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AB Dynamics plc
2018 Annual Report & Accounts
For the year ended 31 August 2018
AB Dynamics plc
Holt Road
Bradford on Avon
Wiltshire BA15 1AJ
T: +44 (0)1225 860 200
F: +44 (0)1225 860 201
E: info@abd.uk.com
www.abd.uk.com
Stock code: ABDP
Company Registration No. 08393914
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Table of contents
Officers and professional advisers
Chairman's statement
Strategic report
Directors' report
Chief Financial Officer’s report
Corporate governance statement
Statement of compliance with the QCA corporate governance code
Independent auditor's report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Accounting policies for the consolidated financial statements
Notes to the consolidated financial statements
Company statement of financial position
Company statement of changes in equity
Notes to the Company financial statements
Page
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Image on cover: Advanced Driving Simulator.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Officers and professional advisers
DIRECTORS
Anthony Best, Non-Executive Chairman and Interim Chief Executive Officer
Dr James Mathew Routh, Chief Executive Officer – Appointed 1 October 2018
Timothy John Rogers, Chief Executive Officer – Resigned 28 February 2018
Robert Andrew Leonard Hart, Chief Financial Officer
Matthew Hubbard, Chief Operations Officer
Graham Dudley Eves, Non-Executive Director
Frederick Bryan Smart, Non-Executive Director
Richard Hickinbotham, Non-Executive Director
SECRETARY
Robert Andrew Leonard Hart
REGISTERED OFFICE
AB Dynamics Plc
Middleton Drive
Bradford-on-Avon
Wiltshire
BA15 1GB
Registered number: 08393914 (England and Wales)
INDEPENDENT AUDITOR
Crowe U.K. LLP
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
NOMINATED ADVISER
Cairn Financial Advisers LLP
Cheyne House
62-63 Cheapside
London
EC2V 6AX
BROKER
Cantor Fitzgerald Europe
One Churchill Place
Canary Wharf
London
E14 5RB
BANKERS
Bank of Scotland
LEGAL ADVISER
Pinsent Masons LLP
30 Crown Place
Earl Street
London
EC2A 4ES
REGISTRARS
Share Registrars Ltd
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
PUBLIC RELATIONS ADVISER
IFC Advisory Limited
24 Cornhill
London
EC3V 3ND
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Chairman’s Statement
Results Overview
I am very pleased to report that the Group has delivered another record year of revenue and adjusted profit
that reflects the increased demand for our advanced test and measurement equipment. The development of
new Advanced Driver Assistance Systems (‘ADAS’) technologies and standards and the drive towards
semi-and fully-autonomous vehicles continues to provide a supportive market backdrop for the Group.
For the year ended 31 August 2018 the Group delivered revenues of £37.05m (2017: £24.57m), a growth of
50.8%. Revenue from Driving Robots was at an all-time high at £21.09m (2017: £13.95m) and similarly for
our ADAS products at £11.85m (2017: £6.40m). As expected, revenue from Laboratory Test Systems was
broadly unchanged at £3.75m (2017: £3.80m). Over 98% of our sales were exported to customers based
outside the United Kingdom.
During the year, we increased investment in our facilities, new product development, marketing and personnel.
This investment will ensure that we remain well positioned within our markets to benefit from the research
and development spending of our automotive OEM customers, as they continue to develop vehicles with
improved safety and driving characteristics. Vehicle complexity is increasing rapidly and there is an established
need for faster and more efficient ways to develop these new vehicles. We are seeing significant interest in
our advanced Vehicle Dynamic Simulator (“aVDS”) as the automotive industry continues to adopt virtual
prototyping to complement physical testing with the longer-term goal of developing fully autonomous vehicles.
As a result of increased investment in new products and operational capabilities, adjusted operating margins
(excluding non-cash charges in respect of share-based payments) reduced slightly to 23.1% (2017: 23.9%).
Reported profit before tax increased to £7.95m (2017: £4.47m), a growth of 77.9%. On a fully diluted basis,
I am pleased to report that earnings per share increased by 70% to 35.03p (2017: 20.56p), with the added
benefit of a reduction in the effective corporation tax rate to 11.7% (2017: 12.7%). Further detail and discussion
of our financial performance can be found in the Chief Financial Officer’s Statement on pages 18 to 21.
People
I would like to thank all our employees for their continued hard work and professionalism over the last year.
AB Dynamics is a people business and it is the performance and dedication of our employees that underpins
the strong achievements of the Group. I am pleased that we continue to attract first class engineering talent
and over the last year the number of our employees has increased by ca. 25% to greater than 150.
New Facilities
Our new 3,070 m2 state of the art factory and headquarters in Bradford on Avon is now fully operational. The
facility has met all our expectations and has provided an attractive environment for both our employees and
customers, who regularly spend time with us. We mostly occupied the building during the first quarter of the
financial year and I am pleased to report that the first Suspension Parameter Measurement Machine (“SPMM”)
is now being assembled, following completion of the bespoke and complex foundations in July 2018.
The increased space brings added flexibility and capacity for the manufacture of our Laboratory Test equipment.
We have an increasingly large installed base of equipment and systems across the world and the Group,
in conjunction with its reseller partners, remains focused on providing the high levels of support and service
that our customers expect when working with our increasingly sophisticated products. In Germany, our wholly
owned subsidiary AB Dynamics Europe GmbH recently leased 950m2 of premises in Wetzlar, near Frankfurt,
and we are in the process of optimising the space to meet our immediate needs. This is an important
development for the Group and will enable us to offer improved levels of service and maintenance and
assembly of our products within the German market. We expect the Group to benefit significantly from on-going
investment in this market which will deepen our customer relationships and allow us to capture new business.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Despite the addition of over 4,000 m2 of new space over the last year, we have previously announced the
acquisition of further land on a site adjacent to our new headquarters for an additional factory of approximately
3,000 m2 to meet our future expansion needs. This building is currently in the planning stage and it is
anticipated that the factory will be completed in 2020. The Board continues to review the Group’s capacity
requirements against the expected future growth and remains confident that the business has sufficient
manufacturing capacity until a new facility becomes available.
New Product Development
During the year, we significantly increased the level of resources applied to new product development and in
particular the next phase of development work on our advanced vehicle driving simulator. In June 2018, we
were delighted to announce the first order for the aVDS, valued at over £2m. The simulator is now being
assembled and will be shipped to the customer, a Chinese test house, in FY19.
We recently introduced our new LaunchPad ADAS target product to the market which has been well received
by the industry and we have already received multiple orders. LaunchPad is a highly manoeuvrable, compact
powered platform that has been designed to carry Vulnerable Road User (‘VRU’) targets for ADAS
development and autonomous vehicle testing and is fully compatible with Euro NCAP approved pedestrian,
cyclist and moped dummies. We see LaunchPad as a significant addition to our comprehensive suite of track
testing products where there is rapidly growing demand for complex testing scenarios with multiple moving
objects. We remain the only supplier to offer a full suite of interactive track testing products managed from a
sophisticated and comprehensive single software environment.
The Group continues to work on a number of innovative new products that we expect to bring to the market
in the coming years and we continue to be pleased with the reaction of our customers to these
exciting projects.
Corporate Governance
The Board firmly believes that robust corporate governance and risk management are essential to maintaining
the stability of the Group and its financial health. During the year the Board decided to adopt the new Quoted
Companies Alliance “QCA” Corporate Governance Code and I am pleased to confirm that the Group is in full
compliance with the QCA Code as required under the AIM Rules. I report separately on the Group’s corporate
governance approach and procedures in my Corporate Governance Statement which can be found on page 22
of this annual report.
The Board
At the end of February 2018 Tim Rogers stepped down as Chief Executive Officer and left the Group. I would
like to express my sincere thanks to him for his hard work over the previous five years in developing the
business from a small private company into a mid-sized AIM quoted group.
Dr James Routh was appointed CEO with effect from 1st October 2018 and I am delighted to have him on
board to lead the Group in our next phase of growth. James joins from Diploma PLC where he was responsible
for the International Seals businesses outside North America. James brings extensive experience of delivering
strong growth both organically and through carefully selected, value-enhancing acquisitions.
I assumed the role of interim Executive Chairman when Tim Rogers stepped down and I would like to thank
Rob Hart (CFO) and Mat Hubbard (COO) for their support and commitment during this time and also all our
Non-Executive Directors for their continuing counsel.
Dividend
The combination of strong results, a robust balance sheet and a positive outlook supports an increased
dividend. The Board is recommending a final dividend of 2.2p per ordinary share, payable on 14 December
2018, subject to shareholder approval at the AGM. The ex-dividend date will be 22 November 2018 and the
record date will be 23 November 2018. The total dividend for the year will therefore be 3.665p representing
an increase of 10% over the prior year.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Outlook
Since its formation in 1982, Anthony Best Dynamics has gone through many changes to establish itself as a
market leader in its targeted segments within the automotive R&D market. Our customers remain very active
in introducing ever more complex ADAS equipment into their vehicles and in the development of semi- and
fully-autonomous vehicles. Vehicle safety standards continue to evolve under Euro NCAP and NHTSA and
their safety ratings are expected to continue to include more and more ADAS and crash avoidance systems,
such as future Autonomous Emergency Braking and Autonomous Emergency Steering developments.
Despite our very strong growth, order intake has continued to run ahead of sales and this has provided the
Group with a healthy order book into our new financial year and, as usual, visibility into our third quarter.
Against this pleasing backdrop, our progress continues to require ever greater investment in systems and our
operational capability to ensure that we are fully capable of supporting current and future growth. In the coming
year we expect to make further investment in new product development, marketing, service and support, our
growing overseas footprint and, of course, our people, whose skills and energy remain so important to our
future success. Inevitably this investment will provide some constraint to our operating margin, but the Board
remains confident that, under the leadership of our new CEO, we are positioned to deliver a year of
solid progress.
Tony Best
Non-Executive Chairman
13 November 2018
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Strategic report for the year ended 31 August 2018
The Directors present the Strategic Report of AB Dynamics Plc for the year ended 31 August 2018.
Our Business – Providing testing solutions to the global automotive market
The Group supplies advanced testing equipment to the global automotive industry, for both R&D and
production quality control. The Company’s products help the automotive industry to design vehicles that are
better and safer for all road users by providing engineering solutions and testing machinery to test and develop
the following:
● Driving safety systems – often referred to as Advanced Driver Assistance Systems (ADAS). These include
systems such as Automatic Emergency Braking (AEB) and Lane Keeping Assist (LKA).
● Autonomous Vehicle driving technology – Evaluating and testing the technologies that will enable future
driverless vehicles to become viable and commonplace.
● Suspension, Chassis, Brake and Steering systems – for Compliance, Dynamics, and Durability.
Track testing – Driving robots
Advanced Vehicle Driving Simulator(aVDS)
Track testing – ADAS LaunchPad target carrier.
Track testing - ADAS Guided Soft Target
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Overview of the customer base
Our customers are typically automotive companies and associated industries engaged in R&D for the
development of the technology for the areas shown above, they include:
● Major Automotive OEMs – Large multinational automotive car companies with central and regional
facilities serving both global and local research and testing needs. All of the top 25 car companies
routinely use the Company’s equipment for the development of their products.
● Smaller Regional OEMs – Notably China that has a very large emerging indigenous car and truck market,
requiring solutions that are appropriate for its particular technical demands for that region.
● New technology entrants – There are a significant number of new technology companies entering the
automotive sector. They may be developing their own vehicles or developing technologies to be supplied
to existing OEMs.
● Tier One suppliers – providing the technology and products to the OEMs to package into their vehicles
such as steering and braking systems.
● Testing houses – Especially Euro NCAP laboratories who are Verifying and Homologating ADAS systems
for the OEMs.
● Design consultancies – providing lead technical inputs to the OEMs and Tier One suppliers.
Market Drivers
The Company invests in new product development and services and support to meet the following four key
market drivers:
1.
Increases in global spending on automotive R&D
R&D spending in the automotive industry continues to be very diverse in nature, not least to keep pace with
ever-growing demands for new technologies as the industry deals with new challenges in the market. Many
traditional car manufacturers are now starting to consider themselves to be “mobility providers.” We believe
it is likely that vehicle autonomy will be a key feature of future mobility technology.
The top automotive OEMs have been consistently among the largest R&D spenders for many years.
Volkswagen, Toyota, GM, Ford, Daimler and Honda all feature in the top 20 Global R&D spenders of 2017. In
addition, new entrants to the automotive markets are also spending considerable sums of money as well as
the plethora of smaller and younger automotive manufacturers in China.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Table 1. Automotive OEMs continue to outspend most industries globally on R&D
2.
Increasing role of computer aided design in new product development
The auto industry is constantly looking for more efficient ways to design new vehicles to shorten development
times and reduce cost. Greater use of computer aided design and modelling has emphasised the need for
more accurate and reliable vehicle data on which mathematical car models can be assessed. The Group’s
track testing products allow customers to undertake testing for both vehicle dynamics and ADAS applications.
The track test systems provide repeatable, accurate and reliable vehicle data on which mathematical vehicle
models can be assessed.
Realtime vehicle models developed with the assistance of ABD’s track testing systems can also be used on
ABD’s driver-in-the-loop vehicle driving simulator to enable human drivers to evaluate vehicle features in a
virtual environment.
3. The advancement of new ADAS technologies and standards
Pressure from Euro NCAP and NHTSA has challenged vehicle manufacturers across the World to offer the
best possible technology, protecting not only car occupants of all ages but also increasingly addressing the
safety of other more vulnerable road users.
Euro NCAP has announced its strategic Roadmap to 2025 which details that testing will rely on vehicle targets
like the Guided Soft Target and other ADAS carriers developed by the Company. They are also proposing a
move into a more scenario-based rating scheme, which will include wider use of simulation to provide a
broader and more robust assessment.
“Euro NCAP expects AEB technology to continue to evolve in the years ahead and has identified three priority
areas where the rating scheme will be updated to reflect the progress in the industry”
Euro NCAP 2025 Roadmap
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Euro NCAP has announced its strategic Roadmap to 2025 which details that testing will rely on vehicle targets
like the Guided Soft Target and other ADAS carriers developed by the Company. They are also proposing a
move into a more scenario-based rating scheme, which will include wider use of simulation to provide a
broader and more robust assessment. An assessment of automated driving has been proposed, this would
fall outside of the main star rating scheme. The report discussed how a driver-initiated in-lane steering support
could be initiated earlier in the roadmap than the more complex Autonomous Emergency Steering, expected
in 2022.
Further developments in Autonomous Emergency Braking (expected in 2020) have been proposed to address
cross-junction, head-on and reversing accidents.
“Euro NCAP has clearly recognised that primary safety has an increasingly important role to play. As the rate
of development in this area accelerates, the safety rating is expected to include more and more ADAS and
crash avoidance technologies, introduced by vehicle manufacturers.”
Euro NCAP 2025 Roadmap
4. Drive towards autonomous vehicles and the demand for new testing technology
Original-equipment manufacturers (OEMs) and their suppliers now see ADAS and autonomous vehicle
features as a key product differentiator.
Evolution of technologies that enable today’s ADAS technology will be used to create fully autonomous
vehicles in future. We believe that this is now a major focus of research and development, both at OEMs and
by new technology entrants to the automotive sector.
There remains some confusion in the industry as to what level of automation is desired and indeed the
technology that will be required. The International and national legal framework on this matter is in its infancy.
Our Products and Solutions
The Company provides its customers with the testing tools for generating accurate and repeatable data at all
stages of their vehicle development cycle, providing testing solutions that shorten the customer’s development
time and introduction of new models to the market. The Company is able to deliver testing solutions through
extensive inhouse technical competencies in the areas of mechanical and electronic design, real-time and
HMI (human machine interface) software design and control algorithm development.
The Company has close working relationships with key customers which helps ABD to understand future
automotive testing requirements and shape its future product and solutions offerings to the market. The
Company also perceives that increasingly complicated vehicle testing will require automotive manufacturers
to seek more assistance with undertaking tests and this provides additional opportunities to offer services and
increase customer contact.
Our two main business product areas are Laboratory Testing and Track Testing. However, many key customers
see AB Dynamics as being capable of providing a suite of solutions to assist in their new product development
(as shown below).
