indicators
The performance indicators relative to revenue and gross margin
follows. A large amount of time by staff and external consultants
has been spent in developing the processes and IT systems and most
of these costs have been written off in the profit and loss account
rather than capitalised. It has secured an R &D tax credit, net
of costs, of £159,046 (£43,790 - 2016). There are no non-financial
performance indicators being used at present. Salient points
are:
|
2017 |
2016 |
|
|
|
Group turnover |
£9,747,759 |
£6,037,550 |
Gross profit for the period |
£5,873,411 |
£3,105,476 |
Profit/(Loss) for the period |
(£4,554,415) |
(£4,858,091) |
Cash and cash equivalents |
£8,333,512 |
£1,783,282 |
Dependence on key
personnel
Whilst the Group intends to enter into contractual arrangements
with the aim of securing the services of its executive Directors,
the retention of their services cannot be guaranteed.
Future developments
The Group continues to seek additional funding in order to finance
the demand for its loan products. The additional funding will be by
way of loans from institutional investors and by sale of the
group's quoted debentures.
The Group is also looking to
increase the range of funding options that it offers to customers
and also to include additional services to help to ensure that
customers remain with the Group during their own long term
development.
On behalf of the board
Mr Robert Boot
Director
30 April 2018
DIRECTORS'
REPORT
FOR THE YEAR ENDED 31 DECEMBER
2017
The directors present their report
and financial statements for the year ended 31 December 2017.
Principal
activities
The principal activity of the company is that of the provision of
commercial loans. The company provides revolving credit facilities
to small and medium enterprises that struggle to obtain traditional
sources of funding for a variety of reasons.
Results and
dividends
The results for the period are set out on page 12.
Future
developments
As per the Strategic Review Report.
Directors
The following directors have held office during the period:
Mr Robert
Boot
Mr John Davies
Mr John McLellan
Sir Eric Peacock
Lord Timothy Razzall
Ms Susanne
Chishti
Directors' interest
At the date of this report the directors held the following
beneficial interest in the ordinary share capital of the Group:
|
2017 |
2016 |
Robert
Boot |
2,500,000 |
2,500,000 |
John
Davies |
14,571,430 |
14,571,430
|
|
|
|
Substantial
interests
As at 31 December 2017 the following had an interest of 2017 -3% or
more in the ordinary share capital of the Group:
|
Ordinary shares
No. |
Percentage |
John
Davies * |
17,243,305
|
61.15 |
Eco
Quest Plc |
3,750,000 |
13.30 |
Carly
Davies |
3,250,000 |
11.52 |
Robert
Boot* |
3,349,536
|
11.88 |
*John Davies and Robert Boot own 71.25% and 22.5%
respectively of the shares of Eco Quest Plc and their interest in
shares in the Company and percentage is included above
Financial risk and management of
capital
The major balances and financial risks to which the Group is
exposed to and the controls in place to minimise those risks are
disclosed in Note 4. The principal current assets of the
business are cash and the loan book. Therefore the principal
financial instruments employed by the group are cash or cash
equivalents and the Directors ensure that the business maintains
surplus cash reserves to minimise liquidity risk.
A description of how the Group
manages its capital is also disclosed in Note 4.
The Board considers and reviews
these risks on a strategic and day-to-day basis in order to
minimise any potential exposure.
DIRECTORS' REPORT
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
Financial
instruments
The group has not entered into any financial instruments to hedge
against interest rate or exchange rate risk.
The debentures are secured by
first floating charge over all of the assets of the group, and bear
interest as per below. Interest is paid in two half yearly
instalments.
|
Repayment date |
Annual interest |
2018 Debentures |
31
December 2018 |
8.25% |
2019 Debentures |
31
December 2019 |
8.25% |
2020 Debentures |
31
December 2020 |
8.75% |
2021 Debentures |
31
December 2021 |
8.75% |
In December 2017 the Group
successfully undertook an exchange of the 2017 Debentures in Just
Finance Loans & Investments Plc bearing 8.25% annual interest,
with 2021 Debentures in The Just Loans Group Plc, bearing 8.75%
annual interest.
Auditors
Jeffreys Henry LLP are auditors to the Group and in accordance with
section 485 of the Companies Act 2006, a resolution proposing that
they be re-appointed will be put at a General Meeting.
Statement of
directors' responsibilities
The directors are responsible for preparing the Directors' Report
and the Group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the directors
to prepare Group and parent financial statements for each financial
period. Under that law the directors have elected to prepare the
financial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted for use in the European
Union. 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. 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 IFRS as adopted by the European Union
-
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
group. They are also responsible for safeguarding the assets of the
company and the group hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
Statement of disclosure to auditors
Each person who is a Director at the date of approval of this
Annual Report confirms that:
-
so far as the Directors are aware, there is no
relevant audit information of which the Company's auditors are
unaware; and
-
each Director has taken all the steps that he
ought to have taken as Director in order to make himself aware of
any relevant audit information and to establish that the Company's
auditors are aware of that information.
On behalf of the board
Mr Robert Boot
Director
30 April 2018
CORPORATE GOVERNANCE
STATEMENT
FOR THE YEAR ENDED 31 DECEMBER
2017
The board has sought to comply
with a number of the provisions of the UK Corporate Governance Code
("the Code") in so far as it considers them to be appropriate to
company of their size and nature. They make no statement of
compliance with the Code overall and do not 'explain' in detail any
aspect of the Code with which they do not comply.
The Directors have formed an Audit
Committee. The Chairman of the committee is John McLellan. The
other members of the Audit Committee are Sir Eric Peacock, the
Chairman of the Company, Lord Razzall and Susanne
Chishti,. The Chairman of the Audit Committee has the right
to require the attendance of the Finance Director of the Company at
meetings of the committee.
The audit committee operates with
the following terms of reference:
Audit
committee
-
to monitor the integrity of the financial
statements of the Company and any formal announcements relating to
the Company's financial performance, reviewing significant
financial reporting judgements contained in them;
-
to review the Company's internal financial
controls and, unless expressly addressed by a separate board risk
committee composed of independent directors, or by the Board
itself, to review the Company's internal control and risk
management systems;
-
to monitor and review the effectiveness of the
Company's internal audit function;
-
to make recommendations to the Board, for it to
put to the shareholders for their approval in general meeting, in
relation to the appointment, re-appointment and removal of the
external auditor and to approve the remuneration and terms of
engagement of the external auditor;
-
to review and monitor the external auditor's
independence and objectivity and the effectiveness of the audit
process, taking into consideration relevant UK professional and
regulatory requirements; and
-
to develop and implement policy on the
engagement of the external auditor to supply non-audit services,
taking into account relevant ethical guidance regarding the
provision of non-audit services by the external audit firm, and to
report to the Board, identifying any matters in respect of which it
considers that action or improvement is needed and making
recommendations as to the steps to be taken.
As and when the Company employs
staff the Audit Committee is to review arrangements by which such
staff may raise concerns about possible improprieties in matters of
financial reporting or other matters so that a proportionate and
independent investigation of such matters can take place, together
with the instigation of appropriate follow up action.
The Audit Committee will also
consider annually whether there is any need to put in place an
internal audit function which, if put in place, is to be monitored
and reviewed by the Audit Committee.
Internal
controls
The Board is responsible for
maintaining a sound system of internal controls to safeguard
shareholders' investment and group assets. The Directors monitor
the operation of internal controls. The objective of
the system is to safeguard group assets, ensure proper accounting
records are maintained and that the financial information used
within the business and for publication is reliable. Any such
system of internal control can only provide reasonable, but not
absolute assurance against material misstatement or loss.
Internal financial control
procedures undertaken by the Board include:
-
Review of biannual financial reports and
monitoring performance.
-
Prior approval of all significant
expenditure/loans including all major investment decisions.
-
Review and debate of treasury policy.
The Board has reviewed the
operation and effectiveness of the Group's system of internal
control for the financial period and the period up to the date of
approval of the financial statements.
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
UK Corporate
Governance Code
While the Directors acknowledge the principle of a clear division
of responsibilities between the running of the Board of Directors
and the executive responsibility for the running of the Company's
business, they consider that the Company's business can best be
advanced by the Board of Directors acting as one body in making
investment decisions.
The Board considers that the
principle in the Code relating to relations with shareholders
should also apply to relations with holders of Debentures. Although
the holders of Debentures will not attend general meetings of the
Company the Board believes that communication with holders of
Debentures on a regular basis is important.
