CONSOLIDATED DIRECTORS’
REPORT & FINANCIAL STATEMENTS
Year ending 30 June 2019
Contents
1
2
4
7
8
11
15
18
22
23
24
25
26
27
51
52
54
Overview
Chairman’s Statement
Chief Executive Officer's Report
Strategic Report
Directors’ Report
Corporate Governance Report
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Information
Director Profiles
Notice of Annual General Meeting
AEOREMA COMMUNICATIONS PLC
2
Overview
PROFITS UP
29%
WE WON
CREATIVE AGENCY
OF THE YEAR 2019
3
REVENUE UP
DIVIDENDS UP 40%
33%
AEOREMA COMMUNICATIONS PLC 4
Chairman’s Statement
In the first full year under new management, I am pleased
to report a strong financial performance for the financial
year ended 30 June 2019. Revenue has increased 40% to
£6,765,280 (2018: £4,820,167) and the Group has increased
profitability reporting an operating profit pre-exceptional
items of £374,399 representing a 29% increase on 2018
(2018: £289,650) and profit before taxation of £375,010
(2018: £58,685). The Group’s cash position remains robust
at £2.2 million (2018: £1.4m). The profitability and the
maintained cash position of the Group has led to the
Board to propose a full year dividend of 1.0 pence per
share (2018: 0.75 pence) to be paid to shareholders on the
register on 22 November 2019. The ex-dividend date will
be 21 November 2019. Subject to the proposed dividend
being approved by shareholders at the forthcoming AGM,
it will be paid on 16 December 2019.
The Group reinforced its strong market reputation for
execution of creative and differentiated live events
through the successful delivery of several noteworthy
events. This includes four client projects delivered at
the Cannes Lions International Festival of Creativity
including a stand-out event hosted on behalf of a global
business-focussed media company that attracted high
praise across the event. I am also proud of the smaller
scale corporate events successfully undertaken including
partner meetings for a global law firm organised in the
United States and an innovative, unique event hosted
at the Bristol waterfront in outdoor, temporary venues.
Further to this, a highly successful senior management
event was completed for a new client in London operating
within the technology and manufacturing sector. The
Group has made additional key executive appointments
during the year with a view to maintaining and expanding
client relationships.
Whilst the Group has delivered an unusually high number
of low profit margin events during the year, new events
to be delivered in 2020 are expected to have higher gross
profit margins. Despite this, the Group has delivered a
highly successful and profitable year. The Group is also
continuing to invest in new hires with the aim of reducing
its use of freelancers.
We are pleased with the ongoing development and
contributions made by our film production and
experiential businesses. The Group produced a variety of
award nominated films during the year which continued
to showcase the Group’s creativity. The Group has recently
appointed a new Director of Client Partnerships, Andrew
Zanelli-King, who is responsible for growing the film
business. Andrew has a proven track record of helping
film businesses expand at various companies and has an
established network of contacts within the industry. The
experiential business continues to grow with several small
events delivered during the year.
Outlook
Focus remains on sustaining client relationships and
effective client acquisition to ensure that a robust pipeline
of business is in place. To this end, I am confident of future
growth having already secured new client wins in the
current financial year including a leading global law firm,
a number within the technology sector and a high-profile,
established confectionery brand. Another upcoming
highlight is set to be the execution of an extraordinary
event at MIPCOM in Cannes, an annual trade show
for entertainment content, in October for a global
media brand.
We continue to invest in the Group and its success through
making key appointments and view this as integral to the
creation of a dividend-paying, financially healthy business
operating at the forefront of the industry. Committed to
the continued growth of the Group, we continue to assess
potentially value accretive, complementary opportunities
as they are presented to the Group. To maintain a
reputation for executing highly creative live events it is
important that innovation remains at the core of what
we do. Therefore, in line with this, we strive to remain
dynamic and adaptive to changes within the industry.
A E O R E M A C O M M U N I C AT I O N S P LC
5
It is testament to the strength of Aeorema’s core
business and established relationships that we have
been able to successfully advance our strategy of
enhancing the offering that we can provide our clients
during the financial year. The notable increase in
revenue and profit reported in the period validates
this strategy and provides confidence for the Board as
we continue to look to ways to grow and improve your
Group, with margins maintained at an
acceptable level.
Finally, I would like to take the opportunity to thank
all employees for their hard work and commitment,
as well as our shareholders for their
continued support.
M Hale
Chairman
27 September 2019
6
A E O R E M A C O M M U N I C AT I O N S P LC
7
Chief Executive Officer's Report
It’s been another outstanding year and I am incredibly
proud of what our operating business, Cheerful
Twentyfirst, has achieved. Our talented and dedicated
team has once again raised the bar for our wonderful
clients who continue to trust us to deliver game
changing live events, brand experiences and impactful
on-screen content.
I look forward to fulfilling my new role as CEO, developing
and delivering the overall vision of the Company. Andrew
Harvey will remain in the role of Managing Director and
oversee all operational elements of the business. We will
both continue to play important roles in developing key
accounts and winning new business, and we now have an
amazing senior team that will continue to grow
the business.
There have been so many highlights in the last financial
year. Our reputation continues to grow at the Cannes
Lions International Festival of Creativity. This year we
delivered a record number of projects for our clients,
including a project which was widely regarded as one
of the best brand activations ever conceived and
delivered in Cannes.
As part of our growth strategy I am delighted that we have
taken our unique Cannes experience into MIPCOM Cannes
for the first time. In October 2019 we will be delivering
an unimaginable brand activation for a global media
client with the world watching! It’s a 3-year project which
encapsulates the ambition, creativity and pure guts of
our Company.
Our delivery in the world of Trade Marketing and B2B
events was further enhanced this year at DMEXCO, MWC
and SIBOS. With the support of our new key hires over
the last 18 months we continue to expand in this exciting
space and significantly add new recurring revenue
streams to our business.
Once again, we continue to grow our reputation within
the senior leadership conference space, and we have
recently won four new clients for the year ahead within
professional services, law, confectionery and tech.
Although budgets remain competitive, clients are still
looking for that unique creative and robust delivery that
we are trusted and known for – game changing events.
We have also seen growth for the second consecutive
year within our Moving Image division. Content plays such
a critical role in what we do, and we are committed to
growing this part of the business dramatically over the
coming years. To support this ambition, we have hired
Client Partnerships Director Andrew Zanelli-King, who
has an enviable reputation in our industry with a fantastic
track record of success, and we can’t wait to see the effect
he has on Cheerful Twentyfirst.
All this is further underpinned by us moving up 13 places
in the C&IT UKs Top 50 agency 2019 list. I look forward to
building on this success in 2020.
All this would not have been achieved without our
amazing team, our great clients and our committed
investors – thank you.
Steve Quah
Chief Executive Officer
27 September 2019
8
Strategic Report
The Board presents its Strategic Report on the Group for the year ended 30 June 2019.
Principal activities
Aeorema, trading as Cheerful Twentyfirst, is a live events agency with film capabilities that
specialises in devising and delivering corporate communication solutions.
Business review
The results for the year show revenue was £6,765,280 (2018: £4,820,167), operating profit
pre-exceptional items was £374,399 (2018: £289,650) and profit before taxation was £375,010
(2018: £58,685).
The Group had net assets of £1,917,372 at the year-end (2018: £1,662,667) and net current
assets of £1,501,676 (2018: £1,258,215).
For the year ended 30 June 2019 the Group continued to deliver large-scale events and
produce films for both existing and new clients from a variety of different industry sectors
using the Group’s creative expertise. The investment in new talent during the previous year
has been instrumental in helping the Group deliver exciting events and films, and winning
new clients. Further investment in talent and resources is expected to help deliver growth in
revenue and profits for the year ended 30 June 2020.
Brexit uncertainty has not had a significant impact on the Group to date. The Group has
already won several contracts for large events in 2020 with new and existing clients.
During the year the gross profit margin decreased to 32% (2018: 37%) and the gross
profit was £2,181,163 (2018: £1,786,653). The decrease in the gross profit margin was as a
consequence of the Group delivering an unusually high number of lower profit margin events
during the year, including a large build for a global media company. The new events which
will be delivered in 2020 are expected to have higher gross profit margins. The Group is also
continuing to invest in talent which will reduce the Group’s use of freelancers.
Key performance indicators
Year
Revenue
Operating profit pre-exceptional items
Profit before taxation
2019
£
2018
£
2017
£
2016
£
6,765,280
4,820,167
4,156,592
4,583,050
374,399
375,010
289,650
58,685
248,368
248,887
339,248
340,165
The Group experienced a 40% increase in revenue during the year. This was as a
consequence of both strong growth in events revenue, up 41% in comparison with the
previous year and film revenue, up 30% in comparison with the previous year.
