TIDMAUCT
RNS Number : 4500D
Auctus Growth Plc
27 April 2017
Auctus Growth plc
('Auctus' or the 'Company')
Final Results
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2016
Dear Shareholder,
I present the Chairman's statement for the year ended 31
December 2016, where the Company reported a net loss of GBP35,783
(1.34p per share) compared to a net loss of GBP189,219 (7.49p per
share) for the year ended 31 December 2015. As at 31 December 2016,
the Company had cash balances of GBP1,006,342 (GBP1,030,551 at 31
December 2015). The loss for the year was predominately incurred as
a result of normal operating costs associated with maintaining the
Company's Standard Listing while it continues to actively evaluate
a number of potential acquisition opportunities. The Company
remains hopeful that it will be able to announce progress in this
regard in due course but in the meantime, the Board continues to
prudently manage the Company's cash reserves. In that regard, the
Directors have continued to suspend the payment of all fees due to
them until further notice and, as a result of this and other cost
saving initiatives, the annualised operating expenses (excluding
transaction costs) continue to sit at approximately GBP35,000 per
annum based on current estimates.
The Board looks forward to providing further updates to
shareholders in due course.
Malcolm Burne
Chairman
26 April 2017
STRATEGIC REPORT
FOR THE YEARED 31 DECEMBER 2016
The Directors are pleased to present their strategic report for
year ended 31 December 2016.
REVIEW OF BUSINESS
The Company was formed to invest in strategic and/or special
situations of unquoted companies or businesses that are seeking a
public quotation.
During the year under review, the Board continued to evaluate a
number of potential acquisition opportunities. As yet the Board has
not found a target company that will provide the targeted returns
for the Company's shareholders.
This review does not contain information regarding the impact of
the business on the environment, the Company's employees or the
social and community issues surrounding the Company.
At the year end the Company has cash of approximately GBP1.006
million, no debt and continues to keep administrative costs to a
minimum so that maximum funds can be dedicated to the review of and
potentially investment in, suitable projects.
PRINCIPAL RISKS AND UNCERTAINTIES
The preservation of its cash balances remains a principal risk
for the Company along with the uncertainty of identifying and
acquiring a suitable target company. The Company is committed to
maintaining its operations at minimal costs. Further information
about the Company's principal risks is detailed in note 12 to the
financial statements.
KEY PERFORMANCE INDICATORS
The key performance indicators for the Company are both the
identification of a suitable investment opportunity within its
stated investment mandate and to adopt a sensible cash utilisation
and management strategy until the successful closing of such a
transaction.
This report was approved by the Board on 26 April 2017 and
signed on its behalf by
Charles Cannon Brookes
Director
REPORT OF THE DIRECTORS
FOR THE YEARED 31 DECEMBER 2016
The Directors are pleased to present their annual report and
audited financial statements of Auctus Growth plc for the year
ended 31 December 2016.
Principal activity
The principal activity of the Company is to invest in strategic
and/or special situations of unquoted companies or businesses that
are seeking a public quotation.
Key events
Key events during the year under review and since the year-end
are referred to in the Chairman's statement.
Results and dividends
The Company received no income during the year (2015: GBPnil)
and the loss after taxation was GBP35,783 (2015: GBP189,219). The
Directors are unable to recommend the payment of a dividend.
Future developments
The future developments of the Company are set out in the
Chairman's statement.
Substantial shareholdings
As at 19 April 2017, the Directors had been notified of the
following holdings representing three per cent or more of the
issued share capital of the Company:
Ordinary Shares %
Malcolm Burne 283,333 10.62
Richard Lockwood 273,333 10.24
Michinoko Limited 200,000 7.49
Arlington Group Asset Management
Limited 192,333 7.21
Miton Group plc 180,000 6.74
These shareholdings were the same as those held at 31 December
2015.
Directors
The Directors of the Company during the year were:
Malcolm A Burne (Chairman)
Charles Cannon Brookes
Nathan A Steinberg
Directors' interests
The table below sets out the interests of the Directors in the
Company's shares.
At 31 December At 31 December
2016 2015
Ordinary % Ordinary %
shares shares
Malcolm Burne 283,333 10.62 283,333 10.62
Charles Cannon - - - -
Brookes
Nathan Steinberg 49,000 1.84 49,000 1.84
In addition, 192,333 (2015: 192,333) Ordinary shares were held
by Arlington Group Asset Management Limited, a company in which
both Malcolm Burne and Charles Cannon Brookes served as Directors
during the year. Arlington Group Asset Management Limited also
holds options to acquire a further 200,000 Ordinary shares, as set
out in note 10 to the financial statements.
The Board currently comprises three Directors, all of whom have
extensive experience in investment, corporate finance and project
assessment regionally and internationally and are well-placed to
implement the Company's business objective and strategy. Any
further appointments to the Board would be made after due
consideration of the Company's requirements and to the availability
of candidates with the requisite skills and, where applicable,
depth of sector experience.