Laboratory Testing – Suspension Parameter Measurement Machine (SPMM)
Sales of the Suspension Parameter Measurement Machine (“SPMM”) have been broadly flat this year. There
is a steady worldwide demand for machines that can measure the suspension properties of road vehicles.
Whilst the product is sold into a mature market, we continue to receive sales from new customers in emerging
markets and see an increasing demand from customers who are looking to replace aging machines and/or
increase testing capacity.
ABD continues to invest in strategically developing the capabilities of the SPMM to improve its performance
as well as reduce manufacturing cost.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Laboratory Testing – Advanced Vehicle Driving Simulator (aVDS)
The Company has entered the market for designing, supplying, and supporting vehicle driving simulators.
The aVDS is a ‘next generation’ vehicle driving simulator that is being developed by AB Dynamics in
partnership with Williams Advanced Engineering. The system provides automotive OEMs and Tier 1 suppliers
with the ability to reduce the cost and time of development of new vehicle systems.
The aVDS is designed to integrate seamlessly with the Group’s portfolio of vehicle development tools that
include our SPMM used for the measurement of vehicle kinematics and compliance characteristics and our
ADAS test systems, used also for track based validation of a vehicle’s active safety measures.
The aVDS provides a fully immersive and realistic environment that enables the test driver to ‘drive’
mathematically modelled vehicles in the virtual world.
The Company received its first order for the aVDS in 2018 and expects sales to develop sustainably over the
coming years. The aVDS is believed to be strategically important to the future revenue stream of the Company.
There is strong competition in the area of driving simulation and ABD will need to invest further to ensure that
the aVDS is commercially successful.
Track testing – Driving Robots and ADAS platforms
Track testing now represents approximately 90% of our revenue and continues to be the most strategically
important part of our business. The Company continues to develop its track testing product portfolio offering
a wide range of driving robots to meet customers requirements. The Company has also recently expanded
the range of ADAS platforms with the introduction of LaunchPad.
The LaunchPad is a highly manoeuvrable, compact powered platform that has been designed to carry
Vulnerable Road User (‘VRU’) targets for ADAS development and autonomous vehicle testing. With a
maximum speed of 50kph and full path following capability, The LaunchPad is a significant addition to our
sophisticated and comprehensive suite of track testing products that allows for complex testing scenarios with
multiple moving objects. We remain the only supplier offering a full suite of interactive track testing products.
The Company is also strategically developing its software offering to meet the future testing requirements.
The Company anticipates that the testing of autonomous technology will become more complicated and our
software offering needs to be developed to meet the future needs of our customers.
Some manufacturers now have vehicles that can be controlled electronically without the need for robotic
actuators. ABD’s Flex-0 electronic vehicle controller allows customers to control these vehicles from ABD’s
software suite that allows the motion of multiple vehicles and ADAS platforms to be synchronised. Whilst
vehicles continue to have steering wheels and pedals, ABD expects sales of physical robot actuators to
continue as there will always be a need to measure vehicles and control them in the same way as a
human driver.
TMS now accounts for around 1% of our revenue. The Company has over 30 years of experience designing,
deploying and supporting production testing systems where noise/vibration measurements are used as primary
indicators of product quality.
Areas of Investment:
Investment in customer support
As mentioned in previous Annual Reports, to maintain and build on the Company’s reputation for good
customer service and to reflect the fact that more systems are out in the field than ever before, additional
customer technical support teams are required. The Company is looking to establish more international
regional technical and sales support hubs as well as growing the support team at its UK headquarters. The
Company wishes to commit to its customers and long-term future by continuing to carry out significant
investment this area.
The ADAS platform products typically have a higher requirement for replacement parts. Our customers expect
replacement parts to be available at short notice. We are investing in inventories of spare parts to be stored
at regional offices as well as processes to manage the delivery of spare parts to customers.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Investment in new products
AB Dynamics is further expanding its product range to offer innovative testing solutions for customers.
The Company year-on-year spend on R&D continues to grow and seeks to develop and introduce new and
novel ranges of ADAS testing products, as well as upgrading existing products to meet the new demands for
sophisticated testing regimes which are now being employed by its customers seeking to develop better and
safer future vehicles.
Investment in facilities, infrastructure, and inventory
The Company has invested in and continues to expand its manufacturing and R&D facilities to meet expected
future demand. The facilities also need to reflect the image that the Company wishes to portray to its customers
as a designer and manufacturer of high quality test equipment. In the next 12 months, the Company hopes
to begin the construction of a new 3,000m2 facility designed to be flexible so that it can be adapted to
future needs.
The World is facing a shortage of electronic components and other items that are typically used in robotics
and process automation. The Company has taken the decision to increase inventory of raw materials to reduce
the risk of being unable to supply products to customers.
Investment in People
The Group recruits high calibre personnel across all roles within the Company. ABD offers attractive
remuneration packages to staff which have proved to be successful to ensure that our staff are motivated.
The Company also operates a profit related bonus scheme so that staff share in the financial success of the
business. Staff turnover is extremely low and customers benefit through engineering staff having extensive
current and historic product knowledge as well as customer specific knowledge. The quality of support offered
to customers is of paramount importance to customer retention.
The Company ensures that staff pass through a rigorous interview process prior to being offered a role at the
Company. We recruit from local universities with a high proportion of graduate engineering staff coming from
the University of Bath. The Company recently passed the threshold of 150 direct employees.
We have also expanded our apprenticeship program for school leavers to ensure that we have sufficient
numbers of technically competent technicians to meet future requirements.
Continued improvements in supply chain and product fulfilment
The Group has generated improvements in supply chain and product fulfilment following a reorganisation of
the mechanical and electrical production units, resulting in better utilisation of resources, shortening delivery
times and increasing units delivered. The Company is also investing in creating business management
software systems that are able to cope with the particularly complex needs of the business.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Principal risks and uncertainties facing the business
Principal risks and uncertainties
Set out below are certain risk factors which could have an impact on the Group’s long term performance.
The factors discussed below should not be regarded as a complete and comprehensive statement of all
potential risks and uncertainties facing the Group.
1. Risks relating to the business and operations of the Group
The Group is reliant on key executives and personnel
The Group’s business, development and prospects are dependent upon the continued services and
performance of its Directors and other key personnel. The experience and commercial relationships of
the Group’s personnel help provide the Group with a competitive advantage. The Directors believe that
the loss of services of any existing key executives, for any reason, or failure to attract and retain necessary
additional personnel, could adversely impact on the business, development, financial condition, results
of operations and prospects of the Group. However, several members of staff have worked for the Group
for over 20 years and the Group continues to recruit and develop intelligent and motivated individuals. In
addition, key man insurance exists for all key personnel in the Group, save for Anthony Best.
The Group may not successfully manage its growth
Expansion of the business of the Group may place additional demands on the Group’s management,
administrative and technological resources and marketing capabilities, and may require additional capital
expenditure. If the Group is unable to manage any such expansion effectively, then this may adversely
impact the business, development, financial condition, results of operations, prospects, profits, cash flow
and reputation of the Group.
The Group’s growth and future success will be dependent to some extent on the successful completion
of such expansion strategies proposed to be undertaken by the Group and the sufficiency of demand for
the Group’s products. The execution of the Group’s expansion strategies may also place a strain on its
managerial, operational and financial reserves. Should the Group fail to implement such expansion
strategies, or should there be insufficient demand for the Group’s products and services, the Group’s
business operations, financial performance and prospects may be adversely affected.
Potential requirement for further investment
The Group may require additional capital in the future for expansion, its activities and/or business
development, whether from equity or debt sources. There can be no guarantee that the necessary funds
will be available on a timely basis, on favourable terms, or at all, or that such funds if raised, would be
sufficient. If additional funds are raised by issuing equity securities, material dilution to the existing
shareholdings may result. The level and timing of future expenditure will depend on a number of factors,
many of which are outside of the Group’s control. If the Group is not able to obtain additional capital on
acceptable terms, or at all, it may be forced to curtail or abandon such expansion, activities and/or
business development which could adversely impact upon the Group, its business, development, financial
condition, operating results or prospects.
Litigation
Legal proceedings, with or without merit, may arise from time to time in the course of the Group’s
business, including in connection with intellectual property rights. The Directors cannot preclude litigation
being brought against the Group and any litigation brought against the Group could have a material
adverse effect on the financial condition, results or operations of the Group. The Group’s business may
be materially adversely affected if the Group and/or its employees or agents are found not to have met
the appropriate standard of care or exercised their discretion or authority in a prudent or appropriate
manner in accordance with accepted standards.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Internal controls
Future growth and prospects for the Group will depend on its management’s ability to manage the
business of the Group and to continue to expand and improve operational, financial and management
information and quality control systems on a timely basis, whilst at the same time maintaining effective
cost controls. Any failure to expand and improve operational, financial and management information and
quality control systems in line with the Group’s growth could have a material adverse effect on the Group’s
business, financial condition and results of operations.
The Group is reliant on overseas sales representatives, agents and distributors
The Group has appointed a number of sales representatives, agents and distributors for certain of its
products in overseas jurisdictions, including the US, Canada, India, Japan, Malaysia, Mexico, Germany,
China and Taiwan. However, for the majority of these individuals, there are no formal written terms of
engagement. Terms concerning, inter alia, notice and termination are therefore uncertain, meaning that
there are potential issues regarding the Group’s ability to sell and distribute in certain jurisdictions should
such sales representatives, agents and distributors cease to work with the Group at short notice. In
addition, provisions as to termination payments and/or compensation are also uncertain, meaning the
Group is at risk of being liable to pay uncapped compensation to these individuals, either under the
Commercial Agents (Council Directive) Regulations 1993 or local law equivalent, as well as possible
common law damages if statutory minimum notice periods are not complied with.
Uninsured liabilities
The Group may be subject to substantial liability claims due to the technical nature of its business and
products or for acts or omissions of its sales representatives, agents or distributors. The Group can give
no assurance that the proceeds of insurance applicable to covered risks will be adequate to cover
expenses relating to losses or liabilities. Accordingly, the Group may suffer material losses from
uninsurable or uninsured risks or insufficient insurance coverage.
Competitors
While the Directors are unaware of any single competitor that provides the range of products and services
offered by the Group, there are a number of competitors for each of the Group’s product categories. The
acquisition of market share by any of these competitors may have a material adverse impact on the
Group’s revenues and profitability.
Limited IP protection
The Group does not have a formal policy on intellectual property. While the Directors believe that the
barriers to entry in its market are high, the ability of a competitor to develop similar products to those
manufactured by the Group may have a material adverse impact on the Group’s revenues and profitability.
2. Risks relating to the market in which the Group operates
Research & development budgets of global automotive corporations can get squeezed or
significantly reduced
The global automotive market is highly competitive and continues its recovery from the significant
downturn in 2008. Competition is expected to intensify further in light of continuing globalisation in the
industry, possibly resulting in industry reorganisation. Factors affecting competition include product quality
and features, safety, reliability, fuel economy, the amount of time required for innovation and development,
pricing, customer service and financing terms. Increased competition may lead to lower vehicle unit sales,
which may result in downward pressure on research and development budgets. Furthermore, adverse
issues arising in the automotive industry or in the global economy may significantly reduce the level of
these research and development budgets.
The Group’s ability to respond adequately to changes in the automotive industry and to maintain its
position as a leading technology supplier will be fundamental to its future success in existing and new
markets and to maintain its market share. There can be no assurance that the Group will be able to
compete successfully in the future.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Key suppliers
Over the past 30 years, the Group has built up a reliable supplier base for its externally sourced
components. At present, a significant proportion of these components are supplied by certain key
suppliers. While the Group uses its design capabilities to dual source components, there remains a risk
of material impact in the short term if one of its key suppliers were to fail.
In certain instances, the Group has taken out an insurance policy to protect its profits should a key supplier
be unable to supply for whatever reason.
Exposure to exchange rate fluctuations
The Group is exposed to exchange rate fluctuations, principally the GBP, the US$, the Euro and, to a
lesser extent, the Japanese Yen and Chinese RMB. Changes in foreign currency exchange rates may
affect the Group’s pricing of products sold and materials purchased in foreign currencies.
The Directors believe that its use of certain derivative financial instruments, including foreign currency
forward contracts used to mitigate the impact of commitments denominated in foreign currencies, reduces
the Group’s exposure to this risk.
Exposure to economic cycle
Market conditions may affect the value of the Group’s share price regardless of operating performance.
The Group could be affected by unforeseen events outside of its control including economic and political
events and trends, inflation and deflation, terrorist attacks or currency exchange fluctuation. The combined
effect of these factors is difficult to predict and an investment in the Group could be affected adversely by
changes in economic, political, administrative, taxation or other regulatory factors in any jurisdiction in
which the Group may operate. Deterioration in the economic climate could result in a delay or cancellation
of clients’ projects. The Group has considered the uncertainty regarding Brexit and how this might impact
trading going forward. The Group believes it is well placed to continue to trade within Europe and has put
measures in place to ensure this continues by opening ABD Europe GmbH.
Force majeure events
There is a risk that the markets in which the Group currently operates could be affected by events such
as war, civil war, riot or armed conflict, acts of terrorism, floods, explosions or other catastrophes,
epidemics or quarantine restrictions, which are outside of the Directors’ control and generally not covered
by insurance. Such events could have a variety of materially adverse consequences for the Group,
including risks and costs related to decline in revenues or reputational damage, and injury or loss of life,
as well as litigation related thereto.
Laws and regulations
The Group is subject to the laws of the United Kingdom. Existing and future legislation and regulation
could cause additional expense, capital expenditure and restrictions and delays in the activities of the
Group, the extent of which cannot be predicted. No assurance can be given that new laws, rules and
regulations will not be enacted, or existing laws, rules and regulations will not be applied in a manner
which could limit or curtail certain of the Group’s activities or services. In addition, the Group may have
to defend itself against legal proceedings which could have an adverse effect on trading performance
and, in turn, future profits. The Group also exports its products overseas and therefore its exports may
be subject to existing and future overseas legislation and regulation and similar risks therefore also
applying in relation to such overseas existing and future legislation and regulation.
Approved by the board on 13 November 2018
Matthew Hubbard
Director
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Directors’ report
The Directors present their report and the audited financial statements of AB Dynamics plc for the year ended
31 August 2018.
Dividends
During the year an interim dividend of £0.01465 per share was paid and the Board has proposed a final
dividend of £0.022 per share.
Research and development
The Group continues to invest in research and development associated with the design and manufacture of
test equipment for vehicle suspension, steering, noise and vibration. Costs attributed to this process have
been charged to profit or loss to the extent that they do not meet all of the criteria for capitalisation as set out
in IAS 38 ‘Intangible Assets’.
Research and development costs expensed is separately identified and disclosed in Note 5.
Financial instruments
The Company’s principal financial instruments comprise cash at bank, bank facilities, and various items within
current assets and current liabilities that arise directly from its operations including foreign currency forward
contracts. The Group’s financial risk management objectives and policies are set out in note 19 to the financial
statements.
Future Developments
Please see the Strategic Report for details of future developments.
Directors
The following directors have held office during the year:
Anthony Best
Dr James Mathew Routh Appointed 1 October 2018
Timothy John Rogers Resigned 28 February 2018
Robert Andrew Leonard Hart
Graham Dudley Eves
Frederick Bryan Smart
Matthew Hubbard
Richard Hickinbotham
At the forthcoming Annual General Meeting, and in accordance with the Company’s articles of association,
Dr James Routh as a Director appointed by the Board after the conclusion of the Company’s previous Annual
General Meeting is required to retire and stands for re-appointment. Anthony Best and Graham Dudley Eves
will also retire by rotation and being eligible will offer themselves for re-election.
Conflicts of interest
Under the articles of association of the Company and in accordance with the provisions of the Companies Act
2006, a director must avoid a situation where he has, or can have, a direct or indirect interest that conflicts,
or possibly may conflict with the Company’s interests. However, the directors may authorise conflicts and
potential conflicts, as they deem appropriate. As a safeguard, only directors who have no interest in the matter
being considered will be able to take the relevant decision, and the directors will be able to impose limits or
conditions when giving authorisation if they think this is appropriate. During the financial year ended 31 August
2018, the directors have authorised no such conflicts or potential conflicts.