9
Strategic Report continued
The Group delivered several new events for both new and existing clients during the year.
These events included two events for a top 4 accountancy firm, an on-going event for a
global media company and a global manufacturing company. These events were one off
events, however, the Group has successfully replaced these events with new events and new
clients for the year ended 30 June 2020.
Film revenue continues to grow year on year as a consequence of investment in talent and
the growth in the number and scale of events. Film content is produced for a large number
of the events delivered by the Group.
Profit before taxation increased by 539% in comparison with the previous year. This increase
in profit before taxation was a consequence of the increase in gross profit and the Group
incurring no exceptional items during the year, compared with the exceptional items
associated with the departure of the two founding shareholders, Peter Litten and Gary
Fitzpatrick in the previous year, totalling £231,357.
Cashflows
Net cash inflow from operating activities was £890,846 compared with a net cash outflow
of £389,918 for the year ended 30 June 2018. The cash position increased by £774,847 to
£2,211,161 (2018: £1,436,314). The increase in cash and cash equivalents at the year-end was
due to advance payments by clients for events being delivered during the 6 month period
ending 31 December 2019 and the growth in revenue during the year.
Capital expenditure
Total capital expenditure, including expenditure on tangible assets, was £48,731 compared
with £26,119 last year.
Employees
Our priority is to attract and retain talented employees and to harness their creativity
to drive growth through development and delivery of services that bring value to our
customers’ business operations.
We continue to focus on ensuring that the performance of staff is measured against clear,
business focused objectives and behavioural criteria through continual appraisals.
Reward
The Group benchmarks employee salaries against the market and reviews salaries annually
to ensure that we are paying at a level to attract and retain high-quality employees.
Key employees are offered access to a share option scheme, further details of which are
provided in note 21 to the financial statements.
AEOREMA COMMUNICATIONS PLC
1 0
Strategic Report Continued
Equal opportunities
We are committed to ensuring equal opportunities for our staff. We have introduced
training which covers equal opportunities legislation and best practice. Our policy in
respect of employment of disabled persons is the same as that relating to all other
employees in matters of training, career development and promotion. Should employees
become disabled during the course of their employment, we will make every effort to make
reasonable adjustments to their working environment to enable their
continued employment.
Safety, health and environment
The commitment and participation of all employees is vital to efficient and effective
occupational risk control. In order to meet our responsibility to protect the environment,
staff and the business, the Group continues to focus on maintaining a risk aware culture.
We believe the Group maintains a low environmental impact. We therefore continue to work
on the potential environmental impacts of energy consumption, waste and travel.
Directors’ policies for managing principal risks
There is an ongoing process for identifying, evaluating and managing the significant risks
faced by the business. Risk reviews are undertaken regularly by the respective business
areas throughout the year to identify and assess the key risks associated with the
achievement of our business objective.
Key risks of a financial nature
The principal risks and uncertainties facing the Group are linked to customer dependency.
Though the Group has a very diverse customer base in certain market sectors, key
customers can represent a significant amount of revenue (see note 2). Key customer
relationships are closely monitored but the loss of a key client could have adverse effect on
the Group’s performance. Further details of risks, uncertainties and financial instruments are
contained in note 24.
Key risks of non financial nature
The Group is operating in a highly competitive global market that is undergoing continual
change. The Group’s ability to respond to many competitive factors including, but not
limited to technological innovations, product quality, customer service and employment of
qualified personnel will be key in the achievement of its objectives, but its ultimate success
will depend on the purchase spends of its customers and the buoyancy of the market.
On behalf of the Board
S Haffner
Director
27 September 2019
1 1
Directors’ Report
The directors present their annual report and financial statements for the year ended 30
June 2019. The financial statements are for Aeorema Communications plc (“the Company”)
and its subsidiaries (together, “the Group”).
Directors
The following directors have held office since 1 July 2018:
M Hale
S Quah
R Owen
S Haffner
A Harvey
In accordance with regulation 122 of the Company’s Articles of Association, one third of the
directors retire by rotation, or if their number is not three, or a multiple of three, the nearest
to but not exceeding one third, and, being eligible, offer themselves for re-election.
Dividends
The Board is proposing a dividend of 1 pence per share, subject to shareholder approval at
the forthcoming AGM, to be paid on 16 December 2019 to shareholders on the register on
22 November 2019. The ex-dividend date for the final dividend will be 21 November 2019.
Financial instruments
Details of financial instruments are given in note 24 to the accounts.
Shareholdings
At 27 September 2019, the directors were aware that the following were directors with an
interest in the Company and/or the beneficial owners of 3% or more of the Company’s
issued share capital:
Directors
M Hale
S Quah
A Harvey
R Owen
Other shareholders
with more than 3%
J Hicking
B Geary
Spreadex Ltd
S Perring
Barnard Nominees Ltd
B Smith
Number
of shares
1,770,000
481,010
130,000
80,000
Number
of shares
1,180,995
521,807
513,718
474,666
434,666
300,000
Percentages
held
19.5
5.3
1.4
0.9
Percentages
held
13.1
5.8
5.7
5.2
4.8
3.3
AEOREMA COMMUNICATIONS PLC
1 2
Directors’ Report Continued
Going concern
After making appropriate enquiries, the directors have a reasonable expectation that the
Group and the Company have adequate resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the going concern basis in
preparing the Group’s financial statements. See note 1 for further information.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the
Company’s auditors are unaware. Additionally, they have taken all the necessary steps
that they ought to have taken as directors in order to make themselves aware of all the
relevant audit information and to establish that the Company’s auditors are aware of
that information.
A resolution to reappoint Hazlewoods LLP as auditor for the ensuing year will be proposed
at the forthcoming annual general meeting.
Directors’ responsibilities
The directors are responsible for preparing the Strategic Report and the Directors’ Report,
and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and Company financial statements
for each financial year. The directors are required by the AIM Rules of the London Stock
Exchange to prepare Group financial statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and have elected
under Company law to prepare the Company financial statements in accordance with IFRS
as adopted by the EU.
The financial statements are required by law and IFRS adopted by the EU to present fairly
the financial position of the Group and the Company and the financial performance of the
Group and the Company. 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.
1 3
Directors’ Report Continued
Directors’ responsibilities continued
Under company law the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of the Group and the
Company and of the profit or loss of the Group and the Company for that period.
In preparing the Group and Company financial statements, the directors are required to:-
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs adopted by the EU;
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s and the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the group and the company and enable them
to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and 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 Aeorema Communications plc website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
S Haffner
Director
27 September 2019
AEOREMA COMMUNICATIONS PLC
1 4
Corporate Governance statement
The Board recognises the importance of good corporate governance and has adopted the
QCA (Quoted Companies Alliance) Corporate Governance Code. This document sets out
how the Company complies with the QCA Corporate Governance Code and the Company’s
compliance with the code will be reviewed annually by the board.
My role as Chairman is to lead the board and to oversee its function and direction.
I have ultimate responsibility for implementing the Company’s corporate governance
arrangements and am accountable to shareholders for the Company’s delivery on
its strategy.
The Company is committed to delivering returns for shareholders whilst looking after its
stakeholders and recognises the importance of a culture which encourages ethical and fair
behaviours. This culture is driven by the Company’s senior management team.
This document sets out how we consider that Aeorema currently complies with the
QCA Corporate Governance Code and explains areas in which we depart from this code.
We consider that our approach is appropriate for a company of our size and stage of
development and will endeavour to evolve our corporate governance arrangements in line
with our growth as a company. We do not consider that any key governance related matters
have occurred during the year and the main change to our governance arrangements has
been our adoption of the QCA Corporate Governance Code.
Mike Hale
Non-Executive Chairman
Overview
The board is focussing on two key areas of growth within the current strategy and
business model. One area is to increase revenue streams within the Group’s operating
company (Aeorema Limited) through key hires, focused account management and new
business development. The other area is to grow the PLC’s portfolio of companies through
acquisitions and mergers. The organic challenge relies on retaining key accounts and
maintaining the balance between building internal delivery teams and growing revenue
streams and profits. Attracting the right talent on both a permanent and freelance basis is
critical for creating the right impact for all clients and ensuring growth is sustainable. The
Company is aiming to reduce its reliance on freelance staff and their associated higher costs.
The board has made a promise to shareholders to ensure that any merger or acquisition is
completed at the right price and benefits the future of the organisation. Therefore, thorough
due diligence and a sensible approach to valuations is key to achieving the right result for
the Group.
