Company registration number: 04799195
AccessIntelligence
ANNUAL REPORT AND ACCOUNTS 2015
for the year ended 30 November 2015
Contents
Highlights
01
Consolidated Statement of Comprehensive Income 21
Access Intelligence Overview 02
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flow
Notes to the Consolidated Statements
Company Balance Sheet
Notes to the Company Financial Statements
Chairman’s Statement
Strategic Report
Directors and Advisers
Directors’ Report
Corporate Governance
Independent Auditor’s Report
06
07
11
12
17
19
Investor Proposition
22
23
25
26
56
57
As the global economic climate puts an increasing onus on the value of corporate reputation and risk management, our
solutions that ensure crisis, compliance and effective stakeholder management are increasingly relevant.
Operating a recognised portfolio in this space provides a strong opportunity for long-term investor return. The
complementary nature of our suite offers excellent opportunities for cross-selling and joint development whilst a long-
standing reputation for high quality SaaS solutions, combined with strong customer relationships, provides strong on-
going revenue potential.
We have focused on putting talent in place to capitalise on this opportunity. Industry specialists lead our product
divisions underpinned by a delivery team dedicated to best practice in product development, sales, marketing and
finance, all supported by an experienced board.
iPad
Vuelio
AIControlPoint
AITrackRecord
Instagram
BBC News
Facebook
Twitter
LinkedIn
Youtube
Safari
Chrome
App Store
Business OverviewFinancial StatementsCorporate Governance
Highlights
Recurring Revenue
as a % of revenue from continuing operations
77%Recurring Revenues
88%Recurring Revenues
92%Recurring Revenues
2013
2014
2015
Contracted Not Yet Invoiced
from continuing operations
£5.6m
£3.5m
£2.6m
2013
2014
2015
2015 Operational Highlights
• Strategic M&A activity has strengthened the Group’s portfolio of
core products and services
• Group revenue from continuing operations at year end up by 89%
to £8.1m from £4.3m
• Recurring revenue from continuing operations up by 99% to
£7.5m from £3.7m
• Strategic shift in focus with increased emphasis on the development
of the reputation and risk management divisions of the business
1
1
www.accessintelligence.com Access Intelligence Overview
Access Intelligence helps organisations effectively manage their reputation and mitigate risk. Our custom-built SaaS
platforms offer a range of reputation management applications, incident and crisis management solutions and training
and competence management software, through the cloud.
Our business is split into two distinct service elements:
Reputation Management
Risk Management
Vuelio
Reputation Management
AIControlPoint
Incident & Crisis Management
AITrackRecord
Training, Competence & Risk Management
All solutions are provided using Microsoft’s highly secure Azure infrastructure giving customers complete confidence and
security. Our solutions have been designed in collaboration with some of the largest companies in the world, ensuring
they are fundamentally fit for purpose.
Brand Strategy
Over the year, Access Intelligence has focused on consolidating operations to strengthen the brand. We have divested
non-core businesses, while making acquisitions to complement the core. Together, this ensures a distinct road map for
the future around four key strategic aims:
1.Predictable Revenue
3. Focus on target sectors
In addition to putting a focus on multi-year deals,
we are developing long-term and predictable new
business revenue models that optimise earnings
growth, promote free cash flow and deliver attractive
returns on capital reinvested in the business.
While our software can be used across all sectors, we
have a strategic focus on regulated industries and the
public sector. Such clients place a premium on being able
to manage and mitigate operational and reputational risk,
which provides strong growth potential.
2. High customer retention rates
4. Investing in talent
Our innovative offerings and intuitive solutions
deliver value that increases with use over time. This
builds loyalty amongst users. We also have solid
experience in successfully developing customer
management programmes, which are a strong
retention tool.
We believe in recruiting the best people and attract
leading industry executives with deep expertise in
reputation and risk management. We also search for the
brightest graduates, putting potential recruits through
a rigorous 48-hour selection process. Our training and
reward programmes ensure that talent and leadership
thrive at all levels of the organisation.
2
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC What is SaaS?
Software as a Service (SaaS) solutions are designed to accelerate adoption and increase value for customers without
the cost burdens or risks of implementing costly software or hardware.
SaaS delivers on-demand software functionality via the internet from a single application shared across multiple users.
SaaS solutions require only a web browser for access, eliminating the need to install and maintain the software and
hardware associated with desktop installed products. Furthermore, they replace the upfront licence fees and lengthy
implementation cycles of traditional installed applications with a “pay-as-you-go” subscription based service, usually
following an upfront professional services fee to cover installation and configuration.
Benefits for SaaS Vendors
Benefits for End Users
• Predictable Revenue and Cash Flows: Customers
pay for software by subscription rather than buying
a licence resulting in more certainty about future
revenue and cash flow.
• Truly Scalable: Software can be distributed rapidly,
via the internet, to many new customers at minimal
incremental cost to the company.
• Highly Valued: Due to predictibility of revenues and
cash flows and ease of scalability.
• Frequent Upgrades: Our SaaS model allows more
regular updates at a lower cost than traditional software
companies.
• Lower Cost of Ownership: Maintenance costs are
lower, no licence costs and the lower distribution costs
for the vendor are passed on to the consumer.
• Higher Level of Service from Vendors: Vendors must
become more responsive to customer needs or they
risk losing subscription revenues.
3
www.accessintelligence.com
Our Brands
Vuelio
Customer use: PR, Public Affairs and Reputation Management
Customers include: Nokia, The Metropolitan Police, Vodafone, Freshfields, First Group and FedEx
Vuelio operates a comprehensive portfolio of products and services for public relations and public
affairs professionals throughout the UK and Europe.
This new flagship brand was created last year following our acquisition of the UK operations of global
PR software company, Cision. This deal expanded our customer base in the communications sector
six-fold, as well as providing a wealth of operational, technology and business development assets.
Vuelio enables effective stakeholder management. The integrated Vuelio Communications Software
suite provides a complete solution for allowing communications and public affairs professionals to
identify and engage with high-value media, digital and political influencers and internal communications
audiences.
While Vuelio supports communications professionals across all sectors, we have a strong presence
in the public sector and other highly regulated industries. This strategy allows us to maximise the
core competencies of our portfolio to mitigate risk, whilst also providing upsell opportunities. We
also have an active and successful initiative to heighten retention rates through multi-year deals.
4
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC AIControlPoint
Customer use: Incident & Crisis Management
Customers include: easyJet, British Petroleum, Thomas Cook and Manchester Airport Group.
AIControlPoint is a suite of technologies that help companies in high-risk industries manage
incidents and crises and proactively mitigate risk. This ensures crisis response, whether localised or
global, is swift, tailored and meets all necessary regulatory requirements. Organisations have used
AIControlPoint to manage some of the world’s most high-profile incidents in recent years, including
the 2015 Tunisia terror attacks. AIControlPoint is already well used in the highly regulated aviation
and oil and gas sectors, and is gradually becoming embedded in new markets, such as travel and
tourism.
AITrackRecord
Customer use: Training, Competence and Employee Performance Management
Customers include: Aviva and St. James’s Place.
AITrackRecord is a powerful complete solution for training, competence and compliance
management; designed specifically for the highly regulated UK financial services industry. It gives
companies full visibility of staff competences, knowledge, performance and compliance through
a single central console. The data gives senior managers a previously unseen insight into their
reporting line, helping them identify trends and make informed decisions that have a proven impact
on the bottom line. By combining information from different parts of a business, AITrackRecord
reduces administrative demands, decreases the cost of competence and compliance management
and mitigates the significant risk of non-compliance.
5
www.accessintelligence.com Chairman’s Statement
I am pleased to announce our results for the year ended 30 November 2015.
2015 has been a pivotal year for Access Intelligence, during which we restructured our portfolio around our reputation
and risk management software interests though a series of acquisitions and divestments.
During the year we made a substantial acquisition of the UK operations of Cision UK Ltd and Vocus UK Ltd. This
acquisition, combined with our existing reputation business significantly strengthens our position in the reputation
management space.
Our strategic focus on reputation and risk management software also prompted the divestment of the software
maintenance and hosting business Willow Starcom Ltd and, more recently in 2016, the e-procurement solution provider
Due North Ltd.
Outlook
The current global political, economic and business climate continues to reinforce the importance of effective reputation
and risk management, and, moreover, the interdependence of the two.
Organisations in both regulated and non-regulated environments recognise the importance of bringing highly flexible,
domain-driven software and responsive business analytics to bear on building and safeguarding reputation through
both responsible, compliant operations and effective communication. It is therefore essential that we continue to invest
in innovative research and development to unify the position of our products in the market and to make our software
synonymous with customer success.
We are excited about the acquisition and development of the reputation management business. The media and
communications environment has been subject to dramatic change in recent years, and as such our software is
increasingly relevant, with customers seeking to influence multiple stakeholders in support of tangible operational
success. We expect our strengthened product suite to drive greater market share as we build on the momentum post-
acquisition.
I would like to take this opportunity on behalf of the Board to thank you for your continued support of Access Intelligence.
M Jackson
Chairman
8 April 2016
6
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Strategic Report
Results
The 2015 financial year has been a year of significant opportunity for the Group to restructure its operations and focus
its commitment on the SaaS business model within the reputation and risk management sectors. This has included the
strategic acquisition of a substantial new business in June 2015 to complement the Group’s existing reputation software
platform and the divestment of a non-core IT support services business in April 2015. Prior to the year-end, the Board
also made the decision to divest a further non-core e-procurement business, with the sale being completed in February
2016.
All companies that form part of the Group’s continuing operations saw their revenue increase year on year, with the
exception of A.I. Talent Limited. Notable revenue increases were delivered by AITrackRecord Limited (34%) and Access
Intelligence Media & Communications Limited (19%), with total revenue from existing continuing operations increasing
by 11% to £4,768,000 (2014: £4,291,000).
In addition, the acquisition contributed revenue of £3,351,000 for the six month period that it formed part of the Group,
resulting in Group revenue from continuing operations increasing by 89% to £8,119,000 (2014: £4,291,000). Reported
revenue for the acquisition is not considered by the Board to be fully reflective of the business acquired due to the
requirements of acquisition accounting (see Note 8 for further detail on the estimation of the fair value of deferred
revenue on acquisition).
Recurring revenue from existing continuing operations increased by 14% to £4,297,000 (2014: £3,756,000), with the
acquisition contributing a further £3,189,000. As a result, total recurring revenue from continuing operations increased
significantly to £7,486,000 for the year (2014: £3,756,000) and accounted for 92% (2014: 88%) of total revenue.
At 30 November 2015, total deferred revenue from continuing operations stood at £4,643,000 (2014: £1,932,000)
reflecting again the impact of the acquisition in the year which added £2,794,000 to deferred revenue at year end. Total
Group deferred revenue at year end stood at £5,264,000 (2014: £3,246,000).
Gross margin from existing continuing operations has remained broadly consistent at 77% (2014: 78%). However,
overall gross profit from continuing operations has fallen to 60%, primarily as a result of the acquisition which has higher
direct costs of sales than the existing continuing operations and short-term transition and migration costs.
The Group has undertaken extensive and ongoing restructuring during the year to reduce costs with the full impact of
this not being fully reflected in the 2015 financial performance. In addition, the acquisition had immediate synergistic
benefits as the Group consolidated London offices and removed duplicated roles although it is notable that the benefit
of these synergies is also not fully reflected in the 2015 financial performance. As a result of the restructuring and
refocusing of the business during the year, earnings before interest, tax, depreciation and amortisation (EBITDA) pre-
impairment charges from existing continuing operations declined to a loss of £1,359,000 (2014: loss £696,000). The
acquisition contributed a further EBITDA loss for the period that it was part of the group of £379,000, resulting in a total
EBITDA loss for the year of £1,738,000 (2014: loss £696,000).
Operating loss from continuing operations before impairments was £2,523,000 (2014: loss £565,000), with a loss of
£1,686,000 from existing continuing operations and a loss of £837,000 from the acquisition. In arriving at the operating
loss the Group has charged £1,922,000 (2014: £2,363,000) for research and development expenditure, £716,000 (2014:
£270,000) for depreciation and amortisation, £153,000 (2014: Nil) in acquisition costs, £70,000 (2014: Nil) loss on
disposal of fixed assets and £278,000 (2014: Nil) in restructuring costs. Development costs relating to the risk platform
moved to normalised operational levels mid-year.
2016 will see continued restructuring of the business and investment across the Company’s brands with the full benefits
expected to come through towards the end of the current financial year and into 2017.
Loss per share
The basic loss per share from continuing operations was 1.55p (2014: loss 0.68p). Basic earnings per share from
discontinued operations was 0.27p (2014: 0.22p).
7
www.accessintelligence.com Cash
Cash at the year end stood at £1,523,000 (2014: £1,144,000) whilst net debt increased to £2,593,000 (2014: £157,000)
during the year, primarily as a result of new loan notes issued to finance the strategic acquisition.
Key Performance Indicators
On a monthly basis management accounts are prepared which provide performance indicators covering revenue,
gross margins, EBITDA, result before tax, result after tax, cash balances and recurring revenue. The key performance
indicators for the year are:
£’000
Continuing Operations
Revenue
Gross margin (%)
EBITDA - loss
Loss before taxation
Loss after taxation
Cash balances
Recurring revenue
2015
8,119
60%
(1,738)
(4,687)
(3,924)
1,523
7,486
2014
4,291
78%
(696)
(1,477)
(1,598)
1,144
3,463
These performance indicators are measured against both an approved budget and the previous year’s actual results.
Further analysis of the Group’s performance is provided earlier in this Strategic Report.
Each month the Board assesses the performance of the Group based on both financial and non-financial key performance
indicators. These are used in conjunction with the controls described in the corporate governance statement and relate
to a wide variety of aspects of the business, including: new business and renewal sales performance; marketing,
development and research activity; year to date financial performance, profitability forecasting and cash flow forecasting.
Non-financial key performance indicators include staff retention rates and staff utilisation rates; we also monitor energy
consumption as part of our ongoing commitment to reduce our carbon footprint.
Dividend
As a result of the significant investment the Company has made in the strategic product innovation and sales development,
the directors do not propose to pay a dividend for 2015.
Principal business risks and uncertainties
The developing nature of the business dictates that the Board understands the market in which it competes and the
strategy that it is implementing. The Statement of Corporate Governance notes the objectives and mechanisms of
internal control. Monthly Board meetings are held, where strategy is discussed and decisions taken at Group level and
formal quarterly meetings are held at subsidiary level, supplemented by more regular operational meetings. The Board
constantly assesses risks and is of the belief that internal control, risk management and stewardship are integral to the
proper management of the business.
Financial instruments
The Group’s operations are subject to a variety of financial risks, most notably the effect of credit risks. Liquidity risks
are set out in note 18 to the consolidated financial statements. At the present time the Group has no bank borrowings
or overdrafts, but has a total of £4,116,000 of loan notes in issue. The Group holds in excess of £1,523,000 of bank
deposits. The Group does not enter into derivative contracts other than the forward currency contracts detailed below.