Directors’ indemnities
The company has made qualifying third party indemnity provisions for the benefit of its directors which were
made during the year and remain in force at the date of this report.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Directors’ interests in shares
Directors’ interests in the shares of the Company, including family interests, were as follows:
Ordinary shares of 1p each
Anthony Best 6,247,107
Robert Andrew Leonard Hart 13,012
Matthew Hubbard 109,649
There have been no changes in the Directors’ shareholdings since the year end.
Directors’ interests in share options
Exercise As at Exercised As at
price 1 September during 31 August Earliest date Latest date
(pence) 2017 the year 2018 for exercise for exercise
Robert Andrew Leonard Hart 395.00 100,341 – 100,341 11 July 2017 11 July 2026
Matthew Hubbard 395.00 65,119 – 65,119 11 July 2017 11 July 2026
Directors’ remuneration and service contracts
The remuneration paid to the directors during 2018 is shown below:
Short
term Post Share
benefits employment based 2018 2017
(Incl. bonus) benefits payments Total Total
£ £ £ £ £
Anthony Best 94,409 – – 94,409 76,785
Timothy John Rogers 178,818 7,675 37,160 223,653 307,261
Robert Andrew Leonard Hart * 165,924 12,000 49,466 227,390 265,236
Matthew Hubbard 162,620 12,000 32,102 206,722 202,288
Graham Dudley Eves 38,000 – – 38,000 30,000
Frederick Bryan Smart 38,000 – – 38,000 30,000
Richard Hickinbotham 38,000 – – 38,000 –
–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––
715,771 31,675 118,728 866,174 911,570
–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––
–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––
* Highest paid director
Other substantial shareholdings
As at 12 November 2018, being the latest practicable date before the issue of these financial statements, the
Company had been notified of the following shareholdings which constitute 3% or more of the total issued
shares of the Company.
Ordinary
shares Shareholding
No. %
Anthony Best 4,647,107 24.0
Naemi Best 1,500,000 7.7
Castlefield CFP SDL UK Buffetology Fund General 1,315,000 6.8
Anne Middleton 1,200,000 6.2
Cannacord Genuity Group Inc 971,893 5.0
Liontrust Investment Management 964,690 5.0
Hargreaves Landsdown Asset Management 933,775 4.8
Tellworth Investments 742,818 3.8
Amati AIM VCT plc 652,750 3.4
Page 15
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report, Directors’ Report, any other surround
information and the group and parent company financial statements in accordance with applicable law and
regulations. Company law requires the Directors to prepare group and parent company financial statements
for each financial year. Under that law, they have elected to prepare the group financial statements in
accordance with International Reporting Standards (IFRSs) as adopted by the European Union (EU) and
applicable law and have elected to prepare the parent company financial statements in accordance with UK
Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
Under Company law, the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss
for that year. In preparing each of the group and parent company 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 applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
● prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the group and the parent company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the parent company’s transactions and disclose with reasonable accuracy at any time the financial position
of the parent 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 parent company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other
information included in the Annual Report and Financial Statements is prepared in accordance with applicable
law in the United Kingdom.
The maintenance and integrity of the AB Dynamics PLC web site is the responsibility of the directors; the work
carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
Provision of information to auditors
Each of the persons who are directors at the time when this Directors’ Report is approved has confirmed that:
● so far as that director is aware, there is no relevant audit information of which the Company’s auditors
are unaware; and
● that director has taken all the steps that ought to have been taken as a director in order to be aware of
any information needed by the Company’s auditors in connection with preparing their report and to
establish that the Company’s auditors are aware of the information.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Auditor
The auditor, Crowe U.K. LLP, will be proposed for re-appointment in accordance with Section 489 of the
Companies Act 2006.
This report was approved by the board and signed on its behalf.
Tony Best
Director
13 November 2018
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Chief Financial Officer’s report
RRevenue £m
24.57
20.47
16.52
12.17
13.85
8.91
37.05
Revenue £m
The Group’s revenue for the financial year ended 31
August 2018 increased by 51% to £37.05m from
£24.57m in 2017.
2012
2013
2014
2015
2016
2017
2018
GGross Margin %
27.7
25.7
29.1
32.3
31.2
32.2
33.9
Gross Margin %
Gross margins were 33.9% (2017:32.2%), reflecting
the change in sales mix and the reallocation of
certain labour costs.
2012
2013
2014
2015
2016
2017
2018
OOperating Profit (Adjusted) £m
8.54
5.87
1.80
1.91
2.68
4.65
3.79
2012
2013
2014
2015
2016
2017
2018
Operating Profit (Adjusted) £m
Adjusted operating profit increased to £8.54m from
£5.87m in 2017, an increase of 46% driven again by
strong demand for Track Testing products, notably
for the testing of Advanced Driver Assistance
Systems (ADAS). The operating profit is adjusted to
exclude a £0.659m (2017: £1.464m) non-cash
charge made in respect of share based payments.
These costs are excluded due to their variable
nature, as demonstrated by the values from both
2017 and 2018 the fluctuation in these would not
allow for a true comparison year on year.
Administrative Expenses Bridge
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Turnover by Region £m
0.6
5.1
18.9
12.5
UK
North America
Europe
Rest of the world
Turnover by Region £m
Over 98% of sales are exported to customers based
outside the United Kingdom.
Increase/
2018 2017 (Decrease)
Region £m £m %
UK 0.62 1.17 (53)
North America 5.09 3.30 54
Europe 12.48 8.97 39
(excluding UK)
Rest of the world 18.86 11.13 69
Total Assets £m
48.19
35.52
Total Assets £m
Total assets increased by approximately 36% during
the year. Further details can be found on page 33 of
the financial statements.
11.62
13.59
6.95
21.33
16.91
2012
2013
2014
2015
2016
2017
2018
EEmployees – Monthly Average
39
47
56
64
128
97
78
Employees – Monthly Average
The average number of employees increased by
31 during the year. At the end of the year the
average headcount was 128.
At 31 August 2018, the Group’s total number of
employees stood at 149 (2017: 120).
2012
2013
2014
2015
2016
2017
2018
TTurnover by Product £m
Turnover by Product £m
0.36
3.75
11.85
Driving Robots
21.09
ADAS
Laboratory Test
equipment
TMS
Increase/
2018 2017 (Decrease)
Product £m £m %
Driving Robots 21.09 13.95 51
ADAS Testing 11.85 6.40 85
Laboratory Test 3.75 3.80 (1)
TMS 0.36 0.42 (14)
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Cash Flow
Cash generated from operations in 2018 totalled £9.94m (2017: £2.12m).
Stock levels have increased in line with increased activity but also to support increasing demands for shorter
lead times.
Year-end cash and cash equivalents increased by £6.3m to £15.9m (2017: £9.6m).
Further details can be found on page 46 of the financial statements.
Capital Expenditure
Capital expenditure on tangible assets was £3,698,479 (2017: £8,040,906) and included approximately £2.5m
of costs incurred in respect of the new facility. The charge for depreciation increased by £196,138 to £462,994
(2017: £266,856).
The multiple of net capital expenditure to depreciation was 7.9 times (2017: 30.1 times).
Interest Received
Bank interest received was £63,167 (2017: £65,257).
Trade Debtors
Trade debtors have reduced by £0.6m to £6.5m.
Trade and other payables
Trade creditors have increased by £0.9m to £2.4m (2017: £1.5m)
Other payables have increased due to significant increases to deferred income on increased sales. Accrued
bonuses have also increased because of increased profits.
Taxation
The effective tax rate for the Group in 2018 was 11.7% (2017: 12.7%) principally as a result of sizeable R&D
and Patent Box tax credits coupled with significant capital allowances claimed on the new facility.
Earnings per Share
Basic earnings per share was 36.29p (2017: 20.83p). This calculation is based on the profit after tax of £7.01m
and 19,330,494 shares, being the weighted average number of shares in issue during the year.
Diluted earnings per share were 35.03p (2017: 20.56p).
On a fully diluted basis the adjusted EPS increased by over 35% to 38.3p (2017: 28.3p)
Further details of the earnings per share calculations are provided in note 8 to the financial statements.
Working Capital
Working capital (net current assets) increased by £5.78m to £23.41m (2017: £17.63m).
Return on Capital Employed
The return on capital employed rose in the current year to 21.3% from 15.6% in 2017. Our definition of ROCE
is based on operating profit before tax as a return on the total assets less current liabilities.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Foreign Exchange Risk
The Group continues to monitor the need for forward contracts depending upon the level of natural hedging
achievable and the extent to which surplus currencies are expected to be generated.
The most important foreign currencies for the Group remain the Euro and the US dollar and the relevant rate
of exchange for the consolidated income statement were:
2018 2017
Euro 1.118 1.083
US dollar 1.297 1.288
Exchange losses in the year amounted to £77,074 compared to a gain of £404,835 in 2017.
This was predominantly due to £259,796 of translation gains arising in FY17 reversing in FY18.
Share Capital and Reserves
The Group’s issued share capital at the year-end totalled 19,536,534 ordinary shares (2017: 19,111,946).
A total of 424,588 share options were exercised during the year.
Order Intake
The Board considers order intake and the resultant period end order book as a critical guide to the Group’s
ability to achieve its profit targets. As it currently stands, the order book takes us into the third quarter of FY19.
Dividends
The Board has proposed a final dividend of 2.20p per share. Together with the interim dividend of 1.465p per
share this gives a total Ordinary dividend of 3.665p for the year (2017: 3.331p).
Dividend cover, defined as the ratio of underlying earnings per share to dividend per share, was 9.77 times
(2017: 6.25 times). If approved by shareholders, the final dividend will be paid to shareholders on the register
at 23 November 2018.
The Group’s policy is to pay a progressively increasing dividend provided the Group retains sufficient cash
with which to pursue its R&D and business development policies.
Full Year Dividend
2.500
2.750
3.025
3.331
3.665
P
R
O
P
O
S
E
D
2014
2015
2016
2017
2018
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Corporate governance statement
Board structure
During the year the Board consisted of seven directors of which three were executive and four non-executive.
During the year Tony Best acted as both Chief executive officer and Interim Chairman and was therefore not
considered independent.
The Board meets as and when required and is satisfied that it is provided with information in an appropriate
form and quality to enable it to discharge its duties. All directors are required to retire by rotation with one third
of the board seeking re-election each year.
The board has undertaken a formal assessment of the auditor’s independence and will continue to do so at
least annually. This assessment includes:
● a review of non-audit services provided to the Company and the related fees;
● a review of the auditor’s own procedures for ensuring the independence of the audit firm and parties and
staff involved in the audit; and
● obtaining confirmation from the auditor that, in their professional judgement, they are independent.
Internal controls
The Board is responsible for the Company’s system of internal controls and for reviewing their effectiveness.
The internal controls are designed to ensure the reliability of financial information for both internal and external
purposes. The Directors are satisfied that the current controls are effective with regard to the size of the
Company. Any internal control system can only provide reasonable, but not absolute assurance against
material mis-statement or loss.
Given the size of the Company, the Board considers there is currently no need for an internal audit function.
Tony Best
Director
13 November 2018
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Statement of compliance with the QCA corporate governance Code
Establish a strategy and business model which promotes long-term value for shareholders
The Company’s strategy is shaped by the executive board and is set out in the 2018 Annual Report.
Our Business – Providing test solutions to the Global Automotive Test Market.
This is achieved by employing high calibre individuals and developing a global customer base. The Company’s
understanding of future automotive testing requirements enables it to develop suitable products and
sustainable shareholder returns.
The Strategic Report further explains the Company’s business model and strategy.
The Strategic Report also includes a number of Risks and Uncertainties identified by the board which also
represent challenges. We also explain how we are addressing them.
Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board is responsible for the Group’s system of internal controls and for the reviewing its effectiveness.
The system is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s strategic
objectives and can only provide reasonable but not absolute assurance against material misstatement or loss.
The Board monitors financial controls through the setting and approval of an annual budget and the regular
review of monthly management accounts. Management accounts contain a number of indicators that are
designed to reduce the possibility of misstatement in the financial statements.
The Group has in place defined authorisation levels for expenditure, the placing of orders and signing
authorities. The daily cash movements of the Group are reconciled and monitored by the finance department.
The Group’s cash flow is also monitored by management.
Each year on behalf of the Board, the Audit Committee reviews the effectiveness of these systems. This is
achieved primarily by a comprehensive review of risks which cover both financial and non-financial issues
potentially affecting the Group and from discussions with the external auditor. The Board is not aware of any
significant failings or weaknesses in the system of internal control. On the recommendation of the Audit
Committee, the Board has determined that an internal audit function is not required due to the small size of
the administrative function and the high level of Director Review and authorisation of transactions. The Board
intends to keep this matter under review as the Group develops.
Where the management of operational risk requires outside advice, this is sought from expert parties.
The Group has put measures in place to protect itself against supplier failure including dual sourcing, insurance
and sufficient stock.
The Group has developed a diversified customer base across multiple geographic locations.
The Board of the Company’s wholly owned subsidiary, Anthony Best Dynamics Ltd, meet on a regular basis
and monitors business risk as part of its agenda.
Maintain the board as a well-functioning, balanced team led by the chair
The purpose of the Board is to ensure that the business is managed for the long-term benefit of all
shareholders, whilst at the same time having regard for employees, customers, suppliers and our impact on
the environment and the communities in which we operate.
The full Board is responsible and accountable to the shareholders for the management and success of the
Group and to provide effective controls to assess and manage risks in the Company.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Following the departure of the CEO in February 2018 and the appointment of a successor which was made
on 1 October 2018, Tony Best has acted as Interim Chief Executive Officer and Non-Executive Chairman.
The Board therefore currently comprises Mr Best, two additional executive directors and three independent
non-executive directors.
The Board is supported by the Audit, Remuneration and Nominations Committees, each of which has access
to information, resources and advice that it deems necessary, at the company’s cost, to enable the committee
to discharge its duties. These duties are set out in the Terms of Reference of each committee which are
available on the AIM rule 26 page of this website.
The Audit Committee is comprised of all three Independent Non-Executive Directors and is chaired by Bryan
Smart. The Audit Committee will meet at least twice a year and is responsible for ensuring that the financial
performance of the Group is properly reported and monitored and for meeting the auditors and reviewing the
reports from the auditors relating to accounts and internal control systems. The external auditors will attend
all meetings and the Audit Committee will have discussions with the external auditors at least once a year
without any executive Directors being present.
The Remuneration Committee comprises all three independent non-executive directors and is chaired by
Graham Eves. The remuneration committee reviews the performance of the executive Directors and sets and
reviews the scale and structure of their remuneration and the terms of their service agreements with due regard
to the interests of the Shareholders. In determining the remuneration of executive Directors, the Remuneration
Committee seeks to enable the Company to attract and retain executives of high calibre. No director is
permitted to participate in discussions or decisions concerning his own remuneration. The Remuneration
Committee meets as and when necessary.
The Nominations Committee comprises all three independent non-executive directors and is chaired by
Richard Hickinbotham. The Nomination Committee is responsible for recommendations to the Board for the
appointment of additional directors or replacement of current directors and for succession planning for the
Company.
The Board and its committees receive appropriate and timely information prior to each meeting. A formal
agenda is produced for each meeting and board committee papers are distributed several days before
meetings take place. Any director can challenge proposals with decisions being taken after discussion. Any
director can ask for a concern to be noted in the minutes of the meeting which are circulated to all directors.
Specific actions arising from meetings are agreed by the Board or relevant committee and then followed up
by management.
Directors have access to advice or services needed to enable them to carry out their roles and duties.
All relevant directors attended all board and board committee meetings during the year.
Graham Eves, Richard Hickinbotham and Bryan Smart (and Tony Best in his capacity as Non-Executive
Chairman) are each Non-Executive Directors and Messrs Eves, Hickinbotham and Smart are considered to
be independent of the management and free to exercise independence of judgement.
The Board has established procedures to identify and monitor potential or actual conflicts of interest.
The Board has also established procedures to ensure AIM Rules are complied with and that there is close
liaison with the Company’s Nominated Adviser.
All Directors are subject to reappointment by shareholders at the first Annual General Meeting following their
appointment and thereafter by rotation.
The Board has a formal schedule of matters reserved for its decisions. There are a minimum of 4 full board
meetings spread across each year which tie in as far as possible with the Group’s financial reporting and
trading calendars. Additional meetings are held as required.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
All directors spend such time as is necessary to effectively carry out their roles, typically on average two days
a month. All of the directors were in attendance at the 7 board and board committee meetings held during
the year.