The Directors have considered the
provision in the Code for the appointment of one of the independent
Non-Executive Directors to be the senior Independent
Director. At the current time the Board is not large enough
to accommodate such an appointment. The Directors will
however, consider the appointment of a senior Independent Director
when appropriate.
.
INDEPENDENT AUDITORS'
REPORT
TO THE MEMBERS OF THE JUST LOANS
GROUP PLC
Opinion
We have audited the financial
statements of The Just Loans Group Plc (the 'company') for
the year ended 31 December 2017 which comprise the Statement of
Comprehensive Income, the Statements of Financial Position, the
Statement of Changes in Equity, the Statement of Cash Flows and
notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
In our opinion, the financial
statements:
give a true and fair view of the
state of the group's and of the parent company's affairs as at 31
December 2017 and of the group's loss for the year then ended;
Basis for
opinion
We conducted our audit in
accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities
for the audit of the financial statements section of our report. We
are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going
concern
We have nothing to report in respect of the
following matters in relation to which the ISAs (UK) require us to
report to you where:
-
the directors' use of the going concern basis of
accounting in the preparation of the financial statements is not
appropriate; or
-
the directors have not disclosed in the
financial statements any identified material uncertainties that may
cast significant doubt about the group's or the parent company's
ability to continue to adopt the going concern basis of accounting
for a period of at least twelve months from the date when the
financial statements are authorised for issue.
INDEPENDENT AUDITORS'
REPORT
TO THE MEMBERS OF THE JUST LOANS
GROUP PLC (continued)
Other information
The directors are responsible for
the other information. The other information comprises the
information included in the report, other than the financial
statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of
the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this
regard.
Opinion on other matters
prescribed by the Companies Act 2006
In our opinion, based on the work
undertaken in the course of the audit:
the strategic report and the
directors' report have been prepared in accordance with applicable
legal requirements.
Matters on which
we are required to report by exception
In the light of the knowledge and
understanding of the group and the parent company and its
environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
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.
INDEPENDENT AUDITORS'
REPORT
TO THE MEMBERS OF THE JUST LOANS
GROUP PLC (continued)
Responsibilities of
directors
As explained more fully in the
directors' responsibilities statement set out on page 5, the
directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial
statements, the directors are responsible for assessing the group's
and the parent company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do
so.
Auditor's
responsibilities for the audit of the financial statements
Our objectives are to obtain
reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance
with ISAs (UK), we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material
misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
-
Obtain an understanding of internal control
relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the group's internal
control.
-
Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
-
Conclude on the appropriateness of the
directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the group's or the parent company's ability to continue as
a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's report to the
related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause
the group or the parent company to cease to continue as a going
concern.
-
Evaluate the overall presentation, structure and
content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation.
INDEPENDENT AUDITORS'
REPORT
TO THE MEMBERS OF THE JUST LOANS
GROUP PLC (continued)
-
Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business
activities within the group to express an opinion on the
consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.
We communicate with those charged
with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
Sanjay Parmar (Senior statutory auditor)
For and on behalf of Jeffreys
Henry LLP Chartered Accountants, Statutory Auditor
Finsgate
5-7 Cranwood Street
London,
EC1V 9EE
30 April 2018
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
2017
|
|
|
|
|
|
|
Year
ended |
|
Year
ended |
|
|
31 December 2017 |
|
31 December 2016 |
|
|
|
|
|
|
Notes |
|
|
£ |
Continuing operations |
|
|
|
|
Revenue |
5 |
9,747,759 |
|
6,037,550 |
Cost of
sales |
|
(3,874,348) |
|
(2,932,074) |
|
|
|
|
|
Gross profit |
|
5,873,411 |
|
3,105,476 |
|
|
|
|
|
Administrative expenses |
|
(5,889,646) |
|
(3,460,387) |
|
|
|
|
|
Operating Profit/(Loss) |
6 |
(16,235) |
|
(354,911) |
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
8 |
(6,660,616) |
|
(4,302,403) |
Gain on
revaluation of investment in associate |
13 |
341,232 |
|
(244,567) |
Gain on
bargain purchase |
13 |
1,587,192 |
|
- |
|
|
|
|
|
Loss on
ordinary activities before taxation |
|
(4,748,427) |
|
(4,901,881) |
|
|
|
|
|
R & D
tax credit |
9 |
159,046 |
|
43,790 |
|
|
|
|
|
Deferred
Tax |
|
34,965 |
|
- |
|
|
|
|
|
Porfit/(Loss) for the period |
|
(4,554,415) |
|
(4,858,091) |
|
|
|
|
|
Profit /
(Loss) attributable to: |
|
|
|
|
|
|
(4,375,267) |
|
(4,858,091) |
|
|
|
|
|
|
21 |
(179,148) |
|
- |
|
|
(4,554,415) |
|
(4,858,091) |
|
|
|
|
|
Loss per
share (expressed in pence per share) |
11 |
(15.74p) |
|
(19.43p) |
|
|
|
|
|
|
|
|
|
|
The notes on pages 19 to 39 form part of these
financial statements.
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2017
|
|
As at |
|
As at |
|
|
31 December 2017 |
|
31 December 2016 |
|
Notes |
|
|
£ |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill |
13 |
392,267 |
|
- |
Property,
Plant and Equipment |
14 |
11,743,603 |
|
56,680 |
Investments |
13 |
- |
|
6 |
Loans and
advances to customers |
15 |
3,571,942 |
|
917,900 |
Trade and
other receivables |
15 |
4,881,178 |
|
9,061,681 |
|
|
20,588,990 |
|
10,036,267 |
Current assets |
|
|
|
|
Inventory |
17 |
44,275 |
|
14,828 |
Loans and
advances to customers |
15 |
28,567,200 |
|
17,653,553 |
Trade and
other receivables |
16 |
569,569 |
|
339,880 |
Cash and
cash equivalents |
18 |
8,333,512 |
|
1,783,282 |
|
|
37,514,556 |
|
19,791,543 |
|
|
|
|
|
Total assets |
|
58,103,546 |
|
29,827,810 |
|
|
|
|
|
Equity and liabilities |
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
Ordinary
shares |
19 |
56,400 |
|
50,000 |
Share
premium |
19 |
4,473,600 |
|
- |
Interest
in own shares |
|
(58,474) |
|
- |
Other
reserves |
29 |
144,877 |
|
75,049 |
Accumulated losses |
20 |
(18,411,936) |
|
(14,036,669) |
|
|
(13,795,533) |
|
(13,911,620) |
Non-controlling interests |
|
454,948 |
|
- |
Total equity |
|
(13,340,585) |
|
(13,911,620) |
|
|
|
|
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
23 |
52,484,809 |
|
35,694,647 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Borrowings |
23 |
14,836,312 |
|
6,794,814 |
Trade and
other payables |
22 |
4,123,010 |
|
1,249,969 |
|
|
18,959,322 |
|
8,044,783 |
|
|
|
|
|
Total liabilities |
|
71,444,131 |
|
43,739,430 |
|
|
|
|
|
Total equity and liabilities |
|
58,103,546 |
|
29,827,810 |
|
|
|
|
|
The notes on pages 19 to 39 form part of these
financial statements.
Approved by the Board and authorised for issue on 30 April 2018
Mr Robert
Boot
Director
Company Registration No. 08062555
COMPANY STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2017
|
|
As at |
|
As at |
|
|
31 December 2017 |
|
31 December 2016 |
|
Notes |
|
|
£ |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Investments |
13 |
601,216 |
|
601,112 |
Other
receivables |
16 |
7,672,969 |
|
2,336,083 |
Total
non-current assets |
|
8,274,185 |
|
2,937,195 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade and
other receivables |
16 |
11,540,067 |
|
13,600,153 |
Cash and
cash equivalents |
18 |
1,378,196 |
|
216,608 |
Total
current assets |
|
12,918,263 |
|
13,816,761 |
|
|
|
|
|
Total assets |
|
21,192,448 |
|
16,753,956 |
|
|
|
|
|
Equity and liabilities |
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
Ordinary
shares |
19 |
56,400 |
|
50,000 |
Share
premium |
19 |
4,473,600 |
|
- |
Other
reserves |
29 |
144,877 |
|
75,049 |
Accumulated losses |
20 |
(13,219,622) |
|
(9,991,215) |
Total equity |
|
(8,544,745) |
|
(9,866,166) |
|
|
|
|
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
23 |
12,628,910 |
|
23,794,249 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Borrowings |
23 |
8,009,727 |
|
- |
Trade and
other payables |
22 |
9,098,556 |
|
2,825,873 |
|
|
17,108,283 |
|
2,825,873 |
|
|
|
|
|
Total liabilities |
|
29,737,193 |
|
26,620,122 |
|
|
|
|
|
Total equity and liabilities |
|
21,192,448 |
|
16,753,956 |
|
|
|
|
|
The notes on pages 19 to 39 form part of these
financial statements.