11% (2014: 8%) of the Group’s revenue is invoiced in a currency other than sterling. Accordingly, foreign exchange
risk is not considered a significant risk. To date the magnitude of euro-based sales has been such that we have not
hedged the currency exposure. In relation to US dollar denominated sales, due to the insignificance of dollar sales and
unpredictability of such collections from debtors we do not hedge and simply hold to pay suppliers invoicing in dollars or
convert if needed into sterling at spot. At 30 November 2015 there were no open exchange contracts.
The most significant financial risk to which the Group is exposed is that of the credit worthiness of our client base.
Around 11% (2014: 10%) of the Group’s revenue from continuing operations is contracted with the public sector where
the directors have judged the credit risk to be minimal.
8
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC The remaining sales are with the private sector where we have experienced a small incidence of bad debts. We have
not considered it necessary to take out credit insurance for the following reasons:
• most invoices are not of a high value;
• no significant concentration of invoices are with any one customer; and
•
in many cases we are able to switch off the service the moment a debt becomes due.
The Group holds a number of deposits with UK tax payer-owned banks or well known high street banks. In recent years
we have become increasingly aware that even financial institutions such as banks are not immune to financial risk. That
said, the directors review the financial position of their deposit holders on a regular basis and at this time are satisfied
with their credit worthiness.
Information about the use of financial instruments by the Group is given in note 21 to the financial statements. The
Group has also previously issued convertible loan notes as disclosed in the financial statements.
Software as a Service (SaaS)
PR, Public Affairs and Reputation Management
The landscape for Vuelio radically changed in 2015 when we acquired the UK assets of communications software
company Cision, prompting a rebrand and refocus. The deal also immediately increased our customer base in this
space from 300 to more than 2,000. Where we previously served primarily the public sector and FTSE 100 companies,
we now have customers of all sizes in numerous sectors, in particular, marketing, PR and digital agencies.
We have reorganised our sales and marketing operations to support a dual focus on growth and strategic services.
The addition of trade and assets of Cision UK Ltd and Vocus UK Ltd brings immediate scale and bolsters our growth
opportunity. To underpin this, we have built a talented team to continue delivering solutions relevant to this evolving
market. This team will target high-value accounts, particularly through up selling and cross selling, in key public sector
and high-regulation sectors.
Access Intelligence has rapidly developed Vuelio’s communications management software platform to address the
needs of this expanded market. These changes are also aimed at supporting a swift migration of clients from Cision and
Vocus software, which is currently underway, providing a platform for profitable growth through further development.
Incident & Crisis Management
AIControlPoint saw a 100% client retention in 2015 but limited revenue growth due to the downturn in the oil and gas
market. We have also helped ensure future growth by diversifying our target markets and focusing on several new
industries. Among our wins were new clients in the transport sector, including the Manchester Airport Group, as well as
building a pipeline in the aviation, travel and local government space.
Training, Competence and Employee Performance Management
Tightening FCA regulation has brought a focus on senior managers and individual accountability in the financial services
sector. This provided us with an opportunity to augment AITrackRecord in 2015, empowering customers in the face of
these changes. Our improved Training and Competence system unifies competence, performance, accountability and
compliance tracking and, crucially, provides evidence of adherence to the new regime. The updated platform centralises
all pertinent information, even digitising legacy paper-based processes. This simplifies compliance and significantly
reduces cost.
Leading FTSE 100 wealth management firm St. James’s Place was an early adopter of the new platform. Additional
customers are targeted for switchover throughout 2016.
Strategy and Market
The M&A activity that the Group has undergone over the past 12 months has created a seismic shift in focus towards
Reputation Management. We now have an exceptional portfolio of products and services for stakeholder engagement
and reputation management throughout the UK and Europe. As customers seek to drive a unified, consistent engage-
ment strategy across multiple stakeholders, they require a comprehensive software portfolio integrated across their
communications teams. Highly regulated industries continue to champion the embedding of best practices in good cor-
porate governance, risk management and effective compliance ensuring that our product suite is well positioned to gain
continued traction in both reputation and risk management.
9
www.accessintelligence.com
SaaS based solutions continue to provide companies with a scalable, resilient and value-driven alternative to the costly
maintenance of in-house on premise solutions. Access Intelligence continues to capitalise on the wider adoption of
SaaS solutions and services to provide tangible alternatives to customers, as well as long term revenue visibility and
stability for investors.
2016 represents a challenging year of customer migrations and further operational restructuring to ensure the optimal
platform for growth. Our focus over the coming year will be maximising the opportunities secured from our recent
acquisition and embedding our market share in an ever-shifting competitive landscape. As the sole provider of a multi-
faceted stakeholder engagement platform we are well positioned to offer a truly diversified offering.
Disposal of Willow Starcom
Following the Group’s decision to focus on reputation and risk management SaaS based solutions, Access Intelligence
divested Willow Starcom Limited on 21 April 2015. Willow Starcom delivered infrastructure support and cloud based IT
services but was considered non-core to the Group as it looked to scale its SaaS offering. The net cash inflow received
for the company amounted to £1,141,000 and resulted in a profit on disposal of the company of £900,000.
Disposal of Due North Limited
In line with Access Intelligence’s strategy to focus on SaaS solutions in reputation and risk management, on 3 February
2016, the Group disposed of Due North Limited for a cash consideration of £4,500,000. The decision to divest Due North
was a result of the management team’s commitment to dispose of non-core businesses and provide the Group with
greater financial flexibility and value for our shareholders.
Directors and Staff
2015 has demonstrated that our core belief of building a Group based on the expertise, experience and integrity of our
industry-leading team is delivering significant value. I would like to thank all our staff for their hard work and commitment,
which has enabled us to recognise considerable progress during 2015 and we expect to benefit from this in the coming
years. As a Group we have delivered growth, and I look forward to our continued operational successes in 2016.
By order of the board
J Arnold
Director
Approved by the directors on 8th April 2016
10
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Directors and Advisers
Directors:
Executive directors:
J Arnold (Chief Executive Officer)
K Dhoot (Chief Financial Officer) (Resigned 12 June 2015)
Non-executive directors:
M Jackson (Chairman)
D Lowe
C Pilling (Appointed 24 August 2015)
J Hamer (Resigned 1 October 2015)
(Resigned 1 October 2015)
H Bang
Company Secretary:
M Greensmith (appointed 1 July 2015)
Registered Office:
Longbow House
14-20 Chiswell Street, London
EC1Y 4TW
Company Registration Number:
04799195
Brokers and Nominated Adviser:
Allenby Capital Limited
3 St Helen’s Place
London
EC3A 6AB
Registrars:
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Bankers:
Bank of Scotland
Aldgate House
1-4 Market Place
Hull
HU1 1RA
Legal Advisers:
Fieldfisher LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
Auditor:
Mazars LLP
Chartered Accountants & Statutory Auditor
Tower Bridge House
St Katharine’s Way
London
E1W 1DD
11
www.accessintelligence.com
Directors’ Report
The directors present their annual report and the consolidated financial statements of the Group for the year ended 30
November 2015.
Principal activity
Access Intelligence is a Software and Computer Services group of companies providing business critical compliance
and legislative driven software solutions and services to both public and private sectors on a recurring revenue basis.
Since the flotation on AIM in November 2003, the Group has made six acquisitions focused in the areas of compliance
software and data backup and recovery. The Group has also sold 4 subsidiaries prior to the disposal of Due North (refer
to events after the balance sheet date below) and had 4 dormant companies dissolved.
Review of business and future outlook
A review of the Group’s activities during the year and future outlook is set out in the Strategic Report and Chairman’s
Statement on pages 6 to 10.
Results
The consolidated trading results for the year and the year-end financial position are shown in the financial statements
on pages 20 to 24. The results for the year and future prospects are reviewed in the Strategic Report and Chairman’s
Statement on pages 6 to 10.
Directors’ interests
The directors who have served during the year and details of their interests, including family interests, in the Company’s
ordinary 0.5p shares at 30 November 2015 are disclosed below:
The high and low price of shares during the year were 5.50p and 2.62p respectively.
30-Nov-15
Beneficial
No.
20,865,858
4,597,475
5,000,000
30-Nov-15
Options
No.
7,808,103
1,841,899
3,000,000
30-Nov-14
Beneficial
No.
24,865,858
4,597,475
5,000,000
30-Nov-14
Options
No.
7,808,103
1,841,897
3,000,000
M Jackson
D Lowe
J Arnold
Substantial shareholdings
Save for the directors’ interests disclosed above together with the following shareholders, the directors are not aware of
any other shareholdings representing 3% or more of the issued share capital of the Company at the year end.
Investor
Elderstreet VCT plc
Kestrel Partners LLP
Unicorn AIM VCT plc
Octopus Asset Management Ltd
Hawk Investment Holdings Ltd and Hawk Pension Ltd
Hargreave Hale
David Alderson
Ray Jackson
No. of shares
% holding Nature of holding
39,675,690
30,902,700
28,066,867
14,820,000
11,666,667
9,821,017
9,342,705
8,917,682
14.3
11.1
10.1
5.3
4.2
3.5
3.4
3.2
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Direct
In addition to the above the following substantial shareholders are also holders of Loan Instruments.
12
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Elderstreet VCT
plc
Unicorn AIM VCT
plc
Kestrel Partners
LLP
Octopus Asset
Management Ltd.
Brought forward
Issued during the year
Carried forward
All convertible
Convertible loan
notes
Non-convertible
loan notes
Convertible loan
notes
Non-convertible
loan notes
500,000
200,000
300,000
700,000
300,000
750,000
-
300,000
750,000
-
-
400,000
900,000
400,000
200,000
-
200,000
300,000
900,000
-
1,250,000
800,000
1,500,000
2,050,000
1,500,000
In 2014, the Company agreed terms with Elderstreet VCT and Unicorn AIM VCT plc to extend the loans issued in June
2009 such that they mature on 31 December 2015, with enhanced interest at 8% during this extended period with
conversion rights unchanged at 4p per share.
In January 2016 the Company agreed the same terms as those agreed in the prior year with both note holders such that
the notes are redeemable at par or convertible to ordinary shares at 4p per ordinary share on or before maturing on 31
December 2016 and carry a coupon rate of 8% per annum, payable semi-annually until such a time as they are repaid
or converted in accordance with their terms. These notes are classified as non-current at the year end.
In December 2014 the company issued a further £1,100,000 of convertible loan notes of which £800,000 were issued
to substantial shareholders as per the table above. These loan notes are redeemable at par or convertible to ordinary
shares at 3p per ordinary share on or before maturing on 3 December 2019 and carry a coupon rate of 8% per annum
payable semi-annually until such time as they are repaid or converted.
On 22 June 2015 the company issued £1,818,000 non-convertible loan notes of which £1,500,000 were issued to
substantial shareholders as per the table above. The loan notes which carry an interest rate of 10% for one year rising
to 12% thereafter. Interest is payable quarterly in arrears. The loans notes are fully repayable in five years.
Elderstreet VCT plc is an AIM listed venture capital trust of which M Jackson is a non-executive director and he is also
a director of Elderstreet Investments Ltd, the manager to Elderstreet VCT plc.
Dividends
Due to the significant and ongoing investment in developing our products, the directors do not propose a dividend in
respect of the year ended 30 November 2015.
Research & development and other technical expenditure
All subsidiaries are encouraged to invest in the development of their products continuously, though 2012 heralded the
start of a significant investment phase, commencing with the creation of a centralised development centre based in York,
which underpins cutting edge development methodologies across the Group. Throughout 2015 we have continued to
invest in developing our products. The Group engaged an average of 72 (2014: 71) technical staff who support both the
existing product offering as well as developing it. In 2015, £3,457,000 (2014: £3,940,000) was spent across the Group
on research and development and other technical expenditure. Of this £1,526,000 (2014: £1,577,000) was capitalised
and the balance was expensed through the consolidated statement of comprehensive income.
Further detail of research & development costs incurred by Group companies is set out in the Strategic Report on pages
8 and 9.
Our policy is to write development expenditure off to the consolidated statement of comprehensive income as incurred
unless it relates to a new product that is yet to be launched or relates to fundamental innovations that meet accounting
definitions in that they are technically feasible, commercially viable and resources exist to complete the development
projects. In such cases the expenditure is capitalised and written-off over five years beginning with the first sale. This
reflects the estimated useful life taking into account the more flexible, structured code using latest modular design
techniques available.
13
www.accessintelligence.com
Employee relations
The Group supports the employment of disabled people, wherever possible, both when recruiting and by retention of
those who become disabled during their employment.
Appropriate steps are taken to inform and consult employees regarding matters affecting them and the Group.
The Group’s policy regarding health and safety is to ensure that, as far as is practical, there is a working environment
which will minimise the risk to the health and safety of its employees and those persons who are authorised to be on its
premises.
The Group encourages staff progression and is introducing more formal training and development of key staff across the
Group. Individual job related training is provided if needed and it is incumbent upon all managers to find time to mentor
and develop their own staff.
The Group’s remuneration policies are driven locally at subsidiary level to reflect circumstances prevailing in their
local labour markets. Our sales teams earn sales commission on top of a competitive basic salary based on their
individual targets. Incentives for all staff are encouraged and the managing directors of each subsidiary have an annual
profit sharing contract based upon the profitability of their subsidiary. Directors’ remuneration is determined by the
remuneration committee, details of which are included in note 6.
Financial risk management and exposure to financial risk
The directors’ management and policies in relation to price risk, credit risk, liquidity risk and cash flow risk is explained
in detail in the Strategic Report.
Environment
The Group’s policy with regard to the environment is to ensure that we understand and effectively manage the actual
and potential environmental impact of our activities. Our operations are conducted such that we comply with all legal
requirements regarding the environment in all areas where we carry out our business. During the period covered by
this report the Group has not incurred any fines or penalties or been investigated for any breach of environmental
regulations.
Social responsibility
The Group has made certain small donations during the year supporting local charities, individually each donation and
in aggregate being less than £2,000. We encourage our staff to raise money for charities by supporting their endeavours
both as a company or the directors individually.
Going concern
The Strategic Report and opening pages to the annual report discuss Access Intelligence’s business activities and
headline results, together with our financial statements and notes which detail the results for the year, net current
liability position, cash flows for the year ended 30 November 2015 and the extension of the maturity of the convertible
loan notes. The Board has further considered 12 month cash flow forecasts from the date of signing the accounts and
consider the assumptions used therein to be reasonable and reflective of the long-term ‘software as a service’ contracts
and contracted recurring revenue. As set out in the Subsequent Events note 30 (and below), the Group has disposed of
Due North Ltd for a total consideration of £4,500,000. From this the Board has concluded that they have a reasonable
expectation that the Company and the Group have adequate resources to meet their liabilities as they fall due and to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
Events after the balance sheet date
On 3 February 2016 Access Intelligence Plc disposed of 100% of the issued share capital of Due North Limited, being
the disposal group held for sale in note 7, for a consideration totalling £4,500,000.
In January 2016, the Company agreed terms to extend the loans issued in June 2009 such that they mature on 31
December 2016, with interest at 8% during this extended period with conversion rights unchanged at 4p per share.