Ensure that between them the directors have the necessary up-to-date experience, skills and
capabilities
The skills and experience of the Board are set out in their biographical details included within the“Investors”
area of the Company’s website. . The experience and knowledge of each of the Directors gives them the
ability to constructively challenge strategy and to scrutinise performance.
Role of the Non-Executive Chairman and Chief Executive
There is normally a clear division of responsibility between the Non-Executive Chairman and the Chief
Executive but in the interregnum the division has been between the Chairman and the Executive Directors.
The Chairman is responsible for running the business of the board and for ensuring appropriate strategic
focus and direction. The Chief Executive is responsible for proposing the strategic focus to the Board,
implementing it once it has been approved and overseeing the management of the Group.
Role of the Independent Directors
The role of the Independent Non-Executive Directors includes questioning and challenging the Executive
Directors and assisting where possible in developing strategic proposals, reviewing and commenting on the
integrity of the Company’s financial reporting systems and the information they provide; recommending
appropriate standards of corporate governance; reviewing internal control systems; ensuring that risk
management systems are robust and reviewing corporate performance and ensuring that performance is
reported to shareholders.
The directors of the Company are:
Tony Best (Interim Chief Executive Officer and Non-Executive Chairman)
Matthew Hubbard (Chief Operations Officer)
Robert Hart (Chief Financial Officer and Company Secretary)
Graham Eves (NED)
Richard Hickinbotham (NED)
Bryan Smart (NED)
Their roles on the Board, biographical details and skills and experience, are set out in the“Investors” area of
the Company’s website.All directors ensure their skillsets are up to date by a combination of reading
professional journals or trade press, attending industry events, conferences and workshops.
The Board comprises a range of different skills including business, engineering and financial. In addition, the
Company’s non-executive directors have all held senior executive positions and do hold a number of
non-executive roles in public companies.
The Company Secretary is responsible for ensuring that the board and its committees receive appropriate
and timely information prior to each meeting. A formal agenda is notified ahead of each meeting and relevant
board committee papers are distributed before meetings take place. Any director can challenge proposals
with decisions being taken after discussion. Any director can ask for a concern to be noted in the minutes of
the meeting which are circulated to all directors. Specific actions arising from meetings are agreed by the
Board or relevant committee and then followed up by management.
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The collective performance of the board is reflected in the success of the business. Evaluation of the
performance of individual members has historically been implemented in an ad hoc manner. From 2019
however, these processes will be reviewed.
On an ongoing basis, board members maintain a watching brief to identify relevant internal and external
candidates to meet the future needs of the business.
Responsibility for succession planning lies with the Nomination Committee as exemplified by the recent search
for a new CEO.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions will impact the corporate culture of the Group as a whole and that
this will affect the performance of the business. The Board is also very conscious that the tone and culture
that it sets will greatly impact all aspects of the Group and the way employees behave and operate. The
importance of sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve
its corporate objectives whilst, in particular, meeting the exacting demands of a sophisticated and demanding
customer base. The Board appreciate it is important to retain and attract staff to continue to grow the business.
Employees are motivated through a bonus scheme which the employees share the success of the group.
The Company’s ethical approach to business is reflected in the way the Company has been able to develop
long term and fruitful relationships with many of its clients. Employees are also aware of how business should
be conducted and the group provide guidance on how the brand values of the business should be
demonstrated.
Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board recognises that meaningful engagement with its shareholders is integral to the continued success
of the Group. Throughout FY18, members of the Board have sought to actively engage with shareholders on
a number of occasions, through meetings, presentations and roadshows. Non-Executive Directors are kept
informed of the views of the shareholders through periodic reports from the Chief Executive Officer and the
Chief Financial Officer, including inputs from the corporate brokers with whom they are in regular contact.
The Board believes that the Annual Report and Accounts, and the Interim Report published at the half-year,
play an important part in presenting all shareholders with an assessment of the Group’s position and prospects.
All reports and press releases are published on the Group’s website.
The Annual General Meeting (‘AGM’) is the principal opportunity for private shareholders to meet and discuss
the Group’s business with the Directors. There is an open question and answer session during which
shareholders may ask questions both about the resolutions being proposed and the business in general. The
Directors are also available after the meeting for an informal discussion with shareholders.
The Board is supported by the Audit, Remuneration and Nominations Committees, each of which has access
to information, resources and advice that it deems necessary, at the company’s cost, to enable the committee
to discharge its duties. These duties are set out in the Terms of Reference of each committee which are
available at
https://www.abdynamics.com/en/investors-area/corporate-governance
The Audit Committee
The audit committee is chaired by Bryan Smart FCA and supported by Graham Eves and Richard
Hickinbotham and meets at least twice a year. All meetings involve the external auditors, together with invited
attendees comprising executive members of the board.
The first meeting is held before the start of the final audit, and typically covers matters such as audit scope,
materiality, auditor independence, new emerging business and corporate governance issues and finally a
negotiation of audit budgets.
The second meeting is held before the final accounts are finalised, and the draft annual reports are reviewed,
and the auditor’s findings and any recommendations for enhanced control procedures are considered.
All meetings are minuted by an independent secretarial service company representative, and action points
arising are followed up to ensure compliance.
The audit committee chairman will periodically extend a committee meeting to allow discussion when only
the committee members and external auditors are present.
The scope of the audit committee function is planned to be expanded for future financial years to include a
review of Risk Management.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
No formal internal audit function is thought necessary at this time, but as the company expands, this policy
will be regularly revisited.
The Nomination Committee
The Nomination Committee consists of the three Independent Non-Executive Directors, Richard Hickinbotham
(Chairman), Graham Eves and Bryan Smart.
The Committee is responsible for recommendations to the Board for the appointment of additional directors
or the replacement of current directors and for succession planning for the Group. The terms of reference of
the Committee were reviewed and updated in September 2018 and can be found on the Group’s website.
The Committee met five times during the year with its principal focus on the recruitment of a new Chief
Executive Officer following the departure of Tim Rogers who stepped down from the Board in February 2018.
The Committee employed the services of an external search firm with the ensuing search conducted against
a comprehensive job specification. After an extensive and thorough process, the Board approved the
appointment of James Routh as Chief Executive Officer with effect from 1 October 2018.
The Committee also works with the Executive Directors to support them in decisions concerning the
development and succession of senior managers within the business. During the year Andrew Pick and Adrian
Simms were appointed to the Board of Anthony Best Dynamics Limited reflecting their respective leadership
roles in managing the Laboratory Test and Track Test activities of the Group.
The on-going work of the Committee remains to support the Board in reviewing its size, structure and
composition to ensure an appropriate balance of skills, knowledge, independence and experience, and as
appropriate to make suitable recommendations to the Board.
The Remuneration Committee
The year was exceptional in that, apart from the usual two meetings, the Remuneration Committee had a
number of additional meetings and telephone conference calls jointly with the Nomination Committee to
discuss the terms of employment of the new CEO, as well as the COO. The Committee also discussed, with
Mr Best not being present, his terms and remuneration for assuming the role of Interim Executive Chairman.
The remuneration will not change when Mr Best reverts to being Non-Executive Chairman when the new CEO
joins in view of the additional time required helping the CEO to become established. The Remuneration
Committee is pleased to record that, with the exception of the CEO, there has been no leavers during the
year, despite the national shortage of people with the qualifications and experience of the Company’s staff.
The objective of the Company’s remuneration policy is to incentivise and reward the achievement of
shareholder value. The Company’s growth in the UK and internationally makes it essential that the Company
attracts and retains the very best people.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Independent Auditor’s report to the members of AB Dynamics plc
Opinion
We have audited the financial statements of AB Dynamics plc (the “Parent Company”) and its subsidiary
(the “Group”) for the year ended 31 August 2018, which comprise:
● the Group income statement and statement of comprehensive income for the year ended 31 August 2018;
● the Group and parent company statement of financial position as at 31 August 2018;
● the Group statement of cash flows for the year ended 31 August 2018;
● the Group and parent company statements of changes in equity for the year ended 31 August 2018; and
● the notes to the financial statements, which include a summary of significant accounting policies and
other explanatory information.
The financial reporting framework that has been applied in the preparation of the Group financial statements
is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The financial reporting framework that has been applied in the preparation of the Parent Company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting
Standard 102. The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
● give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 August
2018 and of the Group’s profit for the year then ended;
● the Group financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union;
● the Parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
● the financial statements 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 Auditor’s responsibilities
for the audit of the financial statements section of our report. We are independent of the Group in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report
to you when:
● the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
● the directors have not disclosed in the financial statements any identified material uncertainties that may
cast significant doubt about the Group’s and the parent company’s ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months from the date when the financial
statements are authorised for issue.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it
could reasonably be expected to change the economic decisions of a user of the financial statements. We used
the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements
as a whole to be £250,000 (2017: £165,000), based on a percentage of Group profit before tax.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the
audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for
the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having
regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related
party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £10,000 (2017: £5,000).
Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required
on qualitative grounds.
Overview of the scope of our audit
The Group and its subsidiary are accounted for from one central operating location, the group’s registered
office. Our audit was conducted from the main operating location and all group companies were within the
scope of our audit testing.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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) that we identified. These matters included 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.
This is not a complete list of all risks identified by our audit.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Key audit matter How the scope of our audit addressed the key
audit matter
Revenue recognition
Revenue is recognised in accordance with the
accounting policy set out in the financial statements.
The accounting policy contains a number of
judgements, particularly in recognising when control
of ownership have passed to the buyer. This is
determined with reference to the underlying contract
with the purchaser.
Accounting for long-term contracts
For certain products the Company recognises
revenue over the period of the contract.
The group uses the percentage of completion
method to determine the appropriate amount of
revenue to recognise in a given period. This is
measured by the proportion that contract costs
incurred for work performed to date bear to the
estimated
total contract costs. A number of
judgements are made by management in making its
assessment of estimated costs and profitability.
We validated a sample of contracts to confirm
revenue was being recognised in line with the
requirements of IFRS 15. We performed cut off
testing to ensure revenue is being recorded in the
correct period.
Our work focussed on validating that estimated
contract costs which include staff costs, overheads
and material costs are appropriate and reliably
estimated. In addition, we assessed whether cut off
has been correctly applied and that any resulting
work in progress and other entries are appropriate.
We considered the original budget for the contract
and compared this to actual costs to validate how the
contract has performed and enquired into any events
which could change this assessment.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no
such 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 auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is
a material misstatement in the financial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our 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 directors’ report and strategic report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
● adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
● the parent company financial statements are not in agreement with the accounting records and returns; or
● certain disclosures of directors’ remuneration specified by law are not made; or
● we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 18, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
John Glasby
Senior Statutory Auditor
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
St Bride’s House,
10 Salisbury Square
London
EC4Y 8EH
Date: 13 November 2018
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
Consolidated statement of comprehensive income
Year ended Year ended
31 August 31 August
2018 2017
Note £ £
––––––––––––––
Continuing operations
Revenue 37,051,145 24,570,050
Cost of sales (24,497,241) (16,654,153)
––––––––––––––
Gross profit 12,553,904 7,915,897
Administrative expenses (4,011,336) (1,985,069)
Fair value loss in respect of foreign currency forward contracts – (59,241)
––––––––––––––
Operating profit before Share based payment costs 8,542,568 5,871,587
Share based payment costs (659,167) (1,464,817)
––––––––––––––
Operating profit 7,883,401 4,406,770
Finance income 4 63,167 65,257
––––––––––––––
Profit before taxation 5 7,946,568 4,472,027
Corporation tax expense 6 (931,900) (569,286)
––––––––––––––
Profit after taxation 7,014,668 3,902,741
Other comprehensive income – –
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
Total comprehensive income for the year
attributed to equity holders 7,014,668 3,902,741
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
Earnings per share – Basic (pence) 8 36.29p 20.83p
Earnings per share – Diluted (pence) 8 35.03p 20.56p
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
Consolidated statement of financial position
as at 31 August 2018
2018 2 0 1 7
Note £ £
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 9 13,679,409 10,464,904
Deferred tax assets 16 1,288,777 148,140
––––––––––––––
14,968,186 10,613,044
––––––––––––––
––––––––––––––
––––––––––––––
CURRENT ASSETS
Inventories 10 6,903,374 4,959,435
Trade receivables 11 6,489,393 7,115,351
Other receivables, deposits and prepayments 12 1,980,870 1,536,134
Amount owing by contract customers 13 2,188,770 1,675,508
Taxation 55,749 –
Cash and cash equivalents 14 15,941,961 9,619,345
––––––––––––––
33,560,117 24,905,773
––––––––––––––
TOTAL ASSETS 48,528,303 35,518,817
––––––––––––––
––––––––––––––
EQUITY AND LIABILITIES
Share capital 15 195,365 191,119
Share premium 10,257,615 8,579,265
Reconstruction reserve (11,284,500) (11,284,500)
Merger relief reserve 11,390,000 11,390,000
Retained profits 27,484,250 19,370,938
––––––––––––––
––––––––––––––
Total equity attributable to owners of the
Company and total equity 38,042,730 28,246,822
––––––––––––––
––––––––––––––
NON-CURRENT LIABILITIES
Deferred tax liabilities 16 339,040 –
––––––––––––––
––––––––––––––
CURRENT LIABILITIES
Trade and other payables and accruals 17 10,146,533 6,951,803
Provision for taxation – 320,192
––––––––––––––
10,146,533 7,271,995
––––––––––––––
TOTAL LIABILITIES 10,485,573 7,271,995
––––––––––––––
TOTAL EQUITY AND LIABILITIES 48,528,303 35,518,817
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
The financial statements were approved by the Board of Directors and authorised for issue on and are signed
on its behalf by:
Director Director
COMPANY REGISTRATION NUMBER: 08393914
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
Consolidated statement of changes in equity
Merger Recon-
Share Share relief struction Retained Total
capital premium reserve reserve profits equity
Note £ £ £ £ £ £
Balance at 1 September 2016 177,646 2,590,267 11,390,000 (11,284,500) 14,580,185 17,453,598
Share based payment
expense 1,464,817 1,464,817
Profit after taxation and
total comprehensive
income for the financial
year 3,902,741 3,902,741
Dividend paid 7 (576,805) (576,805)
Issue of shares, net of share
issue costs 13,473 5,988,998 6,002,471
–––––––––––
–––––––––––
Balance at 31 August 2017 191,119 8,579,265 11,390,000 (11,284,500) 19,370,938 28,246,822
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
Balance at 1 September 2017 191,119 8,579,265 11,390,000 (11,284,500) 19,370,938 28,246,822
Share based payment
expense 659,167 659,167
Profit after taxation and
total comprehensive
income for the financial
year 7,014,668 7,014,668
Taxation on options 1,107,382 1,107,382
Dividend paid 7 (667,905) (667,905)
Issue of shares, net of share
issue costs 4,246 1,678,350 1,682,596
–––––––––––
–––––––––––
Balance at 31 August 2018 195,365 10,257,615 11,390,000 (11,284,500) 27,484,250 38,042,730
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
–––––––––––
The share premium account is a non-distributable reserve representing the difference between the nominal
value of shares in issue and the amounts subscribed for those shares.
The reconstruction reserve and merger relief reserve have arisen as follows:
The acquisition by the Company of the entire issued share capital of Anthony Best Dynamics limited in 2013
was accounted for a group reconstruction. Consequently, the assets and liabilities of the Group were
recognised at their previous book values as if the Company had always been the parent company of the group.
The share capital for the period covered by these consolidated financial statements and the comparative
periods is stated at the nominal value of the shares issued pursuant to the above share arrangement. Any
differences between the nominal value of these shares and previously reported nominal values of shares and
applicable share premium issued by Anthony Best Dynamics Limited were transferred to the
reconstruction reserve.