Malcolm Alec Burne
Malcolm started his career in stock broking as an equity analyst
and then later as investment editor of The Financial Times and
Telegraph Group. He has managed and controlled fund management,
venture capital and investment banking companies in Australia, Hong
Kong and North America. Malcolm has been a Director of over twenty
international companies. He was the founder of resources
stockbroker, publicly quoted Ambrian plc; the former chairman of
Australian Bullion Company; the founder and non-executive chairman
of Golden Prospect Precious Metals Limited; and until 30 June 2016,
was a Director of Arlington Group Asset Management Limited; he also
currently acts as an advisor to Altus Resources Fund, an investment
company focused on the natural resources sector and as a Director
of J P Jenkins Limited, Second Market Limited and StartechNG
plc.
Charles Cannon Brookes
Charles has over 15 years investment experience. He is the
Investment Director of FCA authorised and regulated Arlington Group
Asset Management Limited (AGAM) having acquired the business in
October 2004. Through AGAM, he has been active in a variety of
different investment management mandates and corporate finance
transactions. He is also an executive Director of Duke Royalty
Limited, the first UK quoted diversified royalty investment
company. In addition, he has successfully led a number of IPO and
RTO transactions on the London markets. Prior to AGAM he worked for
Arlington Group plc, an AIM quoted investment company and managed
all of its public equity portfolio, as well as Jupiter Asset
Management, ABN Amro and Barclays de Zoete Wedd. He has extensive
fund management experience and has advised and sat on the board of
a number of different funds, trusts and other operating public
companies.
Nathan Anthony Steinberg
Nathan Steinberg, FCA, FCCA, TEP, is a partner in the London
accountancy practice of Munslows LLP and has considerable public
company experience. He previously served as the finance Director of
Pan African Resources plc and as the chairman of Ambrian plc. He is
an experienced corporate and financial adviser and is a member of
Council of the Institute of Chartered Accountants in England and
Wales.
Employees
Currently the Company has no permanent employees other than its
Directors.
Carbon emissions
The Company is currently non-trading with no operating premises
or employees other than its Directors, and therefore has minimal
carbon emissions. Accordingly, it is not practicable to obtain
emissions data.
Financial risk management
The Company's financial risk management objective is to minimise
as far as possible, the Company's exposure to such risk as detailed
in note 12 to the financial statements.
Capital Management
The Company's objectives when managing capital are to safeguard
its ability to continue as a going concern and to provide a means
of attracting investors. The Company has no debt and therefore does
not have a strategy in terms of maintaining a specific debt to
equity ratio. Instead capital is managed with a view to conserving
cash and cash equivalents which can be used to further the
Company's aims and objectives.
Directors' Indemnity Arrangements
The Company has purchased and maintained throughout the period
qualifying indemnity provisions through Directors' and Officers'
liability insurance.
Going concern
The Directors have a reasonable expectation that the Company has
adequate resources to continue its operational existence for the
foreseeable future. For this reason they have adopted the going
concern basis in preparing the financial statements.
Corporate governance
As a Company listed on the Standard Segment of the Official List
of the UK Listing Authority, the Company is not required to comply
with the provisions of the UK Corporate Governance Code. Although
the Company does not comply with the UK Corporate Governance Code,
the Company intends to have regard for the provisions of the
Corporate Governance Code, which is publicly available at
www.frc.org.uk, insofar as is appropriate, save as set out
below:
-- Given the wholly non-executive composition of the Board,
certain provisions of the UK Corporate Governance Code (in
particular the provisions relating to the division of
responsibilities between the Chairman and chief executive and
executive compensation) are considered by the Board to be
inapplicable to the Company. In addition, the Company does not
comply with the requirements of the UK Corporate Governance Code in
relation to the requirement to have a senior independent
Director.
-- Until an acquisition is made the Company will not have
nomination, remuneration, audit or risk committees. The Board as a
whole will instead review its size, structure and composition, the
scale and structure of the Directors' fees (taking into account the
interests of Shareholders and the performance of the Company), take
responsibility for the appointment of auditors and payment of their
audit fee, monitor and review the integrity of the Company's
financial statements, the Board's performance and take
responsibility for any formal announcements on the Company's
financial performance. Following an acquisition the Board intends
to put in place nomination, remuneration, audit and risk
committees. The Board has adopted the Model Code for Directors'
dealings contained in the Listing Rules of the UK Listing
Authority. The Board will be responsible for taking all proper and
reasonable steps to ensure compliance with the Model Code by the
Directors.
The Directors are responsible for internal control in the
Company and for reviewing its effectiveness. Due to the size of the
Company, all key decisions are made by the Board in full. The
Directors have reviewed the effectiveness of the Company's systems
during the period under review and consider that there have been no
material losses, contingencies or uncertainties due to weaknesses
in the controls. The Board do not consider an internal audit
function to be necessary due to the Company being a 'cash shell'.
Details regarding substantial shareholdings are set out above. As
there is only one class of share, there are no special rights or
restrictions attached to the shares held by any individual or
entity.
The corporate governance practices of the company are publicly
available by making a written enquiry to the Directors of the
Company at the Company's registered office.