14
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
Share capital
Details of the Company’s share capital are set out in note 21 to the financial statements.
Share option plan
The Company administers one approved option scheme called the “Access Intelligence plc Management Incentive
Scheme”. The scheme was adopted at the AGM held on 22 April 2009 and is open to any eligible employee selected at
the discretion of the Board. The scheme period will extend for 10 years from the adoption date. The scheme rules are
available at the Company’s registered office. Details of the movement in options during the year are in note 25. In total
no options were granted in the year, 1,950,000 were exercised and 2,527,605 were forfeited.
Statement of directors’ responsibilities
The directors are responsible for preparing the Strategic Report, the Directors’ Report and the Group and Parent
Company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial year.
Under AIM rules the directors are required to prepare Group financial statements in accordance with IFRS as adopted
by the EU.
The Group financial statements are required by law and IFRS as adopted by the EU to present fairly the financial
position and the performance of the Group. The Companies Act 2006 provides in relation to such financial statements
that references in the relevant part of that Act to financial statements giving a true and fair view are references to their
achieving a fair presentation.
The parent company financial statements are required by law to give a true and fair view of the state of affairs of the
parent company.
In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
•
•
•
for the Group financial statements, state whether they have been prepared in accordance with IFRS as adopted by
the EU;
for the parent company financial statements, state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the parent company financial statements;
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; and
provide additional disclosures when compliance with specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and conditions, on the entity’s financial position and
financial performance.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time
the financial position of the parent company and to enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for systems of internal control, for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Statement as to disclosure of information to auditor
In so far as the directors are aware:
•
•
there is no relevant audit information of which the Company’s auditor is unaware; and
the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
15
www.accessintelligence.com Auditor
Mazars LLP has acted as auditor throughout the period and, in accordance with section 489 of the Companies Act 2006
a resolution to reappoint Mazars LLP will be put to the members at the forthcoming annual general meeting.
By order of the Board
M Jackson
Director
Approved by the directors on 8 April 2016
16
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Corporate Governance
Application of the principles of good governance
As an AIM listed company, the Group is not required by the Financial Conduct Authority Listing Rules to follow the
provisions of the UK Corporate Governance Code. Nevertheless, the Group is committed to applying the principles of
corporate governance commensurate with its size.
The Board
At 30 November 2015, the Board consisted of 3 non-executive directors and 1 executive director being the Chief
Executive Officer. These Board members retain responsibility for the formulation of corporate strategy, approval of
acquisitions, divestments and major capital expenditure and treasury policy. The appointment of new directors is a
matter reserved for the Board as a whole rather than for a separate nomination committee.
The executive director is responsible for operational matters and executing agreed strategic decisions.
The Board meets monthly and has a schedule of matters specifically referred to it for decision. All directors have access
to advice from the company secretary and training is available for directors as necessary.
Each member of the Board comes up for re-election by the shareholders at annual general meetings every three years
by rotation.
The non-executive directors are not involved in the day-to-day running of the business. Shareholdings of all directors
can be found in the directors’ report.
Internal control
The directors have overall responsibility for ensuring that the Group maintains a system of internal control to provide
them with reasonable assurance regarding effective and efficient operations, internal financial control and compliance
with laws and regulations.
The risk management process and systems of internal control are designed to manage rather than eliminate the risk
of failure to achieve the Group’s strategic objectives. However, there are inherent limitations in any system of internal
control and accordingly even the most effective system can only provide reasonable and not absolute assurance. The
Board has reviewed the operation and effectiveness of the system of internal control in operation during the period.
The Board is also responsible for assessing and minimising all business risks, supported by group personnel able to
provide specific assistance in matters relating to regulatory compliance, health and safety, environment, quality systems
and insurance cover for property and liability risks.
Monthly accounts, with commentary on current year performance compared with planned performance, together with
analysis and working capital information, are prepared in accordance with group accounting policies and principles.
They are consolidated and reviewed by the Board in order to monitor overall performance and trigger appropriate
management intervention where applicable.
The Board monitors the funding requirements and banking facilities provided to the Group in addition to the management
of investment and treasury procedures. Capital and significant investment expenditure is approved against performance
criteria.
The Board has considered the need for an internal audit function but has concluded that the size of the Group does not
justify the expense at present. The need for an internal audit function will continue to be reviewed periodically.
Audit committee
The audit committee is appointed by the Board and must comprise a minimum of two members, including one non-
executive director. D Lowe chairs the audit committee with M Jackson and J Arnold as the other members. The committee
met on 2 occasions in 2015 (2014: 2).
The audit committee may examine any matters relating to the financial affairs of the Group. This includes reviews of
the annual accounts and announcements, internal control procedures, accounting policies, compliance with accounting
standards, the appointment of external auditors and other such related functions as the Board may require.
17
www.accessintelligence.com Remuneration committee
The remuneration committee consists of J Arnold, D Lowe and C Pilling and is chaired by C Pilling. The committee’s aim
is to ensure that the executive directors are rewarded for their contribution to the Group and are motivated to enhance
the return to shareholders. The remuneration committee is responsible for reviewing the performance of the directors
and setting their remuneration, and meets on an “as required” basis. The remuneration committee has regard to rates of
pay for similar positions in comparable companies as well as internal factors such as performance. The objective of the
Company’s remuneration policy is to ensure that members of the executive management are provided with appropriate
incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual
contributions to the success of the Company.
The directors are eligible for share options under the Company’s share option scheme. The exercise of options granted
under this share option scheme is not dependent on performance criteria.
Full details of directors’ remuneration are given in note 9 to the financial statements.
Nominations committee
The Group has not appointed a nominations committee. The Board has concluded that given the size of the Group this
function can be effectively carried out by the whole Board.
18
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Independent Auditor’s Report to the Members of Access
Intelligence Plc
We have audited the financial statements of Access Intelligence Plc for the year ended 30 November 2015 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flow, the Company Balance Sheet
and the related notes. 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 (United Kingdom Generally Accepted Accounting Practice).
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on pages 15, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors. 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.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate.
Opinion on the financial statements
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as
at 30 November 2015 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
•
•
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
19
www.accessintelligence.com Independent Auditor’s Report to the Members of Access
Intelligence Plc (Continued)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Richard Metcalfe (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House
St Katharine’s Way
London
E1W 1DD
20
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Consolidated Statement of Comprehensive Income
Year ended 30 November 2015
Note
Continuing
Operations
2015
£’000
Discontinued
Operations
2015
£’000
Continuing
Operations
2014
£’000
Discontinued
Operations
2014
£’000
3
25
6
15
5
10
11
12
6
Revenue
Cost of sales
Gross profit
Administrative expenses
Share-based payment
Operating (loss)/profit before
impairment
Profit on disposal of subsidiary undertaking
Impairment of intangibles
Operating (loss)/profit
Financial income
Financial expense
(Loss)/profit before taxation
Taxation credit/(charge)
(Loss)/profit for the year
Profit for the year from discontinued
operations
Loss for the year
Other comprehensive income
Total comprehensive income for the
period attributable to the owners of the
parent company
8,119
(3,277)
4,842
(7,339)
(26)
(2,523)
-
(1,899)
(4,422)
1
(266)
(4,687)
763
(3,924)
681
(3,243)
-
(3,243)
2,737
(881)
1,856
(2,046)
-
(190)
900
-
710
-
-
710
(29)
681
4,255
(1,419)
2,836
(2,292)
-
544
-
-
544
-
-
544
(28)
516
4,291
(949)
3,342
(3,871)
(36)
(565)
-
(798)
(1,363)
1
(115)
(1,477)
(121)
(1,598)
516
(1,082)
-
(1,082)
Earnings per share
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
14
14
(1.55)p
(1.55)p
0.27p
0.25p
(0.68)p
(0.68)p
0.22p
0.22p
The notes on pages 26 to 55 form part of these financial statements.
21
www.accessintelligence.com Consolidated Statement of Financial Position
At 30 November 2015
Note
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax receivables
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets
Current liabilities
Trade and other payables
Accruals and deferred income
Interest bearing loans and borrowings
Liabilites classified as held for sale
Total current liabilities
Non-current liabilities
Trade and other payables
Interest bearing loans and borrowings
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Treasury shares
Share premium account
Capital redemption reserve
Share option reserve
Equity reserve
Retained earnings
Total equity attributable to the equity
holders of the parent company
16
15
23
17
18
26
7
20
19
7
20
19
23
24
2015
£’000
273
7,423
865
8,561
-
3,628
101
1,523
3,869
9,121
17,682
1,225
6,398
1,277
1,455
2014
£’000
523
8,406
419
9,348
142
2,613
237
1,144
-
4,136
13,484
1,526
4,050
-
-
10,355
5,576
391
2,839
336
3,566
13,921
3,761
1,535
(148)
1,271
191
364
255
293
3,761
60
1,301
956
2,317
7,893
5,591
1,324
(148)
224
191
338
126
3,536
5,591
The consolidated financial statements were approved and authorised for issue by the Board of directors on 8 April 2016
and signed on its behalf by:
M Jackson
Chairman
The notes on pages 26 to 55 form part of these financial statements.
22
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Consolidated Statement of Changes in Equity
Year ended 30 November 2015
Share
capital
£’000
Treasury
shares
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Share
option
reserve
£’000
Equity
reserve
£’000
Retained
earnings
£’000
Total
£’000
Group
At 1 December 2013
Total comprehensive loss
for the year
Transactions with owners
Share-based payments -
current year
Tax reversal relating to
share-based payment
At 30 November 2014
At 1 December 2014
Total comprehensive loss
for the year
Equity component of
convertible loan notes net
of deferred tax
Transactions with owners
Issue of share capital
211
Share-based payments -
current year
Tax reversal relating to
share-based payment
-
-
1,324
(148)
224
191
-
-
-
-
-
-
1,324
1,324
(148)
(148)
-
-
-
-
-
-
-
-
-
-
224
224
-
-
1,047
-
-
-
-
-
191
191
-
-
-
-
-
331
-
36
(29)
338
338
-
-
-
26
-
126
4,618
6,666
-
-
-
126
126
-
129
-
-
-
(1,082)
(1,082)
-
-
36
(29)
3,536
3,536
5,591
5,591
(3,243)
(3,243)
-
-
-
-
129
1,258
26
-
At 30 November 2015
1,535
(148)
1,271
191
364
255
293
3,761
23
www.accessintelligence.com Share capital and share premium account
When shares are issued, the nominal value of the shares is credited to the share capital reserve. Any premium paid
above the nominal value is taken to the share premium account. Access Intelligence plc shares have a nominal value of
0.5p per share. Directly attributable transaction costs associated with the issue of equity investments are accounted for
as a reduction from the share premium account.
Treasury shares
The returned shares are now held in treasury and attract no voting rights. The return of shares has been accounted for in
accordance with IAS 32 ‘Financial instruments: Presentation’ such that the instruments have been deducted from equity
with no gain or loss recognised in profit or loss.
Share option reserve
This reserve arises as a result of amounts being recognised in the income statement relating to share-based payment
transactions granted under the Group’s share option scheme. The reserve will fall as share options vest and are
exercised over the life of the options.
Capital redemption reserve
This reserve arises as a result of keeping with the doctrine of capital maintenance when the Company purchases and
redeems its own shares. The amounts transferred into/out from this reserve from a purchase/redemption is equal to the
amount by which share capital has been reduced/increased, when the purchase/redemption has been financed wholly
out of distributable profits, and is the amount by which the nominal value exceeds the proceeds of any new issue of
share capital, when the purchase/redemption has been financed partly out of distributable profits.
Equity reserve
The equity reserve arises as a result of the equity component that has been recognised on the convertible loan notes
that have been issued by the Group (see the ‘Interest bearing loans and borrowings’ note). The reserve is determined
by deducting the amount of the liability component from the fair value of the convertible loan notes as a whole, net of
income tax effects and the relative proportion of the directly attributable transaction costs associated with the issue of
the compound instruments.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Group since inception of the business.
Where subsidiary undertakings are acquired, only profits and losses arising from the date of acquisition are included.
24
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Consolidated Statement of Cash Flow
Year ended 30 November 2015
Loss for the year
Adjusted for:
Taxation
Depreciation and amortisation
Impairment of intangible assets
Share option charge
Financial income
Financial expense
Loss on disposal of property, plant and equipment
Profit on sale of Willow Starcom Ltd
Operating cash (outflow)/inflow before changes in working capital
(Increase) in trade and other receivables
Decrease in inventories
Increase in trade and other payables
Net cash (outflow)/inflow from operations before taxation
Taxation received
Net cash (outflow)/inflow from operations
Cash flows from investing
Interest received
Acquisition of property, plant and equipment and software licences
Cost of software development
Acquisition of trade and assets
Disposal of Willow Starcom
less: cash and cash equivalents disposed of
Move to held for sale of Due North
Net cash outflow from investing
Cash flows from financing activities
Interest paid
Issue of shares and share option exercise proceeds
Exercise of share options
Issue of loan notes
Net cash inflow/(outflow) from financing
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
The notes on pages 26 to 55 form part of these financial statements.
Note
12
15,16
15
25
10
11
16
6
10
15,16
15
8
6
6
7
25
19
26
26
26
2015
£'000
(3,243)
(734)
948
1,899
26
(1)
266
70
(900)
(1,669)
(496)
8
344
(1,813)
237
(1,576)
1
(66)
(1,541)
(1,340)
1,487
(346)
(207)
(2,012)
(192)
1,200
59
2,900
3,967
379
1,144
1,523
2014
£'000
(1,082)
149
409
798
36
(1)
115
2
-
426
(590)
26
1,192
1,054
356
1,410
1
(140)
(1,573)
-
-
-
-
(1,712)
(75)
-
-
-
(75)
(377)
1,521
1,144
25
www.accessintelligence.com
Notes to the Consolidated Statements
1. General information
Access Intelligence Plc (‘the Company’) and its subsidiaries (together the ‘Group’) provide critical governance, risk and
compliance software and computer services to regulated businesses in both the public and private sectors.
The Company is a public limited company under the Companies Act 2006 and is listed on the Alternative Investment
Market and is incorporated and domiciled in the UK. The address of the Company’s registered office is provided in the
Officers and Professional Advisers page of this Annual Report.
2. Accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been applied consistently to all the years presented, unless otherwise stated.
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards
(‘IFRS’s’) as adopted by the European Union, and with those parts of the Companies Acts applicable to companies
reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention
and on a going concern basis.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.
Going concern
The Strategic Report and opening pages to the annual report discuss Access Intelligence’s business activities and
headline results, together with our financial statements and notes which detail the results for the year, net current
liability position, cash flows for the year ended 30 November 2015 and the extension of the maturity of the convertible
loan notes. The Board has further considered 12 month cash flow forecasts from the date of signing the accounts and
consider the assumptions used therein to be reasonable and reflective of the long-term ‘software as a service’ contracts
and contracted recurring revenue. As set out in the Subsequent Events note 30 (and below), the Group has disposed of
Due North Ltd for a total consideration of £4,500,000. From this the Board has concluded that they have a reasonable
expectation that the Company and the Group have adequate resources to meet their liabilities as they fall due and to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
Significant judgements
In addition to going concern, the areas involving a high degree of judgement or complexity relate to:
•
•
•
the recognition of deferred tax assets in relation to losses (refer to note 23);
the recoverability of trade receivables currently provided for (refer to note 18); and
the fair value estimation of intangible assets acquired (refer to note 8).