Retained profits represent the cumulative value of the profits not distributed to shareholders but retained to
finance the future capital requirements of the Group.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
Consolidated statement of cash flows
2018 2017
£ £
Cash flow from operating activities
Profit before taxation 7,946,568 4,472,027
Adjustments for:
Change in accounting policy – (78,562)
Depreciation of property, plant and equipment 462,994 266,856
Loss on sale of property, plant and equipment 14,606 4,243
Interest income (63,167) (65,257)
Share based payment 659,167 1,464,817
––––––––––––––
Operating profit before working capital changes 9,020,168 6,064,124
Increase in inventories (1,943,939) (1,767,793)
(Increase) in trade and other receivables (332,040) (5,432,557)
Increase in trade and other payables and accruals 3,194,730 3,342,941
Fair value loss / (gain) on derivative instruments – (90,434)
––––––––––––––
Cash flow from operations 9,938,919 2,116,281
Interest received 63,167 65,257
Income tax paid (1,002,057) (351,476)
––––––––––––––
Net cash flow from operating activities 9,000,029 1,830,062
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
Cash flow from investing activities
Purchase of property, plant and equipment (3,698,478) (8,040,906)
Sale of property, plant and equipment 6,374 –
––––––––––––––
Cash flow used in investing activities (3,692,104) (8,040,906)
––––––––––––––
––––––––––––––
––––––––––––––
Cash flow from financing activities
Dividends paid (667,905) (576,805)
Proceeds from issue of share capital, net of share issue costs 1,682,596 6,002,471
––––––––––––––
Net cash flow used in financing activities 1,014,691 5,425,666
––––––––––––––
Net increase in cash and cash equivalents 6,322,616 (785,178)
––––––––––––––
Cash and cash equivalents at beginning of the financial year 9,619,345 10,404,523
––––––––––––––
Cash and cash equivalents at end of the financial year 15,941,961 9,619,345
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
––––––––––––––
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
Notes to the consolidated financial statements
1.
General information
The Company is a public company limited by shares and registered in England and Wales with company
number 08393914. The Company is domiciled in the United Kingdom and the registered office and
principal place of business is Middleton Drive, Bradford on Avon, Wiltshire, BA15 1GB.
The principal activity is the specialised area of design and manufacture of test equipment for vehicle
suspension, steering, noise and vibration. The Company also offers a range of services which include
analysis, design, prototype manufacture, testing and development.
Basis of preparation
The financial statements are measured and presented in sterling (£) and all values are rounded to the
nearest pound, unless otherwise stated, which is the currency of the primary economic environment in
which the entities operate. They have been prepared under the historical cost convention, except for
financial instruments that have been measured at fair value through profit or loss.
The financial statements have been prepared on the going concern basis, which assumes that the
Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.
The financial information has been prepared in accordance with International Financial Reporting
Standards (‘IFRS’) as adopted by the EU including related interpretations issued by the International
Financial Reporting Interpretations Committee (“IFRIC”).
Standards, amendments and interpretations to published standards not yet effective
The Directors have considered those Standards and Interpretations, which have not been applied in
the Financial Statements but are relevant to the Group’s operations, that are in issue but not yet effective
and do not consider that they will have a material impact on the future results of the Group.
The Directors are in the process of considering the potential changes that may occur to the financial
statements under IFRS 9 ‘Financial Instruments’ and IFRS 16 ‘Leases’. These will apply to periods
commencing on or after 1 January 2018 and 1 January 2019 respectively. It is not expected that the
application of IFRS 9 or IFRS 16 will have a material impact on the group’s results.
2.
Summary of significant accounting policies
(a)
Going concern
The Group’s activities and an outline of the developments taking place in relation to its products,
services and marketplace are considered in the Chief Operations Officer’s statement on page 5.
Note 19 to the Consolidated Financial Statements sets out the Company’s financial risks and the
management of capital risks.
Accordingly, after careful enquiry and review of available financial information, including
projections of profitability and cash flows, the Directors believe that the Company has adequate
resources to continue to operate for the foreseeable future and that it is therefore appropriate to
continue to adopt the going concern basis of accounting in the preparation of the consolidated
and company financial statements.
(b)
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated by the directors and management and are
based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty at
the statement of financial position date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial period are
as stated below:
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252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 37
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
2.
Summary of significant accounting policies (continued)
(b)
Critical accounting estimates and judgements (continued)
Assessment of the percentage of completion of construction projects (laboratory test systems)
The probability of a profitable outcome and stage of completion of the contract is determined by
regular review by management of project milestones, actual costs against budgeted costs and
any other pertinent information.
The above estimates are made internally by the Group and any changes of these estimates will
result in a corresponding change in revenue and profit. The Group’s accounting approach reflects
a sound judgement as potential losses on contract are being considered and reflected with its
probability immediately upon occurrence, while contract revenue which cannot be estimated
reliably is recognised only after confirmed by written agreement.
Share based payments
The calculation of the fair value of share based payments at the grant date impacts the profit or
loss over the vesting period and in the current year this has resulted in a charge of £659,167.
The magnitude of the fair value is primarily determined by the estimated volatility. The volatility
has been based on historical share price movement but this is not necessarily representative of
future volatility. If share price volatility had been 5% higher this would have resulted in the current
year charge being £83,793 higher than currently shown.
(c)
Revenue and long-term contracts
Revenue represents the value, net of sales taxes, of goods sold and services provided
to customers.
Revenue is disaggregated into the following two categories:
1)
Revenues on laboratory test systems and simulators, which projects lasting longer than
12 months and require a significant degree of customisation, are recognised according to
the percentage of completion method.
When a contract with a customer is judged to be a long-term contract, contract revenue
and contract costs are recognised over the period of the contract, respectively, as revenue
and expenses. The Group uses the percentage of completion method to determine the
appropriate amount of revenue and costs to recognise in a given period. Management
considers the terms and conditions of the contract, including how the contract was
negotiated and any elements the customer specifies when identifying individual projects
as a long-term contract. The percentage of completion is normally measured by the
proportion that contract costs incurred for work performed to date bear to the estimated
total contract costs, except where this would not be representative of the stage of
completion. This measurement basis is considered to be the most faithful depiction of the
transfer of ownership as the customer is contractually liable for costs incurred to date.
Where this is not representative of the stage of completion, management will assess the
completion of a physical proportion of the contract work in determining the overall stage
of completion.
Variations in contract work, claims and incentive payments are recognised to the extent
that they have been agreed with the customer. The probability of a profitable outcome of
the contract is determined by regular review by management of project milestones, actual
costs against budgeted costs and any other pertinent information. When it is probable that
total contract costs will exceed total contract revenue, the expected loss is recognised as
an expense immediately.
The aggregate of the cost incurred and the profit/loss recognised on each contract is
compared against the progress billings up to the year end.
Page 37
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 38
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
2.
Summary of significant accounting policies (continued)
(c)
Revenue and long-term contracts (continued)
Contract assets (accrued revenue) and contract liabilities (amounts received in advance
of performance delivery) are recognised separately. Business development and other pre-
contract costs are expensed as incurred.
Revenue is recognised on a pro-rata basis according to the work performed and the degree
of completion of the contract. Where the value of the work performed on a contract exceeds
the aggregate of payments received on account from customers, the resulting balance is
included in trade and other receivables. Where the aggregate of payments received on
account from customers exceeds the value of work performed on a contract, the resulting
balance is included in current liabilities.
2)
Revenue from track testing systems, principally in relation the robotic systems which are
constructed and supplied to a customer within 12 months and where there is no significant
degree of customisation, is recognised when control is passed to the buyer, which in almost
all cases is on delivery. Any payments received on account are deferred until these items
are delivered to the customer. Items such as guarantees or servicing arrangements sold
in relation to these systems are accounted for as separate performance obligations and
are recognised over the period to which these obligations are performed by the Company.
Guarantees and servicing arrangements have standard pricing, which management
consider reflects fair value, and these prices are allocated to the separate
performance obligations.
(d)
Basis of consolidation
The consolidated financial statements include the financial statements of all subsidiaries. The
financial year ends of all entities in the Group are coterminous.
The financial statements of subsidiaries are included in the consolidated financial statements
from the date on which control over the operating and financial decisions is obtained and cease
to be consolidated from the date on which control is transferred out of the Group. Control exists
when the Company has the power, directly, or indirectly, to govern the financial and operating
policies of an entity so as to obtain economic benefits from its activities.
All intercompany balances and transactions, including recognised gains arising from inter-group
transactions, have been eliminated in full.
Unrealised losses are eliminated in the same manner as recognised gains except to the extent
that they provide evidence of impairment.
(e)
Inventories
Inventories are valued on a first in, first out basis at the lower of cost and net realisable value.
Cost includes all expenditure incurred during the normal course of business in bringing in
inventories to their present location and condition, including in the case of work-in-progress and
finished goods an appropriate proportion of production overheads. Net realisable value is based
on the estimated useful selling price less further costs expected to be incurred to completion and
subsequent disposal.
(f)
Financial instruments
Financial instruments are recognised in the statements of financial position when the Company
has become a party to the contractual provisions of the instruments.
Financial instruments are classified as assets, liabilities or equity in accordance with the
substance of the contractual arrangement. Interest, dividends, gains and losses relating to a
financial instrument classified as a liability, are reported as an expense or income. Distributions
to holders of financial instruments classified as equity are charged directly to equity.
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252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 39
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
2.
Summary of significant accounting policies (continued)
(f)
Financial instruments (continued)
Financial instruments are offset when the Group has a legally enforceable right to offset and
intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial
instrument not at fair value through profit or loss, transaction costs that are directly attributable
to the acquisition or issue of the financial instrument. Financial instruments recognised in the
statements of financial position are disclosed in the individual policy statement associated with
each item.
(i)
Financial assets
On initial recognition, financial assets are classified as either financial assets at fair value
through profit or loss or loans and receivables financial assets. The group does not hold
any held-to-maturity investments or available-for-sale financial assets.
●
●
Financial assets at fair value through profit or loss
As at the end of the reporting period, there were no foreign currency forward
contracts classified under this category.
Loans and receivables financial assets
Trade receivables and other receivables that have fixed or determinable payments
that are not quoted in an active market are classified as loans and receivables
financial assets. Loans and receivables financial assets are measured at amortised
cost using the effective interest method, less any impairment loss. Interest income
is recognised by applying the effective interest rate, except for short-term
receivables when the recognition of interest would be immaterial.
(ii)
Financial liabilities
All financial liabilities are initially recorded at fair value plus directly attributable transaction
costs and subsequently measured at amortised cost using the effective interest method
other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are either held
for trading or are designated to eliminate or significantly reduce a measurement or
recognition inconsistency that would otherwise arise. Derivatives are also classified as
held for trading unless they are designated as hedges.
(iii)
Equity instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a deduction, net of tax, from proceeds.
Interim dividends are recognised when paid and final dividends on ordinary shares are
recognised as liabilities when approved for appropriation.
(iv) Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered
into and are subsequently measured at their fair value. The method of recognising any
resulting gain or loss depends on whether the derivative is designated as a hedging
instrument and, if so, the nature of the item being hedged. Changes in the fair value of
any derivative instruments that do not qualify for hedge accounting are recognised
immediately in the income statement.
Page 39
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 40
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
2.
Summary of significant accounting policies (continued)
(g)
Property, plant and equipment
Property, plant and equipment is initially recorded at cost. Once the asset is available for use,
depreciation is calculated at rates estimated to write off the cost of the relevant assets, less any
estimated residual value, on either a straight-line basis or reducing balance basis over their
expected useful lives.
Plant and machinery 10% straight line
Motor vehicles 25% reducing balance
Furniture and fittings 10% straight line
Computer equipment 25% straight line
General equipment 10% straight line
Proprietorial equipment 20% straight line
Test equipment Between 10 20% straight line
Buildings 5% straight line
(h)
Impairment
(i)
Impairment of non-financial assets
The carrying values of assets, other than those to which IAS 36 Impairment of Assets does
not apply, are reviewed at the end of each reporting period for impairment when there is
an indication that the assets might be impaired. Impairment is measured by comparing
the carrying values of the assets with their recoverable amounts. The recoverable amount
of the assets is the higher of the assets’ fair value less costs to sell and their value in use,
which is measured by reference to discounted future cash flow.
(ii)
Impairment of non-financial assets (continued)
An impairment loss is recognised in profit or loss immediately.
When there is a change in the estimates used to determine the recoverable amount, a
subsequent increase in the recoverable amount of an asset is treated as a reversal of the
previous impairment loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and depreciation) had no
impairment loss been recognised. The reversal is recognised in profit or loss immediately.
(i)
Income taxes
The income tax expense for the period comprises current and deferred tax. Tax is recognised in
the income statement, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries
operate and generate taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements.
Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Page 40
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 41
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
2.
Summary of significant accounting policies (continued)
(j)
Share-based payments
Employees (including Directors and Senior Executives) of the Group receive remuneration in the
form of share-based payment transactions, whereby these individuals render services as
consideration for equity instruments (“equity-settled transactions”). These individuals are granted
share option rights approved by the Board which can only be settled in shares of the respective
companies that award the equity-settled transactions. Share options rights are also granted to
these individuals by majority shareholders over their shares held. No cash settled awards have
been made or are planned.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance and/or service conditions are fulfilled, ending
on the date on which the relevant individuals become fully entitled to the award (“vesting point”).
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 Group’s best
estimate of the number of equity instruments and value that will ultimately vest. The statement
of comprehensive income charge for the year represents the movement in the cumulative
expense recognised as at the beginning and end of that period.
The fair value of share-based remuneration is determined at the date of grant and recognised
as an expense in profit or loss on a straight-line basis over the vesting period, taking account of
the estimated number of shares that will vest. The fair value is determined by use of Black
Scholes model method.
(k)
Foreign exchange
Transactions denominated in foreign currencies are translated into sterling at the rates prevailing
of the transactions. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated at the rates prevailing at that date. These translation differences
are dealt with in the Consolidated statement of comprehensive income.
Page 41
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 42
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
3.
Segment reporting
The Group derives revenue from the sale of its advanced measurement and testing products derived
in assisting the global automotive industry in the laboratory and on the test track. The income streams
are all derived from the utilisation of these products which, in all aspects except details of revenue, are
reviewed and managed together within the Group and as such are considered to be the only segment.
Per IFRS 8, the operating segment is based on internal reports about components of the group, which
are regularly reviewed and used by the board of directors being the Chief Operating Decision
Maker (“CODM”).
All of the Group’s non-current assets are held in the UK.
Material revenues attributable to individual foreign countries are as follows:
United Kingdom
Rest of the European Union
North America
Rest of the World
2018
£
2017
£
616,964
12,477,737
5,093,783
18,862,661
––––––––––––––
37,051,145
––––––––––––––
––––––––––––––
1,174,643
8,965,899
3,299,671
11,129,837
––––––––––––––
24,570,050
––––––––––––––
––––––––––––––
No revenues derive from major customers, which individually represent 10% or more of total revenue.
Revenues are disaggregated, as required by IFRS 15, as follows:
Revenue from track testing systems
Revenue from laboratory test systems
4.
Finance income
Interest received
33,304,089
3,747,056
––––––––––––––
37,051,145
––––––––––––––
––––––––––––––
20,766,061
3,803,989
––––––––––––––
24,570,050
––––––––––––––
––––––––––––––
2018
£
2017
£
63,167
––––––––––––––
––––––––––––––
65,257
––––––––––––––
––––––––––––––
Page 42
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 43
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
5.
Profit before taxation
The profit before taxation is arrived at after charging/(crediting): -
Depreciation
Loss on sale of assets
Realised loss/(gain) on foreign exchange
Staff costs:
– salaries, allowances and bonuses
Social security costs
Defined contribution pension scheme costs
Share based payments
Research and development costs
Operating lease payments recognised as an expense
Auditors remuneration
Fees payable to the Company’s auditors for the audit of the
Company’s financial statements
Fees payable to the Company’s auditors for other services:
The audit of the Company’s subsidiary subject to legislation
Fees payable to the Company’s auditors for tax compliance services
Total
2018
£
462,994
14,605
(149,869)
2017
£
266,856
4,242
(404,835)
7,328,441
696,793
348,772
659,168
478,458
164,761
––––––––––––––
5,250,212
540,954
282,503
1,464,817
375,016
157,065
––––––––––––––
2018
£
2017
£
26,500
23,226
18,010
7,750
––––––––––––––
52,260
––––––––––––––
––––––––––––––
17,485
8,880
––––––––––––––
49,591
––––––––––––––
––––––––––––––
The average monthly number of employees, including the directors, during the year was as follows:
Directors & Commercial
Engineers & Technicians
Administration
2018
No.
2017
No.
