TIDMAUCT
RNS Number : 3845M
Auctus Growth Plc
27 April 2018
27 April 2018
Auctus Growth plc
('Auctus' or the 'Company)
Final Results
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2017
Dear Shareholder,
I present the Chairman's statement for the year ended 31
December 2017, where the Company reported a net loss of GBP35,861
(1.34p per share) compared to a net loss of GBP35,783 (1.34p per
share) for the year ended 31 December 2016. As at 31 December 2017,
the Company had cash balances of GBP971,581 (GBP1,006,342 at 31
December 2016). 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 2018
STRATEGIC REPORT
FOR THE YEARED 31 DECEMBER 2017
The Directors are pleased to present their strategic report for
year ended 31 December 2017.
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. The company
has three directors who are appointed to the board, all of whom are
male. Due to the nature of the company there are no other
employees.
At the year end the Company has cash of approximately GBP0.972
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 2018 and
signed on its behalf by
Charles Cannon Brookes
Director
REPORT OF THE DIRECTORS
FOR THE YEARED 31 DECEMBER 2017
The Directors are pleased to present their annual report and
audited financial statements of Auctus Growth plc for the year
ended 31 December 2017.
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 (2016: GBPnil)
and the loss after taxation was GBP35,861 (2016: GBP35,783). 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 2018, 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
2017.
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
2017 2016
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 (2016: 192,333) Ordinary shares were held
by Arlington Group Asset Management Limited, a company in which
Charles Cannon Brookes served as a Director during the year.
Arlington Group Asset Management Limited also held options to
acquire a further 200,000 Ordinary shares, which lapsed during the
year ended 31 December 2017, 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
Charlie has over 15 years investment experience. He is an
Executive Director of FCA authorised and regulated Arlington Group
Asset Management Limited (AGAM) having acquired the business in
October 2004. Through AGAM, Charlie has been active in a variety of
different investment management mandates and corporate finance
transactions. 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, TEP, is a consultant with the accountancy
practice of Kreston Reeves 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
(4 held in year)
Malcolm Burne 4
Charles Cannon Brookes 4
Nathan Steinberg 3
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 2018 and
signed on its behalf by
Charles Cannon Brookes
Director
Company Registration Number 09040064
DIRECTORS' REMUNERATION REPORT
FOR THE YEARED 31 DECEMBER 2017
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 2017.
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 2017
---------------------- ---------------------- ---------------------- ----------------------
Total salaries - - - -
and fees
All taxable - - - -
benefits
Annual bonuses - - - -
Long term share - - - -
incentives
plans
All pension - - - -
related
benefits
---------------------- ---------------------- ---------------------- ----------------------
Total to 31 - - - -
December
2017
=============== =============== =============== ===============
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
=============== =============== =============== ===============
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 due.
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, exlcuding VAT, is paid to Arlington Group
Asset Mangement Limited.
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 (now part of Kreston
Reeves LLP).
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.
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 2017 or the year ended 31 December 2016.
Payments for loss of office (audited)
No payments for loss of office were made in the year ended 31
December 2017 or the year ended 31 December 2016.
Directors' interests (audited)
The table below sets out the interests of the Directors in the
Company's shares.
At 31 December At 31 December
2017 2016
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 (2016: 192,333) Ordinary shares were held
by Arlington Group Asset Management Limited, a company in which
Charles Cannon Brookes served as a Director during the year.
Arlington Group Asset Management Limited also held options to
acquire a further 200,000 Ordinary shares, which expired during the
year ended 31 December 2017, 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 website for graph.
The graph shows the FTSE All-share index and the Company's share
price for the period being reported on.
Remuneration of the non-executive Chairman
2017 2016
Malcolm Burne GBP GBP
Salaries and fees - -
% %
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 - - - -
2017
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:
2017 2016
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
2017.
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 which was passed unaminously.
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 remuneration until an acquisition has been successfully
completed. There have been no changes to this policy during the
year ended 31 December 2017.
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 2018 and
signed on its behalf by
Charles Cannon Brookes
Director
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF AUCTUS GROWTH
PLC
FOR THE YEARED 31 DECEMBER 2017
Opinion
We have audited the financial statements of Auctus Growth plc
(the 'Company') for the year ended 31 December 2017 which comprise
the statement of comprehensive income, the statement of financial
position, the statement of cash flows, the statements of changes in
equity 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.
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.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 December 2017 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 requirements of the Companies Act 2006.