Approved by the Board and authorised for issue on 30 April 2018
Mr Robert Boot
Director
Company Registration No. 08062555
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR
THE YEAR ENDED 31 DECEMBER 2017
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
|
31 December 2017 |
|
31 December 2016 |
|
Notes |
£ |
|
£ |
Cash flows from operating activities |
|
|
|
|
Cash
generated from operations |
24 |
(17,193,782) |
|
(14,474,817) |
Finance
costs paid |
|
(4,954,069) |
|
(4,302,403) |
R & D
Tax receipt |
|
159,046 |
|
43,790 |
Net cash generated from operating activities |
|
(21,988,805) |
|
(18,733,430) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Acquisition of PWE Holdings net of cash |
|
14,062 |
|
- |
Payments
to acquire tangible assets |
|
(54,613) |
|
(56,680) |
Net cash generated from investing activities |
|
(40,551) |
|
(56,680) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Net
Proceeds from issue of debenture and other loans |
|
28,579,586 |
|
17,489,356 |
Net cash generated from financing activities |
|
28,539,035 |
|
17,489,356 |
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents |
|
6,550,230 |
|
(1,300,754) |
|
|
|
|
|
Cash and
cash equivalents at the beginning of the period |
|
1,783,282 |
|
3,084,036 |
|
|
|
|
|
Cash and cash equivalents at end of period |
|
8,333,512 |
|
1,783,282 |
|
|
|
|
|
The notes on pages 19 to 39 form part of these
financial statements.
COMPANY STATEMENT OF CASH
FLOWS
FOR
THE YEAR ENDED 31 DECEMBER 2017
|
|
|
|
|
|
|
Year
Ended |
|
Year
Ended |
|
|
31 December 2017 |
|
31 December 2016 |
|
Notes |
£ |
|
£ |
Cash flows from operating activities |
|
|
|
|
Cash
generated from operations |
24 |
2,235,137 |
|
(4,511,656) |
Finance
costs paid |
|
(2,397,833) |
|
(2,372,820) |
Net cash generated from operating activities |
|
(162,696) |
|
(6,884,476) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Payments
to acquire investments |
|
(104) |
|
(7) |
Net cash generated from financing activities |
|
(104) |
|
(7) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Net
proceeds from issue of debenture loans |
|
1,324,388 |
|
7,085,300 |
Net cash generated from financing activities |
|
1,324,388 |
|
7,085,300 |
|
|
|
|
|
Net increase in cash and cash equivalents |
|
1,161,588 |
|
200,817 |
Cash and
cash equivalents at the beginning of the period |
|
216,608 |
|
15,791 |
Cash and cash equivalents at end of period |
|
1,378,196 |
|
216,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 19 to 39 form part of these
financial statements.
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
|
|
|
|
Attributable to owners of the
parent |
Non-controlling
interest |
Total
equity |
|
Share capital |
Share Premium |
Interest in own shares |
Other reserves |
Accumulated losses |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
As at
31 December
2015 |
50,000 |
- |
- |
15,000 |
(9,178,578) |
(9,113,578) |
- |
(9,113,578) |
|
|
|
|
|
|
|
|
|
Other
reserves |
- |
|
|
60,049 |
- |
60,049 |
- |
60,049 |
|
|
|
|
|
|
|
|
|
Loss for
the period |
- |
|
|
- |
(4,858,091) |
(4,858,091) |
- |
(4,858,091) |
|
|
|
|
|
|
|
|
|
As at 31 December 2016 |
50,000 |
- |
- |
75,049 |
(14,036,669) |
(13,911,620) |
- |
(13,911,620) |
|
|
|
|
|
|
|
|
|
Issue of
new shares |
6,400 |
4,473,600 |
|
- |
- |
4,480,000 |
|
4,480,000 |
|
|
|
|
|
|
|
|
|
Interest
in own shares |
|
|
(58,474) |
|
|
(58,474) |
|
(58,474) |
|
|
|
|
|
|
|
|
|
Non-Controlling interest arising on business combinations |
|
|
|
|
|
|
454,948 |
454,948 |
Other
reserves |
- |
|
|
69,828 |
|
69,828 |
|
69,828 |
|
|
|
|
|
|
|
|
|
Profit/(Loss) for the year |
- |
|
|
|
(4,375,267) |
(4,375,267) |
|
(4,375,267) |
|
|
|
|
|
|
|
|
|
As at 31 December 2017 |
56,400 |
4,473,600 |
(58,474) |
144,877 |
(18,411,936) |
(13,795,533) |
454,948 |
(13,340,585) |
|
|
|
|
|
|
|
|
|
Share capital is the amount subscribed for shares
at nominal value.
Other reserves represent the expenses recognised
for share-based payments.
Accumulated losses represent the cumulative loss of the group
attributable to equity shareholders.
Share premium reflects the issue of shares in
January 2017 on the exchange of Debt to equity at £1.40
The Non-Controlling represents the 22.5% of PWE
Holdings. On the 1 August the Group via its 100% owned subsidiary
increased its stake from 22.5% to 77.5%
The interest in own shares represent ordinary
shares owned by Just Loans Group EB Trustee Limited.
COMPANY STATEMENT OF CHANGES IN
EQUITY
FOR
THE YEAR ENDED 31 DECEMBER 2017
|
Share
capital |
Share
premium |
Other reserves
|
Accumulated losses |
Total
equity |
|
£ |
£ |
£ |
£ |
£ |
As at 31 December 2015 |
50,000 |
- |
15,000 |
(6,617,585) |
(6,552,585) |
|
|
|
|
|
|
Other
reserves |
- |
- |
60,049 |
|
60,049 |
Loss for
the year |
- |
- |
|
(3,373,630) |
(3,373,630) |
As at 31 December 2016 |
50,000 |
- |
75,049 |
(9,991,215) |
(9,866,166) |
|
|
|
|
|
|
Issue of
Shares |
6,400 |
4,473,600 |
|
- |
4,480,000 |
Charge
for the year |
- |
- |
69,828 |
|
69,828 |
Loss for
the year |
- |
- |
|
(3,228,407) |
(3,228,407) |
|
|
|
|
|
|
As at 31 December 2017 |
56,400 |
4,473,600 |
144,877 |
(13,219,622) |
(8,544,745) |
Share capital is the amount subscribed for shares
at nominal value.
Retained losses represent the cumulative loss of the group
attributable to equity shareholders.
Other reserves represents the expense recognised
for share based payments.
The notes on pages 19 to 39 form part of these
financial statements.
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
2017
-
General information
The Just Loans Group Plc ("the
Company") and its subsidiaries (together, "the Group") provide
Revolving Credit Facilities to Small and Medium Enterprises that
struggle to obtain traditional sources of funding for a variety of
reasons. The Group is based in the United Kingdom and all entities
have been incorporated in the United Kingdom. The address of the
registered office is disclosed on the company information page at
the front of the annual report.
The Company is a public limited
company and is listed on the Cyprus Stock Exchange. The Group also
have debentures that are listed on the Cyprus Stock Exchange.
-
Summary of significant
accounting policies
The
principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the periods presented unless otherwise
stated.
2.1 Basis of
preparation
The consolidated statements of The
Just Loans Group Plc have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) applicable to companies
reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention.
Preparation of
financial
statements
The preparation of
financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgment in the process of applying the group's
accounting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note
3.
Going concern
The financial statements
have been prepared on a going concern basis, the validity of which
is dependent on the Group obtaining additional long-term
financing.
The group has secured
institutional funding of £62m to date of which £11m has been drawn.
Included in the £62m, is a £50m bond raising which has secured a
credit rating of A. The Company will continue to seek additional
long-term financing via sale of debentures and further
institutional funding. The Directors believe that the necessary
funding will be available to the group to enable them to trade for
the foreseeable future.
The Company has
undertaken to provide continuing financial support to its
subsidiaries for the foreseeable future and in any event for the
next 12 months following the date of approval of the financial
statements, so that such subsidiaries can pay their debts as and
when they fall due.
The financial statements do not
include any adjustments that would results if the necessary
long-term financing was not secured by the Group and if the above
support by the Company was withdrawn.