9
94
25
––––––––––––––
128
––––––––––––––
––––––––––––––
10
72
15
––––––––––––––
97
––––––––––––––
––––––––––––––
Total remuneration of key management personnel, being the directors of the Company plus the directors
of the operating subsidiary, is set out below in aggregate for each of the categories specified in IAS24,
related party disclosures:
Short term employee benefits
Post-employment benefits
Social security costs
Share based payments – equity settled
2018
£
2017
£
1,260,052
63,630
154,173
217,837
––––––––––––––
1,695,692
––––––––––––––
––––––––––––––
1,070,060
55,648
126,087
479,555
––––––––––––––
1,731,350
––––––––––––––
––––––––––––––
Further details relating to the remuneration of the directors of the Company can be found in the
directors report.
Page 43
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 44
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
6.
Income tax expense
Current tax:
– for the financial year
– under/(over) provision in the
previous financial year
Deferred tax: (Note 16):
– origination and reversal of temporary differences
– related to share-based payments on exercised options
2018
£
2017
£
1,010,058
747,883
(110,766)
––––––––––––––
899,292
––––––––––––––
88,489
––––––––––––––
836,372
––––––––––––––
147,787
(115,179)
––––––––––––––
931,900
––––––––––––––
––––––––––––––
72,307
(339,393)
––––––––––––––
569,286
––––––––––––––
––––––––––––––
The tax assessed for the year is the same as (2017 – the same as) the standard rate of corporation tax
in the UK of 19% (2017 – 19.58%) as set out below.
A reconciliation of income tax expense applicable to the profit before taxation at the effective tax rate
to the income tax expense at the effective tax rate of the Group are as follows:
Profit before taxation
Tax at the applicable statutory tax rate of
19% (2017 – 19.58%)
Tax effects of:
Non-deductible expenses
Adjustment in research and development tax credit
(Over)/under provision in the previous financial year
Non-taxable foreign currency forward contracts
Patent box relief *
Other differences including change in rate of deferred tax provision
Income tax expense for the financial year
2018
£
2017
£
7,946,568
––––––––––––––
––––––––––––––
4,472,027
––––––––––––––
––––––––––––––
1,509,848
875,623
41,123
(118,179)
(110,766)
–
(271,974)
(118,152)
––––––––––––––
931,900
––––––––––––––
––––––––––––––
17,215
(95,461)
88,489
(279,062)
(37,518)
––––––––––––––
569,286
––––––––––––––
––––––––––––––
* Patent box relief represents the tax effect of the reduced amount payable on profits that fall within the
Patent Box.
In addition to the amount charged to the profit or loss, the following amounts relating to tax have been
recognised directly in equity:
Current tax
Excess tax deductions related to share-based
payments on exercised options
Deferred tax
Change in estimated excess tax deductions related to
share-based payments
Total income tax recognised directly in equity
Page 44
2018
£
2017
£
(273,177)
–
(834,205)
––––––––––––––
(1,107,382)
––––––––––––––
––––––––––––––
–
––––––––––––––
–
––––––––––––––
––––––––––––––
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 45
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
7.
Dividends paid
Final 2016 dividend paid of £0.01815 per share
Interim dividend paid of £0.01331 per share
Final 2017 dividend paid of £0.02 per share
Interim dividend paid of £0.01465 per share
2018
£
2017
£
–
–
383,880
284,025
––––––––––––––
667,905
––––––––––––––
––––––––––––––
322,426
254,379
–
–
––––––––––––––
576,805
––––––––––––––
––––––––––––––
The Board has proposed a final dividend of 2.20p per share totalling £429,804. Together with the interim
dividend of 1.465p per share this gives a total Ordinary dividend of 3.665p for the year.
8.
Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential shares. The Company has one category of
potentially dilutive shares, namely share options.
The calculation of earnings per share is based on the following earnings and number of shares.
Profit after tax attributable to owners of
the Group (£)
Weighted average number of shares:
Basic
Adjustments in respect of potentially dilutive share options
Diluted
Earnings per share (pence)
Basic
Diluted
Years ended 31 August
2017
2018
7,014,668
3,902,741
19,330,494
18,734,960
20,023,754
18,982,585
36.29
35.03
20.83
20.56
Page 45
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 46
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
9.
Property, plant and equipment
Test
Equipment
£
Cost
At 31 August 2017
Additions
Disposals
Transfer between classes
At 31 August 2018
Accumulated depreciation
At 31 August 2017
Charge for the year
Disposals
At 31 August 2018
Net book value
At 31 August 2017
At 31 August 2018
1,812,842
–––––––––
–––––––––
365,279
–
–
–––––––––
2,178,121
–––––––––
–––––––––
245,074
33,546
–
–––––––––
278,620
–––––––––
–––––––––
1,567,768
–––––––––
–––––––––
1,899,501
–––––––––
–––––––––
Furniture
and
fittings
£
722,613
–––––––––
–––––––––
310,702
(18,575)
259,970
–––––––––
1,274,710
–––––––––
–––––––––
350,492
117,059
(11,825)
–––––––––
455,726
–––––––––
–––––––––
Motor
Vehicles machinery
£
Plant and Other fixed
assets
£
£
164,120
–––––––––
–––––––––
79,207
(31,851)
–
–––––––––
211,476
–––––––––
–––––––––
72,522
30,205
(27,456)
–––––––––
75,271
–––––––––
–––––––––
443,345
–––––––––
–––––––––
51,657
(15,931)
–
–––––––––
479,071
–––––––––
–––––––––
221,770
35,636
(6,097)
–––––––––
251,309
–––––––––
–––––––––
120,278
–––––––––
–––––––––
105,908
–
–
–––––––––
226,186
–––––––––
–––––––––
61,061
30,289
–
–––––––––
91,350
–––––––––
–––––––––
Land &
Buildings
£
Total
£
8,315,406
–––––––––
–––––––––
2,785,725
–
(259,970)
–––––––––
10,841,161
–––––––––
–––––––––
11,578,604
––––––––––
––––––––––
3,698,478
(66,357)
–
––––––––––
15,210,725
––––––––––
––––––––––
162,781
216,259
–
–––––––––
379,040
–––––––––
–––––––––
1,113,700
462,994
(45,378)
––––––––––
1,531,316
––––––––––
––––––––––
372,121
–––––––––
–––––––––
818,984
–––––––––
–––––––––
91,598
–––––––––
–––––––––
136,205
–––––––––
–––––––––
221,575
–––––––––
–––––––––
227,762
–––––––––
–––––––––
59,217
–––––––––
–––––––––
134,836
–––––––––
–––––––––
8,152,625
–––––––––
–––––––––
10,462,121
–––––––––
–––––––––
10,464,904
––––––––––
––––––––––
13,679,409
––––––––––
––––––––––
Included within land and buildings is property under the course of construction with a total net book
value of £163,944 (2017: £7,959,947). Depreciation will not be charged until the property is ready
for use.
Costs associated with the development of the advanced vehicle dynamic simulator, which is under
construction, are included within test equipment and have a total net book value of £1,650,024
(2017: £1,368,108). Depreciation will not be charged until the asset is ready for use.
Test
Equipment
£
Cost
At 31 August 2016
Additions
Disposals
At 31 August 2017
Accumulated depreciation
At 31 August 2016
Charge for the year
Disposals
At 31 August 2017
Net book value
At 31 August 2016
At 31 August 2017
816,293
–––––––––
–––––––––
996,549
–
–––––––––
1,812,842
–––––––––
–––––––––
210,040
35,034
–
–––––––––
245,074
–––––––––
–––––––––
606,253
–––––––––
–––––––––
1,567,768
–––––––––
–––––––––
Furniture
and
fittings
£
612,709
–––––––––
–––––––––
116,696
(6,792)
–––––––––
722,613
–––––––––
–––––––––
274,813
78,228
(2,549)
–––––––––
350,492
–––––––––
–––––––––
337,896
–––––––––
–––––––––
372,121
–––––––––
–––––––––
Motor
Vehicles machinery
£
Plant and Other fixed
assets
£
£
95,089
–––––––––
–––––––––
69,031
–
–––––––––
164,120
–––––––––
–––––––––
57,321
15,201
–
–––––––––
72,522
–––––––––
–––––––––
37,768
–––––––––
–––––––––
91,598
–––––––––
–––––––––
364,420
–––––––––
–––––––––
78,925
–
–––––––––
443,345
–––––––––
–––––––––
192,074
29,696
–
–––––––––
221,770
–––––––––
–––––––––
172,346
–––––––––
–––––––––
221,575
–––––––––
–––––––––
103,895
–––––––––
–––––––––
16,383
–
–––––––––
120,278
–––––––––
–––––––––
40,282
20,779
–
–––––––––
61,061
–––––––––
–––––––––
63,613
–––––––––
–––––––––
59,217
–––––––––
–––––––––
Land &
Buildings
£
1,552,084
–––––––––
–––––––––
6,763,322
–
–––––––––
8,315,406
–––––––––
–––––––––
74,863
87,918
–
–––––––––
162,781
–––––––––
–––––––––
Total
£
3,544,490
––––––––––
––––––––––
8,040,906
(6,792)
––––––––––
11,578,604
––––––––––
––––––––––
849,393
266,856
(2,549)
––––––––––
1,113,700
––––––––––
––––––––––
1,477,221
–––––––––
–––––––––
8,152,625
–––––––––
–––––––––
2,695,097
––––––––––
––––––––––
10,464,904
––––––––––
––––––––––
Page 46
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 47
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
10.
Inventories
Work in progress
Raw materials
2018
£
2017
£
3,279,398
3,623,976
––––––––––––––
6,903,374
––––––––––––––
––––––––––––––
1,970,871
2,988,564
––––––––––––––
4,959,435
––––––––––––––
––––––––––––––
The value of inventories (being materials used and consumables) recognised as an expense was
£15,492,323 (2017: £9,753,366).
The amount of write down of inventories recognised as an expense was £Nil (2017: £Nil).
11.
Trade receivables
Trade receivables
2018
£
2017
£
6,489,393
––––––––––––––
––––––––––––––
7,115,351
––––––––––––––
––––––––––––––
The Group’s normal trade credit term is 30 to 60 days. Other credit terms are assessed and approved
on a case by case basis.
12. Other receivables and prepayments
Other receivables
Prepayments
13.
Amount owing to contract customers
Cost incurred to date
Attributable profits
Progress billings
Represented by:
Contract liabilities (see note 24)
Contract assets (see note 24)
No retentions were held by customers for contract work.
2018
£
2017
£
1,056,398
924,472
––––––––––––––
1,980,870
––––––––––––––
––––––––––––––
868,807
667,327
––––––––––––––
1,536,134
––––––––––––––
––––––––––––––
2018
£
2017
£
36,789,365
3,786,166
––––––––––––––
40,575,531
(42,727,869)
––––––––––––––
(2,152,338)
(4,341,108)
2,188,770
––––––––––––––
(2,152,338)
––––––––––––––
––––––––––––––
20,130,826
2,888,698
––––––––––––––
23,019,524
(23,908,729)
––––––––––––––
(889,205)
(2,564,713)
1,675,508
––––––––––––––
(889,205)
––––––––––––––
––––––––––––––
Page 47
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 48
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
14.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
Cash and bank balances
2018
£
2017
£
15,941,961
––––––––––––––
––––––––––––––
9,619,345
––––––––––––––
––––––––––––––
15.
Share capital
The allotted, called up and full paid share capital is made up of 19,536,534 ordinary shares of £0.01
each.
At 1 September 2016
On 9 December 2016
On 9 December 2016
On 28 December 2016
On 28 December 2016
At 31 August 2017
On 13 September 2017
On 19 January 2018
On 15 May 2018
On 23 July 2018
At 31 August 2018
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Note
Number
of shares
Share
Capital
£
177,646
11,368
17,764,578
1,136,842
210,526
2,105
–––––––––––––
19,111,946
–––––––––––––
–––––––––––––
82,053
193,486
25,127
123,922
19,536,534
–––––––––––––
–––––––––––––
–––––––––––––
191,119
–––––––––––––
–––––––––––––
821
1,935
251
1,239
195,365
–––––––––––––
–––––––––––––
Share
premium
£
2,590,267
5,388,631
(393,478)
997,894
(4,048)
–––––––––––––
8,579,265
–––––––––––––
–––––––––––––
323,288
765,758
99,001
490,303
10,257,615
–––––––––––––
–––––––––––––
Total
£
2,767,913
5,399,999
(393,478)
999,999
(4,048)
–––––––––––––
8,770,384
–––––––––––––
–––––––––––––
324,109
767,693
99,252
491,542
10,452,980
–––––––––––––
–––––––––––––
(i)
On 9 December 2016, a total of 1,136,842 new ordinary shares were placed of £0.01 each
for £4.75.
(ii)
Costs of £393,478 associated with the Placing on 9 December 2016 were incurred.
(iii) On 28 December 2016, a total of 210,526 new ordinary shares were admitted to trading on AIM
following the issue of Offer shares.
(iv)
Costs of £4,048 associated with the Offer in 28 December 2016 were incurred.
(v)
On 13 September 2017, a total of 82,053 share options were exercised of £0.01 each for £3.95.
(vi) On 19 January 2018, a total of 193,486 share options were exercised of £0.01 each for £3.95.
(vii) On 15 May 2018, a total of 25,127 share options were exercised of £0.01 each for £3.95.
(viii) On 23 July 2018, a total of 123,922 share options were exercised of £0.01 each for £3.95.
Page 48
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 49
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
16.
Deferred tax
At 1 September
Recognised in profit or loss:
In respect of accelerated capital allowances
In respect of deferred tax on share options
Recognised in equity:
In respect of deferred tax on share options
At 31 August
The deferred tax balance is analysed as follows:
Deferred tax asset
Deferred tax liability
The deferred tax assets are attributable to:
Accelerated capital allowances
Deferred tax on share options
The deferred tax liabilities are attributable to:
Accelerated capital allowances
Short term timing differences
17.
Trade and other payables and accruals
Trade payables
Contract liabilities (note 24)
Social security and other taxes
Other payables and accruals
2018
£
2017
£
148,140
(118,946)
(147,787)
115,179
(72,307)
339,393
834,205
––––––––––––––
949,737
––––––––––––––
––––––––––––––
–
––––––––––––––
148,140
––––––––––––––
––––––––––––––
£
£
1,288,777
(339,040)
––––––––––––––
949,737
––––––––––––––
––––––––––––––
148,140
–
––––––––––––––
148,140
––––––––––––––
––––––––––––––
£
£
–
1,288,777
––––––––––––––
1,288,777
––––––––––––––
––––––––––––––
(191,253)
339,393
––––––––––––––
148,140
––––––––––––––
––––––––––––––
£
£
(347,106)
8,066
––––––––––––––
(339,040)
––––––––––––––
––––––––––––––
–
–
––––––––––––––
––––––––––––––
––––––––––––––
2018
£
2017
£
2,427,501
4,341,108
153,943
3,223,981
––––––––––––––
10,146,533
––––––––––––––
––––––––––––––
1,532,313
2,564,713
114,660
2,740,117
––––––––––––––
6,951,803
––––––––––––––
––––––––––––––
Contract liabilities consist of Deferred income and payments in advance. Where payments are received
on account and then deferred until the goods and have been delivered to the customer. Payments in
advance relate to contractual revenue billed in advance and the income to be recognised upon delivery
of goods and completion of services.
Page 49
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 50
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments
The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest
rate risk and equity price risk), credit risk and liquidity risk. The overall financial risk management policy
focuses on mitigating the potential adverse effects on the Group’s financial performance, through the
use of forward contracts.
(a)
Financial risk management policies
The Group’s policies in respect of the major areas of treasury activity are as follows:
(i)
Market risk
(i) Foreign currency risk
The Group is exposed to foreign currency risk on transactions and balances that
are denominated in currencies other than the Great Britain Pound. The currencies
giving rise to this risk are primarily the Euro and United States Dollar. Foreign
currency risk is monitored closely on an ongoing basis to ensure that the net
exposure is at an acceptable level.
The Group maintains a natural hedge whenever possible, by matching the cash
inflows (revenue stream) and cash outflows used for purposes such as capital
expenditure and operational expenditure in the respective currencies.
Where appropriate the Group has also utilised derivative financial instruments in
the form of forward contracts to sell currency in respect of sales denominated in
currencies other than Great Britain Pound.