Communication will continue with shareholders on several levels. The Chairman is available
to speak to directly and the Company’s broker will set up key shareholder meetings or
conference calls directly after half year and full year results are announced. The board
considers that this approach to shareholder engagement has worked well and was pleased
to see a good attendance of shareholders at its last AGM. Announcements will continue to be
released through regulatory channels and added to the aeorema.com website.
1 5
Corporate Governance statement Continued
The business is focussed on building strong relationships with clients, staff, suppliers and
freelancers. Company account managers/directors continually gain feedback from clients
and report back to management. Staff appraisals are regularly held, but the Company
also has an open-door policy for staff feedback direct to management. Suppliers and
freelancers are reviewed on an annual basis and relevant feedback is reported back to
management. Management and heads of departments review strategy and use appropriate
key performance indicators to monitor performance on a regular basis and the board is
informed with regular business update at each board meeting.
The aim of the board is to function at the head of the Company's management structures,
leading and controlling its activities and setting a strategy for enhancing shareholder value.
The board currently consists of two executive directors and three non-executive directors.
The Company does not have a Nomination Committee; the board collectively undertakes
the functions of such a committee. The details of each board member along with their
background and their role is listed on the website aeorema.com. Both Stephen Haffner and
Richard Owen exercise independent judgement in all matters relating to the Company.
The CEO and Managing Director work full-time in the business and have no other significant
outside business commitments. The Non-Executive Directors are required to be available to
attend Board meetings and to deal with both regular and ad hoc matters. All Non-Executive
Directors have confirmed and demonstrated that they have adequate time available to meet
the requirements of the role and they have no conflicts of interest.
The board and the Company’s senior management team has a mix of relevant industry
experience, public company experience and financial expertise which enables it to deliver on
its strategy. Directors keep their skill-sets up to date by attending relevant industry seminars
as well as reviewing regulatory and accounting updates provided by the Company’s
professional advisers.
The board undertakes an annual review of risk management across the business. For day
to day financial transactions, controls are in place to ensure higher payments are signed off
from both financial controller and at director level. Forecasting is reviewed monthly
to ensure the staffing levels and overheads are aligned to expected revenue and profit.
The board regularly reviews management accounts and forecasts. Contingency plans
are reviewed regularly throughout the year and a business continuation plan is
updated annually.
There is an Audit Committee consisting of Non-Executive Chairman Michael Hale, Non-
Executive Director Stephen Haffner and Non-Executive Director Richard Owen. The
terms of reference of the Audit Committee are to assist the board in the discharge of its
responsibilities for corporate governance, financial reporting and internal control. Stephen
Haffner chairs the Audit Committee and meetings are held twice a year.
Its duties include maintaining an appropriate relationship with the company’s auditors,
keeping under review the scope and the results of the audit and its effectiveness. The audit
last went out to tender for the financial year ended June 2019 and will be reviewed annually.
Currently the tender process will occur every three years.
AEOREMA COMMUNICATIONS PLC
1 6
Corporate Governance statement Continued
The next tender will be for the year ending June 2022 but can be brought forward if required.
As well as overseeing the tender process and reviewing the scope and effectiveness of
the audit, the Audit Committee reviewed the full year and interim financial statements,
considering the impact of new accounting standards under IFRS on the Company’s
financial statements. The Audit Committee reviewed the Company’s financial performance
throughout the year and monitored the integrity of any formal market announcements.
They also reviewed the Company’s internal financial controls, ensuring all internal financial
controls and risk management systems were effective.
The Remuneration Committee consists of Non-Executive Chairman Michael Hale, Non-
Executive Director Stephen Haffner and Non-Executive Director Richard Owen, and meetings
are held at least once a year. The Remuneration Committee is responsible for reviewing the
performance of the executives of the Company and for setting the scale and structure of
their remuneration, paying due regard to the interests of shareholders as a whole and the
performance of the Company. Richard Owen chairs the Remuneration Committee. Details of
Directors’ remuneration is set out in the notes to the financial statements.
The board will continue to meet at least six times a year to review, formulate and approve
the Company’s strategy, budget, corporate actions and major items of capital expenditure.
During the financial year ended 30 June 2019, the Board met on six occasions. The Audit
Committee met twice and the Remuneration Committee met once. Board attendance from
all board members is currently 78%-100%. The Board’s attendance record for the year ended
30 June 2019 was as follows;
• Mike Hale – 100%
• Richard Owen – 78%
• Stephen Haffner – 100%
• Andrew Harvey – 100%
• Steve Quah – 83%
The Company currently departs from the QCA Code in a number of respects, and
in particular:
(i) Board evaluation: the board currently runs a self-evaluation process on board
effectiveness. It is intended that the board will create a more formal process with annual
reviews which will focus more closely on objectives and targets for improving performance;
(ii) Induction, training and succession planning: the Company receives advice from its
nominated adviser and external lawyers. The board will consider the introduction of a facility
for directors to receive training on relevant new developments on a more regular basis. The
Company has not adopted a policy on succession planning but made changes to its board
in 2017 whereby two members of senior management joined the board as Joint Managing
Directors in replacement of the exiting founders of the business. The board proposes, to
further consider succession planning as part of its regular review of board effectiveness;
1 7
Corporate Governance statement Continued
(iii) Board diversity: the Company is committed to a culture of equal opportunities for all
employees regardless of gender and considers that it has a diverse workforce. The board
aims to reflect this diversity over time in terms of its range of cultures, nationalities, gender
and international experience.
(iv) Senior Independent Director: the Company does not have a director designated as a
Senior Independent Director. In light of the size of the board, and the Company’s stage of
development, the board does not consider it necessary to appoint a Senior Independent
Director at this stage, but will nevertheless keep this under review as part of the board’s
evaluation on board effectiveness;
(v) Results of Shareholder voting: The Company has not historically announced the detailed
results of Shareholder voting to the market. It intends to follow the QCA guidelines in this
regard from now on.
The board intends to monitor its governance framework as the Company grows and will
consider introducing additional board committees such as a nominations committee and
potentially expanding its investor relations capabilities.
AEOREMA COMMUNICATIONS PLC
1 8
Independent Auditors’ Report
to the Members of Aeorema Communications plc
Opinion
We have audited the financial statements of Aeorema Communications plc (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2019 which comprise
the consolidated Statement of Comprehensive Income, the group and company Statements
of Financial Position, the consolidated and company Statements of Changes in Equity, the
group and company Statements of Cash of Flows and notes to the financial statements,
including a summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the
parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
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 June 2019 and of its profit 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 prepared in accordance with IFRSs
as adopted by the European Union and as applied in accordance with the requirements
of the Companies Act 2006; and
the financial statements have been prepared in accordance with the provisions of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs
(UK) require us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the
financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material
uncertainties that may cast significant doubt about the group’s or parent company’s
ability to continue to adopt the going concern basis of accounting for a period of at least
twelve months from the date when the financial statements are authorised for issue.
1 9
Independent Auditors’ Report Continued
to the Members of Aeorema Communications plc
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter – group
Revenue recognition
The group adopted IFRS 15 ‘Revenue from
contracts with customers’ for the first time
in these financial statements.
Management performed an impact
assessment on initial implementation of the
standard and concluded that the impact
was not material.
Our specific audit focus was on the risk
that, especially for projects ongoing over
the year end, revenue may be recognised
in the incorrect period or that revenue and
associated profit may be misstated.
The group’s revenue accounting policy,
disclosed in note 1 to these financial
statements, has been expanded to meet
the requirement of the new standard
but continues to be recognised, as in
previous periods, on an input basis when
the group has earned the right to receive
consideration for its services.
How our audit addressed
the key audit matter
We obtained management’s impact
assessment and evaluated this, along with
the revised accounting policy disclosed in
note 1 to these financial statements, against
the requirements of the new standard and
our business understanding.
We reviewed a sample of projects, including
those with significant revenue recognised
in the year and/or with significant contract
assets or liabilities, to confirm that
revenue had been recognised in a manner
consistent with the group’s accounting
policy, the principles of IFRSs as adopted
by the European Union and the commercial
substance of the contracts.
We confirmed the group’s recognition of
revenue, and associated contract balances,
to documentary evidence including
correspondence between the group, its
customers and its contractors, as well as
publicly available press releases made by
the group’s customers.
There were no key audit matters in respect of the parent company.
Our application of materiality
When establishing overall audit strategy, we set certain thresholds which help us
determine the nature, timing and extent of our audit procedures and evaluate the
effects of misstatements, both individually and on the financial statements as a
whole. During planning we determined a magnitude of uncorrected misstatements
that we judge would be material for the financial statements as a whole (FSM).