Significant estimates
Further to the significant judgements above the areas where key assumptions and estimates have been made by
management relate to:
the impairment testing of goodwill and capitalised development costs and other non-current assets, (refer to note
15);
the charge for share-based payment transactions which include assumptions on future share prices movements,
expected future dividends, and risk-free discount rates (refer to note 25); and
the fair value estimation of intangible assets acquired (refer to note 8).
•
•
•
26
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC New standards and interpretations
The following standards, amendments and interpretations to published standards, have been adopted during the year.
IFRS 10 ‘Consolidated financial statements’ Effective 1 January 2013, with an EU effective date of 1 January 2014
This standard replaces the principle of control and the consolidation requirements in IAS 27 ‘Consolidated and Separate
Financial Statements’, SIC-12 ‘Consolidation – Special Purpose Entities’ and SIC-33 ‘Consolidation and Equity Method
– Potential Voting Rights and Allocation of Ownership Interests’.
IFRS 11 ‘Joint Arrangements’ Effective 1 January 2013, with an EU effective date of 1 January 2014
IFRS 12 ‘Disclosure of Interests in Other Entities’ Effective 1 January 2013, with an EU effective date of 1 January
2014.
This standard sets out new and comprehensive disclosure requirements for interests in other entities, including
subsidiaries, joint arrangements, associates and unconsolidated structured entities.
IAS 27 ‘Separate Financial Statements’ and IAS 28 ‘Investments in Associates and Joint Ventures’ Effective 1
January 2013, with an EU effective date of 1 January 2014
Following the issue of IFRS 10 ‘Consolidated Financial Statements’, IFRS 11 ‘Joint Arrangements’ and IFRS 12
‘Disclosure of Interests in Other Entities’, consequential changes have been made to these standards.
IAS 32 (amendment) ‘Financial Instruments: Presentation’ Effective 1 January 2014
Amendment relates to the offsetting of financial assets and liabilities.
IAS 36 (amendment) ‘Impairment of Assets’ Effective 1 January 2014
Amendment relates to the recoverable amount disclosures for non-financial assets.
IAS 39 (amendment) ‘Financial Instruments: Recognition and Measurement’ Effective 1 January 2014
Amendment relates to the novation of derivatives and continuation of hedge accounting.
IFRIC 21 ‘Levies’ Effective 1 January 2014 with an EU effective date of 17 June 2014
This interpretation addresses the accounting for a liability to pay a levy.
There has been no impact of adopting the above standards, amendments and interpretations.
New standards issued but not yet effective
Standards issued but not yet effective up to the date of issuance of the Company’s financial statements are listed below.
The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a
future date. The Company does not intend to adopt those standards until they become effective.
IFRS 15 ‘Revenue from contracts with customers’: Original issue; Issued – May 2014; Effective – Annual periods
beginning on or after 1 January 2018
IFRS 9 ‘Financial Instruments’; Original issue; Issued – November 2009; Effective – Annual periods beginning on or
after 1 January 2018
IFRS 16 ‘Leases’; Original issue; Issued – January 2016; Effective – Annual periods beginning on or after 1 January
2019
IAS 1 ‘Presentation of Financial Information’: Amendment relates to the disclosure initiative; Effective – Annual
periods beginning on or after 1 January 2016
IAS16 ‘Property, plant and equipment’ and IAS 38 ‘Intangible Assets’: Amendments regarding the clarification of
acceptable methods of depreciation and amortisation; Amended May 2014; Effective for Annual periods beginning on
or after 1 January 2016
IAS 27 ‘Separate Financial Statements’ (as amended in 2011): Original issue; Issued – May 2011; Effective – Annual
periods beginning on or after 1 January 2016
IFRS 10 ‘Consolidation Financial Statements’, IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 28
‘Investment in Associates and Joint Ventures’: Amendments relate to investment entities, applying the consolidation
exemption; Effective – Annual periods beginning on or after 1 January 2016
27
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IAS 12 ‘Income taxes’: Amendment relating to the recognition of deferred tax for unrealised losses; Amended January
2016; Effective – Annual periods beginning on or after 1 January 2017
IAS 7 ‘Statement of cash flows’: Amendment relating to disclosure intiatives; Amended January 2016; Effective –
Annual periods beginning on or after 1 January 2017
The directors expect that the adoption of the above pronouncements will have no material impact to the financial
statements in the period of initial application other than disclosure except for IFRS 15 and IFRS 16 where the Group is
still assessing the impact..
Standards not expected to have a significant impact on the group or are not applicable
The following standards are not expected to have a significant impact on the group or are not applicable:
IFRS 11 ‘Joint Arrangements’: Amendment relating to the accounting for acquisition of interests in joint operations;
Effective – Annual periods beginning on or after 1 January 2016
IFRS 14 ‘Regularity Deferral Accounts’: Original issue; Issued – January 2014; Effective – Annual periods beginning
on or after 1 January 2016
IAS 19 ‘Employee Benefits’: Amendment relating to the accounting for contributions from employees or third parties
to defined benefit plans; Effective – Annual periods beginning on or after 1 February 2015
The directors do not consider the adoption of the amendments resulting from the Annual Improvements 2010 - 2012
cycle will result in a material impact on the financial information of the group and company. These amendments to
IFRS2, IFRS3, IFRS8 IAS 16, IAS24 and IAS38 are effective for accounting periods beginning on or after 1 February
2015.
The directors do not consider the adoption of the amendments resulting from the Annual Improvements 2011 - 2013
cycle will result in a material impact on the financial information of the group and company. These amendments to
IFRS3, IFRS13 and IAS40 are effective for accounting periods beginning on or after 1 February 2015.
The directors do not consider the adoption of the amendments resulting from the Annual Improvements 2012 - 2014
cycle will result in a material impact on the financial information of the group and company. These amendments to IFRS
5, IFRS 7, IAS 19 and IAS 34 are effective for accounting periods beginning on or after 1 January 2016.
There have been no other new or revised International Financial Reporting Standards, International Accounting
Standards or Interpretations that are in effect since that last annual report that have a material impact on the financial
statements.
Basis of consolidation
The Group financial statements comprise the financial statements of the Company and all of its subsidiary undertakings
made up to the financial year end. Subsidiaries are entities controlled by the Group. Control exists when the Group has
the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
Adjustments are made where necessary to bring the accounting policies of acquired businesses into alignment with
those of the Group.
The results of subsidiary undertakings acquired or disposed of in the year are included in the Group statement of
comprehensive income from the effective date of acquisition or to the effective date of disposal. Accounting policies are
consistently applied throughout the Group. Inter-company balances and transactions have been eliminated. Material
profits from inter-company sales, to the extent that they are not yet realised outside the Group, have also been eliminated.
28
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Depreciation is charged to the income statement on both a straight-line and reducing balance basis over the estimated
useful lives of fixtures, fittings and equipment taking into account any estimated residual value. The estimated useful
lives are as follows:
Fixtures, fittings and equipment - 3 - 5 years
Leasehold improvements - over lease term
Intangible assets
Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries. Goodwill represents the difference between the cost
of the acquisition and the fair value of the net identifiable assets and contingent liabilities acquired. Identifiable intangible
assets are those which can be sold separately or which arise from legal rights regardless of whether those rights are
separable.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is allocated to cash generating units and
is not amortised, but is tested annually for impairment.
In respect of acquisitions prior to 1 December 2006, goodwill is included at 1 December 2006 on the basis of its deemed
cost, which represents the amount recorded under UK GAAP which was broadly comparable save that only separable
intangibles were recognised and goodwill was amortised. On transition, amortisation of goodwill has ceased.
Research and development expenditure
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an
intangible asset when the Group can demonstrate:
the technical feasibility of completing the intangible asset so that the asset will be available for use or sale
its intention to complete and its ability and intention to use or sell the asset;
•
•
• how the asset will generate future economic benefits;
•
the availability of resources to complete the asset; and
•
the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the asset begins from the date development is
complete and the asset is available for use, which may be before first sale. It is amortised over the period of expected
future benefit. Amortisation is recorded in administration expenses. During the period of development, the asset is tested
for impairment annually. In 2015 there were five (2014: five) capitalised development projects. The directors assess
the useful life of the completed capitalised development projects to be five years from the date of the first sale or when
benefits begin to be realised and amortisation will begin at that time.
Database
On acquisition of the business and certain assets of Cision UK Ltd and Vocus UK Ltd, a fair value was calculated in
respect of the PR and media contacts database acquired. Subsequent expenditure on maintaining this database are
expensed as incurred. Amortisation is calculated on a straight line basis over the estimated useful economic life of the
database. It is the directors’ view that this useful economic life is three years based on the level of ongoing investment
required to maintain the quality of data in the database.
Customer list
On acquisition of the business and certain assets of Cision UK Ltd and Vocus UK Ltd, a fair value was calculated
in respect of the customer list acquired. Amortisation is calculated on a straight line basis over the estimated useful
economic life of the customer list. It is the directors’ view that this useful economic life is five years, based on known and
forecast customer retention rates.
29
www.accessintelligence.com
Brand value
Acquired brands, which are controlled through custody or legal rights and could be sold separately from the rest of the
Group’s businesses, are capitalised where fair value can be reliably measured. The Group applies a 20 year straight line
amortisation policy on all brand values.
The brand equity in each case has been built up over a 5-10 year period addressing the needs of two large global
markets that have yet to reach maturity. In the event that the developed world became saturated it is the directors’ view
that the developing world will soon find a need for such products. The conclusion is that a realistic life for the brand
equity would be a ‘generation’ or 20 years. Where there is an indication of impairment, the directors will perform an
impairment review by analysing the future discounted cash flows over the remaining life of the brand asset to determine
whether impairment is required.
Software licences
Software licences include software that is not integral to a related item of hardware. These items are stated at cost less
accumulated amortisation and any impairment. Amortisation is calculated on a straight line basis over the estimated
useful economic life. Although perpetual licences are maintained under support and maintenance agreements, a useful
economic life of five years has been determined.
Impairment of non-financial assets
The carrying amounts of the Group’s assets other than deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is
estimated based upon the value in use.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount is estimated at each reporting date. The recoverable amount is the higher of the fair value less
costs to sell and value in use of the cash generating unit containing the goodwill or intangible assets with an indefinite
useful life.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to the carrying amount of the
goodwill allocated to that cash-generating unit and then to the carrying amount of the other assets in the unit on a pro
rata basis, applied in priority to non-current assets ahead of more liquid items. A cash-generating unit is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other
assets or groups of assets.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed
when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates
used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and
slow-moving items. Cost is determined on a first in first out (FIFO) basis and is calculated as the cost of materials,
direct labour and appropriate production overheads based on normal capacity levels. Net realisable value is based on
estimated selling price less additional costs to completion and costs to be incurred in marketing, selling and distribution.
Financial instruments
Financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, trade
and other payables and other financial liabilities.
Financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any
30
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC directly attributable transaction costs, except as described below. Subsequent to initial recognition financial instruments
are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or
if the Group transfers the financial asset to another party without retaining control of substantially all risks and rewards
of the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are
discharged or are cancelled.
Trade and other receivables are recorded initially at fair value and subsequently measured at amortised cost, using the
effective interest method, less provision for impairment. Specific impairment provisions are made when management
consider the debtor irrecoverable and these are charged to the income statement. Trade and other payables are recorded
initially at fair value and subsequently measured at amortised cost, using the effective interest method.
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short term highly liquid
investments.
Loans and borrowings and other financial liabilities, which include the convertible redeemable loan notes, are initially
measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective
interest rate method. Interest expense is measured on an effective yield basis and recognised in the income statement
over the relevant period.
Issue costs are apportioned between the liability and equity components of the convertible loan notes based upon their
relative carrying amounts at the date of issue. The portion relating to the equity component is recognised in equity.
Finance payments associated with financial liabilities are dealt with as part of finance expenses.
The Group may enter into derivative financial instruments for risk management purposes. Derivatives are initially
recognised at fair value on the date the derivative contract is entered into and are subsequently re-measured at their
fair value with gains and losses recognised through profit or loss. The Group does not hold or issue derivative financial
instruments for trading purposes.
Convertible loan notes
The component parts of compound instruments issued by the Group are classified separately as financial liabilities
and equity in accordance with the substance of the contractual arrangement. At the date of issue, in the case of a
convertible loan note denominated in the functional currency of the issuer that may be converted into a fixed number
of equity shares, the fair value of the liability component is estimated at the present value of the stream of future cash
flows (including both coupon payments and redemption) discounted at the market rate of interest that would have been
applied to an instrument of comparable credit quality with substantially the same cash flows, on the same terms, but
without the conversion option. This amount is recorded as a liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by
deducting the amount of the liability component and deferred tax liability from the fair value of the compound instrument
as a whole. This is recognised and included in equity, and is not subsequently re-measured.
Issue costs are apportioned between the liability and equity components of the convertible loan notes based upon their
relative carrying amounts at the date of issue.
Current and deferred income tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided
for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
31
www.accessintelligence.com The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable
profits will be available in the future, against which the reversal of temporary differences can be deducted. Recognition,
therefore, involves judgement regarding the future financial performance of the particular legal entity or tax group in
which the deferred tax asset has been recognised.
Historical differences between forecast and actual taxable profits have not resulted in material adjustments to the
recognition of deferred tax assets.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. These equity-settled share-based
payments are measured at fair-value at the date of the grant. Where material, the fair value as determined at the grant
date is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest.
Fair value is measured by use of the Black–Scholes method. The charges to the profit and loss rest in the subsidiary
employing the executive concerned.
Employee benefits
Individual subsidiaries of the Group operate defined contribution pension schemes for their employees. The assets of
the schemes are not managed by the Group and are held separately from those of the Group. The annual contributions
payable are charged to the income statement when they fall due for payment.
Revenue
Revenue represents the amounts derived from the provision of goods and services, stated net of Value Added Tax. The
methodology applied to income recognition is dependent upon the goods or services being supplied.
In respect of income relating to annual service contracts and/or hosted services which are invoiced in advance, it is
the Group’s policy to spread the income of each contract equally over the contract’s life. The full value of each sale
is credited to deferred revenue when invoiced to be released to the statement of comprehensive income in equal
instalments over the contract period.
Revenues from the delivery of infrastructure are recognised on installation with associated training and consultancy fees
recognised when specified contractual milestones are met or on project completion. In the event that these services
are invoiced in advance they will be credited to deferred revenue and released to the comprehensive income statement
once delivered.
Income from the sale of perpetual licences is recognisable in full at the date of sale.
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the term
of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease
expense.
Finance income and finance expenses
Finance income and finance expenses are recognised in profit or loss as they accrue, using the effective interest method.
Finance income relates to interest income on the Group’s bank account balances.
Interest payable comprises interest payable or finance charges on loans classified as liabilities.