The Group’s exposure to foreign currency is as follows:
Great
Britain
Pound
£
United
States
Dollar
£
Euro
£
Japan
Yen
£
Chinese
RMB
£
Total
£
2018
Financial assets
6,256,844
Trade receivables
1,063,765
Contract assets
Other receivables
924,472
Cash and bank balances 14,296,139
––––––––––
22,541,220
––––––––––
71,123
–
–
1,277,232
–––––––––
1,348,355
–––––––––
161,426
1,125,005
–
6,573
–––––––––
1,293,004
–––––––––
–
–
–
–
–
–
250
6,489,393
2,188,770
924,472
361,767 15,941,961
––––––––– –––––––––– ––––––––––
361,767 25,544,596
––––––––– –––––––––– ––––––––––
250
Financial liabilities
Trade payables
Other payables and
accruals
Net financial assets
Less: Net financial
assets denominated
in the functional currency
Currency exposure
2,059,262
108,572
246,434
13,233
–
2,427,501
–
–
3,223,981
––––––––– –––––––––– ––––––––––
5,651,482
––––––––– –––––––––– ––––––––––
19,893,114
13,233
–
17,257,937
––––––––––
2,635,177
––––––––––
––––––––––
3,223,981
––––––––––
5,283,243
––––––––––
–
–––––––––
108,572
–––––––––
–
–––––––––
246,434
–––––––––
Page 50
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 51
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments (continued)
(a)
Financial risk management policies (continued)
(i)
Market risk (continued)
(i) Foreign currency risk (continued)
The Group’s exposure to foreign currency is as follows:
Great
Britain
Pound
£
United
States
Dollar
£
Euro
£
Japan
Yen
£
Chinese
RMB
£
Total
£
2017
Financial assets
Trade receivables
Contract assets
Other receivables
Cash and bank balances
Financial liabilities
Trade payables
Other payables and
accruals
Net financial assets
Less: Net financial
assets denominated
in the functional currency
Currency exposure
4,921,481
1,231,550
667,327
9,175,451
––––––––––
15,995,809
––––––––––
1,892,235
–
–
263,652
–––––––––
2,155,887
–––––––––
143,453
393,144
–
29,965
–––––––––
566,562
–––––––––
–
–
–
2,636
7,115,351
158,182
1,675,508
50,814
667,327
–
9,619,345
147,641
––––––––– –––––––––– ––––––––––
356,637 19,077,531
––––––––– –––––––––– ––––––––––
2,636
1,034,267
177,140
289,179
31,727
–
1,532,313
2,740,117
––––––––––
3,774,384
––––––––––
–
–––––––––
177,140
–––––––––
–
–––––––––
289,179
–––––––––
–
–
2,740,117
––––––––– –––––––––– ––––––––––
4,272,430
––––––––– –––––––––– ––––––––––
14,805,101
31,727
–
12,221,425
––––––––––
2,583,676
––––––––––
––––––––––
The Group seeks to offset foreign currency risk exposure by way of forward
exchange contracts.
The consolidated statement of comprehensive income would be affected by a
gain/loss of approximately £105k (2017 – £28k) by a reasonable 10 percentage
point fluctuation down/up in the exchange rate between sterling and the US dollar,
a gain/loss of approximately £124k (2017 – £198k) by a reasonable 10 percentage
point fluctuation down/up in the exchange rate between sterling and the Euro, a
gain/loss of approximately £1k (2017 – £3k) by a reasonable 10 percentage point
fluctuation down/up in the exchange rate between sterling and the Japanese Yen
and a gain/loss of approximately £36k (2017 – £36k) by a reasonable 10 percentage
point fluctuation down/up in the exchange rate between sterling and the
Chinese RMB.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Group’s
exposure to interest rate risk arises mainly from interest-bearing financial assets
being interest bearing bank deposits. The Group’s policy is to obtain the most
favourable interest rates available whilst ensuring that cash is deposited with a
financial institution with a credit rating of “AA” or better. Any surplus funds are placed
with licensed financial institutions to generate interest income.
Interest rate risk sensitivity analysis
A 100 basis points strengthening/weakening of the interest rate as at the end of the
reporting period would have immaterial impact on profit after taxation and equity.
This assumes that all other variables remain constant.
Page 51
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 52
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments (continued)
(a)
Financial risk management policies (continued)
(i)
Market risk (continued)
(iii) Equity price risk
The Group does not have any quoted investments and hence is not exposed to
equity price risk.
(ii)
Credit risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly
from trade and other receivables. The Group manages its exposure to credit risk by the
application of credit approvals, credit limits and monitoring procedures on an ongoing
basis. For other financial assets (including cash and bank balances), the Group seeks to
minimise credit risk by dealing exclusively with high credit rating counterparties.
The Group establishes an allowance for impairment that represents its estimate of incurred
losses in respect of the trade and other receivables as appropriate. The main components
of this allowance are a specific loss component that relates to individually significant
exposures. Impairment is estimated by management based on prior experience and the
current economic environment.
Credit risk concentration profile
The Group’s major concentration of credit risk at 31 August 2018 relates to the amounts
owing by three customers which constituted approximately 47% of its trade receivables
as at the end of the reporting period.
Exposure to credit risk
As the Group does not hold any collateral, the maximum exposure to credit risk is
represented by the carrying amount of the financial assets as at the end of the
reporting period.
The exposure of credit risk for trade receivables by geographical region is as follows:
United States
United Kingdom
Europe
Rest of the World
2018
£
2017
£
864,320
15,726
2,934,353
2,674,994
––––––––––––––
6,489,393
––––––––––––––
––––––––––––––
1,390,707
559,943
2,917,059
2,247,642
––––––––––––––
7,115,351
––––––––––––––
––––––––––––––
Page 52
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 53
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments (continued)
(a)
Financial risk management policies (continued)
(ii)
Credit risk (continued)
Ageing analysis
The ageing analysis of the Group’s trade receivables as at each of the two years ended
31 August 2018 is as follows:
2018
Not past due
Past due:
– less than 3 months
– 3 to 6 months
2017
Not past due
Past due:
– less than 3 months
– 3 to 6 months
Gross
amount
£
Individual
impairment
£
Carrying
value
£
2,838,021
–
2,838,021
3,479,630
179,024
7,122,633
––––––––––––––
6,496,675
––––––––––––––
––––––––––––––
–
7,282
7,282
––––––––––––––
7,282
––––––––––––––
––––––––––––––
3,479,630
171,742
7,115,351
––––––––––––––
6,489,393
––––––––––––––
––––––––––––––
3,503,178
–
3,503,178
3,325,162
294,293
7,122,633
7,122,633
––––––––––––––
7,122,633
––––––––––––––
––––––––––––––
–
7,282
7,282
7,282
––––––––––––––
7,282
––––––––––––––
––––––––––––––
3,325,162
287,011
7,115,351
7,115,351
––––––––––––––
7,115,351
––––––––––––––
––––––––––––––
At the end of the reporting period, trade receivables that are individually impaired were
those in significant financial difficulties and have defaulted on payments. These receivables
are not secured by any collateral or credit enhancement.
Trade receivables that are past due but not impaired
The Group believes that no impairment allowance is necessary in respect of these trade
receivables. They are substantially companies with good collection track record and no
recent history of default.
(iii)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The exposure to liquidity risk arises primarily from mismatches of the
maturities of financial assets and liabilities.
The Group maintains a level of cash and cash equivalents and bank facilities deemed
adequate by the management to ensure as far as possible, that it will have sufficient
liquidity to meet its liabilities when they fall due.
Page 53
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 54
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments (continued)
(a)
Financial risk management policies (continued)
(iii)
Liquidity risk (continued)
The following table details the Group’s contractual maturity for its financial liabilities. The
table has been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the Group and the Company can be required to pay.
As at 31 August 2018
Less than
1 month
£
Less than
3 months
£
3 to
12 months
£
Total
£
Trade and other payables
3,277,394
66,302
2,307,786
5,651,482
This compares to the maturity of the Group’s financial liabilities in the previous reporting
periods as follows:
As at 31 August 2017
Trade and other payables
Less than
1 month
£
Less than
3 months
£
3 to
12 months
£
Total
£
2,820,623
–––––––––––––
2,820,623
–––––––––––––
–––––––––––––
–
–––––––––––––
–
–––––––––––––
–––––––––––––
1,451,807
–––––––––––––
1,451,807
–––––––––––––
–––––––––––––
4,272,430
–––––––––––––
4,272,430
–––––––––––––
–––––––––––––
The above contractual maturities reflect the gross cash flows, which may differ to the
carrying values of the liabilities at the balance sheet date.
(b)
Capital risk management
Capital is defined as the total equity of the Group. The Group’s objectives when managing capital
are to safeguard the Group’s ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Group manages its capital based on debt-to-equity ratio. The strategies adopted were
unchanged during the period under review and from those adopted in the previous financial year.
The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as
borrowings plus trade and other payables less cash and cash equivalents.
At 31 August 2018, the Group’s cash resources exceed its total debt. The Company hence has
no net debt.
Page 54
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 55
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
18.
Financial instruments (continued)
(c)
Classification of financial instruments
All financial instruments are categorised as follows.
Loans and receivables
Trade receivables
Contract assets
Other receivables
Cash and bank balances
Financial assets at fair value through profit or loss
Derivative financial instruments
Financial liabilities held at amortised cost
Trade and accruals and other payables
Financial assets at fair value through profit or loss
Derivative financial instruments
2018
£
6,489,393
2,188,770
924,472
15,941,961
–
––––––––––––––
25,544,596
––––––––––––––
––––––––––––––
2017
£
7,115,351
1,675,508
667,327
9,619,345
–
––––––––––––––
19,077,531
––––––––––––––
––––––––––––––
5,651,482
4,272,430
–
––––––––––––––
5,651,482
––––––––––––––
––––––––––––––
–
––––––––––––––
4,272,430
––––––––––––––
––––––––––––––
(d)
Fair value hierarchy
The fair values of the financial assets and liabilities are analysed into level 1 to 3 as follows:
Level 1:
Level 2:
Level 3:
Fair value measurements derive from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Fair value measurements derive from inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either directly or indirectly.
Fair value measurements derive from valuation techniques that include inputs for
that are not based on observable market data
the asset or
(unobservable inputs).
liability
The only financial instruments carried at fair values were foreign currency forward contracts being
derivative financial instruments falling within Level 2 and valued based on discounted cash flow.
The future cash flows are estimated based on forward exchange rates (from observable forward
exchange rates at the end of the reporting period) and contract forward rates, discounted at a
rate that reflects the credit risk of various counterparties. The carrying value of all other financial
instruments approximates their fair value.
There were no forward contracts in 2018.
19.
Lease commitments
The Group had total commitments at the end of each financial year in respect of non-cancellable
operating leases of:
Property leases
Payable within one year
Payable within 2-5 years
The lease terms are due to complete between 2018 and 2023.
Page 55
2018
£
2017
£
220,147
404,800
––––––––––––––
624,947
––––––––––––––
––––––––––––––
143,079
170,233
––––––––––––––
313,312
––––––––––––––
––––––––––––––
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 56
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
20.
Related party disclosures
Mr. A. Best, a director of the Company, is a trustee and beneficiary of the Best Middleton Trust. Rental
payments of £48,000 (2017 – £48,000) were made in the year. No amounts were due to or from the
trust at any year end.
Balances and transactions between the Company and its subsidiaries are eliminated on consolidation
and are not disclosed in this note.
The remuneration of the key management personnel of the Group is set out in the Directors’ report on
page 16.
During the year, the directors received dividends from the Company totalling £226,254.
21.
Share options and warrants
The share option schemes were established to reward and incentivise the executive management team
and staff for delivering share price growth. The share option schemes are administered by the
Remuneration Committee.
The share option scheme adopted by the Company during the year ending 31 August 2018 is equity
settled and a charge of £659,167 (2017 £1,464,817) has been charged to profit or loss relating to
these options.
These fair values were calculated using Black Scholes option pricing model. The inputs into the model
were as follows:
Stock price 395p
Exercise price 395p
Interest rate 1%
Volatility 40%
Time to maturity 10 years
The expected volatility was determined with reference to recent trading performance.
One third of the options will vest on each of the first, second and third anniversary of the grant date of
11 July 2016 subject to the employees remaining employed by the Company.
Details of the share options outstanding at the year-end are as follows:
Outstanding as at
1 September
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Options outstanding at
31 August
Exercisable at 31 August
Number
31 August
2018
1,337,122
–
–
–
(424,588)
––––––––––––––
912,534
––––––––––––––
––––––––––––––
912,534
––––––––––––––
WAEP
(pence)
31 August
2018
395.00
–
–
–
395.00
––––––––––––––
395.00
––––––––––––––
––––––––––––––
395.00
––––––––––––––
Number
31 August
2017
1,337,122
–
–
–
–
––––––––––––––
1,337,122
––––––––––––––
––––––––––––––
445,731
––––––––––––––
WAEP
(pence)
31 August
2017
395.00
–
–
–
–
––––––––––––––
395.00
––––––––––––––
––––––––––––––
395.00
––––––––––––––
The weighted average share price on the date of exercise was 940.00p.
The weighted average remaining contractual life of the options outstanding at the statement of financial
position date is 7.8 years.
Warrants
There are no warrants outstanding at 31 August 2018.
Page 56
252371 AB Dynamics pp36-59.qxp 13/11/2018 14:55 Page 57
AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
22.
23.
Ultimate controlling party
There is no ultimate controlling party.
Capital commitments
At 31 August 2018 the Group had capital commitments as follows:
Contracted but not provided in these financial statements
2018
£
2017
£
77,828
––––––––––––––
77,828
––––––––––––––
––––––––––––––
2,449,272
––––––––––––––
2,449,272
––––––––––––––
––––––––––––––
24.
Revenue recognition and contract balances
Contract balances
At 31 August 2018, the group had the following customer contract related assets and liabilities:
Contract assets:
Opening balance at 1 September 2017
Closing balance at 31 August 2018
Accrued income
£1,675,508
£2,188,770
––––––––––––––
––––––––––––––
The increase in contract assets is the result of the stage of completion of two contracts.
Within the figure of £2,188,770 is a balance of:
£1,125,005 for a customer whereby nothing has been invoiced yet £1,125,005 of expenditure has been
allocated. In October 2018 75% of the contract was invoiced which has resulted in a contract liability in
the month.
£1,063,765 for a customer whereby nothing has been invoiced yet £1,063,765 of expenditure has
been allocated.
Contract liabilities:
Opening balance at 1 September 2017
Closing balance at 31 August 2018
Contract Liabilities
£2,564,713
––––––––––––––
£4,341,108
––––––––––––––
––––––––––––––
This balance consists of Deferred income and Payments in advance. The significant increase of contract
liabilities is due to deferred income which principally relates to a marked increase in the volume of track
testing systems in progress as at 31 August 2018 where payments received on account are deferred
until the goods have been delivered to the customer. Within this figure is £0.56m relating to support
and warranty and is recognised over the period to which these obligations are performed.
Within the opening balance of £2,564,713, an amount of £2,039,929 has been recognised in revenue
during the period.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
24.
Revenue recognition and contract balances (continued)
Performance obligations
The performance obligations in relation to the contracts with its customers are as follows:
Laboratory test systems
The long term construction contracts are in relation to the laboratory test systems which are highly
customised items which typically take more than 12 months to construct and supply these systems to
the customers. In the judgement of management, the group satisfies the performance obligations under
these contracts over time. The key determination of this judgement was that the Company’s
performance does not create an asset with alternative use to the Company and that the Company has
an enforceable right to payment for performance completed to date. Payment for these construction
contracts is accordance with an agreed schedule with typical contracts including certain technical and
physical completion milestones as payment points for customers. The majority of contracts are expected
to result in contract liability balances. These balances arise as these contracts typically provide for an
up-front deposit and other payments through the course of the contract.
The consideration for these contracts is agreed in advance between the Company and the customer
and is fixed.
Revenue relating to warranties and related obligations is recognised over the period to which these
obligations are performed by the Company.
In determining the transaction prices and amounts allocated to performance obligations for these
systems, management have consideration to price lists of component parts and standard pricing for
servicing and guarantee arrangements.