New and amended
standards adopted by the Group
There are no IFRSs or IFRIC
interpretations that are effective for the first time in this
financial period that would be expected to have a material impact
on the Group.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.1 Basis of preparation (Continued)
Standards,
interpretations and amendments to published standards that are not
yet effective
Reference |
Title |
Summary |
Application date of standard (Periods
commencing on or after) |
Amendments to IFRS 1 |
First-time adoption of International Financial Reports
Standards |
Amendments resulting from Annual Improvements 2014-2016 Cycle
(removing short-term exemptions) |
1 January 2018 |
Amendments to IFRS 2 |
Share-based payments |
Amendments to clarify the classification and measurement of
share based payment transactions |
1 January 2018 |
Amendment to IFRS 4 |
Insurance Contracts |
Amendments regarding the interaction of IFRS 4 and IFRS
9 |
1 January 2018 |
IFRS 9 |
Financial Instruments |
Requirements on the classification and measurement of
financial assets and liabilities and includes an expected credit
losses model which replaces the current loss impairment model. Also
includes the hedging amendment that was issued in 2013 |
1 January 2018 |
IFRS 15 |
Revenue from contracts with customers |
Specifies how and when to recognize revenue from contracts as
well as requiring more information and relevant disclosures |
1 January 2018 |
IFRS 16 |
Leases |
IFRS 16 replaces IAS 17..The objective is to report
information that (a) faithfully represents lease transactions and
(b)provides a basis for users of financial statements to assess the
amount, timing and uncertainty of cash flows arising from
leases |
1 January 2019 |
Amendments to IAS 28 |
Investments in Associates and Joint Ventures |
Amendments resulting from Annual improvements 2014-2016 cycle
(Clarifying certain fair value measurements |
1 January 2018 |
Amendments to IAS 39 |
Financial Instruments: Recognition and measurement |
Amendments to permit entity to elect to continue to apply the
hedge accounting requirements in IAS 39 for a fair value hedge of
the interest rate exposure of a portion of a portfolio of financial
assets or financial liabilities when IFRS 9 is applied and to
extend the fair value option to certain contracts that meet the
'own use' scope exception |
1 January 2018 |
Amendments to IAS 40 |
Investment Property |
Amendments to clarify transfers or property to or from
investment property |
1 January 2018 |
The following new standards,
amendments to standards and interpretations have been issued, but
are not effective for the financial period beginning 1 January 2017
and have not been early adopted:
The Directors anticipate that the
adoption of these standard and the interpretations in future period
will have no material impact on the financial statements of the
company. However the adoption of the IFRS 9 may have a material
impact as it moves from the incurred loss approach to the expected
loss model. The Group is still to assess the impact of this and
will adopt IFRS 9 from 1 January 2018.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.2
Consolidation
-
Subsidiaries
The group applies
the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is
the fair values of the assets transferred, the liabilities incurred
to the former owners of the acquiree and the equity interests
issued by the group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
Acquisition-related
costs are expensed as incurred. If the business combination is
achieved in stages, the acquisition date carrying value of the
acquirer's previously held equity interest in the acquiree is
re-measured to fair value at the acquisition date; any gains or
losses arising from such re-measurement are recognised in profit or
loss.
Any contingent
consideration to be transferred by the group is recognised at fair
value at the acquisition date. Subsequent changes to the fair value
of the contingent consideration that is deemed to be an asset or
liability is recognised in accordance with IAS 39 either in profit
or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not re-measured, and
its subsequent settlement is accounted for within equity.
Inter-company
transactions, balances and unrealised gains on transactions between
group companies are eliminated. Unrealised losses are also
eliminated. When necessary amounts reported by subsidiaries have
been adjusted to conform with the group's accounting policies.
(b) Changes in
ownership interest in subsidiaries without change of control
Transactions with
non-controlling interests that do not result in loss of control are
accounted for as equity transactions - that is, as transactions
with the owners in their capacity as owners. The difference between
fair value of any consideration paid and the relevant share
acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.
(c) Disposal of
subsidiaries
When the group
ceases to have control any retained interest in the entity is re-
measured to its fair value at the date when control is lost, with
the change in carrying amount recognised in profit or loss. The
fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect of
that entity are accounted for as if the group had directly disposed
of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are
reclassified to profit or loss.
2.3
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, who is responsible for allocating resources and
assessing performance of the operating segments, has been
identified as the steering committee that makes strategic
decisions.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.4 Financial assets and
liabilities
The group classifies its financial
assets at fair value through profit and loss or as loans and
receivables and classifies its financial liabilities as other
financial liabilities. Management determines the classification of
its investments at initial recognition. A financial asset or
financial liability is measured initially at fair value. At
inception transaction cost that are directly attributable to its
acquisition or issue, for an item not at fair value through profit
or loss, is added to the fair value of the financial asset and
deducted from the fair value of the financial liability.
-
Loans and receivables
Loans and receivables are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They arise when the group
provides money, goods or services directly to a debtor with no
intention of trading the receivable. Loans are recognised when the
funds are advanced to customers. Loans and receivables are carried
at amortised cost using the effective interest method (see
below).
-
Other financial liabilities
Other
financial liabilities are non-derivative financial liabilities with
fixed or determinable payments. Other financial liabilities are
recognised when cash is received from the depositors. Other
financial liabilities are carried at amortised cost using the
effective interest method. The fair value of other liabilities
repayable on demand is assumed to be the amount payable on demand
at the Statement of Financial Position date.
Amortised cost measurement
The amortised cost
of a financial asset or financial liability is the amount at which
the financial asset or liability is measured at initial
recognition, minus principal payments, plus or minus the cumulative
amortisation using the effective interest method of any difference
between the initial amount recognised and maturity amount, minus
any reduction for impairment.
Fair value measurement
Fair value is the
amount for which an asset could be exchanged, or a liability
settled, between knowledgeable, willing parties in an arm's length
transaction on the measurement date. The fair value of assets and
liabilities in active markets are based on current bid and offer
prices respectively. If the market is not active the group
establishes fair value by using appropriate valuation techniques.
These include the use of recent arm's length transactions,
reference to other instruments that are substantially the same for
which market observable prices exist, net present value and
discounted cash flow analysis.
Derecognition
Financial assets
are derecognised when the rights to receive cash flows from the
financial assets have expired or where the group has transferred
substantially all of the risks and rewards of ownership. In
transaction in which the group neither retains nor transfers
substantially all the risks and rewards of ownership of a financial
asset and it retains control over the asset, the group continues to
recognise the asset to the extent of its continuing involvement,
determined by the extent to which it is exposed to changes in the
value of the transferred asset. There have not been any instances
where assets have only been partly derecognised. The group
derecognises a financial liability when its contractual obligations
are discharged, cancelled or expire.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.4 Financial assets and liabilities
(continued)
Impairment
The Group assesses
at each financial position date whether there is objective evidence
that a financial asset or group of financial assets is impaired. If
there is objective evidence (such as significant financial
difficulty of obligor, breach of contract, or it becomes probable
that debtor will enter bankruptcy), the asset is tested for
impairment. The amount of the loss is measured as the difference
between the asset's carrying amount and the present value of the
estimated future cash flows (excluding future expected credit
losses that have not been incurred) discounted at the financial
asset's original effective interest rate (that is, the effective
interest rate computed at initial recognition). The carrying amount
of the asset is reduced through use of an allowance account. The
amount of loss is recognised in the Statement of Comprehensive
Income.
2.5
Revenue
Revenue comprises of interest
income, arrangement, management and commission fees on financial
assets. Interest income is recognised using the effective interest
method. Arrangement, management and commission fees are generally
recognised on the accruals basis when the service has been
provided.
The effective interest method
calculates the amortised cost of a financial asset and allocated
the interest income over the relevant period. The effective
interest rate is the rate that discounts estimated future cash
payments or receipts through the expected life of the financial
instrument or, when appropriate, a shorter period to the net
carrying amount of the financial asset. When calculating the
effective interest rate, the group takes into account all
contractual terms of the financial instrument but does not consider
future credit losses.
2.6
Cash and cash equivalents
In the consolidated statement of
cash flows, cash and cash equivalents includes cash in hand,
deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less
and bank overdrafts.
2.7
Share capital
Ordinary shares are classified as
equity.
Incremental costs directly
attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
2.8
Trade payables
Trade payables are obligations to
pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified
as current liabilities if payment is due within one year or
less.
2.9
Borrowings
Borrowings are recognised
initially at fair value, net of transaction costs incurred.