The Board meets regularly and the following table sets out the
Directors' attendance at the Board meetings held during the
year:
Board Meetings Attended
(1 held in year)
Malcolm Burne 1
Charles Cannon Brookes 1
Nathan Steinberg 1
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations. Company law requires the Directors to prepare
financial statements for each financial year. Under that law the
Directors have, as required by the Rules of the London Stock
Exchange, elected to prepare the Company financial statements in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union. Under Company law the Directors
must not approve the financial statements unless they are satisfied
that they are sufficient to show a true and fair view of the state
of affairs of the Company and of its profit or loss for that
period. In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether the financial statements have been prepared in
accordance with IFRS as adopted by the European Union; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements and other
information included in annual reports may differ from legislation
in other jurisdictions.
Auditors and disclosure of information to auditors
The Directors who held office at the date of approval of this
Directors' Report each confirm that, so far as they 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 a Director to make himself aware of
any relevant audit information and to establish that the Company's
auditors are aware of that information.
Auditors
A resolution to re-appoint F. W. Smith, Riches & Co. as
auditors will be proposed at the Annual General Meeting.
Annual General Meeting
Notice of the forthcoming Annual General Meeting of the Company
together with resolutions relating to the Company's ordinary
business will be given to the members separately.
This report was approved by the Board on 26 April 2017 and
signed on its behalf by
Charles Cannon Brookes
Director
Company Registration Number 09040064
DIRECTORS' REMUNERATION REPORT
FOR THE YEARED 31 DECEMBER 2016
This Remuneration Report sets out the Company's policy on the
remuneration of Directors together with details of Directors'
remuneration packages and service contracts for the year ended 31
December 2016.
The first part is the Annual Remuneration Report which details
remuneration awarded to Directors during the period. The Annual
Remuneration Report will be proposed as an ordinary resolution to
shareholders at the forthcoming Annual General Meeting, the date of
which will be notified to shareholders in due course.
The second part is the Remuneration Policy Report which details
the remuneration policy for Directors. This policy was approved by
a binding vote by shareholders at the Annual General Meeting held
on 30 June 2015 and applies for a three year period commencing 30
July 2015.
Until an acquisition is made, the Company will not have a
separate remuneration committee. The Board as a whole will review
the scale and structure of the Directors' fees, taking into account
the interests of shareholders and the performance of the Company
and Directors. Following the completion of an acquisition, the
Board intends to put in place a remuneration committee.
The Company maintains contact with its shareholders about
remuneration in the same way as other matters and, as required by
Section 439 of the Companies Act 2006, this remuneration report
will be put to an advisory vote of the Company's shareholders at
the forthcoming Annual General Meeting.
Annual Remuneration Report
Directors' emoluments (audited)
Malcolm Charles Nathan
Burne Cannon Steinberg Total
Brookes
GBP GBP GBP GBP
Salaries and fees
Total fees paid - - - -
(excluding VAT)
In advance at 1 - - - -
January 2016
------------------ ------------------ ------------------ ------------------
Total salaries - - - -
and fees
All taxable benefits - - - -
Annual bonuses - - - -
Long term share - - - -
incentives plans
All pension related - - - -
benefits
------------------ ------------------ ------------------ ------------------
Total to 31 December - - - -
2016
=============== =============== =============== ===============
The Directors have agreed that with effect from 31
August 2015, in order to conserve working capital,
they will not take any further remuneration until
an acquisition has been successfully completed.
Malcolm Charles Nathan
Burne Cannon Steinberg Total
Brookes
GBP GBP GBP GBP
Salaries and fees
Total fees paid - - - -
(excluding VAT)
In advance at 1
January 2015 *9,617 *6,411 **6,667 22,695
------------------ ------------------ ------------------ ------------------
Total salaries
and fees 9,617 6,411 6,667 22,695
All taxable benefits - - - -
Annual bonuses - - - -
Long term share - - - -
incentives plans
All pension related - - - -
benefits
------------------ ------------------ ------------------ ------------------
Total to 31 December
2015 9,617 6,411 6,667 22,695
=============== =============== =============== ===============
*paid in advance to 22 August 2015
**paid in advance to 31 August 2015
Malcolm Burne's services are provided to the Company pursuant to
a non-executive appointment letter dated 30 July 2014, under which
GBP15,000 per annum, excluding VAT, is paid to Arlington Group
Asset Management Limited, the first payment being due on the date
of admission.
Charles Cannon Brookes' services are provided to the Company
pursuant to a non-executive appointment letter dated 30 July 2014,
under which GBP10,000 per annum, excluding VAT, is paid to
Arlington Group Asset Management Limited, the first payment being
due on the date of admission.
Nathan Steinberg's services are provided to the Company pursuant
to a non-executive appointment letter dated 30 July 2014, under
which GBP10,000 per annum, excluding VAT, is paid to Munslows LLP,
the first payment being due on the date of admission.
Each of the Directors' appointments is for a period of 12 months
and thereafter subject to termination by either party on three
months' written notice.
As the Company is non-operational, all the Directors are
non-executive.
Payments to past Directors (audited)
No payments were made to past Directors in the year ended 31
December 2016 or the year ended 31 December 2015.
Payments for loss of office (audited)
No payments for loss of office were made in the year ended 31
December 2016 or the year ended 31 December 2015.
Directors' interests (audited)
The table below sets out the interests of the Directors in the
Company's shares.