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
Auditors' Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company
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 as applied to listed public interest
entities, 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 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.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter How we addressed the key audit matter
Existence of in the audit.
and controls Our audit work included, but was not
over the Company's restricted to, the following:
cash balances * We obtained an external third party confirmation of
the Company's cash balance directly from the
Company's bankers
* We reviewed the design, implementation and
appropriateness of the Company's controls relating to
the holding of cash balances and the execution of
payments.
Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work. Based on our
professional judgement we determined materiality for the financial
statements as follows:
Materiality GBP20,000
Basis of calculation We have determined materiality on the
approximate basis of 2% of gross assets.
We have calculated materiality on a consistent
basis with the previous year.
Rationale of We have assessed the use of gross assets
benchmark applied as an appropriate benchmark as the Company
is holding assets until a suitable target
for acquisition is identified.
Significant There have been no significant changes
changes in our in our audit approach in the current
audit approach year.
An overview of the scope of our audit
Our audit of the Company was scoped and tailored by obtaining an
understanding of the Company and its environment, including the
Company's system of internal control, accounting processes and
assessing the risks of material misstatement to the financial
statements at a Company level to ensure we performed enough work to
form an opinion on the financial statements as a whole. We
collected sufficient audit evidence from substantive and analytical
audit procedures to respond to the assessed risks to enable us to
form our opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the Annual
Report other than the financial statements and our auditors' 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.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- 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 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 in
relation to which 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out in the report of the directors, 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 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 Company or to cease
operations, or have no realistic alternative but to do so.
Auditors' 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
auditors' 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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the directors on 23 March 2015 to audit the
financial statements for the period ending 31 December 2014. Our
total uninterrupted period of engagement is 4 years, covering the
periods ending 31 December 2014 to 31 December 2017.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Company and we remain independent of the
Company in conducting our audit.
Our audit opinion is consistent with the additional report to
the directors.
Martin J. Rooney (Senior Statutory Auditor)
For and on behalf of F. W. Smith, Riches & Co., Statutory
Auditors
London
26 April 2018
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2017
Notes 2017 2016
GBP GBP
NET TRADING INCOME - -
---------------------- ----------------------
Other operating expenses (35,861) (35,783)
---------------------- ----------------------
Total operating expenses (35,861) (35,783)
---------------------- ----------------------
OPERATING LOSS 3 (35,861) (35,783)
Finance income - -
---------------------- ----------------------
LOSS BEFORE TAXATION (35,861) (35,783)
Income tax expense 5 - -
---------------------- ----------------------
LOSS FOR THE YEAR ATTRIBUTABLE
TO EQUITY HOLDERS OF THE
COMPANY (35,861) (35,783)
=============== ===============
Earnings per share (pence)
- basic and fully diluted 6 (1.34)p (1.34)p
=============== ===============
STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2017
2017 2016
Notes GBP GBP
CURRENT ASSETS
Trade and other receivables 7 6,904 5,830
Cash and cash equivalents 971,581 1,006,342
---------------------- ----------------------
978,485 1,012,172
CURRENT LIABILITIES
Trade and other payables 8 (17,827) (15,653)
---------------------- ----------------------
NET CURRENT ASSETS 960,658 996,519
---------------------- ----------------------
NET ASSETS 960,658 996,519
=============== ===============
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY
Share capital 9 266,900 266,900
Share premium account 994,271 972,140
Share-based payment reserve - 22,131
Retained earnings (300,513) (264,652)
---------------------- ----------------------
TOTAL EQUITY 960,658 996,519
=============== ===============
The financial statements were approved and authorised for issue
by the Directors on 26 April 2018 and were signed on their behalf
by:
Charles Cannon Brookes
Director
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2017
2017 2016
Notes GBP GBP
Net cash outflow from operating activities 11 (34,761) (24,209)
---------------------- ----------------------
Cash flows from financing activities
Share issue proceeds - -
Share issue costs - -
---------------------- ----------------------
Cash flows from investing activities - -
---------------------- ----------------------
Net decrease in cash and cash equivalents (34,761) (24,209)
Cash and cash equivalents at beginning of the year 1,006,342 1,030,551
---------------------- ----------------------
Cash and cash equivalents at end of the year 971,581 1,006,342
=============== ===============
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2017
Share Share Share Retained Total
capital premium Based earnings
Payment
reserve
GBP GBP GBP GBP GBP
At 1
January
2017 266,900 972,140 22,131 (264,652) 996,519
Loss for
year - - - (35,861) (35,861)
Transfer
on
expiry
of
share
options - 22,131 (22,131) - -
--------------------- --------------------- --------------------- --------------------- ---------------------
At 31
December
2017 266,900 994,271 - (300,513) 960,658
============= ============= ============= ============= =============
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
============= ============= ============= ============= =============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2017
1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRSs
The Company's financial statements for the year to 31 December
2017 were authorised for issue by the Board of Directors on 26
April 2018 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 judgments 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 :-
2017 2016
GBP GBP
Fees payable to the Company's
auditors (excluding VAT)
* Audit of the Company's financial statements 10,000 10,000
* Other non-audit services 250 2,750
=============== ===============
Other non-audit services in the current period comprise company
secretarial services.