During planning FSM was calculated as £29,000, which was not changed during
the course of our audit. We agreed with the Audit Committee that we would report
them all unadjusted differences in excess of £1,400, as well as differences below
those thresholds that, in our view, warranted reporting on qualitative grounds.
AEOREMA COMMUNICATIONS PLC
2 0
Independent Auditors’ Report Continued
to the Members of Aeorema Communications plc
An overview of the scope of our audit
Our audit scope included all components and was performed to component materiality.
Our audit work therefore covered 100% of group revenue, group profit and total group assets
and liabilities. It was performed to the materiality levels set out above.
Other information
The directors are responsible for the other information. The other information comprises
the information included in the annual report, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment
obtained in the course of the audit, we have not identified material misstatements in the
Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
•
the 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.
2 1
Independent Auditors’ Report Continued
to the Members of Aeorema Communications plc
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on pages 11 and
12, the directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s
and the parent company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is
located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditors
responsibilities. This description forms part of our auditor’s report.
Use of this report
This report is made solely to the company’s members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we
might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Scott Lawrence (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor
Windsor House
Bayshill Road
Cheltenham
GL50 3AT
27 September 2019
AEOREMA COMMUNICATIONS PLC
2 2
Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2019
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit pre–exceptional items
Exceptional items
Operating profit post exceptional items
Finance income
Profit before taxation
Taxation
Profit and total comprehensive income for the year
attributable to owners of the parent
Profit per ordinary share:
Total basic earnings per share
Total diluted earnings per share
There were no other comprehensive income items.
The notes on pages 27 to 50 are an integral part of these financial statements.
Notes
2019
£
2018
£
2
6,765,280
4,820,167
(4,584,117)
(3,033,514)
2,181,163
1,786,653
(1,806,764)
(1,497,003)
374,399
289,650
–
(231,357)
374,399
58,293
611
392
375,010
58,685
(86,687)
(8,280)
288,323
50,405
3.18571p
0.55693p
3.14129p
0.53906p
3
4
5
6
9
9
Statement of
Financial Position
As at 30 June 2019
Group
2019
£
Notes
2 3
2018
£
365,154
37,044
2,254
Company
2019
£
–
–
–
2018
£
–
–
–
–
614,751
580,490
365,154
58,071
–
–
423,225
404,452
614,751
580,490
1,612,345
1,106,292
2,211,161
1,437,904
977,427
3,606
995,874
–
3,823,506
2,544,196
981,033
995,874
4,246,731
2,948,648
1,595,784
1,576,364
–
(1,590)
–
(1,590)
(2,247,214)
(1,274,979)
(88,397)
(102,647)
(74,616)
(9,412)
–
–
(2,321,830)
(1,285,981)
(88,397)
(104,237)
(7,529)
(7,529)
(2,329,359)
–
–
–
–
–
–
–
–
–
1,917,372
1,662,667
1,507,387
1,472,127
17
1,131,313
1,131,313
1,131,313
1,131,313
7,063
16,650
34,261
257,812
470,273
7,063
16,650
–
257,812
249,829
7,063
16,650
34,261
257,812
60,288
7,063
16,650
–
257,812
59,289
10
11
7
12
13
14
16
15
7
Non–current assets
Intangible assets
Property, plant and equipment
Deferred taxation
Investments in subsidiaries
Total non–current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Bank loans and overdrafts
Trade and other payables
Current tax payable
Total current liabilities
Non–current liabilities
Deferred taxation
Total non–current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Other reserve
Capital redemption reserve
Retained earnings
Equity attributable to owners of the parent
1,917,372
1,662,667
1,507,387
1,472,127
The notes on pages 27 to 50 are an integral part
of these financial statements.
The profit for the financial year of the holding company
was £68,878 (loss in 2018: £176,778).
The financial statements were approved and authorised
by the board of directors on 27 September 2019 and were
signed on its behalf by
A Harvey, Director
Company Registration No. 04314540
S Haffner, Director
AEOREMA COMMUNICATIONS PLC
2 4
Consolidated Statement
of Changes in Equity
For the year ended 30 June 2019
Share capital
£
1,131,313
Share
premium
£
7,063
Merger
reserve
£
16,650
Other
reserve
£
–
Capital
redemption
reserve
£
257,812
Retained
earnings
£
244,677
Total equity
£
1,657,515
–
–
–
–
–
–
At 30 June 2018
1,131,313
7,063
16,650
–
–
–
–
–
–
–
–
–
–
–
–
–
50,405
50,405
(45,253)
(45,253)
257,812
249,829
1,662,667
–
–
288,323
288,323
(67,879)
(67,879)
Group
At 1 July 2017
Comprehensive
income for the year,
net of tax
Dividends paid
Comprehensive
income for the year,
net of tax
Dividends paid
Share-based
payment
At 30 June 2019
–
1,131,313
–
7,063
–
16,650
34,261
34,261
–
257,812
–
470,273
34,261
1,917,372
Share premium represents the value of shares issued in excess of their list price.
In accordance with section 612 of the Companies Act 2006, the premium on ordinary
shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is
not distributable.
Other reserve represents equity settled share-based employee remuneration, as detailed
in note 21.
Capital redemption reserve represents a statutory non-distributable reserve into which
amounts are transferred following redemption or purchase of a company’s own shares.
The notes on pages 27 to 50 are an integral part of these financial statements.
2 5
Company Statement of
Changes in Equity
For the year ended 30 June 2019
Share capital
£
1,131,313
Share
premium
£
7,063
Merger
reserve
£
16,650
Other
reserve
£
–
Capital
redemption
reserve
£
257,812
Retained
earnings
£
281,320
Total equity
£
1,694,158
–
–
–
–
–
–
At 30 June 2018
1,131,313
7,063
16,650
–
–
–
–
–
–
–
–
–
–
–
–
–
(176,778)
(176,778)
(45,253)
(45,253)
257,812
59,289
1,472,127
–
–
68,878
(67,879)
68,878
(67,879)
Company
At 1 July 2017
Comprehensive
income for the year,
net of tax
Dividends paid
Comprehensive
income for the year,
net of tax
Dividends paid
Share-based
payment
At 30 June 2019
–
1,131,313
–
7,063
–
16,650
34,261
34,261
–
257,812
–
60,288
34,261
1,507,387
Share premium represents the value of shares issued in excess of their list price.
In accordance with section 612 of the Companies Act 2006, the premium on ordinary
shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is
not distributable.
Other reserve represents equity settled share-based employee remuneration, as detailed
in note 21.
Capital redemption reserve represents a statutory non-distributable reserve into which
amounts are transferred following redemption or purchase of a company’s own shares.
The notes on pages 27 to 50 are an integral part of these financial statements.
AEOREMA COMMUNICATIONS PLC
2 6
Statement of
Cash Flows
For the year ended 30 June 2019
Net cash flow from operating activities
Cash flows from investing activities
Finance income
Purchase of property, plant and equipment
Notes
23
5
11
Cash (used) / generated in investing
activities
Cash flows from financing activities
Dividends paid to owners of the Company
Group
Company
2019
£
890,846
2018
£
(389,918)
2019
£
(126,930)
2018
£
(415,534)
611
392
(48,731)
(26,119)
5
–
(48,120)
(25,727)
200,005
17
–
–
17
Dividends received by the Company
–
–
200,000
(67,879)
(45,253)
(67,879)
(45,253)
Cash used in financing activities
(67,879)
(45,253)
(67,879)
(45,253)
Net increase / (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
774,847
(460,898)
5,196
(460,770)
1,436,314
1,897,212
(1,590)
459,180
Cash and cash equivalents at end of year
2,211,161
1,436,314
3,606
(1,590)
Cash and cash equivalents
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash
equivalents are in respect of the Statement of Financial Position amounts:
Cash and cash equivalents
Bank overdraft
Group
Company
Notes
14
16
2019
£
2,211,161
2018
£
1,437,904
2019
£
3,606
2018
£
–
–
(1,590)
–
(1,590)
2,211,161
1,436,314
3,606
(1,590)
The notes on pages 27 to 50 are an integral part of these financial statements.
2 7
Notes to the Consolidated
Financial Statements
For the year ended 30 June 2019
1 Accounting policies
Aeorema Communications plc is a public limited company incorporated in the United
Kingdom and registered in England and Wales. The Company is domiciled in the United
Kingdom and its principal place of business is Moray House, 23/31 Great Titchfield Street,
London, W1W 7PA. The Company’s Ordinary Shares are traded on the AIM Market.