In relation to interest relating to the convertible redeemable loan notes, the charge to the profit and loss account is an
‘effective interest charge’ over the period as opposed to the actual interest paid or payable. The effective interest charge
is higher than the actual interest paid.
Dividend distributions
Dividend distributions are recognised as transactions with owners on payment.
32
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Foreign Exchange
The individual financial statements of each Group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). The results and financial position of each Group company are
expressed in pounds sterling, which is the functional currency of the Company, and the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in profit or loss for the year.
3. Revenue
The Group’s revenue is primarily derived from the rendering of services with the value of sales of goods being not
significant in relation to total Group revenue.
The Group’s revenue was split into the following territories:
United Kingdom
European Union
Rest of the world
Continuing
Operations
2015
£’000
Discontinued
Operations
2015
£’000
7,269
464
386
8,119
2,737
-
-
2,737
Continuing
Operations
2014
£’000
3,790
202
299
4,291
Discontinued
Operations
2014
£’000
4,255
-
-
4,255
All non-current assets are held in the United Kingdom as they were in 2014. No customer represents 10% or more of
revenue as was the case in 2014.
4. Segment reporting
Segment information is presented in respect of the Group’s operating segments which are based upon the Group’s
management and internal business reporting.
Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.
Segment non-current asset additions show the amounts relating to property, plant and equipment and intangible assets
including goodwill. All non-current assets are located in the UK.
Operating segments
The Group operating segments have been decided upon according to their revenue model and product or service offering
being the information provided to the chief operating decision maker, the non-executive Chairman. The Reputation and
Governance, Risk & Compliance segments derive their revenues from software licence sales and support and training
revenues. As a result of the Group’s divestments and acquisitions during the year the segments reported have changed
to reflect the Board’s focus. The segments are:
• Reputation
• Governance, Risk & Compliance
• Discontinued - Disposals & Held for Sale
• Head Office
33
www.accessintelligence.com
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34
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
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5. Operating loss
Operating loss is stated after charging:
Depreciation of property, plant and equipment
Amortisation of development costs
Amortisation of brand values
Amortisation of software licences
Amortisation of database
Amortisation of customer list
Loss on disposal of property, plant and equipment
Impairment of intangible assets
Loss on foreign currency translation
Exceptional costs (see below)
Operating lease charges - land and buildings
Auditor's remuneration (see below)
Share based payments
2015
£'000
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2014
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Inventories recognised as expense
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Research and development and other technical expenditure (income statement)
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Exceptional costs in the year ended 30 November 2015 were incurred as a result of restructuring and non-recurring one
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made up of the following:
Compensation for loss of office - directors
Compensation and notice payments - all staff
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Fees payable to the Company's auditor for the audit of the
Company's annual accounts
Under-provision for the audit of the Company’s 2014 annual accounts
The audit of the Company's subsidiaries, pursuant to legislation
Tax services
2015
£’000
88
152
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2014
£'000
27
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35
www.accessintelligence.com
6. Discontinued operations
In April 2015 the Group sold its entire IT support segment (see note 4: Discontinued - Disposals); the segment was not a
discontinued operation or classified as held for sale at 30 November 2014 and the comparative consolidated statement
of comprehensive income has been re-presented to show the discontinued operation separately from continuing
operations. Management committed to a plan to sell this segment early in 2015 following a strategic decision to focus
on Software as a Service lines and move away from non core activities.
Due North Limited is also presented as a disposal group held for sale following the commitment of the Group’s
management, in June 2015, to a plan to sell the entity.
2015
£’000
2014
£'000
2,737
(2,927)
4,255
(3,711)
(190)
(29)
(219)
900
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544
(28)
516
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681
516
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0.22p
0.22p
2014
£’000
760
(876)
-
(116)
Results of discontinued operation
Revenue
Expenses
Results from operating activites
Tax
Results from operating activites, net of tax
Gain on sale of discontinued operation
Tax on gain on sale of discontinued operation
Profit for the year
Basic earnings per share
Diluted earnings per share
The profit from discontinued operations of £681,000 is entirely attributable to the owners of the Company.
Cash flows from (used in) discontinued operation
Net cash used in operating activities
Net cash from investing activites
Net cash from finacing activities
Net cash flows for the year
2015
£’000
398
(444)
-
(46)
The following is a breakdown of the effects of the disposal of the IT support segment on the financial position of the
Group:
Goodwill
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Deferred tax liabilities
Trade and other payables
Net assets and liabilities
Consideration received, satisfied in cash
Cash and cash equivalents disposed of
36
2015
£’000
800
166
134
776
346
(20)
(1,740)
462
1,487
346
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
7. Disposal group held for sale
Due North Limited is presented as a disposal group held for sale following the commitment of the Group’s management,
in June 2015, to a plan to sell the entity. Efforts to sell the disposal group had therefore commenced before the year end
with the sale being completed on 3 February 2016 (see note 30).
At 30 November 2015 the disposal group comprised the following assets and liabilities:
Assets classified as held for sale
Goodwill
Development costs
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Liabilities classified as held for sale
Trade and other payables
Deferred tax liabilities
2015
£’000
412
2,661
73
516
207
3,869
2015
£’000
1,022
433
1,455
8. Acquisition of business combinations
On 23 June 2015, the group entered into an asset purchase agreement to acquire certain trade and assets of Cision UK
Limited and Vocus UK Limited for an aggregate cash consideration of £1,340,000. The trade and assets were acquired
through a newly incorporated subsidiary company, AIMediaData Limited, as a single economic unit which will continue
to be operated on this basis
The Board believe the acquisition will provide the Group with a developed media contacts database which will strengthen
the long term ability of Group subsidiary Access Intelligence Media & Communications Limited to compete within the
IMS market in the UK.
In the six months to 30 November 2015, AIMediaData Limited contributed revenue of £3,351,000 and a loss of £929,000.
The Directors do not consider it practicable to report either the revenue or the loss of AIMediaData as though the
acquisition date had been as of the beginning of the reporting period. The reason that this is considered impracticable
is that only certain trade and assets of Cision UK Limited and Vocus UK Limited were acquired and the Group has
made significant changes to the operations of the acquired business during its period of ownership. As a result, both the
revenue profile and the cost base of the business are fundamentally different to pre-acquisition results of the Cision UK
and Vocus UK businesses.
Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred.
Cash
Total consideration transferred
£’000
1,340
1,340
37
www.accessintelligence.com
Acquisition related costs
The Group incurred acquisition related costs of £153,000 on legal fees and due diligence costs. These costs have
been included in ‘administrative expenses’.
Identifiable assets acquired and liabilites assumed
The following table summarises the recognised amounts of assets acquired and liabilites assumed at the date of acqui-
sition.
Property, plant and equipment
Intangible assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Accruals and deferred income
Total identifiable net liabilities acquired
£’000
254
1,835
1,452
-
(877)
(3,367)
(703)
The intangible assets identified above primarily comprise the fair values estimated for the media contacts database and
customer list acquired.
A cost based approach was used to value the media contacts database, determining the likely cost of building an
equivalent media contacts database from new. The useful life of the database has been estimated at 3 years.
The customer list was valued by assessing a discounted cash flow for the acquired customer list, based on customer
attrition rates and using a discount factor of 12%. This discount factor is in line with value-in-use calculations performed
for intangibles testing (see Note 15). The useful life of the customer list has been estimated at 5 years.
Trade and other receivables comprise gross contractual amounts due of £1,536,000, of which £84,000 was expected to
be uncollectable at the date of acquisition.
Trade and other payables include an amount of £3,074,000 which relates to the fair value of deferred revenue acquired.
The fair value has been estimated based on the value of deferred revenue relating to contracts transferred, discounted
in accordance with IFRS.
Goodwill
Goodwill recognised on this acquisition represents the difference between the consideration paid and the fair value of
the net liabilities acquired. It includes the value inherent in the assembled workforce acquired. The goodwill arising has
been recognised as follows:
Consideration transferred
Fair value of identifiable net liabilities
Goodwill
The goodwill arising on acquisition is considered to be deductible for tax purposes.
£’000
1,340
703
2,043
38
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
9.Particulars of employees
The average number of persons (including directors) employed by the Group during
the year was:
Selling, distribution and administration
Technical
Costs incurred in respect of these employees were:
Wages and salaries costs
Social security costs
Pension costs
Health insurance
Employee benefits
Compensation for loss of office
2015
2014
148
72
220
2015
£'000
7,403
707
119
39
12
240
58
71
129
2014
£'000
4,443
492
90
71
5
8
8,520
5,109
Of the costs listed above in relation to employees £577,000 were capitalised to the statement of financial position within
development costs and £7,943,000 were expensed to the statement of comprehensive income.
The compensation for loss of office charge of £240,000 (2014: £8,000) relates to 3 employees (2014: 3 employees) who
were made redundant during the year and 3 directors (2014: Nil).
The reportable key management personnel are considered to be comprised of the Company directors, the remuneration
for whose services during the year are detailed in the table below.
Directors’ remuneration
Executive Directors
J Arnold
K Dhoot (Resigned 12 June 2015)
Non Executive Directors
M Jackson
J Hamer (Resigned 1 October 2015)
H Bang (Resigned 1 October 2015)
D Lowe
C Pilling (Appointed 24 August 2015)
Salaries
£
Settlements
£
Fees
£
2015
£
2014
£
201,410
89,423
32,500
12,500
12,500
17,500
-
-
58,334
-
15,000
15,000
-
-
365,833
88,334
-
-
-
-
-
-
19,500
19,500
201,410
147,757
141,667
85,000
32,500
27,500
27,500
17,500
19,500
29,000
15,000
15,000
15,000
-
473,667
300,667
J Arnold and K Dhoot received health insurance benefits during the year of £1,120 (2014: £1,154) and £803 (2014:
£1,587) respectively.
J Arnold and K Dhoot received payments into personal retirement money purchase pension schemes during the year of
£7,474 (2014: £6,155) and £3,298 (2014: £5,275) respectively.
No other directors received any other benefits other than those detailed above.
The number of directors at 30 November 2015 accruing retirement benefits under money purchase schemes was 1
(2014: 2).
The interests of the directors in share options are detailed in the Directors’ Report on page 12 of this report.
39
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10. Financial income
Interest receivable on bank accounts
11. Financial expense
Effective interest charged on convertible loan notes
Interest charged on non-convertible loan notes
Total financial expense
12. Taxation
Current income taxes credit:
UK corporation tax credit for the year
Adjustment in respect of prior year
Total current income tax credit
Deferred tax (note 23)
Impact of change in tax rate
De-recognition of deferred tax assets
Origination and reversal of temporary differences
Total deferred tax
Total tax (credit)/expense
Attributable to:
Continuing operations
Discontinued operations
Total
2015
£’000
1
2015
£’000
191
75
266
2015
£’000
(101)
-
(101)
27
80
(740)
(633)
(734)
(763)
29
(734)
2014
£'000
1
2014
£'000
115
-
115
2014
£’000
(237)
(19)
(256)
-
363
42
405
149
121
28
149
As shown above the tax assessed on the loss on ordinary activities for the year is higher than (2014: higher than) the
standard rate of corporation tax in the UK of 20.3% (2014: 21.7%).
The differences are explained as follows:
Factors affecting tax credit
Loss on ordinary activities before tax
Loss on ordinary activities by effective rate of tax of 20.3% (2014: 21.7%)
Expenses not deductible for tax purposes
Adjustment in respect of prior year
De-recognition of deferred tax assets
Additional R&D claim CTA 2009
Total tax (credit)/expense
2015
£’000
(3,977)
(809)
274
-
80
(279)
(734)
2014
£’000
(933)
(202)
142
(19)
363
(135)
149
Factors that may affect future tax expenses
The main rate of corporation tax was reduced to 20% from 1 April 2015 and is due to be further reduced by a further
1% from April 2017 and by a further 1% from April 2020 . All deferred tax assets and liabilities are assumed to cease
or be utilised at 19%.
40
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
10. Financial income
13. Dividend paid
Due to the significant and ongoing investment in developing our products, the directors do not propose a dividend in
respect of the year ended 30 November 2015.
11. Financial expense
14. Earnings per share
12. Taxation
Current income taxes credit:
UK corporation tax credit for the year
Adjustment in respect of prior year
Total current income tax credit
Deferred tax (note 23)
Impact of change in tax rate
De-recognition of deferred tax assets
Origination and reversal of temporary differences
Total deferred tax
Total tax (credit)/expense
Attributable to:
Continuing operations
Discontinued operations
Total
The differences are explained as follows:
Factors affecting tax credit
Loss on ordinary activities before tax
Expenses not deductible for tax purposes
Adjustment in respect of prior year
De-recognition of deferred tax assets
Additional R&D claim CTA 2009
Total tax (credit)/expense
As shown above the tax assessed on the loss on ordinary activities for the year is higher than (2014: higher than) the
standard rate of corporation tax in the UK of 20.3% (2014: 21.7%).
Loss on ordinary activities by effective rate of tax of 20.3% (2014: 21.7%)
Factors that may affect future tax expenses
The main rate of corporation tax was reduced to 20% from 1 April 2015 and is due to be further reduced by a further
1% from April 2017 and by a further 1% from April 2020 . All deferred tax assets and liabilities are assumed to cease
or be utilised at 19%.
2015
£’000
(101)
-
(101)
27
80
(740)
(633)
(734)
(763)
29
(734)
2015
£’000
(3,977)
(809)
274
-
80
(279)
(734)
2014
£’000
(237)
(19)
(256)
-
363
42
405
149
121
28
149
2014
£’000
(933)
(202)
142
(19)
363
(135)
149
The calculation of earnings per share is based upon the total Group loss after taxation of £3,243,000 (2014: loss of
£1,082,000) divided by the weighted average number of ordinary shares in issue during the year which was 252,593,681
(2014: 235,110,347).
In 2015 and 2014 potential ordinary shares from the share option schemes and convertible loan notes have an anti-
dilutive effect due to the Group being in a loss position. This includes the convertible loan notes issued during the year.
As a result, dilutive loss per share is disclosed as the same value as basic loss per share.
This has been computed as follows:
Numerator
(Loss)/Profit for the
year and earnings
used in basic EPS
Earnings used in
diluted EPS
Continuing
Operations
Discontinued
Operations
2015
£’000
2015
£’000
Total
2015
£’000
Continuing
Operations
Discontinued
Operations
2014
£’000
2014
£’000
Total
2014
£’000
(3,924)
681
(3,243)
(1,598)
516
(1,082)
(3,924)
681
(3,243)
(1,598)
516
(1,082)
Denominator
'000
'000
'000
'000
'000
'000
Weighted average
number of shares used
in basic EPS
Effects of:
Dilutive effect of
options
Dilutive effect of loan
note conversion
Weighted average
number of shares used
in diluted EPS
Basic (Loss)/earnings
per share (pence)
Diluted loss per share
for the year (pence)
252,594
252,594
252,594
235,110
235,110
235,110
N /A
14,821
14,821
N/A
N/A
N/A
N/A
N/A
420
420
N/A
N/A
252,594
267,415
267,415
235,110
235,530
235,530
(1.55)
0.27
(1.28)
(0.68)
0.22
(0.46)
(1.55)
0.25
(1.30)
(0.68)
0.22
(0.46)
On 21 September 2011 29,666,667 shares were returned to the Company and were held in Treasury at the year end.