Borrowings are subsequently
carried at amortised cost; any difference between the
proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over
the period of the borrowings using the
effective interest method.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.9
Borrowings (continued)
Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the
fee is capitalised as a pre-payment for liquidity services and
amortised over the period of the facility to which it relates.
Borrowings consist of interest
bearing debentures which are quoted.
2.10 Borrowing
costs
General and specific borrowing
costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended
use or sale, are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use or
sale.
Investment income earned on the
temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
All other borrowing costs are
recognised in profit or loss in the period in which they are
incurred.
2.11 Income tax
expense
Current income tax which is
payable on taxable profits is recognised as an expense in the
period in which the profits arise.
Deferred income tax is recognised
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill;
deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when
the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax assets are
recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary
differences can be utilised.
2.12 Share-based
compensation
The fair value of equity settled
share-based payment awards are calculated at grant date and
recognised over the period in which the employees become
unconditionally entitled to the awards (the vesting period). The
amount is recognised as personnel expenses in the profit and loss,
with a corresponding increase in equity. The group adopts a
Black-Scholes valuations model in calculation in calculating the
fair value of the share options as adjusted for an attrition rate
of member of the scheme and probability of pay-out reflecting the
risk of not meeting the terms of the scheme over the vesting
period. The number of share options expected to vest are reviewed
annually.
2.13 Investments
in subsidiaries
Investments are held as
non-current assets at cost less any provision for impairment. Where
the recoverable amount of the investment is less than the carrying
amount, impairment is recognised.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
2.14
Leases
Leases in which a significant
portion of the risk and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor)
are charged to the income statement on a straight-line basis over
the period of the lease.
3 Critical accounting estimates and
judgments
The group makes certain judgements
and estimates which affect the reported amount of assets and
liabilities. Critical judgements and the assumptions used in
calculating estimates 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.
3.1
Impairment of loans and advances to customers and other
receivables
The group reviews its portfolio of
receivables to assess impairment at least on a half-yearly basis.
The basis for evaluating impairment losses is determining whether a
loss event has occurred, the criteria used (but which is not
limited to) is:
-
Delinquency in contractual payments of principal
or interest;
-
Cash flow difficulties experience by the
borrower; and
-
Initiation of liquidation proceedings.
In determining whether an
impairment loss should be recognised the Company has made
judgements as to whether a loss event indicates that there is a
measurable decrease in the estimated future cash flows of the
respective receivable. Provisions for impairment have been included
in the accounts in accordance with the requirements under IFRS.
No provisions for impairment have
been made against the following other receivables as the Directors
believe the group to have a positive future outlook which is not
reflected in their results to date:
-
2017 - £8,488,923 (2016 £6,075,345) loaned to
Pure World Energy Limited. In February 2018 £4m was repaid.
-
2017 - £3,468,275 (2016 £2,239,186) loaned to
City Oils Limited. £571,321 has been provided (2016 £Nil).
-
2017 - £11,473,603 (2016 £56,680) value of plant
and equipment.
-
2017 - £1,289,763 (2016 £146,774) loaned to
Kompli Limited.
-
2017 - £694,492 (2016 £542,149) loaned to Eco
Quest.
4 Financial risk management
The group's activities expose it
to a variety of financial risks: market risk (including
currency risk, fair value interest rate risk, cash flow interest
rate risk and price risk), credit risk and liquidity risk. The
group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the group's financial performance.
4.1 Financial risk
factors
The group's activities may expose
it to a variety of financial risks: foreign exchange risk, and
credit risk. The group's overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the group's financial performance.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
-
Credit risk
The group take on exposure to
credit risk, which is this risk that the counterparty will be
unable to pay amounts in full when due. A formal Credit Risk Policy
has been agreed by the Board who review credit risk on a monthly
basis. Exposure to credit risk is managed through regular analysis
of the ability of borrowers and potential borrowers to meet
interest and capital repayment obligations and by changing these
lending limits when appropriate. Exposure to credit risk is also
maintained by obtaining collateral, the loans to customers include
a deed of indemnity and personal guarantees and the directors
therefore believe there is a low risk of customer default.
4.1 Financial risk factors
(continued)
The maximum exposure to credit risk for the Group
was as follows:
|
Group |
Company |
Credit
risk exposure relating to on-balance sheet assets are as
follows: |
2017
£ |
2016
£ |
2017
£ |
2016
£ |
|
|
|
|
|
Loans and
advances to customers |
32,139,142 |
18,571,453 |
1,523,058 |
- |
Other
receivables |
5,450,747 |
9,401,561 |
62,605 |
444,824 |
Amounts
due from Group undertakings |
- |
- |
19,150,431 |
13,234,685 |
|
|
|
|
|
At 31 December 2017 |
37,589,889 |
27,973,014 |
20,736,094 |
13,679,509 |
-
Cash flow and interest rate risk
The Group does not have any
borrowings other than its debentures which are at a fixed rate of
interest exposing the Group to fair value interest rate risk. The
Group does not manage any cash flow interest rate risk.
-
Liquidity risk
The Group is careful to ensure
that its loans and investments can be realised prior to the due
date for the repayment of the debentures. This applies equally to
the underlying investments of the companies or projects in which
the Group invests.
-
Capital risk
The Group takes great care to
protect its capital investments. Significant due diligence is
undertaken prior to making any investment. The investment is
closely monitored.
-
Market risk
A general economic downturn at a
global level, or in one of the world's leading economies, could
impact on the group. In addition, terrorism and other hostilities,
as well as disturbances in worldwide financial markets, could have
a negative effect on the Group. Regulatory requirements, taxes,
tariffs and other trade barriers, price or exchange controls or
other governmental policies could also limit the Group's
operations. These risks are also applicable to most companies and
the risk that Group will be more affected than the majority of
companies is assessed as small.
-
Price risk
The
Group's principal activity is provision of loans, the Group does
not have a diversified portfolio of services and is therefore at
risk.
4.2 Capital risk
management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital
structure appropriate for its growth plans.
In order to maintain or adjust the
capital structure the Group may issue new shares or alter debt
levels.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
5 Segment
information
The group's line of business is
the provision of loans and equity investments.
All of the group's revenue arises
in the UK and all of the Group's non-current assets are held in the
UK.
There are no customers who account
for over 10% of revenue.
6 Operating
loss
|
2017 |
|
2016 |
|
£ |
|
£ |
Operating loss is stated after charging: |
|
|
|
Directors emoluments |
398,800 |
|
396,600 |
Directors fees |
64,800 |
|
64,800 |
Audit
fees (of which £15,000 (2016 - £15,000) relates to the audit of the
Parent Company and Consolidated Financial Statements) |
88,014 |
|
155,297 |
Operating
leases |
64,665 |
|
20,355 |
7 Employee benefit
expense
Employees and Directors |
2017 |
|
2016 |
|
£ |
|
£ |
|
|
|
|
Wages and salaries |
1,297,176 |
|
919,629 |
Social security costs |
143,521 |
|
102,088 |
Directors fees |
64,800 |
|
64,800 |
|
|
|
|
|
1,505,497 |
|
1,086,517 |
During the period a total
remuneration of £141,000 (2016 - £141,000) was received by the
highest-paid Director, who does not hold any share options.
The average monthly number of employees (including
directors) during the period was:
|
2017 |
|
2016 |
|
Number |
|
Number |
|
|
|
|
Directors |
7 |
|
6 |
Staff |
30 |
|
15 |
|
37 |
|
21 |
8 Finance
income and costs
|
2017 |
|
2016 |
|
£ |
|
£ |
Finance costs |
|
|
|
Finance cost in relation to debentures |
2,790,352 |
|
2,553,871 |
Other interest paid |
3,870,264 |
|
1,748,532 |
|
6,660,616 |
|
4,302,403 |
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2016
9 Taxation
|
2017 |
|
2016 |
|
£ |
|
£ |
Total
current tax |
(159,046) |
|
(43,970) |
Total
deferred tax |
(34,965) |
|
- |
Total tax credit for the
year |
(194,011) |
|
(43,790) |
|
|
|
|
Factors affecting the tax charge for
the period |
|
|
|
Loss on
ordinary activities before taxation |
(6,335,619) |
|
(4,901,881) |
|
|
|
|
|
|
|
|
Loss on
ordinary activities before taxation multiplied by standard rate of
UK corporation tax of 19.25% (2016: 20%) |
(1,219,607) |
|
(980,376) |
Non-deductible expenses |
135,300 |
|
43,972 |
Capital allowances in excess of
depreciation/amortisation |
(40,484) |
|
|
Income not taxable |
(76,943) |
|
|
Group loss relief surrendered |
(159,046) |
|
(43,790) |
Tax losses carried forward |
1,166,769 |
|
936,404 |
Tax credit for the year |
(194,011) |
|
(43,790) |
The Group has estimated tax losses
of £16,742,927 (2016 - £10,022,636) available for carry forward
against future profits.