The principal accounting policies adopted in the preparation of the financial statements are
set out below. The policies have been consistently applied to all the years presented, unless
otherwise stated.
The presentation currency is £ sterling.
Going concern
The Group’s business activities, together with the factors likely to affect its future
development and performance are set out in the review of business contained in the
Chairman’s Statement. The Group’s financial statements show details of its financial position
including, in note 24, details of its financial instruments and exposure to risk.
After reviewing the Group’s budget for the next financial year, other medium term plans
and considering the risks outlined in note 24, the Directors, at the time of approving the
financial statements, have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future and have therefore used the
going concern basis in preparing the financial statements.
Basis of preparation
The Group’s financial statements have been prepared under the historical cost convention
and in accordance with International Financial Reporting Standards (IFRS) as adopted by the
European Union, and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The following new standards, amendments to standards and interpretations have been
applied for the first time from 1 July 2018. Their adoption has not had a material impact on
the financial statements:
•
•
•
IFRS 9 ‘Financial Instruments’, effective 1 January 2018;
IFRS 15 ‘Revenue for Contracts with Customers’, effective 1 January 2018;
IFRS 2 ‘Classification and Measurement of Share-Based Payment Transactions’, effective
1 January 2018.
AEOREMA COMMUNICATIONS PLC
2 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
Future standards in place but not yet effective
No new standards, amendments or interpretations to existing standards that have been
published and that are mandatory for the Group’s accounting periods beginning on or after
1 July 2019 have been adopted early.
The following standards and amendments are not yet applied at the date of authorisation of
these financial statements:
•
IFRS 16 – Leases (effective 1 January 2019);
• Annual Improvements to IFRS Standards 2015 – 2017 Cycle (effective 1 January 2019);
•
IAS 12 – Income taxes (effective 1 January 2019);
• Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020); and
• Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020).
The Group does not believe that there would have been a material impact on the financial
statements from early adoption of these standards/interpretations.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary
undertakings drawn up to 30 June 2019. Subsidiaries are all entities (including structured
entities) over which the Group has control. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are consolidated until the date that
control ceases.
Intra-group transactions, balances and unrealised gains and losses on transactions between
group companies are eliminated.
The merger reserve is used where more than 90% of the shares in a subsidiary are acquired
and the consideration includes the issue of new shares by the Company, thereby attracting
merger relief under the Companies Act 2006.
2 9
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
Revenue
Revenue represents amounts (excluding value added tax) derived from the provision of
services to third party customers in the course of the Group’s ordinary activities.
As a result of providing these services, the Group may from time to time receive commissions
from other third parties. These commissions are included within revenue on the same basis
as that arising from the contract with the underlying third party customer.
The revenue and profits recognised in any period are based on the satisfaction of
performance obligations and an assessment of when control is transferred to the customer.
For most contracts with customers, there is a single distinct performance obligation and
revenue is recognised when the event has taken place or control of the content or video has
been transferred to the customer.
Where a contract contains more than one distinct performance obligation (multiple film
productions, or a project involving both build construction and event production) revenue is
recognised as each performance obligation is satisfied.
The transaction price is substantially agreed at outset of the contract, along with a project
brief and payment schedule (full payment in arrears for smaller contracts; part payment(s) in
advance and final payment in arrears for significant contracts).
Due to the detailed nature of project briefs agreed in advance for significant contracts,
management do not consider that significant estimates or judgements are required to
distinguish the performance obligation(s) within a contract.
For contracts to prepare multiple film productions, the transaction price is allocated to
constituent performance obligations using an output method in line with agreements with
the customer.
For other contracts with multiple performance obligations, management’s judgement
is required to allocate the transaction price for the contract to constituent performance
obligations using an input method using detailed budgets which are prepared at outset
and subsequently revised for actual costs incurred and any changes to costs expected to
be incurred.
The Group does not consider any disaggregation of revenue from contracts with customers
necessary to depict how the nature, amount, timing and uncertainty of the Group's revenue
and cash flows are affected by economic factors.
Where payments made are greater than the revenue recognised at the reporting date, the
Group recognises deferred income (a contract liability) for this difference. Where payments
made are less than the revenue recognised at the reporting date, the Group recognises
accrued income (a contract asset) for this difference.
A receivable is recognised in relation to a contract for amounts invoiced, as this is the point
in time that the consideration is unconditional because only the passage of time is required
before the payment is due.
AEOREMA COMMUNICATIONS PLC 3 0
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
At each reporting date, the Group assesses whether there is any indication that accrued
income assets may be impaired by assessing whether it is possible that a revenue reversal
will occur. Where an indicator of impairment exists, the Group makes a formal estimate
of the asset's recoverable amount. Where the carrying value of an assets exceeds its
recoverable amount, the asset is considered impaired and is written down to is
recoverable amount.
Intangible assets – goodwill
All business combinations are accounted for by applying the acquisition method. Goodwill
acquired represents the excess of the fair value of the consideration and associated costs
over the fair value of the identifiable net assets acquired.
After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. At the date of acquisition, the goodwill is allocated to cash generating units, usually
at business segment level or statutory company level as the case may be, for the purpose of
impairment testing and is tested at least annually for impairment. On subsequent disposal
or termination of a business acquired, the profit or loss on termination is calculated after
charging the carrying value of any related goodwill.
Property, plant and equipment
Property, plant and equipment is stated in the financial statements at cost less accumulated
depreciation and any impairment value. Depreciation is provided to write off the cost less
estimated residual value of property, plant and equipment over its expected useful life
(which is reviewed at least at each financial year end), as follows:
Leasehold land and buildings
Fixtures, fittings and equipment
Straight line over the life of the lease
(three years)
Straight line over four years
Any gain or loss arising on the derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
Statement of Comprehensive Income in the year that the asset is derecognised.
Fully depreciated assets still in use are retained in the financial statements.
Impairment
The carrying amounts of the Group’s assets are reviewed at each period
end to determine whether there is any indication of impairment. If any such
indication exists, the assets’ recoverable amount is estimated. For goodwill
and intangible assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount is estimated at each
annual period end date and whenever there is an indication of impairment.
3 1
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
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
Statement of Comprehensive Income in those expense categories consistent with the
function of the impaired asset.
Operating leases
Rentals under operating leases are charged to the Statement of Comprehensive Income on a
straight line basis over the period of the lease.
The Group leases office facilities under operating leases. The lease typically runs for a period
of 5 years, with a break cause in year 3. The Group is restricted from entering into any sub-
lease arrangements.
Investments
Fixed asset investments are stated at cost less provision for diminution in value.
Trade and other receivables
Trade and other receivables are stated initially at fair value and subsequently measured at
amortised cost less any provision for impairment.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at
amortised cost.
Cash and cash equivalents
Cash comprises, for the purpose of the Statement of Cash Flows, cash in hand and deposits
payable on demand. Cash equivalents are short-term highly liquid investments that are
readily convertible to known amounts of cash and that are subject to an insignificant risk of
changes in value. Cash equivalents normally have a date of maturity of 3 months or less from
the acquisition date.
Bank loans and overdrafts comprise amounts due on demand.
Finance income
Finance income consists of interest receivable on funds invested. It is recognised in the
Statement of Comprehensive Income as it accrues.
Taxation
Income tax on the profit or loss for the periods presented comprises current and deferred
tax. Current tax is the expected tax payable on the taxable income for the year, using rates
enacted or substantively enacted at the end of the reporting period, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided on temporary differences between 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
AEOREMA COMMUNICATIONS PLC 3 2
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
initial recognition of assets or liabilities that affect neither accounting nor taxable profit
other than in a business combination; the 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 end of the reporting period.
A deferred tax asset is recognised only to the extent that it is probable that future taxable
profits will be available against which the assets can be utilised. Deferred tax assets and
liabilities are not discounted.
Pension costs
The Group operates a pension scheme for its employees. It also makes contributions to
the private pension arrangements of certain employees. These arrangements are of the
money purchase type and the amount charged to the Statement of Comprehensive Income
represents the contributions payable by the Group for the period.
Financial instruments
The Group does not enter into derivative transactions and does not trade in financial
instruments. Financial assets and liabilities are recognised on the Statement of Financial
Position when the Group becomes a party to the contractual provision of the instrument.
Equity
An equity instrument is a contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments are recorded at the proceeds received,
net of direct issue costs. The Group’s equity instruments comprise ‘share capital’ in the
Statement of Financial Position.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling
at the rates of exchange ruling at the end of the reporting period. Transactions in foreign
currencies are recorded at the rate ruling at the date of the transaction. All differences are
taken to the Statement of Comprehensive Income.