Once in treasury they were removed from the earnings per share calculation.
41
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The total number of options and warrants granted at 30 November 2015 of 33,958,676 (2014: 38,436,281) would
generate £984,626 (2014: £1,176,190) in cash if exercised. At 30 November 2015, 545,000 (2014: 34,936.281) were
priced above the mid-market closing price of 5.13p per share (2014: 2.31p) per share and 33,413,676 (2014: 3,500,000)
were below.
At the 30 November 2015 9,258,676 (2014: 6,947,387) staff options were eligible for exercising at an average price of
3.2p (2014: 4.2p). Also eligible for exercising are the 21,300,000 warrants priced at 2.75p per share held by M Jackson,
D Lowe and Elderstreet VCT plc consequent to their investment in October 2008.
The below table shows the amount of outstanding convertible loan notes at 30 November 2015 and the amount of
shares they would convert into if the holder chooses the conversion option:
Holder
Elderstreet VCT
Unicorn AIM VCT
Elderstreet VCT
Hawk Investments
Kestrel Partners LLP
Octopus AIM VCT
Total
Loan Notes £’000
Convert into shares ’000
500
750
200
300
400
200
2,350
12,500
18,750
6,667
10,000
13,333
6,667
67,917
Date of conversion
31 December 2016
31 December 2016
4 December 2019
4 December 2019
4 December 2019
4 December 2019
42
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC 15. Intangible fixed assets
Brand
value Goodwill
£’000
£’000
Development
costs
£’000
Software
licences
£’000
Database
£’000
Customer
list
£’000
Total
£’000
Cost
At 1 December 2013
Capitalised during the year
At 30 November 2014
At 1 December 2014
Capitalised during the year
Additions through business combination
Disposals
Held for sale
1,369
-
1,369
12,005
-
12,005
1,369
12,005
-
-
-
-
-
2,043
(1,430)
(1,481)
At 30 November 2015
1,369
11,137
Amortisation and impairment
At 1 December 2013
Charge for the year
Impairment in year
At 30 November 2014
At 1 December 2015
Charge for the year
Disposals
Held for sale
Impairment in year
At 30 November 2015
Net Book Value
At 30 November 2015
At 30 November 2014
349
7,978
60
-
409
409
60
-
-
-
-
798
8,776
8,776
-
(630)
(1,069)
-
469
7,077
900
960
4,060
3,229
3,119
1,573
4,692
4,692
1,533
-
-
(2,846)
3,379
472
80
-
552
552
378
-
(185)
1,899
2,644
735
4,140
160
-
160
160
68
8
-
-
236
47
36
-
83
83
44
-
-
-
-
-
-
-
-
997
-
-
997
-
-
-
-
-
138
-
-
-
-
-
-
-
-
830
-
16,653
1,573
8,226
18,226
1,601
3,878
(1,430)
-
(4,327)
830
17,948
-
-
-
-
-
70
-
-
-
8,846
176
798
9,820
9,820
690
(630)
(1,254)
1,899
127
138
70
10,525
109
77
859
-
760
7,423
-
8,406
For the purpose of impairment testing, goodwill is allocated by entity, which represent the Group’s CGUs and the lowest
level within the Group at which the goodwill is monitored.
The carrying value of capitalised development costs which are not yet being amortised and goodwill, allocated to each
CGU are:
Development Costs
Goodwill
2015
Continuing operations:
Access Intelligence plc
Access Intelligence Media & Communications Ltd
AI Media Data Ltd.
AITrackRecord Ltd
AI Talent Ltd
£'000
-
-
78
-
-
78
£'000
89
1,928
2,043
-
-
4,060
43
www.accessintelligence.com
2014
Continuing operations:
Access Intelligence plc
Access Intelligence Media & Communications Ltd
AITrackRecord Ltd
AI Talent Ltd
Discontinued operations:
Willow Starcom Ltd
Due North Ltd
Development Costs
Goodwill
£'000
30
425
1,242
44
1,741
-
2,399
4,140
£'000
89
1,928
-
-
2,017
800
414
3,231
At the balance sheet date, impairment tests were undertaken by comparing the carrying values of goodwill, capitalised
development costs and other assets with the recoverable amount of the CGU to which the goodwill, capitalised
development costs and other assets have been allocated. The recoverable amount of the CGU is based on value-in-
use calculations. These calculations use pre-tax cash flow projections covering a five year period based on financial
budgets and forecasts as approved by the Board with a terminal value for goodwill impairment assessment and covering
a ten year period based on financial budgets and forecasts as approved by the Board with no terminal value for other
intangible assets. Ten years were selected as this represents the estimated lifetime of the software platforms.
The key assumptions used for value-in-use calculations are those regarding revenue growth rates and discount rates
over the forecast period. Growth rates are based on past experience, the anticipated impact of the CGUs significant
investment in research and development, and expectations of future changes in the market. The value in use calculations
use information from approved budgets in the first three years, followed by applying specific growth rates for which the
key assumptions in respect of annual revenue growth rates range between 0% and 7% from year 4 onwards.
The discount rate used for all companies was 12%, based on an assessment of the Group’s cost of capital and on
comparison with other listed technology companies. The terminal growth rate used for the purposes of goodwill
impairment assessments was 2.5%. The Board considered that no impairment to goodwill is necessary based on the
value-in-use reviews of Access Intelligence Media & Communications Limited and AIMediaData Limited.
After review of the value-in-use of AITrackRecord Limited, the Board considers that the recent history of losses in
that company and net cash outflows forecast in the immediate future mean that a provision should be recognised
representing the full carrying value of development costs capitalised by that company, being £1,692,000. After review of
the value-in-use of AITalent Limited, the Board considers that the recent history of losses in that company and net cash
outflows forecast in the immediate future mean that a provision should be recognised representing the full carrying value
of development costs capitalised by that company being £30,000.
The value-in-use calculations for Access Intelligence Media & Communications Limited and AIMediaData Limited
significantly exceeded the carrying values of goodwill and intangibles relating to those companies.
Sensitivity analysis has been performed on reasonably possible changes in assumptions upon which recoverable
amounts have been estimated. Based on the sensitivity analysis, a reduction of 77% in the EBITDA delivered by
Access Intelligence Media & Communications Limited would result in the carrying value of its goodwill being to equal its
recoverable amount. For AIMediaData Limited, a 31% reduction in the revenue growth rate would result in the carrying
value of its goodwill being equal to its recoverable amount. For both companies, an increase in the discount rate by 25
percentage points would still not result in the carrying value of goodwill exceeding the recoverable amount.
Other impairments
Other intangible assets are tested for impairment if indicators of an impairment exist. Such indicators include performance
falling short of expectation.
In 2015, development costs of £177,000 were impaired as a result of projects that did not perform as expected.
The directors considered that there were no further indicators of impairment relating to the remaining intangible fixed
assets at 30 November 2015.
44
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
16. Property, plant & equipment
Fixtures fittings and
equipment
£’000
Leasehold
improvements
£’000
Cost
At 1 December 2013
Additions
Disposals
At 30 November 2014
At 1 December 2014
Additions
Additions through business combination
Disposals
Classified as held for sale
At 30 November 2015
Depreciation
At 1 December 2013
Charge for the year
Disposals
At 30 November 2014
At 1 December 2014
Charge for the year
Disposals
Classified as held for sale
At 30 November 2015
Net Book Value
At 30 November 2015
At 30 November 2014
17. Inventories
1,297
140
(1)
1,436
1,436
66
122
(782)
(266)
576
768
218
-
986
986
206
(563)
(193)
436
140
450
Spare parts servicing maintenance contracts
18. Trade and other receivables
Current assets
Trade receivables
Less: provision for impairment of trade receivables
Prepayments and other receivables
104
-
-
104
104
-
132
(22)
(27)
187
16
15
-
31
31
51
(3)
(25)
54
133
73
2015
£’000
-
2015
£'000
3,008
(330)
2,678
950
3,628
Total
£’000
1,401
140
(1)
1,540
1,540
66
254
(804)
(293)
763
784
233
-
1,017
1,017
257
(566)
(218)
490
273
523
2014
£'000
142
2014
£'000
2,172
(200)
1,972
641
2,613
As at 30 November 2015, trade receivables of £330,000 (2014: £200,000) were impaired and fully provided for. The
provision relates primarily to monies owed by Organization Metrics Inc, a company based in Canada. A further £84,000
was acquired through the acquisition of a business and relates to debt over 120 days overdue.
All trade receivables are reviewed by management and are considered collectible. The ageing of trade receivables
which are past due and not impaired is as follows:
45
www.accessintelligence.com
Days outstanding:
31–60 days
61–90 days
91-180 days
Movements on the Group provision for impairment of trade receivables are as follows:
At 1 December
On business combination
Increase in provision
At 30 November
Ageing on impaired debt
Days outstanding:
90–180 days
181–270 days
Above 270 days
2015
£’000
771
152
506
1,429
2015
£’000
200
84
46
330
2015
£’000
123
-
207
330
2014
£’000
344
330
-
674
2014
£'000
181
-
19
200
2014
£'000
-
-
200
200
The creation and release of a provision for impaired receivables has been included in ‘administrative expenses’ in the
income statement. Amounts charged to the allowance account are generally written off, where there is no expectation
of recovering additional cash.
The other asset classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned
above together with our cash deposits totaling £1,523,000 (2014: £1,144,000). The Group does not hold any collateral
as security.
As disclosed in note 22, credit risk is considered according to sector and necessary allowances are made when needed
by assessing changes in our customers’ credit profiles and credit ratings.
19. Interest bearing loans and borrowing
Current
Convertible loan notes
Non-current
Convertible loan notes
Non-convertible loan notes
2015
£’000
1,277
1,277
1,009
1,830
2,839
2014
£'000
-
-
1,301
-
1,301
On 30th June 2009 £1,750,000 convertible loan notes were issued. At 30 November 2014 and 30 November 2015,
£1,250,000 of these loan notes were in issue.
The original terms were that these loan notes were redeemable at par or convertible to ordinary shares at 4p per
ordinary share on or before maturing on 30th June 2015 and carried a coupon rate of 6% per annum payable semi-
annually until such time as they were repaid or were converted in accordance with their terms. The holder of the notes
may convert all or part of the notes held by them into new ordinary shares in the Company on delivery to the Company
of a conversion notice at 4p per share.
46
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
In 2014, the Company agreed terms with Elderstreet VCT (a company related to Chairman Michael Jackson) and
Unicorn AIM VCT plc to extend the loans such that they mature on 31 December 2015, with enhanced interest at 8%
during this extended period with conversion rights unchanged at 4p per share.
In January 2016 the Company agreed the same terms as those agreed in the prior year with both note holders such that
the notes are redeemable at par or convertible to ordinary shares at 4p per ordinary share on or before maturing on 31
December 2016 and carry a coupon rate of 8% per annum, payable semi-annually until such a time as they are repaid
or converted in accordance with their terms. These notes are classified as current at the year end.
In December 2014 the company issued a further £1,100,000 of convertible loan notes. These loan notes are redeemable
at par or convertible to ordinary shares at 3p per ordinary share on or before maturing on 3 December 2019 and carry
a coupon rate of 8% per annum payable semi-annually until such time as they are repaid or converted.
No redemptions or conversions of the convertible loan stock arose in the year ended 30 November 2015.
The net proceeds received from the issues of the convertible loan notes have been split between the liability element
and an equity component, representing the fair value of the embedded option to convert the liability into equity of the
Company, as follows:
Proceeds of issue of convertible loan notes
Existing loan notes rolled over
Equity component
Deferred taxation
Initial fair value of liability component
Cumulative interest charged
Cumulative interest paid
Liability component at 30 November
2015
£’000
1,100
1,250
(255)
(79)
2,016
792
(522)
2,286
2014
£'000
-
1,250
(126)
(49)
1,075
601
(375)
1,301
The equity component of £255,000 (2014: £126,000) has been credited to equity reserve (see note 10 of the parent
company). The interest charged for the year is calculated by applying an effective rate of interest of 9.8% (2014: 9.8%)
to the liability component for the 12 month period. The liability component is measured at amortised cost. The difference
between the carrying amount of the liability component at the date of issue and the amount reported in the balance sheet
at 30 November 2015 represents the effective interest rate less interest paid to that date.
The movement on the convertible loan note liability is summarised below:
Opening loan liability
Issue of convertible loan notes
Interest charged for the year
Interest paid in the year
Liability component at 30 November
2015
£’000
1,301
941
191
(147)
2,286
2014
£'000
1,261
-
115
(75)
1,301
On 22 June 2015 the company issued £1,818,000 non-convertible loan notes which carry an interest rate of 10% for
one year rising to 12% thereafter. Interest is payable quarterly in arrears. The loans notes are fully repayable in 5 years.
Opening loan liability
Issue of non-convertible loan notes
Costs associated with the issue of loans
Interest charged for the year
Interest paid in the year
Liability component at 30 November
2015
£’000
-
1,818
(18)
75
(45)
1,830
2014
£'000
-
-
-
-
-
47
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20. Trade and other payables
Due within one year
Trade and other payables
Other taxes and social security costs
VAT payable
Due greater than one year
Trade and other payables
2015
£’000
824
190
211
1,225
2015
£’000
391
2014
£'000
888
312
326
1,526
2014
£'000
60
21. Financial instruments
The Group’s treasury activities are designed to provide suitable, flexible funding arrangements to satisfy the Group’s
requirements. The Group uses financial instruments comprising borrowings, cash, liquid resources and items such as
trade receivables and payables that arise directly from its operations. The main risks arising from the Group financial
instruments relate to the maintaining of liquidity across the 6 group entities and debt collection. The Board reviews
policies for managing each of these risks and they are summarised below.
The Group finances its operations through a combination of cash resources, loan notes and equity. Short term flexibility
is provided by moving resources between the individual subsidiaries. Exposure and interest rate fluctuations are minimal
as all borrowings are at fixed rates of interest. The Group also has deposit facilities on which 1.25% interest was being
earned throughout 2015 (2014: 1.25%) and will be optimising the use of these accounts going forward. In 2015, the
Group’s investment in developing its products resulted in lower cash resources resulting in the reduction in interest
received. The Group’s exposure to interest rate risk is not significant and therefore no sensitivity analysis has been
performed.
Small amounts of foreign currency risk exists in two subsidiaries which invoice in currencies other than sterling. Due to
the relative size of the currency risks concerned no hedging takes place in Australian dollars, Euros or US dollars. At the
year end there were no open contracts, however the Group was holding a US dollar deposit of $113,058 (2014: $20,000)
which was translated at the rate of 1.5031 (2014:1.6052) for inclusion in the consolidated statement of financial position.
This amounted to £75,206 (2014: £12,500). There are no hedges against this balance.
The Group did not hold any other assets or liabilities in foreign denominated currencies at the reporting date. The
directors do not consider that there is a significant exposure to foreign exchange risk and therefore no sensitivity
analysis has been performed.