At 31 December At 31 December
2016 2015
Ordinary % Ordinary %
shares shares
Malcolm Burne 283,333 10.62 283,333 10.62
Charles Cannon - - - -
Brookes
Nathan Steinberg 49,000 1.84 49,000 1.84
In addition, 192,333 (2015: 192,333) Ordinary shares were held
by Arlington Group Asset Management Limited, a company in which
both Malcolm Burne and Charles Cannon Brookes served as Directors
during the year. Arlington Group Asset Management Limited also
holds options to acquire a further 200,000 Ordinary shares, as set
out in note 10 to the financial statements.
Since the year end there have been no changes to the interests
of the Directors in the Company's shares.
Performance graph
The FTSE All Share is the closest comparable index for a
standard list company, whilst a standard listing does not provide
for inclusion in the all-share index it is a relevant comparator of
the Company's performance.
See Company website.
The FTSE all share index is shown for the whole of the period
from incorporation to date, the Company's performance is only shown
from 22 August 2014, from which date its shares were first
traded.
Remuneration of the non-executive Chairman
2016 2015
Malcolm Burne GBP GBP
Salaries and fees - 9,617
% %
Annual bonus payout against - -
maximum opportunity
Long-term incentive vesting
rates against maximum opportunity - - -
The Company does not have a chief executive so the table
includes the equivalent information for the non-executive
Chairman.
Percentage change in remuneration of Director undertaking role
of Chairman
Salaries and fees M A % change All other % change
Burne directors
GBP GBP
Year ended 31 December
2016 - (100.0%) - (100.0%)
Year ended 31 December
2015 9,617 78.6% 13,078 88.9%
Period from 14 May 2014
to
31 December 2014 5,383 - 6,922 -
No other remuneration or benefits were received by any director
during the periods under review.
Relative importance of spend on pay
The total expenditure on remuneration to all employees is as
shown below:
2016 2015
GBP GBP
Employee remuneration (excluding - -
Directors)
Distribution to shareholders - -
Consideration by the Directors of matters relating to Directors'
remuneration
The Board considered the Directors' remuneration in the year
ended 31 December 2015. It was agreed that, in order to conserve
working capital, the Directors would not take any further
remuneration until an acquisition has been successfully completed.
No external advice was taken in reaching this decision. There have
been no changes to the policy during the year ended 31 December
2016.
Shareholder voting
At the Annual General Meeting on 30 June 2015, there was an
advisory vote on the resolution to approve the Remuneration Report
and policy, the result of which is detailed below:
% of votes % of votes % of votes withheld
for against
100% - -
Remuneration Policy Report
The Remuneration Policy is the Company's policy on Directors'
remuneration, which was approved by a binding vote at the 2015
Annual General Meeting. The policy took effect from 30 July
2015.
In setting the policy, the Board has taken the following into
account:
-- The need to attract, retain and motivate individuals of a
calibre who will ensure successful leadership and management of the
Company;
-- The Company's general aim of seeking to reward all employees
fairly according to the nature of their role and their
performance;
-- Remuneration packages offered by similar companies within the same sector;
-- The need to align the interests of shareholders as a whole
with the long-term growth of the Company; and
-- The need to be flexible and adjust with operational changes
throughout the term of this policy.
Future Policy Table
Element Purpose Policy Operation Opportunity
and performance
conditions
------------------ -------------- ----------------------- ---------------- -----------------
Non-executive
Directors
------------------ -------------- ----------------------- ---------------- -----------------
Salaries To award The Board as Payable The total
and fees for services a whole determines in advance value of
provided the remuneration and reviewable Directors'
of non-executive annually fees that
Directors based may be
on comparison paid is
of other companies limited
of similar size to the
and sector. There appointment
is no element letters
of remuneration the Directors
for performance. have entered
Any Director into as
who serves on outlined
any committee, above.
or devotes special
attention to
the business
of the Company,
or otherwise
performs services
which in the
opinion of the
Directors are
outside the scope
of the ordinary
duties of a Director,
may be paid such
extra remuneration
as the Directors
may determine.
------------------ -------------- ----------------------- ---------------- -----------------
All taxable N/A Not awarded N/A N/A
benefits
------------------ -------------- ----------------------- ---------------- -----------------
Annual bonuses N/A Not awarded N/A N/A
------------------ -------------- ----------------------- ---------------- -----------------
Long term N/A Not awarded N/A N/A
share incentives
plans
------------------ -------------- ----------------------- ---------------- -----------------
Pensions N/A Not awarded N/A N/A
------------------ -------------- ----------------------- ---------------- -----------------
Notes to the Future Policy Table
All the Directors are entitled to be reimbursed by the Company
for travel, hotel and other expenses incurred by them in the course
of their Directors' duties relating to the Company.
Remuneration scenario for Directors
The Directors have agreed that with effect from 31 August 2015,
in order to conserve working capital, they will not take any
further renumeration until an acquisition has been successfully
completed. There have been no changes to this policy during the
year ended 31 December 2016.
Approach to recruitment remuneration
All appointments to the Board are made on merit. The components
of a new Director's remuneration package (who is recruited within
the life of the approved remuneration policy) would comprise base
salary as outlined above and the approach to such appointments are
detailed within the Future Policy Table above. The Company will pay
such levels of remuneration to new Directors that would enable the
Company to attract appropriately skilled and experienced
individuals that are not in the opinion of the remuneration
committee excessive.