The deferred tax assets at a rate
of 19% (2016 - 20%) at the period-end of £1,166,769 (2016 -
£936,404) has not been recognised in the financial statements due
to the uncertainty of the recoverability of the amount.
The Group has estimated non-trade
loan relationship deficits of £5,215,448 (2016 - £3,084,228)
available for carry forward against income from non-trade loan
relationships. A deferred tax asset on this deficit has not been
recognised in the financial statements due to the uncertainty of
the recoverability of the amount.
The Group received an R&D tax
credit in the year of £159,046 (2016 - £43,790), in respect of
software development.
10 Loss of parent company
As permitted by Section 408 of the
Companies Act 2006 the profit and loss account of the parent
company is not presented as part of these financial statements. The
parent company's loss for the financial period was £ 3,228,407
(2016- £3,373,630).
11 Loss per
share
Basic earnings per share is calculated by dividing the earnings
attributable to shareholders by the weighted average number of
ordinary shares outstanding during the period. Reconciliations are
set out below:
|
2017 |
|
2016 |
|
|
|
|
Earnings/(losses) attributable to ordinary
shareholders |
(4,375,267) |
|
(4,858,091) |
|
|
|
|
Weighted average number of shares |
27,805,479 |
|
25,000,000 |
|
|
|
|
Basic and diluted earnings/(loss) per share
(pence) |
(15.74) |
|
(19.43) |
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
11
Loss per share continued
Diluted earnings per share is
calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares. Since the Group is loss-making the diluted loss
per share is the same as the basic loss per share. The dilutive
potential ordinary shares relate to share options issued to
employees and are disclosed within Note 29.
12 Dividends
Nil dividends were paid or
proposed for the year ended 31 December 2017 (2016- £nil).
13 Fixed Asset Investments &
Business Combinations
Group
|
Internally generated development
costs |
|
Investment in associate |
|
Total |
|
£ |
|
£ |
|
£ |
Cost |
|
|
|
|
|
Brought forward |
37,950 |
|
62,824 |
|
100,774 |
Additions |
|
|
|
|
|
At 31 December 2017 |
37,950 |
|
62,824 |
|
100,774 |
|
|
|
|
|
|
Depreciation/amortisation |
|
|
|
|
|
Brought forward |
37,950 |
|
62,818 |
|
100,768 |
Disposal of associate |
- |
|
6 |
|
6 |
At 31 December 2017 |
37,950 |
|
62,818 |
|
100,774 |
|
|
|
|
|
|
Net book value |
|
|
|
|
|
At 31 December 2017 |
- |
|
- |
|
- |
At 31 December 201 |
- |
|
6 |
|
6 |
Internally generated development
cost additions relate to computer software development of the
Group's lending system. These costs were fully amortised during the
year during 2016
On 1 August 2017 Just Loans Group
acquired 55% of PWE Holdings Limited through its subsidiary Just
Finance Loans and Investments Plc. The effect of the acquisition
was to increase the shareholding in PWE Holdings Plc to 77.5% (2016
- 26.5%). As such the Group ceased recognising the results of PWE
Holdings Limited under the equity method and instead the results
have been consolidated. Immediately prior to the acquisition the
net assets of the Associate were remeasured to fair value with the
gain recognised in profit or loss. Goodwill was then determined as
the fair value of the consideration plus the non-controlling
interest plus the fair value of the previously held investment,
less the fair value of net assets. This resulted in a gain on
bargain purchase which was immediately recognised in the profit or
loss.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
13 Fixed Asset Investments &
Business Combinations continued
PWE Holdings Plc |
NBV at 31.07.2017 |
FV at 31.07.2017 |
Fair value uplift |
|
£ |
£ |
£ |
Tangible
assets |
4,667,555 |
11,292,555 |
6,625,000 |
Trade and
other receivables |
290,828 |
767,126 |
476,298 |
Cash |
14,062 |
14,062 |
- |
Trade and
other payables |
(385,231) |
(385,231) |
- |
Long term
liabilities |
(7,696,770) |
(8,955,520) |
(1,258,750) |
|
|
|
|
Net
assets/(liabilities) |
(3,109,556) |
2,732,992 |
5,842,548 |
Plant has been fair valued on the basis of the net
present value of future cash flows.
|
|
|
PWE Holdings Plc
£ |
Fair Value of
Consideration
Fair value of consideration
Non-controlling interest
Fair value of previously held investment |
|
|
96,500
614,985
434,589 |
|
|
|
1,146,074 |
Recognised Amounts of Identifiable assets acquired
and liabilities assumed
100% of net assets on acquisition
|
|
|
2,733,266 |
Gain on Bargain Purchase |
|
|
1,587,192 |
On 9 November 2017 Just Loans Group acquired 70%
of Ko-Su Limited, a provider of mobile trading platforms, through
its subsidiary Just Finance Loans and Investments Plc for a
consideration of £Nil. As such goodwill on acquisition amounted to
£756,795 which is recognised on consolidation.
|
|
|
Ko-Su Ltd
£ |
|
|
|
|
Fair Value of
Consideration |
|
|
|
Fair value of consideration
Non-controlling interest |
|
|
-
- |
|
|
|
- |
Recognised Amounts of Identifiable assets acquired
and liabilities assumed
100% of net assets on acquisition
|
|
|
756,795 |
Goodwill on acquisition |
|
|
756,795 |
|
|
|
|
Impairment at acquisition |
|
|
(364,528) |
|
|
|
|
Goodwill on consolidation |
|
|
392,267 |
Included within the investments above is £450,000 (2016 - £450,000)
non-redeemable preference shares with discretionary dividends of
Just Cash Flow Plc which have been classified as an investment.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
13 Fixed Asset Investments &
Business Combinations continued
The group had the following
subsidiaries and associates at 31 December 2017, all of which have
been included in the Group consolidation:
Name |
Country of incorporation and place of
business |
Nature of business |
Proportion of ordinary shares held by parent
and group (%) |
Just Cash
Flow Plc |
UK |
Provision
of loans |
100.0 |
Just
Finance Loans & Investments Plc |
UK |
Provision
of loans and equity investments |
100.0 |
Just
Bridging Loans Plc |
UK |
Provision
of loans |
100.0 |
Just Cash
Flow (Agency) Limited |
UK |
Centralisation of public relation costs |
100.0 |
Just
Loans Group Operations Limited |
UK |
Centralisation of operating costs |
100.0 |
Just Cash
Flow (FK) Limited |
UK |
Provision
of loans |
100.0 |
JCF (FK1)
Limited * |
UK |
Provision
of loans |
100.0 |
JCF (FK2)
Limited *
JCF (FK3) Limited * |
UK
UK |
Provision
of loans
Provision of loans |
100.0
100.0 |
Just
Bridging Loans (ABL) Limited |
UK |
Provisions of loans |
100.0 |
Just ABL
1 Limited |
UK |
Provisions of loans |
100.0 |
Just
Capital(Europe) Limited |
UK |
Provisions of loans |
100.0 |
JBL (SQN)
Limited |
UK |
Provisions of loans |
100.0 |
JCF SQN 2
Limited |
UK |
Provision
of loans |
100.0 |
JCF (SQN)
Limited |
UK |
Provisions of loans |
100.0 |
JCF
(SSIF) Limited |
UK |
Provision
of loans |
100.0 |
City Fuel
Services Limited ** |
UK |
Re-cycling of contaminated fuel |
100.0 |
City Fuel
Services (Manchester) Limited ** |
UK |
Re-cycling of contaminated fuel |
100.0 |
City Oils
Group Limited *** |
UK |
Holding
company |
100.0 |
PWE
Holdings PLC*** |
UK |
Holding
Company of Pure World Energy Limited |
77.5 |
Just
Loans (EBT) Trustee Ltd |
UK |
Holder of
Employee shares |
100.0 |
Ko-Su
Limited |
UK |
Training
Platform |
70.0 |
Name |
Country of incorporation and place of
business |
Nature of business |
Proportion of ordinary shares held by parent
and group (%) |
Just ISAS
Limited |
UK |
Dormant |
100.0 |
Just
Development Finance Limited |
UK |
Dormant |
100.0 |
Just ABL
2 Limited |
UK |
Dormant |
100.0 |
Wage
roller Limited |
UK |
Dormant |
100.0 |
JCF (FK4)
Limited |
UK |
Dormant |
100.0 |
Just
Capital Limited |
UK |
Dormant |
100.0 |
Just
Transact Limited |
UK |
Dormant |
100.0 |
Just
Business Finance (UK) Limited |
UK |
Dormant |
100.0 |
KO-SU
Limited *** |
UK |
Dormant |
70.0 |
* Shares held by Just Cash
Flow (FK) Limited
** Shares held by City Oils
Group Limited
*** Shares held by Just
Finance Loans & Investments Plc
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
14 Property, plant and
equipment
Group |
Plant & Machinery |
Assets under Construction |
Fixtures, fittings & equipment |
Total |
|
£ |
£ |
£ |
£ |
Cost or fair valuation |
|
|
|
|
At 1 January 2017 |
58,299 |
|
8,266 |
66,565 |
Additions |
1,031,362 |
979,461 |
30,333 |
2,041,156 |
Acquisition |
10,400,000 |
109,264 |
833 |
10,510,097 |
At 31 December 2017 |
11,489,661 |
1,088,725 |
39,432 |
12,617,818 |
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
At 1 January 2017 |
5,958 |
- |
3,927 |
9,885 |
Charge for the year |
76,343 |
- |
7,530 |
23,198 |
Acquisition |
830,504 |
- |
10,628 |
841,132 |
At 31 December 2017 |
852,130 |
- |
22,085 |
874,215 |
Carrying amount |
|
|
|
|
At 1 January 2017 |
52,341 |
- |
4,339 |
56,680 |
At 31 December 2017 |
10,637,531 |
1,088,725 |
17,347 |
11,743,603 |
From the 1 August the above
reflects the increase in The Group holdings in PWE holdings
Plc.