At 30 November 2015 borrowings comprised convertible loan notes of £2,350,000 (2014: £1,250,000) and non-convertible
loan notes of £1,818,000. Of the convertible loan notes, £750,000 and £500,000 loan notes have been extended and
may convert to equity on 31 December 2016 at 4 pence per share unless they have already been redeemed at par. The
remaining 5 loan notes will convert into equity on 7 December 2019 at 3 pence per share.
There is no material difference between the fair values and book values of the Group’s financial instruments. Short term
trade receivables and payables have been excluded from the above disclosures.
The objectives of the Group’s treasury activities are to manage financial risk, secure cost-effective funding where
necessary and minimise the adverse effects of fluctuations in the financial markets on the value of the Group’s financial
assets and liabilities, on reported profitability and on the cash flow of the Group. Interest income is sought wherever
possible and in 2014 produced £1,000 (2013: £10,000) of income.
The Group’s principal financial instruments for fundraising are through share issues.
48
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
2015
Assets per the balance sheet
Trade and other receivables excluding prepayments
Cash and cash equivalents
Liabilities per the balance sheet
Trade and other payables excluding accruals
Interest bearing loans and borrowings
Undiscounted contractual maturity of financial liabilities
Amounts due within one year
Amounts due between one and five years
Amounts that convert to equity
Less: future interest charges
Financial liabilities carrying value
The above analysis excludes corporation tax receivable.
2014
Assets per the balance sheet
Trade and other receivables excluding prepayments
Cash and cash equivalents
Liabilities per the balance sheet
Trade and other payables excluding accruals
Interest bearing loans and borrowings
Undiscounted contractual maturity of financial liabilities
Amounts due within one year
Amounts due between one and five years
Amounts that convert to equity
Less: future interest charges
Financial liabilities carrying value
Loans, receivables
and other payables
£'000
-
2,678
1,523
4,201
1,599
4,116
5,715
Loans, receivables
and other payables
£'000
1,972
1,144
3,116
1,526
1,301
2,827
Total
£'000
-
2,678
1,523
4,201
1,599
4,116
5,715
1,599
2,827
2,648
7,074
(1,359)
5,715
Total
£'000
1,972
1,144
3,116
1,526
1,301
2,827
1,526
-
1,401
2,927
(100)
2,827
The liquidity risk relating to the contractual liabilities listed above is managed on a local basis through their day to
day cash management. The Group has invested significantly in restructuring the Group and building products written
in current code bases, accordingly the Group is liquid with £1,523,000 (2014: £1,144,000) available cash resources
against a liability payable within the next 12 months of £1,599,000 (2014: £1,526,000). Management monitor cash
balances weekly. However should any subsidiary, or the parent company, find that it does not have the liquidity to pay a
debt as it becomes due an inter-company cash transfer will be made available by another member of the Group.
22. Financial and operational risk management
The Group’s activities expose it to a variety of financial risks which are managed by the Group and subsidiary management
teams as part of their day-to-day responsibilities. The Group’s overall risk management policy concentrates on those
areas of exposure most relevant to its operations. These fall into four categories:
• Competitive risk — that our products are no longer competitive or relevant to our customers
• Cash flow and liquidity risk — that we run out of the cash required to run the business
• Credit risk — that our customers do not pay
• Key personnel risk — that we cannot attract and retain talented people
49
www.accessintelligence.com
Competitive risk
All of our businesses are active in competitive markets. These markets are predominantly UK based but nevertheless
face global competition. To succeed we need staff with the appropriate skills, offering state of the art product and service
solutions at competitive prices. They need a full understanding of the benefits and attributes of our products as well as
an understanding of competitor products. They also need to know about sales opportunities on a timely basis.
As a small company, with limited resources, we need to manage our product investments with care but we tackle these
risks as follows:
• We encourage investment as needed to maintain our market leading status through product research and
development;
• We created a cutting edge centre of dedicated .Net development expertise in York housing 30 developers and
testers serving the Group;
• We are growing our sales and marketing teams across the Group in a controlled manner;
• We make time and funds available for staff training;
• We incentivise through balanced sales commission schemes;
• We monitor individual sales person performance, taking action where necessary; and
• We expect subsidiary directors to have an excellent understanding of their market.
Cash flow and liquidity risk
As a Group we support the cash requirements of six individual trading units, all of which have their individual working
capital requirements during a trading month. At the end of 2015 we had no bank borrowings (2014: Nil) but £4,083,000
of loan notes. As an acquisitive business which also invests in its existing infrastructure continually, the need to project
future requirements is important. To encourage tough cash management and good planning we manage cash as follows:
• We collect and communicate a weekly cash summary every Friday by subsidiary;
• We pay sales commissions, where appropriate but only once cash is received;
• We monitor detailed ageing analysis of debtors from each subsidiary on a monthly basis; and
• We encourage subsidiary cash generation by monitoring the ageing of debtors.
Credit risk
Our sales are split 33:67 (2014: 42:58) between public and private sector organisations. Whilst recognising that
circumstances change, we are of the opinion that the public sector will pay its debts providing the purchasing rules
have been followed. Despite the tough solvency issues facing all European governments we have seen no reason to
change this view at the present time. The private sector however remains a higher risk and we remain diligent about our
approach to these sales:
• We will not do business without a purchase order;
• We must take credit checks on new customers;
• We track aged debtors very diligently, reporting them monthly at Group Board level; and
• We do not pay sales commission on unpaid sales.
Key personnel risk
This is a people business. Our technical staff creates the product and our sales staff sell it, supported by our marketing
staff. In 2015 78% (2014: 70%) of our outflows were on people. In a competitive market we recognise good people can
be poached or just lose their way. There is nothing that can beat a motivated, educated and focused team. Whilst our
size limits the extent of our actions, we address this risk as follows:
• We take care to take references when recruiting;
• Managers monitor performance individually whatever the role in the organisation;
• We offer training of specific skills where appropriate;
• We encourage flat management structures, open plan offices and easy accessibility up and down the organisation;
• We pay competitive market prices whilst recognising regional differences;
• We incentivise subsidiary managing directors on subsidiary profit performance;
• We have a broadly distributed approved option scheme for senior employees; and
• A number of key personnel are significant shareholders in their own right.
50
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
providing long-term returns for shareholders and security for other stakeholders whilst maintaining optimal capital
structure to allow for future acquisition and growth.
In order to manage the overall objective above, the Group gives consideration to the following:
The Board views equity firstly as the key source of funding for acquisitions and secondly as an important incentivisation
tool for management. These are the key justifications for the Group’s AIM listing.
In relation to acquisitions, the appropriate funding structure will be a blend of our own available cash, gearing and equity.
The structure for each transaction will take into account our intention for an immediate enhancement in earnings per
share.
The Board is also sensitive to the fact that there may be times when capital is in short supply justifying fundraising
beyond our immediate needs. With a buy and build strategy new acquisition opportunities must be responded to as they
arise, though during the remainder of 2016 the focus will be to build on developing what we have.
As an incentive for management we offer equity based payments, in line with market prices at the time of grant, aligning
the long-term interests of shareholders and key executives.
23. Deferred tax assets and liabilities
The following are the major deferred tax assets and liabilities recognised by the Group and the movements thereon
during the current year end the prior year:
Accelerated
tax
depreciation
£'000
(15)
5
-
-
(10)
(10)
10
-
20
1
21
29
(8)
21
Convertible
loan notes
£'000
Share-based
payments
£'000
Tax losses
£'000
2
(2)
-
-
-
-
-
(30)
-
-
(30)
(30)
-
(30)
60
(31)
(29)
-
-
-
-
-
-
-
-
-
-
-
523
(134)
-
-
389
389
361
-
-
(17)
733
720
13
733
Accelerated
tax on
intangible
assets
£'000
(672)
(244)
-
-
(916)
(916)
244
-
-
44
(628)
(190)
(438)
(628)
Total £'000
(102)
(406)
(29)
-
(537)
(537)
615
(30)
20
28
96
529
(433)
96
At 1 December 2013
Charge to income
Charge to equity
Change in tax rate
At 30 November 2014
At 1 December 2014
Charge to income
Charge to equity
Disposal of subsidiary
Change in tax rate
At 30 November 2015
Attributable to:
Continuing operations
Discontinued operations
Total
At the reporting date the Group had unused tax losses of £7,000,000 (2014: £3,800,000) available for offset against
future profits. A deferred tax asset has been recognised in respect of all available losses expected to be utilised against
future taxable profits within three years based on the forecasts approved by the directors. The tax losses do not have
any expiry date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a
net basis.
Deferred tax assets totalling £606,000 (2014: £363,000) arising in respect of losses have not been included in the
balance sheet due to uncertainties in regard to their recoverability.
51
www.accessintelligence.com The following is the aggregate amounts of deferred tax balances in each group entity, after allowable offset, for financial
reporting purposes:
Deferred tax assets
Deferred tax liabilities
Total
24. Share capital
Equity: Ordinary shares of 0.5p each
Allotted, issued and fully paid
307,127,015 ordinary shares of 0.5p each
(2014: 264,777,014 ordinary shares of 0.5p each)
2015
£’000
865
(336)
529
2015
£’000
1,535
2014
£'000
419
(956)
(537)
2014
£'000
1,324
During 2015, 40,400,001 shares were issued to raise finance for the acquisition of a business and a further 1,950,000
shares were issued at 3p as a result of an employee exercising share options.
On 21 September 2011 29,666,667 ordinary shares of 0.5 pence, and with a total nominal value of £148,333 were
returned to the Company and were held in treasury at the year end. The shares held in treasury have no voting rights,
or rights to dividends and so the total issued share capital for voting and dividend purposes is 277,460,348 (2014:
235,110,347).
Transaction costs associated with share issues in the year amounted to £12,120 (2014: Nil). Transaction costs are
accounted for as a reduction from the share premium account.
25. Equity-settled share-based payments
The Company has a share option scheme for employees of the Group.
Ordinary share options granted and subsisting at 30 November 2015 were as follows:
Date of grant
17 November 2006
28 February 2007
23 October 2008
03 April 2009
08 April 2009
19 May 2009
29 September 2009
04 December 2009
19 December 2011
07 March 2012
09 January 2013
16 January 2013
13 June 2013
24 October 2013
52
Option price
No of shares
Exercisable between
6.75p
6.75p
2.75p
2.75p
3.0p
3.5p
100,000
Nov 2009-Nov 2016
45,000
Nov 2010-Nov 2017
21,300,000
No time limit
1,000,000
Apr 2012-Apr 2019
1,302,282
Apr 2012-Apr 2019
72,500
Nov 2009-Nov 2016
4.375p
2,000,000
Sep 2012-Sep 2019
5.5p
2.2p
3.3p
3.5p
3.7p
3.1p
2.5p
400,000
Dec 2012-Dec 2019
3,500,000
Dec 2014-Dec 2021
838,894
Mar 2015-Mar 2022
1,000,000
Jan 2016-Jan 2023
400,000
Jan 2016-Jan 2023
1,000,000
1,000,000
Jun 2016-Jun 2023
Oct 2016-Oct 2023
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
Details of the movements in the weighted average exercise price (“WAEP”) and number of share options during the
current and prior year are as follows:
WAEP 2014
WAEP 2015
Options 2014
Options 2015
At start of year
Granted
Exercised
Forfeited At end of year
3.04
3.06
39,396,281
38,436,281
2.62
-
-
3.02
2.37
4.76
3.06
2.90
500,000
-
(1,460,000)
38,436,281
-
(1,950,000)
(2,527,605)
33,958,676
No options were cancelled in the year (2014: Nil).
The options grant detailed above resulted in a share-based payment charge for the Group of £26,000 (2014: £36,000).
During 2015, there were no share options granted in the year. Specific assumptions used in the calculation of the share-
based payment charge applicable to the grant of options in the prior year are as follows:
2014
Share price at grant date
Exercise price
Expected volatility
Expected life of options
Expected dividend yield
Risk free rate
3 November
2014
2.6p
2.6p
54%
7 years
0%
1.99%
Expected volatility rates have been arrived at by reference to the Risk Management Service information relating to
Access Intelligence Plc published by the London Business School on a quarterly basis. The rate used is the rate for the
quarter in which the option is granted.
The option pricing model used to determine the fair value of options granted is the Black-Scholes Model.
Further details of share options exercisable at the year end are provided in note 14.
There are no market, non-market or service conditions as part of the share option scheme. The only condition existing
is that employees must still be in employment with the company at the point they exercise the options.
26. Cash and cash equivalents
The Group monitors its exposure to liquidity risk based on the net cash flows that are available. The following provides
an analysis of the changes in net funds:
As at 30
November 2014
£'000
Cash inflow
£'000
As at 30
November 2015
£'000
Cash in hand and at bank
1,144
379
1,523
Cash in hand and at bank
As at 30
November 2013
£'000
1,521
Cash outflow
£'000
(377)
As at 30
November 2014
£'000
1,144
53
www.accessintelligence.com 27. Commitments
Capital commitments
The Group had no capital commitments at the end of the financial year or prior year.
Operating lease commitments
The Group was committed to making the following payments in respect of operating leases for land and buildings
expiring:
Within 1 year
Between 2 and 5 years
Over 5 years
Land and buildings
2015
£’000
580
2,279
664
3,523
Restated
2014
£’000
353
999
283
1,635
The Group leases various offices and storage units under non-cancellable fixed term operating lease agreements. The
lease terms are up to 10 years, with break clauses ahead of the full term and the majority are not renewable at the end
of the lease period.
Other operating lease commitments comprise motor vehicles and office equipment expiring:
Amounts payable within 1 year
Between 2 and 5 years
Provisions and contingent liabilities
Other
2015
£’000
21
25
46
2014
£'000
11
61
72
At 1 December 2014
Charged to profit or loss
On acquisition
Released in year
At 30 November 2015
Due within one year or less
Due after more than one
year
Onerous Contracts
Leasehold dilapidations
Legal disputes
£'000
40
32
-
(25)
47
47
-
47
£'000
-
-
374
-
374
-
374
374
£'000
-
100
-
-
100
100
-
100
Onerous contracts predominantly relate to lease contracts from which the company is currently trying to exit and relate
to office equipment and services no longer required after the business combination part way through the year. Inherent
uncertainties in measuring the provision relate to the expected future lease payments on the equipment and the final
agreed termination fee.
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the
lease in accordance with the lease terms. The main uncertainty relates to estimating the cost that will be incurred at the
end of the lease. The earliest point at which it is considered that this amount may become payable is December 2016.
54
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
The Group had a legal dispute with a previous director. The amount provided represents the directors’ best estimate of
the Group’s liability having taken legal advice.
28. Related party transactions
One (2014: none) of the directors have received a portion of their remuneration through their individual service companies
during the year. The payments represent short term employee benefits. The amounts involved are as follows and relate
to activities within their responsibilities as directors:
In all cases the directors are responsible for their own taxation and national insurance liabilities.
2015
£
C Pilling (via The Personal Web Company Ltd.)