Service contracts
The non-executive Directors are contracted under letters of
appointment with the Company and do not have a contract of
employment with the Company. None of the Directors are entitled to
receive compensation for loss of office, they are all appointed on
rolling one year contracts which are subject to termination on
three months' notice on either side. The Directors are subject to
annual re-election in accordance with the Company's Articles of
Association. The letters of appointment are kept at the Company's
registered office.
Policy on payment for loss of office
Termination payments will be calculated in accordance with the
existing letters of appointment. It is the policy of the Company to
appoint Directors without extended terms of notice which could give
rise to extraordinary termination payments.
Consideration of employment conditions elsewhere in the
Company
In setting out this policy for Directors' remuneration, the
Board has been mindful of the Company's objective to reward all
employees fairly according to their role, performance and market
forces. However, as the Company does not currently have any
employees, other than the directors, it is not able to consider the
pay and employment conditions of other employees within the Company
nor undertake any consultation with employees in drawing up a
policy. The Company has also not used any formal comparison
measures.
Consideration of shareholders' views
The Directors remuneration policy was approved by a binding vote
by shareholders at the Annual General Meeting held on 30 June 2015
and applies for a three year period commencing 30 July 2015.
This report was approved by the Board on 26 April 2017 and
signed on its behalf by
Malcolm Burne
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF AUCTUS GROWTH
PLC
FOR THE YEARED 31 DECEMBER 2016
We have audited the financial statements of Auctus Growth plc
for the year ended 31 December 2016 which comprise the statement of
comprehensive income, the statement of financial position, the
statement of cash flows, the statement of changes in equity and the
related notes. 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.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditors' report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As explained more fully in the statement of Directors'
Responsibilities Statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
and express opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices Board's Ethical Standards for Auditors.
SCOPE OF THE AUDIT
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Directors; and the
overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the annual
report to identify material inconsistencies with the audited
financial statements and to identify any information that is
apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material
misstatement or inconsistencies we consider the implications for
our report.
OPINION ON THE FINANCIAL STATEMENTS
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 December 2016 and of its loss for the year then
ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the Companies Act 2006.
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT
2006
In our opinion; based on the work carried out in the course of
the audit:
-- the part of the Directors' Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act
2006;
-- the information given in the Strategic Report and Report of
the Directors for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Strategic Report and Report of the Directors 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 company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
the Report of the Directors.
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, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the Directors'
Remuneration Report to be audited 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.
Martin J. Rooney (Senior Statutory Auditor)
For and on behalf of F. W. Smith, Riches & Co., Statutory
Auditors
London
26 April 2017
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
Notes 2016 2015
GBP GBP
NET TRADING INCOME - -
---------------------- ----------------------
Other operating expenses (35,783) (189,219)
---------------------- ----------------------
Total operating expenses (35,783) (189,219)
---------------------- ----------------------
OPERATING LOSS 3 (35,783) (189,219)
Finance income - -
---------------------- ----------------------
LOSS BEFORE TAXATION (35,783) (189,219)
Income tax expense 5 - -
---------------------- ----------------------
LOSS FOR THE YEAR ATTRIBUTABLE
TO EQUITY HOLDERS OF THE
COMPANY (35,783) (189,219)
=============== ===============
Earnings per share (pence)
- basic and fully diluted 6 (1.34)p (7.49)p
=============== ===============
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
2016 2015
Notes GBP GBP
CURRENT ASSETS
Trade and other receivables 7 5,830 22,077
Cash and cash equivalents 1,006,342 1,030,551
---------------------- ----------------------
1,012,172 1,052,628
CURRENT LIABILITIES
Trade and other payables 8 (15,653) (20,326)
---------------------- ----------------------
NET CURRENT ASSETS 996,519 1,032,302
---------------------- ----------------------
NET ASSETS 996,519 1,032,302
=============== ===============
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY
Share capital 9 266,900 266,900
Share premium account 972,140 972,140
Share-based payment reserve 22,131 22,131
Retained earnings (264,652) (228,869)
---------------------- ----------------------
TOTAL EQUITY 996,519 1,032,302
=============== ===============
The financial statements were approved and authorised for issue
by the Directors on 26 April 2017 and were signed on their behalf
by:
Charles Cannon Brookes
Director
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2016
2016 2015
Notes GBP GBP
Net cash outflow from operating activities 11 (24,209) (174,844)
---------------------- ----------------------
Cash flows from financing activities
Share issue proceeds - 114,500
Share issue costs - (5,925)
---------------------- ----------------------
- 108,575
---------------------- ----------------------
Cash flows from investing activities
Finance income - -
---------------------- ----------------------
Net (decrease) in cash and cash equivalents (24,209) (66,269)
Cash and cash equivalents at beginning of the year 1,030,551 1,096,820
---------------------- ----------------------
Cash and cash equivalents at end of the year 1,006,342 1,030,551
=============== ===============
STATEMENT OF CHANGES IN
EQUITY
FOR THE YEARED 31
DECEMBER
2016
Share Share Share Retained Total
capital premium -based earnings
payment
reserve
GBP GBP GBP GBP GBP
At 1
January
2016 266,900 972,140 22,131 (228,869) 1,032,302
Loss for
year - - - (35,783) (35,783)
------------------ ------------------ ------------------ ------------------ ------------------
At 31
December
2016 266,900 972,140 22,131 (264,652) 996,519
============= ============= ============= ============= =============
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2015
Share Share Share Retained Total
capital premium -based earnings
payment
reserve
GBP GBP GBP GBP GBP
At 1
January
2015 244,000 886,465 22,131 (39,650) 1,112,946
Issue of
shares 22,900 91,600 - - 114,500
Costs of
share
issue - (5,925) - - (5,925)
Loss for
year - - - (189,219) (189,219)
------------------ ------------------ ------------------ ------------------ ------------------
At 31
December
2015 266,900 972,140 22,131 (228,869) 1,032,302
============= ============= ============= ============= =============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRSs
The Company's financial statements for the year to 31 December
2016 were authorised for issue by the Board of Directors on 26
April 2017 and the balance sheet was signed on the Board's behalf
by Charles Cannon Brookes. Auctus Growth plc is a public limited
Company incorporated and domiciled in England and Wales. The
Company does not have an ultimate controlling party. The Company's
Ordinary shares are currently admitted to a standard listing on the
Official List and to trading on the London Stock Exchange.