15
Loans and advances to
customers
Group
|
2017 |
|
2016 |
|
£ |
|
£ |
|
|
|
|
Non-current assets |
|
|
|
Loans and
advance to customers |
3,571,942 |
|
917,900 |
|
|
|
|
Current |
|
|
|
Loans and
advance to customers |
28,567,200 |
|
17,653,553 |
|
|
|
|
|
32,139,142 |
|
18,571,453 |
Loans and advances to customers
relates to the provision of revolving credit facilities to small
and medium enterprises. The total balance of £32,139,142 (2016 -
£18,571,453) is shown net of provision for impairment of £ 543,338
(2016 - £181,170).
£17,283,672 (2016 - £7,328,957) of loans advanced to customers is
secured against 3rd party
funding.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
16 Trade and other receivables
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
Non-current |
|
|
|
|
Other
receivables |
4,881,178 |
- |
- |
- |
Amounts
due from Group undertakings |
- |
- |
7,672,969 |
2,336,083 |
|
4,881,178 |
- |
7,672,969 |
2,336,083 |
Current |
|
|
|
|
Other
receivables |
542,958 |
303,265 |
56,840 |
423,956 |
Prepayments |
26,611 |
36,615 |
5,765 |
20,868 |
Amounts
due from Group undertakings |
- |
- |
11,477,462 |
13,155,329 |
|
569,569 |
339,880 |
11,540,067 |
13,600,153 |
|
5,450,747 |
339,880 |
19,213,036 |
15,936,236 |
17 Inventory
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
Materials |
44,275 |
14,828 |
- |
- |
|
44,275 |
14,828 |
- |
- |
18 Cash and cash equivalent
For the purposes of the Statement
of Cash Flows, cash and cash equivalents include cash at banks and
on hand and deposits with banks. Cash and cash equivalents at the
end of the reporting period as shown in the Statement of Cash Flows
can be reconciled to the related items in the Statement of
Financial Position as follows:
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
|
|
|
|
|
Cash and cash equivalents |
8,333,512 |
1,783,282 |
1,378,196 |
216,608 |
The carrying amount of cash and
cash equivalents approximates to its fair value.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
19 Share Capital
|
|
2017 |
|
2016 |
|
|
£ |
|
£ |
Allotted, called up and fully
paid |
|
|
|
|
25,000,000 Ordinary shares of £0.002 |
|
50,000 |
|
50,000 |
3,200,000 Ordinary shares of £0.002 |
|
6,400 |
|
-
|
|
|
56,400 |
|
50,000 |
During the year an additional
3,200,000 shares were issued in exchange for the 2017 Just Cash
Flow Debentures. These were issued at £1.40 thus creating a share
premium of £4,473,600.
The ordinary shares have attached
to them full voting, dividend and capital distribution (including
on winding up) right; they do not confer any rights of
redemption.
20 Accumulated losses
|
Group |
|
Company |
|
£ |
|
£ |
At 31 December 2015 |
(9,178,578) |
|
(6,617,585) |
Loss for the year |
(4,858,091) |
|
(3,373,630) |
|
|
|
|
At 31 December 2016 |
(14,036,669) |
|
(9,991,215) |
Profit/(Loss) for the year |
(4,375,267) |
|
(3,228,407) |
|
|
|
|
|
(18,411,936) |
|
(13,219,622) |
Non-controlling interest |
454,948 |
|
- |
At 31 December 2017 |
(17,956,988) |
|
(13,219,622) |
21 Non-controlling interests
|
2017 |
|
2016 |
|
£ |
|
£ |
|
|
|
|
Brought forward |
- |
|
- |
Share of loss for the year |
(179,148) |
|
- |
|
|
|
|
|
(179,148) |
|
- |
From 1 August the company
increased its stake in PWE Holdings to 77.5%. This reflects the
share of the loss related to the minority interest in PWE holdings
Plc
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
22 Trade and other payables
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
|
|
|
|
|
Trade
payables |
1,072,318 |
521,497 |
52,229 |
89,567 |
Accruals
and deferred income |
816,377 |
143,031 |
85,182 |
92,921 |
Deferred
Tax |
747,487 |
- |
- |
- |
Other
payables |
1,486,827 |
585,441 |
912,486 |
386,658 |
Amounts
due from Group undertakings |
- |
- |
8,048,659 |
|
|
4,123,009 |
1,249,969 |
9,098,556 |
569,146 |
|
|
|
|
|
Accruals principally comprise
amounts outstanding for ongoing expenses and accrued interest on
issued debentures. The carrying amount of other payables
approximates to its fair value.
The deferred tax arises at 19% on the fair value adjustment on the
fixed assets on the acquisition of PWE Holodings Plc.
23 Borrowings
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
Non-current |
|
|
|
|
Debentures and other loans |
52,484,809 |
35,694,647 |
12,628,910 |
23,794,249 |
|
|
|
|
|
Current |
|
|
|
|
Debentures and other loans |
14,836,321 |
6,794,814 |
8,009,727 |
- |
|
|
|
|
|
|
67,321,130 |
42,489,461 |
20,638,637 |
23,794,249 |
|
|
|
|
|
All commissions due on debentures
have been deferred against the debentures they relate to and have
either been shown as non-current or current borrowings. All
non-current borrowings are wholly repayable within five years. The
debentures are secured by first floating charge over all of the
assets of the group, and bear interest as per below. Interest is
paid in two half yearly instalments.
All Companies having loans secured
by first floating charges over all of the assets of their relevant
companies.
|
Repayment date |
Annual interest |
|
|
|
2017 Debentures |
31
December 2017 |
8.25% |
2018 Debentures |
31
December 2018 |
8.25% |
2019 Debentures |
31
December 2018 |
8.25% |
2020 Debentures |
31
December 2020 |
8.75% |
2021 Debentures |
31
December 2021 |
8.75% |
In December 2017 the Group
successfully undertook an exchange of the 2017 Debentures in The
Just Loans Group Plc and Just Cash Flow Plc, both bearing 7.5%
annual interest, with 2018 and 2020 Debentures in The Just Loans
Group Plc, bearing 8.25% and 8.75% annual interest respectively.
Included within Group debentures and other loans is capitalised
commission of £1,686,154 (2016 - £2,327,298). Included within
Company debentures and other loans is capitalised commission of
£942,543 (2016 £1,524,332).
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
23 Borrowings continued
In January 2017, via Bedford Row
Capital Advisers Limited, the Company signed an agreement to raise
£25m for a 3 year from November 2016 at 7.25% coupon and a further
£25m for a 5 year from November 2016 at 8.5% coupon.