Share-based awards
The Group issues equity settled payments to certain employees. Equity settled share based
payments are measured at fair value (excluding the effect of non-market based vesting
conditions) at the date of grant.
The fair value is estimated using option pricing models and is dependent on factors such as
the exercise price, expected volatility, option price and risk free interest rate. The fair value
is then amortised through the Statement of Comprehensive Income on a straight-line basis
over the vesting period. Expected volatility is determined based on the historical share price
volatility for the Company. Further information is given in note 21 to the financial statements.
3 3
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
Exceptional items
Exceptional items are one off, material items outside the normal course of business which
are not related to the Group’s trading activities.
Significant judgements and estimates
The preparation of the Group’s financial statements in conforming with IFRS required
management to make judgements, estimates and assumptions that effect the application of
policies and reported amounts in the financial statements. These judgements and estimates
are based on management’s best knowledge of the relevant facts and circumstances.
Information about such judgements and estimation is contained in the accounting policies
and / or notes to the financial statements. There are no critical judgements that the directors
have made in the process of applying the Group’s accounting policies.
AEOREMA COMMUNICATIONS PLC 3 4
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
2 Revenue and segment information
The Group uses several factors in identifying and analysing reportable segments, including
the basis of organisation, such as differences in products and geographical areas. The Board
of directors, being the Chief Operating Decision Makers, have determined that for the year
ending 30 June 2019 there is only a single reportable segment.
All revenue represents sales to external customers. Five customers (2018: four) are defined as
major customers by revenue, contributing more than 10% of the Group revenue.
Company
Customer One
Customer Two
Customer Three
Customer Four
Customer Five
Major customers in the current year
Major customers in prior year
2019
£
1,342,594
951,189
905,578
794,599
778,834
2018
£
617,576
886,981
–
493,766
–
4,772,794
1,998,323
1,114,846
3,113,169
The geographical analysis of revenue from continuing operations by geographical location
of customer is as follows:
2019
2018
2019
2018
Geographical
market
Revenue
UK
£
6,693,163
UK
£
4,774,107
Europe
£
61,764
Europe
£
31,531
2019
Rest of the
World
£
10,353
2018
Rest of the
World
£
14,529
2019
2018
Total
£
6,765,280
Total
£
4,820,167
Company
Revenue from contracts with customers
Other revenue
Total revenue
2019
£
6,696,305
2018
£
4,786,777
68,975
33,390
6,765,280
4,820,167
Contract assets and liabilities from contracts with customers have been recognised
as follows:
Company
Deferred income
Accrued income
2019
£
333,305
245,989
2018
£
40,278
252,111
Deferred income at the beginning of the period has been recognised as revenue during
the period.
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
3 Operating profit
Operating profit is stated after charging or crediting:
Cost of sales
3 5
2019
£
2018
£
Depreciation of fixtures, fittings and equipment
21,525
15,327
Administrative expenses
Depreciation of leasehold, land and building
Loss on foreign exchange differences
Fees payable to the Company’s auditor in respect of:
Audit of the Company’s annual accounts
Audit of the Company’s subsidiaries
Staff costs (see note 20)
Operating leases – land and buildings
4 Exceptional items
–
9,229
6,000
17,000
5,089
6,902
7,500
21,000
1,221,559
1,081,153
91,000
91,000
Items that are material either because of their size or their nature, or that are non-recurring,
are considered as exceptional. During the year, the Group incurred expenditure totalling
£nil (2018: £231,357 in relation to the departure of its two founders, Peter Litten and Gary
Fitzpatrick, from the Board of directors). This cost has been included in the consolidated
Statement of Comprehensive Income as an operating exceptional cost.
5 Finance income
Finance income
Bank interest received
2019
£
611
2018
£
392
AEOREMA COMMUNICATIONS PLC 3 6
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
6 Taxation
The tax charge comprises:
Current tax
Prior period adjustment
Current year
Deferred tax (see note 7)
Current year
2019
£
2018
£
2,288
74,616
76,904
9,783
9,783
(1,739)
9,412
7,673
607
607
Total tax charge in the statement of comprehensive income
86,687
8,280
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation from continuing operations
Profit on ordinary activities before taxation multiplied by standard rate of UK
corporation tax of 19% (2018: 19%)
Effects of:
Non-deductible expenses
Prior period adjustment
Total tax charge
375,010
71,252
58,685
11,150
13,147
2,288
(1,131)
(1,739)
15,435
(2,870)
86,687
8,280
The Group has estimated losses of £375,762 (2018: £375,762) available to carry forward
against future trading profits. These losses are in Aeorema Communications plc which is
not currently making taxable profits as all trading is undertaken by its subsidiary Aeorema
Limited, therefore no deferred tax asset has been recognised.
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
7 Deferred taxation
Property, plant and equipment temporary differences
Temporary differences
At 1 July
Transfer to Statement of Comprehensive Income
3 7
2019
£
(8,555)
1,026
(7,529)
2,254
(9,783)
2018
£
(4,016)
6,270
2,254
2,861
(607)
At 30 June
(7,529)
2,254
8 Profit attributable to members of the parent company
As permitted by section 408 of the Companies Act 2006, the parent Company’s Statement of
Comprehensive Income has not been included in these financial statements.
9 Earnings per ordinary share
Basic earnings per share are calculated by dividing the profit or loss attributable to owners of
the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit or loss attributable to owners
of the parent by the weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would have been issued on
the conversion of all dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used and dilutive earnings per share
computations:
Basic earnings per share
Profit for the year attributable to owners of the Company
Basic weighted average number of shares
Dilutive potential ordinary shares:
Employee share options
Diluted weighted average number of shares
2019
£
2018
£
288,323
50,405
9,050,500
9,050,500
127,987
300,000
9,178,487
9,350,500
AEOREMA COMMUNICATIONS PLC 3 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
10 Intangible fixed assets
Group
Cost
At 1 July 2017
At 30 June 2018
At 30 June 2019
Impairment and amortisation
At 1 July 2017
At 30 June 2018
At 30 June 2019
Net book value
At 1 July 2017
At 30 June 2018
At 30 June 2019
Goodwill
£
2,728,292
2,728,292
2,728,292
2,363,138
2,363,138
2,363,138
365,154
365,154
365,154
Goodwill arose for the Group on consolidation of its subsidiary company, Aeorema Limited.
Impairment – Aeorema Limited
Goodwill has previously been tested for impairment based on its future value in use
resulting in the carrying value above. The future value was calculated on a discounted
cash flow basis using the 2018-19 budgeted figures as approved by the Board of directors,
extended in perpetuity to calculate the terminal value and discounted at a rate of 10%. It
was assumed that future growth would be between 1.5% and 2%. Since then, the assets
and liabilities of the Group relating to the goodwill have, together with the profit of the same,
increased and it is unlikely that an updated calculation would result in a further impairment
of goodwill. Consequently, the annual impairment test has been completed by reference to
previous calculations.
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
11 Property, plant and equipment
Group
Cost
At 1 July 2017
Additions
Disposals
At 30 June 2018
Additions
Disposals
At 30 June 2019
Depreciation
At 1 July 2017
Charge for the year
Eliminated on disposal
At 30 June 2018
Charge for the year
Eliminated on disposal
At 30 June 2019
Net book value
At 1 July 2017
At 30 June 2018
At 30 June 2019
3 9
Total
£
153,588
26,119
(2,141)
177,566
48,731
(29,112)
Leasehold land
and buildings
£
Fixtures, fittings
and equipment
£
58,536
–
–
58,536
–
–
95,052
26,119
(2,141)
119,030
48,731
(29,112)
58,536
138,649
197,185
53,447
5,089
–
58,536
–
–
58,536
5,089
–
–
68,800
15,327
(2,141)
81,986
21,525
(22,933)
80,578
26,252
37,044
58,071
122,247
20,416
(2,141)
140,522
21,525
(22,933)
139,114
31,341
37,044
58,071
AEOREMA COMMUNICATIONS PLC
4 0
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
12 Non-current assets – Investments
Group
Cost
At 1 July 2017
At 30 June 2018
Increase in respect of share-based payments
At 30 June 2019
Provision
At 1 July 2017
At 30 June 2018
At 30 June 2019
Net book value
At 1 July 2017
At 30 June 2018
At 30 June 2019
Shares in subsidiary
£
3,274,703
3,274,703
34,261
3,308,964
2,694,213
2,694,213
2,694,213
580,490
580,490
614,751
Holdings of more than 20%
The Company holds more than 20% of the share capital of the following companies:
Subsidiary undertakings
Aeorema Limited
Twentyfirst Limited (dormant)
Country of
registration or
incorporation
Shares held
Class
England and Wales
Ordinary
England and Wales
Ordinary
%
100
100
The registered address of Aeorema Limited and Twentyfirst Limited is 64 New Cavendish
Street, London, W1G 8TB.