The principal activity of the Company is to invest in strategic
and/or special situations of unquoted companies or businesses that
are seeking a public quotation.
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted and
endorsed by the European Union (EU), and the Companies Act 2006
applicable to companies reporting under IFRS. These comprise
standards and interpretations approved by the International
Accounting Standards Board (IASB) that remain in effect and to the
extent that they have been adopted by the EU. Under Section 454 of
the Companies Act 2016, the Directors can amend these financial
statements on a voluntary basis if they subsequently prove to be
defective.
2. ACCOUNTING POLICIES
Basis of measurement
The financial statements have been prepared on a historical cost
basis. All amounts are shown in sterling, the Company's functional
currency.
Trading income
Trading income is recognised to the extent that it is probable
that economic benefit will flow to the Company and the trading
income can be reliably measured.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand and bank
deposits. Bank deposits include on demand deposits and short-term,
highly liquid investments which are readily convertible to known
amounts of cash, subject to insignificant risk of changes in value,
and have a maturity of less than 3 months from the date of
acquisition.
Current income tax
The current income tax payable is based on the taxable profit
for the period. Taxable profit differs from net profit as reported
in the income statement because it excludes items of income or
expense that are taxable or deductible in other periods and it
further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred income tax
Deferred income tax is provided by using the liability method on
temporary timing differences at the balance sheet date between the
tax basis of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred income tax liabilities are
recognised in full for all temporary differences. Deferred income
tax assets are recognised for all deductible temporary differences
carried forward of unused tax credits and unused tax losses to the
extent that it is probable that taxable profits will be available
against which the deductible temporary differences, and
carry-forward of unused tax credits and unused losses can be
utilised.
The carrying amount of deferred income tax assets is assessed at
each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available
to allow all or part of the deferred income tax asset to be
utilised. Unrecognised deferred income tax assets are reassessed at
each balance sheet date and are recognised to the extent that it is
probable that future taxable profits will allow the deferred income
tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when the asset
is realised or the liability settled, based on tax rates that have
been enacted or substantively enacted at the balance sheet
date.
Share-based payments
Certain services have been provided to the Company in exchange
for equity-settled share-based payments.
The cost of equity-settled transactions is determined with
reference to their fair value at the date on which they were
granted. The fair value is determined by using the Black-Scholes
option pricing model.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the service conditions are fulfilled, ending on the date on which
the grantees become fully entitled to the award ("the vesting
date"). The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the
Company's best estimate of the number of equity instruments that
will ultimately vest.
The dilutive effect of the outstanding options is reflected as
additional dilution in the computation of earnings per share.
Financial instruments
Financial assets and financial liabilities are recognised on the
Company's statement of financial position when the Company becomes
a contractual party to the instrument.
Trade receivables
Trade receivables are recognised initially at their fair value
which equates to their nominal value as reduced by appropriate
provision for irrecoverable amounts and subsequently at amortised
cost.
Trade payables
Trade payables are recognised initially at their fair value and
subsequently at amortised cost.
Equity
Share capital is determined using the nominal value of shares
that have been issued.
The share premium account includes any premiums on the initial
issuing of share capital. Any transaction costs associated with the
issue of shares are deducted from the share premium account. The
share-based payment reserve arises from the charge associated with
the issue of equity settled share-based payments.
Accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in accordance with IFRS
requires management to make estimates and assumptions in certain
circumstances that affect reported amounts. The most sensitive
estimate affecting the financial statements is the area of
share-based payments. Actual outcomes may therefore differ from
these estimates and assumptions.
In determining the fair value of equity settled share-based
payments and the related charge to the income statement, the
Company makes assumptions about future events and market
conditions. In particular, judgment must be made as to the likely
number of shares that will vest and the fair value of each award
granted. The fair value is determined using a valuation model which
is dependent on further estimates including the Company's future
dividend policy, the timing of the exercise of options and the
future volatility in the price of the Company's shares.