4. PARTICULARS OF EMPLOYEES
The average number of employees of the Company in the year
was:
2017 2016
Number Number
Directors 3 3
=============== ===============
The Directors' aggregate emoluments
in respect of qualifying services GBP GBP
were:
Other fees (excluding Value Added - -
Tax)
---------------------- ----------------------
- -
=============== ===============
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.
Kreston Reeves LLP, a firm in which Nathan Steinberg acts as a
consultant, provides accounting and taxation services at a cost of
GBP7,500 plus VAT (2016: GBP7,500 plus VAT).
5. INCOME TAX EXPENSE
(a) Analysis of charge in the year
2017 2016
GBP GBP
Current tax:
UK corporation tax based on the
results for the year at 19.25%
(2016: 20%) - -
---------------------- ----------------------
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 19.25% (2016: 20%).
2017 2016
GBP GBP
Loss before tax (35,861) (35,783)
=============== ===============
Loss before tax multiplied
by the standard rate of
corporation tax (6,903) (7,156)
Disallowable expenses - -
Losses carried forward 6,903 7,156
---------------------- ----------------------
Current tax for the year - -
=============== ===============
Total losses carried forward
against future profits 175,245 139,384
=============== ===============
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 2017 2016
Loss for the year (35,861) (35,783)
============== ===============
Weighted average number of shares 2,668,999 2,668,999
=============== ===============
Earnings per share attributed
to ordinary shareholders (1.34)p (1.34)p
=============== ===============
The Company has made a loss and, accordingly the effect of the
share options is anti-dilutive.
7. TRADE AND OTHER RECEIVABLES
2017 2016
GBP GBP
Prepayments 4,185 3,659
Other receivables 2,719 2,171
---------------------- ----------------------
6,904 5,830
=============== ===============
The Directors consider that the carrying value of each class of
receivable approximates its fair value.
8. TRADE AND OTHER PAYABLES
2017 2016
GBP GBP
Accrued expenses 17,827 15,653
=============== ===============
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:
2017 2017 2016 2016
No of No of
shares GBP shares GBP
Ordinary shares of GBP0.10
each 2,668,999 266,900 2,668,999 266,900
=============== =============== =============== ===============
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 Nil
31 December 2017 200,000
31 December 2016
===============
No share options were granted, exercised or forfeited during the
year ended 31 December 2017 or the year ended 31 December 2016. As
the options were not exercised by the final exercisable date of 21
August 2017, they lapsed during the year.
11. CASH FLOWS FROM OPERATING ACTIVITIES
2017 2016
GBP GBP
Loss before taxation (35,861) (35,783)
(Increase)/decrease in receivables (1,074) 16,247
Increase/(decrease) in payables 2,174 (4,673)
---------------------- ----------------------
Net cash outflows from operating
activities (34,761) (24,209)
=============== ===============
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:-
2017 2016
Assets GBP GBP
Cash and cash equivalents 971,581 1,006,342
---------------------- ----------------------
Total financial assets 971,581 1,006,342
=============== ===============
Liabilities
Accrued expenses 17,827 15,653
---------------------- ----------------------
Total financial liabilities 17,827 15,653
=============== ===============
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 Company manages its liquidity requirements by the use of long
and short term cash flow forecasts.
(b) Liquidity risks (continued)
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 2017, 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:
2017 2016
GBP GBP
Financial assets
GBP - cash and cash equivalents 971,581 1,006,342
=============== ===============
(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 1st Floor, 47-48 Piccadilly, London
W1J 0DT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IRMPTMBATMPP
(END) Dow Jones Newswires
April 27, 2018 05:04 ET (09:04 GMT)
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