4 1
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
13 Trade and other receivables
Trade receivables
Related party receivables
Other receivables
Prepayments and accrued income
Group
Company
2019
£
1,156,689
2018
£
693,725
2019
£
–
2018
£
–
–
38,280
417,376
–
960,063
981,850
25,870
386,697
4,910
12,454
4,718
9,306
1,612,345
1,106,292
977,427
995,874
All trade and other receivables are expected to be recovered within 12 months of the end of
the reporting period. The fair value of trade and other receivables is the same as the carrying
values shown above.
At the year end, trade receivables of £32,616 (2018: £34,324) were past due but not impaired.
These relate to a number of customers for whom there is no significant change in credit
quality and the amounts are still considered recoverable. The ageing of these trade
receivables is as follows
Less than 90 days overdue
More than 90 days overdue
14 Cash at bank and in hand
Group
2019
£
9,339
23,277
32,616
2018
£
–
34,324
34,324
Bank balances
Group
Company
2019
£
2,211,161
2018
£
1,437,904
2,211,161
1,437,904
2019
£
3,606
3,606
2018
£
–
–
AEOREMA COMMUNICATIONS PLC 4 2
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
15 Trade and other payables
Trade payables
Related party payables
Taxes and social security costs
Other payables
Group
Company
2019
£
1,258,646
2018
£
736,442
2019
£
7,043
–
–
67,355
388,869
220,825
59,677
1,541
–
–
2018
£
13,257
67,355
–
–
Accruals and deferred income
540,022
316,171
13,999
22,035
2,247,214
1,274,979
88,397
102,647
All trade and other payables are expected to be settled within 12 months of the end of the
reporting period. The fair value of trade and other payables is the same as the carrying
values shown above.
16 Loans
An analysis of the maturity of loans is given below:
Amounts falling due within one year or on demand:
Bank overdrafts
17 Share capital
Authorised
Group
2019
£
–
–
2018
£
1,590
1,590
Company
2019
£
–
–
2018
£
1,590
1,590
2019
£
2018
£
28,000,000 Ordinary shares of 12.5p each
3,500,000
3,500,000
Allotted, called up and fully paid
At 1 July 2017
At 30 June 2018
At 30 June 2019
Number
9,050,500
Ordinary
shares
£
1,131,313
9,050,500
1,131,313
9,050,500
1,131,313
Holders of these shares are entitled to dividends as declared from time to time and are
entitled to one vote per share at general meetings of the company.
See note 21 for details of share options outstanding.
4 3
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
18 Financial commitments
Total future minimum lease payments under non-cancellable operating lease rentals are
payable as follows:
Group
Not later than one year
Later than one year and not later than five years
Total
Land and Buildings
Other
2019
£
15,167
–
2018
£
91,000
15,167
15,167
106,167
2019
£
987
4,111
5,098
2018
£
–
–
–
19 Directors’ emoluments
The remuneration of directors of the Company is set out below.
Salary, fees,
bonuses and
benefits in
kind
2019
£
–
Salary, fees,
bonuses and
benefits in
kind
2018
£
12,167
P Litten1
G Fitzpatrick1
–
8,111
25,000
15,000
25,000
20,000
15,000
20,000
M Hale
S Haffner
R Owen
S Quah
122,004
100,000
A Harvey
91,352
80,625
Pensions
2019
£
–
–
–
–
–
925
1,533
Pensions
2018
£
33,590
17,019
–
–
–
493
665
268,356
265,903
2,458
51,767
1 Resigned as directors 13 September 2017
Compensa-
tion for loss
of office
2019
£
–
Compensa-
tion for loss
of office
2018
£
70,000
50,000
–
–
–
–
–
–
–
–
–
–
–
–
Total
2019
£
–
–
20,000
15,000
20,000
Total
2018
£
115,757
75,130
25,000
15,000
25,000
122,929
100,493
92,885
81,290
120,000
270,814
437,670
The share options held by directors who served during the year are summarised below:
Name
S Quah
S Quah
A Harvey
Grant
date
25 April 2013
Number
awarded
300,000
Exercise
price
16.50p
Earliest
exercise date
25 April 2016
Expiry
date
24 April 2023
22 August 2018
300,000
29.00p
17 November 2020
22 August 2028
22 August 2018
300,000
29.00p
17 November 2020
22 August 2028
Fees for S Haffner are charged by Harris & Trotter LLP, a firm in which he is a member
(see note 22).
AEOREMA COMMUNICATIONS PLC 4 4
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
20 Employee information
The average monthly number of employees (including directors) employed by the Group
during the year was:
Number of employees
Administration and production
Group
Company
2019
Number
21
2018
Number
18
2019
Number
5
2018
Number
7
The aggregate payroll costs of these employees charged in the Statement of Comprehensive
Income was as follows:
Employment costs
Wages and salaries
Social security costs
Pension costs
Share-based payments
Group
Company
2019
£
1,068,710
2018
£
922,969
2019
£
55,000
2018
£
65,000
105,471
101,250
13,117
34,261
56,934
–
–
–
–
–
–
–
1,221,559
1,081,153
55,000
65,000
21 Share-based payments
The Group operates an EMI share option scheme for key employees. Options are granted
to key employees at an exercise price equal to the market price of the Company’s shares at
the date of grant. Options are exercisable from the third anniversary of the date of grant and
lapse if they remain unexercised at the tenth anniversary or upon cessation of employment.
The following option arrangements exist over the Company’s shares:
Date of grant
25 April 2013
22 August 2018
14 June 2019
Exercise
price
16.5p
Exercise period
From
25 April 2016
To
24 April 2023
29.0p
17 November 2020
22 August 2028
26.0p
14 June 2022
14 June 2029
Number of
options
2019
300,000
600,000
120,000
Number of
options
2018
300,000
–
–
1,020,000
300,000
4 5
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
Details of the number of share options and the weighted average exercise price outstanding
during the year are as follows:
Allotted, called up and fully paid
Outstanding at beginning of the year
Granted during the year
Outstanding at end of the year
Exercisable at the end of the year
Number of
options
2019
300,000
720,000
1,020,000
300,000
Weighted
average
exercise price
2019
0.17
0.29
0.25
0.17
Number of
options
2018
300,000
–
300,000
300,000
Weighted
average
exercise price
2018
0.17
–
0.17
0.17
The exercise price of options outstanding at the year-end was £0.250 (2018: £0.165) and
their weighted average contractual life was 7.6 years (2018: 4.8 years). In 2019, options were
granted on 22 August 2018 and 14 June 2019. The aggregate of the estimated fair values of
the options granted on those dates is £104,041.
Equity-settled share-based payments are measured at fair value at the date of grant. The fair
value as determined at the grant date of equity-settled share-based payments is expensed
on a straight line basis over the vesting period, based on the Group’s estimate of shares that
will eventually vest. The estimated fair value of the options is measured using an option
pricing model. The inputs into the model are as follows:
Grant date
Model used
Share price at grant date
Exercise price
Contractual life
Risk free rate
Expected volatility
Expected dividend rate
Fair value option
Grant date
Model used
Share price at grant date
Exercise price
Contractual life
Risk free rate
Expected volatility
Expected dividend rate
Fair value option
25 April 2013
Black-Scholes
16.5p
16.5p
10 years
0.5%
104%
0%
14.889p
22 August 2018
Black-Scholes
29.0p
29.0p
10 years
0.75%
40.33%
0%
14.800p
AEOREMA COMMUNICATIONS PLC 4 6
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
Grant date
Model used
Share price at grant date
Exercise price
Contractual life
Risk free rate
Expected volatility
Expected dividend rate
Fair value option
14 June 2019
Black-Scholes
26.0p
26.0p
10 years
0.75%
40.33%
0%
12.894p
The expected volatility is determined by calculating the historical volatility of the Company’s
share price over the last three years. The risk free rate is the official Bank of England base rate.
The Group recognised the following charges in the Statement of Comprehensive Income in
respect of its share-based payment plans:
Share-based payment charge
2019
£
34,261
2018
£
–
22 Related party transactions
The Group has a related party relationship with its subsidiaries and its key management
personnel (including directors). Details of transactions between the Company and its
subsidiaries are as follows:
Amounts owed by subsidiaries
Total amount owed by subsidiaries
Amounts owed to subsidiaries
Total amount owed to subsidiaries
2019
£
2018
£
960,063
981,850
67,355
67,355
The company received dividends during the year of £200,000 (2018: £nil) from its subsidiary,
Aeorema Limited. The company transferred a VAT receivable of £22,810 (2018: £15,155) to
Aeorema Limited due to being part of a common VAT group.