Track testing systems
The contracts in relation to the sale of track testing systems are in relation to the robotic systems which
typically take less than 12 months to construct and supply these systems to the customers. In the
judgement of management, due to the lower level of customisation required to these items, the relative
cost and time required to construct the systems, the group satisfies the performance obligations under
these contracts on delivery to the customer. In making this determination, management have considered
when customer has obtained control of this system, and the principal indicator of this was when the
customer has physical possession. Payment for these construction contracts is accordance with an
agreed schedule with typical contracts including certain technical and physical completion milestones
as payment points for customers. A typical contract may include a 30% deposit, which is recorded as
a contract liability until such time as the performance obligation is met. The consideration for these
contracts is agreed in advance between the Company and the customer and is fixed.
Revenue relating to warranties and related obligations is recognised over the period to which these
obligations are performed by the Company.
In determining the transaction prices and amounts allocated to performance obligations for these
systems, management have consideration to price lists of component parts and standard pricing for
servicing and guarantee arrangements.
Page 58
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Consolidated financial statements
24.
Revenue recognition and contract balances (continued)
Performance obligations (continued)
Remaining performance obligations as at 31 August 2018
As at 31 August 2017, the aggregate amount of the transaction price on open contracts which is
allocated to performance obligations that are unsatisfied (or partially unsatisfied) was as follows:
Unsatisfied performance obligations
Partially unsatisfied performance obligations
Laboratory
test systems
Track testing
systems
£1,276,031
£664,789
£20,186,149
3,926,354
The revenue recognised in the period in relation to Laboratory test systems amount to £1,208,887 and
track testing systems amounted to £12,204,603.
As at 31 August 2018, the aggregate amount of the transaction price on open contracts which is
allocated to performance obligations that are unsatisfied (or partially unsatisfied) was as follows:
Unsatisfied performance obligations
Partially unsatisfied performance obligations
Laboratory
test systems
Track testing
systems
£1,174,329
£2,150,101
£20,216,344
£3,926,294
The revenue on outstanding performance obligations at 31 August 2018 on the track testing systems
will be recognised on delivery of these items, alongside the associated cost of sales, in the following
financial year.
The revenue on outstanding performance obligations at 31 August 2018 on laboratory test systems will
be recognised over time alongside the associated cost of sales, in the following financial year. The
typical length of time for these construction projects is 18-24 months.
No practical expedients have been applied on transition to IFRS 15.
Assets recognised from costs to obtain or fulfil customer contracts
No amounts have been recognised in relation to these categories of assets as at 31 August 2018.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
Company statement of financial position
Fixed assets
Investments
Current assets
Other debtors
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Capital and reserves
Called up share capital
Share premium account
Profit and loss account
Equity – attributable to the owners of the parent
Note
2018
£
2017
£
3
4
5
2,591,274
––––––––––––––
1,932,106
––––––––––––––
11,528,758
––––––––––––––
11,528,758
20,000
––––––––––––––
11,508,758
––––––––––––––
14,100,032
––––––––––––––
––––––––––––––
195,365
10,257,615
3,647,052
––––––––––––––
14,100,032
––––––––––––––
––––––––––––––
9,743,437
––––––––––––––
9,743,437
15,600
––––––––––––––
9,727,837
––––––––––––––
11,659,943
––––––––––––––
––––––––––––––
191,119
8,579,265
2,889,559
––––––––––––––
11,659,943
––––––––––––––
––––––––––––––
The profit for the financial year dealt with in the financial statements of the parent company was £766,230
(2017 – £679,687).
The financial statements were approved by the Board of Directors and authorised for issue on and are signed
on its behalf by:
Anthony Best Robert Hart
Director Director
COMPANY REGISTRATION NUMBER: 08393914
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
Company statement of changes in equity
Balance at 1 September 2016
Share based payment expense
Profit after taxation and
total comprehensive
income for the financial year
Dividend paid
Issue of shares, net of
share issue costs
Balance at 31 August 2017
Balance at 1 September 2017
Share based payment
Expense
Profit after taxation and
total comprehensive
income for the financial
year
Dividend paid
Issue of shares, net of share
issue costs
Balance at 31 August 2018
Share
capital
£
Share
premium
£
Retained
profits
£
Total
equity
£
Note
177,646
2,590,267
1,321,860
4,089,773
7
7
1,464,817
1,464,817
679,687
(576,805)
679,687
(576,805)
13,473
––––––––––––––
191,119
––––––––––––––
191,119
––––––––––––––
5,988,998
––––––––––––––
8,579,265
––––––––––––––
8,579,265
––––––––––––––
––––––––––––––
2,889,559
––––––––––––––
2,889,559
––––––––––––––
6,002,471
––––––––––––––
11,659,943
––––––––––––––
11,659,943
––––––––––––––
659,168
659,168
766,230
(667,905)
766,230
(667,905)
4,246
––––––––––––––
195,365
––––––––––––––
––––––––––––––
1,678,350
––––––––––––––
10,257,615
––––––––––––––
––––––––––––––
1,682,596
––––––––––––––
3,647,052
––––––––––––––
––––––––––––––
––––––––––––––
14,100,032
––––––––––––––
––––––––––––––
The share premium account is a non-distributable reserve representing the difference between the nominal
value of shares in issue and the amounts subscribed for those shares.
Retained profits represent the cumulative value of the profits not distributed to shareholders but retained to
finance the future capital requirements of the Group.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
Notes to the Company financial statements
GENERAL INFORMATION
AB Dynamics Plc (“the Company”) is the UK holding company of a group of companies which are engaged
in the provision of advanced testing systems to the global motor industry. The Company is registered in
England and Wales (registered number 08393914). Its registered office and principal place of business is
Middleton Drive, Bradford-on-Avon, BA15 1GB.
BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with the historical cost convention and in
accordance with FRS 102 – The Financial Reporting Standard applicable in the UK and Republic or Ireland
and the Companies Act 2006. The financial statements present information about the Company as an
individual entity and the principal accounting policies are described below. They have all been applied
consistently throughout the period.
REDUCED DISCLOSURE EXEMPTIONS
The company, as a qualifying entity, has taken advantage of the disclosure exemptions in FRS102 paragraph
1.12 as follows:
No cash flow statement has been presented as the Company is included within the consolidated financial
statements of the group.
Disclosures in respect of the Company’s financial instruments have not been presented as equivalent
disclosures are included in the consolidated financial statements of the group.
The company has also taken advantage of the disclosure exemptions in FRS102 paragraph 33.1A as follows:
Related party transactions have not been disclosed with other wholly owned members of the group.
GOING CONCERN
At 31 August 2018, the Company had net current assets of £11,486,712 (2017 – £9,727,837) with the main
current asset being amounts owed from its subsidiary Anthony Best Dynamics Ltd, amounting to £11,514,088
(2017 – £9,716,403). The Company has assessed its ongoing costs with cash generated by its subsidiary to
ensure that it can continue to settle its debts as they fall due.
The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate to
adopt the going concern basis for the preparation of the financial statements and the financial statements do
not include any adjustments that would result if the going concern basis was not appropriate.
INVESTMENTS
Investments held as fixed assets are stated at cost less provision for impairment.
TAXATION
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or
recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the
balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a
right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences
between the Company’s taxable profits and its results as stated in the financial statements that arise from the
inclusion of gains and losses in tax assessments in periods different from those in which they are recognised
in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognised only
when, on the basis of all available evidence, it can be regarded as more likely than not that there will be
suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised in the statements of financial position when the Company has
become a party to the contractual provisions of the instruments.
The Company only enters into basic financial instruments transactions that result in the recognition of financial
assets and liabilities like trade and other debtors and creditors and loans to related parties.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans and receivables are
measured initially at fair value and are measured subsequently at amortised cost using the effective interest
method, less any impairment.
Creditors
Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank
loans, are measured initially at fair value and are measured subsequently at amortised cost using the effective
interest method.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company’s accounting policies, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not apparent from
other sources. The estimates and assumptions are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future and other key sources of estimation uncertainty
at the statement of financial position date that have a significant risk of causing a significant adjustment to the
carrying amounts of assets and liabilities in the Financial statements:
Share based payment
The fair value of share-based remuneration is determined at the date of grant and recognised as a capital
contribution to its subsidiary on a straight line basis over the vesting period, taking account of the estimated
number of shares that will vest. The fair value is determined by use of Black Scholes model method.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
1
2
PROFIT FOR THE FINANCIAL YEAR
The Company has taken advantage of section 408 of the Companies Act 2006 and, consequently, a
profit and loss account for the Company alone has not been presented.
The Company’s profit for the financial year was £766,230 (2017 – £679,687).
The Company’s profit for the financial year has been arrived at after charging auditor’s remuneration
payable to Crowe U.K. LLP for audit services to the Company of £38,540 (2017 – £18,600). Statutory
information on remuneration for other services provided by the Company’s auditors and its associates
is given on a consolidated basis in note 5 of the consolidated financial statements.
EMPLOYEES AND DIRECTORS’ REMUNERATION
Staff costs during the year by the Company were as follows:
Wages and salaries
Social security costs
2018
£
2017
£
182,325
20,179
––––––––––––––
202,504
––––––––––––––
––––––––––––––
62,500
6,036
––––––––––––––
68,536
––––––––––––––
––––––––––––––
The executive management team is remunerated by the operating subsidiary Anthony Best Dynamics
Limited. Details of their remuneration is in the Directors’ report on page 44.
The average number of employees of the Company during the year was:
Directors and management
3
INVESTMENTS
Subsidiary undertaking
Brought forward
Addition (capital contribution arising on share based payment)
Carried forward
2018
Number
2017
Number
7
––––––––––––––
––––––––––––––
5
––––––––––––––
––––––––––––––
2018
£
2017
£
1,932,106
659,168
––––––––––––––
2,591,274
––––––––––––––
––––––––––––––
467,289
1,464,817
––––––––––––––
1,932,106
––––––––––––––
––––––––––––––
The Company owns more than 20% of the following undertakings which are incorporated in the
United Kingdom:
Class of share held % shareholding
Registered office
Subsidiary undertaking:
Anthony Best Dynamics Limited
Ordinary
100
Middleton Drive
Bradford-on-Avon
Wiltshire
BA15 1GB
Anthony Best Dynamics Ltd owns 100% of the ordinary share capital of AB Dynamics Europe GmbH
and 100% of the ordinary share capital of AB Dynamics 2013 Ltd which is dormant.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
4
OTHER DEBTORS
Amounts owed by group undertakings
Prepayment
5
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Accruals
2018
£
2017
£
11,514,088
14,670
––––––––––––––
11,528,758
––––––––––––––
––––––––––––––
9,716,403
27,034
––––––––––––––
9,743,437
––––––––––––––
––––––––––––––
2018
£
2017
£
20,000
––––––––––––––
20,000
––––––––––––––
––––––––––––––
15,600
––––––––––––––
15,600
––––––––––––––
––––––––––––––
All amounts fall due within 30 days of the year end.
6
SHARE CAPITAL
The allotted, called up and full paid share capital is made up of 19,536,534 ordinary shares of
£0.01 each.
At 1 September 2016
On 9 December 2016
On 9 December 2016
On 28 December 2016
On 28 December 2016
At 31 August 2017
On 13 September 2017
On 19 January 2018
On 15 May 2018
On 23 July 2018
At 31 August 2018
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Note
Number of
shares
Share
Capital
£
177,646
11,368
17,764,578
1,136,842
210,526
2,105
–––––––––––––
19,111,946
–––––––––––––
–––––––––––––
82,053
193,486
25,127
123,922
19,536,534
–––––––––––––
–––––––––––––
–––––––––––––
191,119
–––––––––––––
–––––––––––––
821
1,935
251
1,239
195,365
–––––––––––––
–––––––––––––
Share
Premium
£
2,590,267
5,388,631
(393,478)
997,893
(4,048)
–––––––––––––
8,579,265
–––––––––––––
–––––––––––––
323,288
765,758
99,001
490,303
10,257,615
–––––––––––––
–––––––––––––
Total
£
2,767,913
5,399,999
(393,478)
999,998
(4,048)
–––––––––––––
8,770,384
–––––––––––––
–––––––––––––
324,109
767,693
99,252
491,542
10,452,980
–––––––––––––
–––––––––––––
(ix) On 9 December 2016, a total of 1,136,842 new ordinary shares were placed of £0.01 each
for £4.75.
(x)
Costs of £393,478 associated with the Placing on 9 December 2016 were incurred.
(xi) On 28 December 2016, a total of 210,526 new ordinary shares were admitted to trading on AIM
following the issue of Offer shares.
(xii) Costs of £4,048 associated with the Offer in 28 December 2016 were incurred.
(xiii) On 13 September 2017, a total of 82,053 share options were exercised of £0.01 each for £3.95.
(xiv) On 19 January 2018, a total of 193,486 share options were exercised of £0.01 each for £3.95.
(xv) On 15 May 2018, a total of 25,127 share options were exercised of £0.01 each for £3.95.
(xvi) On 23 July 2018, a total of 123,922 share options were exercised of £0.01 each for £3.95.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
7
DIVIDENDS
Final 2016 dividend paid of £0.01815 per share
Interim dividend paid of £0.01331 per share
Final 2017 dividend paid of £0.02 per share
Interim dividend paid of £0.01465 per share
2018
£
2017
£
–
–
383,880
284,025
––––––––––––––
667,905
––––––––––––––
––––––––––––––
322,426
254,379
–
–
––––––––––––––
576,805
––––––––––––––
––––––––––––––
8
9
The Board has proposed a final dividend of 2.20p per share totalling £429,804. Together with the interim
dividend of 1.465p per share this gives a total Ordinary dividend of 3.665p for the year.
RELATED PARTY TRANSACTIONS
The only key management personnel of the Company are the Directors. Details of their remuneration
are contained in the Director’s Report on page 17 of the consolidated financial statements.
During the year, the directors received dividends from the Company totalling £226,254.
SHARE OPTIONS AND WARRANTS
The share option schemes were established to reward and incentivise the executive management team
and staff for delivering share price growth. The share option schemes are administered by the
Remuneration Committee.
The share option scheme adopted by the Company during the year ending 31 August 2018 is equity
settled and a charge of £659,168 (2017: £1,464,817) has been charged to profit or loss of the subsidiary
Anthony Best Dynamics Limited relating to these options on the basis that the scheme members and
profits are in that entity.
These fair values were calculated using Black Scholes option pricing model. The inputs into the model
were as follows:
Stock price 395p
Exercise price 395p
Interest rate 1%
Volatility 40%
Time to maturity 10 years
The expected volatility was determined with reference to recent trading performance.
One third of the options will vest on each of the first, second and third anniversary of the grant date of
11 July 2016 subject to the employees remaining employed by the Company.
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AB Dynamics plc
Annual report and financial statements
For the year ended 31 August 2018
Company financial statements
9
SHARE OPTIONS AND WARRANTS (continued)
Details of the share options outstanding at the year end are as follows:
Number
31 August
2018
WAEP
(pence)
31 August
2018
1,337,122
–
–
–
(424,588)
––––––––––––––
395.00
–
–
–
395.00
––––––––––––––
Number
31 August
2017
1,337,122
–
–
–
–
––––––––––––––
WAEP
(pence)
31 August
2017
395.00
–
–
–
–
––––––––––––––
912,534
––––––––––––––
––––––––––––––
395.00
––––––––––––––
––––––––––––––
1,337,122
––––––––––––––
––––––––––––––
395.00
––––––––––––––
––––––––––––––
Outstanding as at
1 September
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Options outstanding at
31 August
Exercisable at 31 August
912,534
––––––––––––––
395.00
––––––––––––––
445,731
––––––––––––––
395.00
––––––––––––––
The weighted average remaining contractual life of the options outstanding at the statement of financial
position date is 7.8 years.
Warrants
There are no warrants outstanding at 31 August 2018.
Page 67
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Perivan Financial Print 252371
252371 AB Dynamics Cover Spread 4mm.QXP 13/11/2018 14:53 Page 1
AB Dynamics plc
2018 Annual Report & Accounts
For the year ended 31 August 2018
AB Dynamics plc
Holt Road
Bradford on Avon
Wiltshire BA15 1AJ
T: +44 (0)1225 860 200
F: +44 (0)1225 860 201
E: info@abd.uk.com
www.abd.uk.com
Stock code: ABDP
Company Registration No. 08393914