Such assumptions are based on publicly available information and
reflect market expectations. Different assumptions from those used
(which are disclosed in note 10) could materially affect the
reported value of share-based payments. The Company has recognised
a corresponding increase in equity in accordance with IFRS 2:
Share-based payments by crediting "Share-based payment reserve" (a
component of equity) for the grant of the share options.
New and amended standards
Various new or revised accounting standards have been issued
which are not yet effective, including IFRS 9 'Financial
Instruments', IFRS 16 'Leases' and IFRS 15 'Revenue from Contracts
with Customers'. The Directors' initial assessment is that they are
unlikely to have a significant impact on the Company.
3. OPERATING LOSS
The Company has not yet commenced trading and accordingly there
is no segmental analysis.
Operating loss is stated after charging :-
2016 2015
GBP GBP
Aborted acquisition costs - 125,268
Fees payable to the Company's
auditors (excluding VAT)
* Audit of the Company's financial statements 10,000 10,000
* Other non-audit services 2,750 500
=============== ===============
4. PARTICULARS OF EMPLOYEES
The average number of employees of the Company in the year
was:
2016 2015
Number Number
Directors 3 3
=============== ===============
The Directors' aggregate emoluments
in respect of qualifying services GBP GBP
were:
Other fees (excluding Value Added
Tax) - 22,695
--------------------- ---------------------
- 22,695
=============== ===============
The Directors, whose aggregate emoluments are disclosed above,
also comprise the group of individuals who are considered to be the
Company's Key Management Personnel.
Other fees in 2015 comprise GBP16,028 plus VAT, to Arlington
Group Asset Management Limited, a company in which Malcolm Burne
and Charles Cannon Brookes served as Directors during the year, and
GBP6,667 plus VAT, to Munslows LLP, a firm in which Nathan
Steinberg is a partner.
In addition, Arlington Group Asset Management Limited provided
advisory services amounting to GBPNil
(GBP25,000 plus VAT), and Munslows LLP provided accounting and
taxation services to the Company at a cost of GBP7,500 plus VAT
(2015: GBP10,000 plus VAT).
5. INCOME TAX EXPENSE
(a) Analysis of charge in the year
2016 2015
GBP GBP
Current tax:
UK corporation tax based on the
results for the year at 20% (2015:20.25%) - -
---------------------- ----------------------
Total current tax - -
=============== ===============
(b) Factors affecting the tax charge for the year
The tax assessed for the year does not reflect a credit
equivalent to the loss before tax multiplied by the standard rate
of corporation tax of 20% (2015: 20.25%).
2016 2015
GBP GBP
Loss before tax (35,783) (189,219)
=============== ===============
Loss before tax multiplied
by the standard rate of
corporation tax (7,156) (38,317)
Disallowable expenses - 25,367
Losses carried forward 7,156 12,950
---------------------- ----------------------
Current tax for the year - -
=============== ===============
Total losses carried forward
against future profits 139,384 103,601
=============== ===============
No deferred income tax asset has been recognised in respect of
the losses carried forward, due to the uncertainty as to whether
the Company will generate sufficient future profits in the
foreseeable future to prudently justify this.
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year. Diluted
earnings per share is calculated using the weighted average number
of shares adjusted to assume the conversion of all dilutive
potential ordinary shares.
Basic Earnings per share 2016 2015
Loss for the year (35,783) (189,219)
=============== ===============
Weighted average number of shares 2,668,999 2,525,326
=============== ===============
Earnings per share attributed
to ordinary shareholders (1.34)p (7.49)p
=============== ===============
The Company has made a loss and, accordingly the effect of the
share options is anti-dilutive.
7. TRADE AND OTHER RECEIVABLES
2016 2015
GBP GBP
Prepayments 3,659 3,535
Other receivables 2,171 18,542
-------------------- -------------------
5,830 22,077
=============== ===============
The Directors consider that the carrying value of each class of
receivable approximates its fair value.
8. TRADE AND OTHER PAYABLES
2016 2015
GBP GBP
Accrued expenses 15,653 20,326
=============== ===============
The Directors consider that the carrying value of each class of
payable approximates its fair value.
9. SHARE CAPITAL
Allotted, called up and fully paid:
2016 2016 2015 2015
No of No of
shares GBP shares GBP
Ordinary shares of GBP0.10
each 2,668,999 266,900 2,668,999 266,900
=============== =============== =============== ===============
On 18 August 2015, the Company issued 228,999 Ordinary shares of
GBP0.10 each at a price of GBP0.50 per share by private
placement.
10. SHARE-BASED PAYMENTS
The Company has granted and issued share options over Ordinary
shares in the Company as follows:
Final exercisable
Date granted Parties Exercise price Number date
of shares
Arlington Group Asset
30/07/2014 Management Limited 60p 200,000 21/08/2017
----------------------
Options vested and outstanding
at 31 December 2016 and 31
December 2015 200,000
===============
No share options were granted, exercised or forfeited during the
year ended 31 December 2016 or the year ended 31 December 2015.