To date the company has raised
£5.9m on the November 2021 and £22.7m on the November 2019.
Other loans are comprised of the
following facilities: £12,196,348 with Escher Marwick at 7.25%,
£5,298,375 with Escher Marwick at 8.5%, £16,075,000 with SQN at
10%, £230,407 with Funding Knight at 10% and £49,792 with ABLrate
Assets at 10%. The security on these loans is comprised of fixed
and floating charges over the assets of the company which holds the
loan.
24 Cash generated from
operations
|
Group |
Company |
|
2017 |
2016 |
2017 |
2016 |
|
£ |
£ |
£ |
£ |
Reconciliation to cash generated from operations |
|
|
|
|
Loss
before taxation |
(4,748,427) |
(4,901,881) |
(3,228,407) |
(3,373,630) |
Adjustments for: |
|
|
|
|
- Finance
costs |
6,555,200 |
4,302,403 |
2,397,833 |
2,372,820 |
- Other
reserves |
|
60,049 |
69,828 |
60,049 |
- Non-controlling interest |
179,148 |
- |
|
- |
Depreciation |
339,755 |
37,950 |
- |
- |
Amortisation |
- |
37,000 |
- |
- |
Share
based payments |
69,828 |
- |
- |
-
|
Gain on
bargain purchase |
(1,587,192) |
- |
- |
- |
Fair
value of investment in associate |
(341,232) |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in working capital: |
|
|
|
|
-(Increase)/ Decrease in inventory |
(29,447) |
(14,828) |
|
- |
-
(Increase)/ Decrease in loans and trade and other receivable |
(9,326,048) |
(13,826,960) |
(3,276,800) |
(5,768,085) |
-
Increase/(Decrease) in trade and other payables |
(8,305,367) |
(168,550) |
6,272,683 |
2,197,190 |
|
|
|
|
|
|
(17,193,782) |
(14,474,817) |
2,235,137 |
(4,511,656) |
|
|
|
|
|
|
|
|
|
|
The group issued shares with a nominal value of
£6,400 and share premium of £4,473,600 in exchange for outstanding
debentures amounting to £4,480,000.
Included in the statement of cash flows are the
results of PWE Holdings Limited and its subsidiaries from 1 August
2017 to the year end. The results of PWE contributed negative
operating cash flows of £815,481, negative investing cash flows of
£541,845 and positive financing cash flows of £1,383,693.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
2017
25 Control
The Group is controlled by John
Davies by virtue of his shareholding in the Company.
26 Related party transactions
Group
The Group has loaned funds to Pure World Energy Limited, an
subsidiary company. A loan facility agreement is in place and the
group was owed £8,458,923 (2016 - £6,075,345) as at 31 December
2017. The loan is accruing interest at 1% per month (12% per
annum). The agreement is dated 30 June 2014. The loan is secured by
a fixed and floating charge over all property and assets of the
company. The loan is also secured by personal guarantees of the
directors and shareholders of the company.
The Interest charged during the year was £815,837 (2016 -
£510,205).
The Group has loaned funds to City
Oils Limited, a company of which Robert Boot is a common director.
A loan facility agreement is in place and the group was owed
£3,468,275 (2016 - £2,244,186) as at 31 December 2017. The loan is
accruing interest at 1% per month (12% per annum). The agreement is
dated 30 June 2014. The loan is secured by a fixed and floating
charge over all property and assets of the company. The loan is
also secured by personal guarantees of the directors and
shareholders of the company. The Interest charged during the year
was £319,988 (2016 - £187,155).
The Group has
loaned funds to Eco Quest Plc, a company of which John Davies and
Robert Boot are common directors. A loan facility agreement is in
place and the group was owed £694,462 (2016 -£584,995) as at 31
December 2017. The loan has stopped accruing interest. The
agreement is dated 30 June 2014.The Interest charged during the
year was £nil (2016 - £33,640).
The Group has
loaned funds to Kompli, a company of which John Davies and Robert
Boot are common directors. A loan facility agreement is in place
and the group was owed £1,289,763 (2016 - £Nil) as at 31 December
2017. Interest is charged at 1.5% per month. The loan is guaranteed
by John Davies.
Company
The Company has a
loan agreement with Eco Quest Plc, a company of which John Davis
and Robert Boot are directors and shareholders for short term loans
up to a maximum of £500,000 at an interest, rate of 1% per month.
The balance outstanding as at 31 December 2017 was £228,295 (2016,
£225,173) due from Eco Quest Plc. No provision has been provided
due to the liquidity of its holding of 750,000 shares in Just
Loans
Just Cash Flow Plc,
Just Finance Loans & Investments Plc, Just Bridging Plc, Just
Loans Group Operations Limited and Just Cash Flow (Agency) Limited
were formed as subsidiaries of the Group to take advantage of the
business opportunities created by the Group.
The Company made
advances to its subsidiaries and as at 31 December 2017 was owed
£5,991,879 (2016 - £2,336,083) from Just Finance Loans &
Investments Plc, £4,901,339 (2016 £3,412,187) from Just Loans
Group Operation Limited, £4,343,696 (2016 - £2,793,932) from Just
Cash Flow (Agency) Limited, £111,999 (2016 - £56,999) from Just
Bridging Loans (ABL) Limited, £249,644 (2016 - £249,644) from
JBL (SQN) Limited, £136,819 (2016 - £136,819) from JCF (SQN)
Limited, £967,210 (2016 -£477,210) from Just Cash Flow (FK)
Limited, £1,559 (2016 - £Nil) from Just Capital Europe Limited and
£20,999 (2016 - £Nil) from JCF (SSIF) Limited.
It owes £805,890 to
Just Bridging Loans Plc (2016 - £2,256,727) and due £7,242,767 to
Just Cash Flow Plc (2016 - due from £6,028,539).
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31
DECEMBER 2017
The loan to Just
Finance Loans & Investments Plc is accruing interest at 12% per
annum and is repayable on demand. The loans provided to other
subsidiaries carry no interest and is repayable on demand. Except
for the loan to Just Finance Loans & Investments Plc, the
amounts due from subsidiaries have been classified as current
debtors due to the fact the loans are repayable on demand.
The balance as at
31 December 2017 was £5,971,879 (2016 - £2,336,083)
27 Contingent liabilities
The group has no
contingent liabilities in respect of legal claims arising from the
ordinary course of business.
28 Capital commitments
There was no
capital expenditure contracted for at the end of the reporting
period but not yet incurred.
29 Share-based payment
transaction
The measurement
requirement of IFRS 2 has been implemented in respect of share
options that were granted after 7 November 2002. The expenses
recognised for share based payment made during the year is £69,828
(2016 -£60,049).
Vesting conditions
of the options dictate that employees must remain in the employment
of the Group for the whole period to qualify.
Movement in issued share options during the period
The below schedule
illustrates the number and weighted average exercise price (WAEP)
of, and movements in share options during the year. The options
outstanding at 31 December 2017 had a WAEP of 3.5p (2016 -3.5p) and
a weighted average contracted life of 4.05 years and their exercise
prices of 3.5p. All share options are settled in form of equity
issued.
|
2017 |
|
2016 |
|
No. of options |
WAEP |
|
No. of options |
WAEP |
Outstanding at the beginning of the period |
575,000 |
- |
|
350,000p |
- |
Granted during the period |
50,000 |
|
|
225,000p |
1,097p |
Forfeited/cancelled during the period |
- |
|
|
- |
- |
Exchanged for shares |
- |
|
|
- |
- |
|
|
|
|
|
|
Outstanding at the end of the
period |
625,000 |
1,097p |
|
575,000 |
1,097p |
Exercisable at the end of the
period |
- |
- |
|
- |
- |
The inputs into the Black-Scholes
model are as follows:
|
31 December 2017 |
|
31 December 2017 |
|
|
|
|
Number of options granted |
50,000 |
|
125,000 |
Share price at grant date |
2.00p |
|
2.000p |
Bid price discount |
10% |
|
10% |
Exercise price |
2.00p |
|
2.000p |
Option life in years |
3.3 |
|
3.3 |
Risk free rate |
1.84% |
|
1.84% |
Expected volatility |
60% |
|
60% |
Expected dividend yield |
0% |
|
0% |
Fair value of options after special 20% discounts |
£0.691 |
|
£0.691 |
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
30 Events after the
reporting period
During February 2018, Pure World Energy Ltd repaid
£4m after a successful fund raise of a £10M Bond issue