19,500
2014
£
-
Access Intelligence Plc invoiced Elderstreet Investments Limited, a company controlled by M Jackson, £760
(2014: £58,585) for rent and office support costs. The company also credited Elderstreet Investments Limited
for rent which was charged in advance but which, on termiantion of the lease, was no longer due of £9,099. The
charges are based on usage and therefore are considered to be at arms length and on standard commercial terms.
Elderstreet Investments Limited also invoiced Access Intelligence Plc £16,740 for legal and support costs it incurred
on the Company’s behalf. At the year end Access Intelligence Plc owed Elderstreet Investments Ltd £10,766.
For the acquisition of AIMediaData Limited, Elderstreet Investments Limited provided a short term loan of
£100,000 to the Group. No interest was charged on the loan and the amount was repaid shortly afterwards.
During the year interest on convertible loans of £49,000 (2014: £30,000) was paid to Eldersteet VCT plc which is
controlled by M Jackson.
During the year M Jackson, a director, provided short term loan amounts of £550,000 and £250,000 to fund the Group’s
investment activities. No interest was charged on the loans and the amounts were repaid shortly afterwards. Also due
to Mr M Jackson was an amount of £2,040 (2014: £2,040).
During the year Access Intelligence Media & Communications Ltd received services from Macranet Ltd, a company in
which M Jackson is a board member totalling £51,000 (2014: £51,000). At the year end the company owed Nil (2014:
£12,750) to Macranet Ltd.
29. Pension commitments
Individual subsidiaries of the Group operate defined contribution pension schemes for their employees. The assets of
the schemes are held separately from those of the Group. The annual contributions payable are charged to the income
statement when they fall due for payment.
During the year £119,000 (2014: £92,000) was contributed by the Group to individual pension schemes.
At 30 November 2015 £12,000 of pension contributions were outstanding (2014: £11,000).
30. Events after the balance sheet date
On 3 February 2016 Access Intelligence Plc disposed of 100% of the issued share capital of Due North Limited, being
the disposal group held for sale in note 4, for a consideration totalling £4,500,000. Group profit on disposal of the
subsidiary was £1,658,000, Company profit on disposal was £3,104,000.
In January 2016, the Company agreed terms with Elderstreet VCT and Unicorn AIM VCT plc to extend the loans
issued in June 2009 such that they mature on 31 December 2016, with interest at 8% during this extended period with
conversion rights unchanged at 4p per share.
55
www.accessintelligence.com
Company Balance Sheet
Company Number: 04799195
At 30 November 2015
Fixed assets
Tangible assets
Investments
Intangible assets
Current assets
Debtors
Cash and cash equivalents
Creditors: amounts falling due within one year
Net current liabilities
Creditors: amounts falling due over one year
Net assets
Capital and reserves
Share capital
Treasury shares
Share premium account
Capital redemption reserve
Share option reserve
Equity reserve
Profit and loss account
Equity shareholders’ funds
Note
2
3
4
5
6
7
8
8
10
10
10
10
10
2015
£’000
78
4,521
41
4,640
5,898
249
6,147
(7,746)
(1,599)
(2,839)
202
1,535
(148)
1,271
191
364
255
(3,266)
202
2014
£’000
221
6,244
85
6,550
2,983
106
3,089
(6,351)
(3,262)
(1,301)
1,987
1,324
(148)
224
191
338
126
(68)
1,987
The financial statements were approved by the Board of directors on 8 April 2016 and signed on its behalf by:
M Jackson
Chairman
56
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
Notes to the Company Financial Statements
Year ended 30 November 2015
1. Accounting policies
Basis of preparation
These separate financial statements of the Parent Company, Access Intelligence Plc, which have been prepared in
accordance under the historical cost convention and in accordance with applicable accounting standards under UK
GAAP, are presented as required by the Companies Act 2006.
On the basis of current financial projections and available funds and facilities, the directors are satisfied that the Company,
taking into account that it operates as part of the Access Intelligence plc Group, has adequate resources to continue
in operation for the foreseeable future and therefore consider it appropriate to prepare the financial statements on the
going concern basis (refer to the Group going concern assessment in note 2 to the consolidated financial statements).
The particular accounting policies adopted by the Company are described below.
Results of the Company
As permitted by Section 408(3) of the Companies Act 2006, the profit and loss account of the parent Company is not
presented as part of these accounts. The Parent Company’s loss after taxation, for the financial year amounted to
£3,198,000 (2014: loss £974,000).
Cash Flow Statement
The cash flows of the Company are included in the consolidated cash flow statement of Access Intelligence Plc which
is included in this Annual Report. Consequently, the Company is exempt under the terms of FRS 1 (Revised) from
publishing a cash flow statement.
Fixed assets
All fixed assets are initially recorded at cost.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful
economic life of that asset as follows:
Fixtures, fittings and equipment - 3 to 5 years
Leasehold improvements - over the lease term
Share-based payments
The fair value of equity-settled share-based payments to employees is determined at the date of grant and is expensed
on a straight-line basis over the vesting period based on the Company’s estimate of shares or options that will eventually
vest. In the case of options granted, fair value is measured by the Black–Scholes option pricing model. Further details
are set out in note 25 of the consolidated statements.
Investments
Investments held as fixed assets are stated at cost less provision for any impairment.
57
www.accessintelligence.com Intangible assets
Research and development expenditure
Expenditure identified as development expenditure being costs incurred on clearly defined unique projects whose
outcome can be assessed with reasonable certainty and which are expected to lead to new products and revenue
streams is measured at cost less accumulated amortisation and accumulated impairment losses. Where development
expenditure does not meet these requirements then it is recognised as an expense in the period it is incurred.
Amortisation will be calculated so as to write off the cost of an asset over the useful economic life of that asset. In 2015
there was one (2014; one) main capitalised development project. The directors assess the useful life of the current
capitalised development projects to be 3 years.
Software licences
Software licences include software that is not integral to a related item of hardware. These items are stated at cost less
accumulated amortisation and any impairment. Amortisation is calculated on a straight line basis over the estimated
useful economic life. Although perpetual licences are maintained under support and maintenance agreements, a useful
economic life of 5 years has been determined.
Impairment
The Company evaluates its financial assets for financial impairment where events or circumstances indicate that the
carrying amount of such assets may not be fully recoverable. When such evaluations indicate that the carrying value
of an asset exceeds its recoverable value, the impairment loss is recognised in the profit and loss account. The same
approach is applied to group goodwill impairment testing as is described in note 15 of the consolidated Group financial
statements.
Taxation
Current tax is the tax currently payable based on taxable profits for the year. Due to losses no current taxation will be
payable by the Company and the losses will be made available for Group relief or be available for carry forward for offset
against future profits of the same trade.
Deferred taxation is recognised on timing differences that result in an obligation at the balance sheet date to pay more
tax, or a right to pay less tax at a future date, at rates expected to apply when they crystallise based on current tax rates
and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in
periods different from those in which they are included in financial statements.
Deferred tax assets are recognised to the extent that they are regarded as more likely than not that they will be recovered.
Deferred tax assets and liabilities are not discounted.
Convertible loan notes
The component parts of compound instruments issued by the Group are classified separately as financial liabilities and
equity in accordance with the substance of the contractual arrangement. At the date of issue, in the case of a convertible
bond denominated in the functional currency of the issuer that may be converted into a fixed number of equity shares,
the fair value of the liability component is estimated at the present value of the stream of future cash flows (including
both coupon payments and redemption) discounted at the market rate of interest that would have been applied to
an instrument of comparable credit quality with substantially the same cash flows, on the same terms, but without
the conversion option. This amount is recorded as a liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined
by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is
recognised and included in equity and is not subsequently re-measured.
Issue costs are apportioned between the liability and equity components of the convertible loan notes based upon their
relative carrying amounts at the date of issue. The portion relating to the equity component is charged directly against
equity.
58
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC Revenue
Revenue represents the amounts derived from the provision of goods and services, stated net of Value Added Tax. The
methodology applied to income recognition is dependent upon the goods or services being supplied.
In respect of income relating to annual service contracts and/or hosted services which are invoiced in advance, it is
the Company’s policy to spread the income of each contract equally over the contract’s life. The full value of each
sale is credited to deferred revenue when invoiced to be released to the statement of comprehensive income in equal
instalments over the contract period.
Revenues from the delivery of infrastructure are recognised on installation with associated training and consultancy fees
recognised when specified contractual milestones are met or on project completion. In the event that these services are
invoiced in advance they will be credited to deferred revenue and released to the profit and loss account once delivered.
Income from the sale of licences is recognisable in full at the date of sale.
Revenue arising from management of the subsidiary undertakings is recognised on an accruals basis.
2.Tangible fixed assets
Cost
At 1 December 2014
Additions
Disposals
At 30 November 2015
Depreciation
At 1 December 2013
Charge for the year
Depreciation on disposal
At 30 November 2015
Net Book Value
At 30 November 2015
At 30 November 2014
3. Investments
Cost
At 1 December 2014
Additions
Disposals
At 30 November 2015
Impairment
At 1 December 2014
Impairment charge
At 30 November 2015
Net Book Value
At 30 November 2015
At 30 November 2014
Fixtures fittings
and equipment
£’000
Leasehold
improvements
£’000
353
10
(101)
262
202
72
(44)
230
32
151
87
-
(22)
65
17
11
(9)
19
46
70
Total
£’000
440
10
(123)
327
219
83
(53)
249
78
221
Investment in subsidiary undertakings
£’000
15,754
12
(1,238)
14,528
9,510
497
10,007
4,521
6,244
59
www.accessintelligence.com
Additions in the year comprise a capital contribution for the Company’s obligation to settle share options on behalf of
subsidiaries as well as the cost of acquiring the issued share capital of AIMediaData Ltd.
At 30 November 2015 the Company was the beneficial owner of the entire issued share capital and controlled all the
votes of its subsidiaries, all of which are incorporated in England and Wales. The trading subsidiaries are set out below:
Subsidiary
Activity
Share type
% holding
Due North Ltd (Held for sale at 30 November 2015)
Software development
Ordinary
Access Intelligence Media & Communications Ltd
Software development
Ordinary
AITrackRecord Ltd (formerly Management Services
2000 Ltd)
AI Talent Ltd (formerly Cobent Ltd)
AIMediaData Ltd
Software development
Ordinary
Software development
Ordinary
Software development
Ordinary
100%
100%
100%
100%
100%
4. Intangible assets
Cost
At 1 December 2014
Additions
At 30 November 2015
Depreciation
At 1 December 2014
Impairment
Charge for the year
At 30 November 2015
Net Book Value
At 30 November 2015
At 30 November 2014
Development
costs
£’000
Software
licence
£’000
TOTAL
£’000
140
158
298
111
177
7
295
3
29
120
7
127
64
-
25
89
38
56
2015
£’000
217
5,072
330
279
5,898
260
165
425
175
177
32
384
41
85
2014
£’000
207
2,166
338
272
2,983
See note 15 of the consolidated financial statements for further details of the impairment.
5. Debtors
Trade debtors
Amounts due from group undertakings
Deferred taxation
Prepayments and other debtors
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Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
2015
£’000
5,282
347
57
400
1,277
383
7,746
2015
£’000
1,009
1,830
2,839
2014
£’000
5,132
248
302
313
-
356
6,351
2014
£'000
1,301
-
1,301
6. Creditors due within one year
Amounts due to group undertakings
Trade creditors
Other taxes and social security
Accruals and other creditors
Convertible loan notes
Deferred income
7. Creditors: due after more than one year
Convertible loan notes
Non-convertible loan notes
See note 19 of the consolidated financial statements for further details.
8. Share capital
See note 24 of the consolidated financial statements for further details.
9. Equity-settled share-based payments
See note 25 of the consolidated financial statements for further details.
10. Reserves
Share
capital
£’000
1,324
Treasury
shares
£’000
(148)
Share
option
reserve
£’000
319
Equity
reserve
£’000
126
Share
premium
£’000
224
Capital
redemption
£’000
191
Profit
and loss
£’000
721
Total
£’000
2,757
At 1 December 2013
Opening reserve transfer
Loss retained for the year
Share based payments
Tax on share based
payments
-
-
-
-
-
-
-
-
At 30 November 2014
1,324
(148)
12
-
36
(29)
338
-
-
-
-
-
-
-
-
-
-
-
-
(12)
-
(777)
(777)
-
-
36
(29)
126
224
191
(68)
1,987
61
www.accessintelligence.com
Share
capital
£’000
Treasury
shares
£’000
Share
option
reserve
£’000
Equity
reserve
£’000
Share
premium
£’000
Capital
redemption
£’000
Profit
and loss
£’000
Total
£’000
At 1 December 2014
1,324
(148)
338
126
224
191
(68)
1,987
Opening reserve
transfer
Loss retained for the
year
Shares issued in the
year
Share premium on
issue
Dividends paid
Share based payments
Equity component of
convertible loan notes
Tax on share based
payments
-
-
211
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26
-
-
-
-
-
-
-
-
129
-
-
-
-
1,047
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,198)
(3,198)
-
-
-
-
-
-
211
1,047
-
26
129
-
At 30 November 2015
1,535
(148)
364
255
1,271
191
(3,266)
202
11. Reconciliation of movement in equity shareholders’ funds
Opening shareholders’ funds
Loss for the financial year
Shares issued in the year
Share premium on shares issued in year
Share based payment
Equity component of convertible loan notes
Tax credit relating to share-based payments
Closing shareholders’ funds
12. Commitments
Capital Commitments
2015
£'000
1,987
(3,198)
211
1,047
26
129
-
202
2014
£'000
2,757
(777)
-
-
36
-
(29)
1,987
The Company had no capital commitments at the end of the financial year or prior year.
Operating lease commitments
At 30 November 2015, the Company was committed to making the following payments during the next year respect of
operating leases for land and buildings expiring:
Amounts payable within 1 year
Payable between 2-5 years
Over 5 years
62
Land and buildings
2015
2014
£’000 £’000
16
-
110
-
160
99
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC
Provisions and contingent liabilities
Onerous contracts
Legal Disputes
At 1 December 2015
Charged to profit or loss
Released in year
At 30 November 2015
Due within on year or less
Due after more than one year
£'000
40
32
(25)
47
47
-
47
£'000
-
100
-
100
100
-
100
See note 27 of the consolidated financial statements for further details.
13. Related party transactions
The Company has taken the exemption available not to disclose transactions with wholly owned subsidiaries. See note
28 of the consolidated financial statements for details of other related party transactions.
14. Events after the balance sheet date
See note 30 of the consolidated financial statements for further details.
63
www.accessintelligence.com Notes
64
Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC 65
www.accessintelligence.com Access Intelligence Reputation and Risk Management Solutions
PR, Public Affairs and Reputation Management
Vuelio
Incident and Crisis Management
AIControlPoint
Training, Competence and Employee Performance Management
AITrackRecord
Access Intelligence
Longbow House, 14-20 Chiswell Street, London, EC1Y 4TW
0843 659 2940 | info@accessintelligence.com | www.accessintelligence.com
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Access Intelligence Plc | Annual Report and Accounts 2015 | Stock Code: ACC