The grant of the options was conditional on the successful
Initial Public Offering of the Company on the London Stock
Exchange. Since the fair value of the services provided could not
be reliably estimated, the fair value of the equity settled share
option was estimated at the grant date using the Black-Scholes
option pricing model, taking into account the terms and conditions
upon which the options were granted. The options vested on the
Initial Public Offering. No options were exercised or forfeited
during the year ended 31 December 2016 or the year ended 31
December 2015. The following table lists the inputs into the model
used for the period ended 31 December 2014:
Dividend yield on underlying shares 0%
Risk free rate 0.67
Expected volatility 41%
Average time to expiry 3 years
Weighted average share price of
options 60p
The expected life of the options is based on an estimate and is
not necessarily indicative of exercise patterns that may occur. The
expected volatility reflects the assumption that the historical
volatility is indicative of future trends, which may also not be
the actual outcome. As the Company had no trading history, and
consequently no historical volatility of its own shares, the
Company has used the historical volatility of similar companies on
the London Stock Exchange at the date the options were granted. The
options were granted for services provided in respect of the
Initial Public Offering, accordingly, the fair value arising of
GBP22,131 was charged to the share premium account in 2014.
11. CASH FLOWS FROM OPERATING ACTIVITIES
2016 2015
GBP GBP
Loss before taxation (35,783) (189,219)
Decrease in receivables 16,247 12,049
(Decrease)/increase in payables (4,673) 2,326
---------------------- ----------------------
Net cash outflows from operating
activities (24,209) (174,844)
=============== ===============
12. FINANCIAL INSTRUMENTS
The Company uses financial instruments such as trade receivables
and payables and other items that arise directly from its
operations. The main purpose of these financial instruments is to
help finance the Company's operations.
A financial instrument is any contract that gives rise to both a
financial asset of one enterprise and a financial liability or
equity instrument of another enterprise.
The Company's financial instruments, which are recognised in its
statement of financial position, comprise cash and cash
equivalents, receivables and payables. The information about the
extent and nature of these recognised financial instruments,
including significant terms and conditions that may affect the
amount, timing and certainty of future cash flows are disclosed in
the respective notes below, where applicable.
The Company does not generally enter into derivative
transactions (such as interest rate swaps and forward foreign
currency contracts) and it is, and has been throughout the period
under review, the Company's policy that no trading in financial
instruments shall be undertaken.
All financial instruments are recognised in the statement of
financial position of the Company. Financial assets and liabilities
are held as follows :-
2016 2015
Assets GBP GBP
Cash and cash equivalents 1,006,342 1,030,551
--------------------- ---------------------
Total financial assets 1,006,342 1,030,551
=============== ===============
Liabilities
Accrued expenses 15,653 20,326
--------------------- ---------------------
Total financial liabilities 15,653 20,326
=============== ===============
The Directors consider that the carrying value of the financial
assets and liabilities approximates their fair value.
Financial risk management objectives and policies
The Company's activities expose it to a variety of financial
risks: credit risk, liquidity risk and cash flow interest-rate
risk. These risks are limited by the Company's financial management
policies and practices described below:
(a) Credit risk
As the Company had no revenue during the period, there is no
significant concentration of credit risk. The Company does not have
written credit risk management policies or guidelines.
The Company's cash is held in reputable banks. The carrying
amounts of these financial assets represent the maximum credit
exposure.
(b) Liquidity risks
The Company currently has no operational revenue streams.
Operational cash flow represents the ongoing administration costs.
The group manages its liquidity requirements by the use of long and
short term cash flow forecasts.
The Company's policy is to ensure facilities are available as
required and to issue share capital in accordance with long and
short term cash flow forecasts. As at 31 December 2016, the Company
has no undrawn facilities. The Company actively manages its working
finance to ensure it has sufficient funds for operations and
planned expansion.
The Company's financial liabilities are primarily accruals. All
amounts are due for payment in accordance with agreed settlement
terms.
(c) Cash flow and fair value interest rate risks
The Company has no interest-bearing liabilities. Interest rates
on bank deposits are based on the relevant national inter-bank
offered rates. The Company has no fixed interest rate assets.
The main financial risks for the Company are given on page 3 in
the Strategic Report.
At 31 December, the currency and interest rate profile of the
financial assets and liabilities of the Company was as follows:
2016 2015
GBP GBP
Financial assets
GBP - cash and cash equivalents 1,006,342 1,030,551
=============== ===============
(d) Capital risk management
The Company defines capital as the total equity of the Company.
The Company manages its capital to ensure that it will be able to
continue as a going concern, while maximising the return to
shareholders through the optimisation of debt and equity balances.
The Company manages its capital structure and makes adjustments to
it, in the light of changes in economic conditions. To maintain or
adjust its capital structure, the Company may adjust the amount of
dividends to shareholders, issue new shares or return capital to
shareholders, and raise debt or sell assets to reduce debt.
(e) Sensitivity analysis
Sensitivity analysis has been performed on all risks documented.
There was no material difference to disclosure made on financial
assets and liabilities.
13. GENERAL INFORMATION
The principal activity of the Company is to invest in strategic
and/or special situations of unquoted companies or businesses that
are seeking a public quotation. The Company is incorporated in
England and Wales and is domiciled in England and Wales. Its
Registered Office is 15 Whitehall, London, SW1A 2DD, and its
principal place of business is New Liverpool House, 1st Floor,
47-48 Piccadilly, London W1J 7LD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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