Aeorema Limited transferred a net amount of expenses to Aeorema Communications plc
during the year of £40,000 (2018: £58,050).
Aeorema Limited paid expenses totalling £121,718 (2018: £132,203) on behalf of Aeorema
Communications plc during the year.
During the year, Aeorema Limited made a net transfer of cash of £82,879 to Aeorema
Communications plc (2018: £413,911 from Aeorema Communications plc to Aeorema Limited).
47
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
The compensation of key management (including directors) of the Group is as follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
2019
£
2018
£
294,997
309,786
2,458
51,767
–
120,000
297,455
481,553
The share options held by directors of the Company are disclosed in note 19. During the
year, a charge of £33,761 (2018: £nil) was recognised in the Consolidated Statement of
Comprehensive Income in respect of these share options.
Harris and Trotter LLP is a firm in which S Haffner is a member. The amounts charged to the
Group for professional services is as follows:
Harris and Trotter LLP – charged during the year
Aeorema Communications plc
Aeorema Limited
2019
£
15,000
11,850
2018
£
15,000
25,995
26,850
40,995
At the year end, the Group had an outstanding trade payable balance to Harris and Trotter
LLP of £4,500 (2018: £6,174).
AEOREMA COMMUNICATIONS PLC 4 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
23 Cash flows
Cash flows from operating activities
Profit before taxation
Depreciation
Dividends received by the Company
Loss on disposal of fixed assets
Share-based payment expense
Finance income
Group
2019
£
375,010
21,525
–
6,179
34,261
2018
£
58,685
20,416
–
–
–
(611)
(392)
Company
2019
£
2018
£
68,878
(176,778)
–
(200,000)
–
–
(5)
–
–
–
–
(17)
436,364
78,709
(131,127)
(176,795)
Increase / (decrease) in trade and other payables
972,235
(340,624)
(14,250)
8,474
(Increase) / decrease in trade and other receivables
(506,053)
(98,700)
18,447
(247,213)
Taxation paid
(11,700)
(29,303)
–
–
Cash generated / (used) from operating activities
890,846
(389,918)
(126,930)
(415,534)
24 Financial instruments
Financial instruments recognised in the consolidated
statement of financial position
All financial instruments are recognised initially at their fair value and subsequently
measured at amortised cost.
Financial Assets
Trade and other receivables
Cash and cash equivalents
Investments in subsidiaries
Total
Financial Liabilities
Trade and other payables
Accruals
Total
Group
2019
£
2018
£
Company
2019
£
2018
£
1,487,328
987,811
960,063
981,850
2,211,161
1,437,904
3,606
–
–
–
614,751
580,490
3,698,489
2,425,715
1,578,420
1,562,340
1,318,322
206,716
779,851
275,893
74,398
13,999
82,202
22,035
1,525,038
1,055,744
88,397
104,237
4 9
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
The Group is exposed to risks that arise from its use of financial instruments. There have
been no significant changes in the Group’s exposure to financial instrument risk, its
objectives, policies and processes for managing those from previous periods. The principal
financial instruments used by the Group, from which financial instrument risk arises, are
trade receivables, cash and cash equivalents and trade and other payables.
Credit risk
Credit risk arises principally from the Group’s trade receivables. It is the risk that the
counterparty fails to discharge its obligation in respect of the instrument. The maximum
exposure to credit risk at 30 June 2019 was £1,156,689 (2018: £693,725). Trade receivables are
managed by policies concerning the credit offered to customers and the regular monitoring
of amounts outstanding for both time and credit limits. At the year end, the credit quality of
trade receivables is considered to be satisfactory.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that
the Group will encounter difficulty in meeting its financial obligations as they fall due. The
Group’s policy is to meet its liabilities when they fall due. The Group monitors cash flow
on a regular basis. At the year end, the Group has sufficient liquid resources to meets its
obligations of £1,988,522 (2018: £1,244,113).
Market risk
Market risk arises from the Group’s use of interest bearing financial instruments. It is the risk
that the fair value of future cash flows of a financial instrument will fluctuate. At the year end,
the cash and cash equivalents of the Group net of bank overdrafts was £2,211,161 (2018:
£1,436,314). The Group ensures that its cash deposits earn interest at a reasonable rate.
Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern while maximising the return to stakeholders. The capital
structure of the Group consists of equity attributable to equity holders of the parent,
comprising issued share capital, reserves and retained earnings as disclosed in the
Consolidated Statement of Changes in Equity. At the year end, total equity was £1,917,372
(2018: £1,662,667).
25 Pension costs defined contribution
The Group makes pre-defined contributions to employees’ personal pension plans.
Contributions payable by the Group for the year were £13,117 (2018: £56,934). At the end of
the reporting period £1,605 (2018: £nil) of contributions were due in respect of the period.
AEOREMA COMMUNICATIONS PLC 5 0
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2019
26 Dividends
On the 11 January 2019 a final dividend of 0.75 pence per share (total dividend £67,879) was
paid to holders of fully paid ordinary shares.
In respect of the current year, the directors propose that a final dividend of 1 pence per share
be paid to shareholders on 16 December 2019. The dividends are subject to approval by
shareholders at the Annual General Meeting and have not been included as liabilities in these
consolidated financial statements. The proposed dividends are payable to all shareholders
on the Register of Members on 22 November 2019. The total estimated dividend to be paid is
£90,505. The payment of this dividend will not have any tax consequences for the Group.
27 Contingent Liability
Company
The Company is a member of a group VAT registration with all other companies in the
Aeorema Communications group and, under the terms of the registration, is jointly and
severally liable for the VAT payable by all members of the group. At 30 June 2019 the
Company had no potential liability under the terms of the registration.
28 Control
There is no overall controlling party.
5 1
Company Information
Directors
M Hale
S Haffner
R Owen
S Quah
A Harvey
(Non-Executive Chairman)
(Non-Executive)
(Non-Executive)
(Chief Executive Officer)
(Managing Director)
Secretary
S Haffner
Company number
04314540
Registered office
Financial advisers
Nominated adviser
and broker
Auditors
Solicitors
Bankers
Registrar
64 New Cavendish Street
London, W1G 8TB
Harris & Trotter LLP
64 New Cavendish Street
London, W1G 8TB
Allenby Capital Limited
5 St. Helens Place
London
EC3A 6AB
Hazlewoods LLP
Windsor House, Bayshill Road
Cheltenham, GL50 3AT
Howard Kennedy LLP
No. 1 London Bridge
London, SE1 9BG
Barclays Bank plc
P O Box 32106
London, NW1 2ZH
Link Asset Services
The Registry
34 Beckenham Road
Beckenham, Kent, BR3 4TU
AEOREMA COMMUNICATIONS PLC
5 2
Director Profiles
Mike Hale
Non-Executive Chairman
Mike Hale has spent most of his career in the marketing and advertising
sectors. His roles have included Chairman and CEO of Young and
Rubicam Australia, Chairman and CEO of FCB Australia and Board
Director of Saatchi and Saatchi UK. He also established his own
eponymous agency which he built into one of Australia’s leading
independent agencies and which he sold before relocating to London.
He has also been involved with business and strategic planning
for major Australian and international companies including
British Airways, Unilever, Epson, Toshiba, NRMA and BMW.
His extensive marketing and advertising experience with blue-
chip companies, both in the UK and Australia, will be highly
beneficial to the Company’s plans for growth and expansion.
Stephen Haffner
Non-Executive Director
Steve Haffner has almost 30 years’ accounting experience having qualified
as a chartered accountant in 1989. He has spent over 25 years at Harris and
Trotter LLP, during which time he became Head of the Audit Department.
He was appointed as Partner to the firm in 1994. Steve joined Aeorema
as Company Secretary in 2014 and as a Director in 2015. He is a Fellow
of The Institute of Chartered Accountants in England and Wales.
Richard Owen
Non-Executive Director
Richard is Executive Chairman of AIM listed Ultimate Sports Group
(USG) Plc and an Executive Director of its subsidiary Pantheon
Leisure Plc. Richard has extensive involvement and experience
in corporate and strategic planning, acquisitions and finance.
Richard holds various other private company directorships.
5 3
Steve Quah
Chief Executive Officer
Steve Quah is a founder and Chief Executive Director at Cheerful Twentyfirst
and oversees the management of all events. With extensive expertise in
both theatrical and digital brand experiences, Steve is the driving force
behind the company’s strong creative service ethos. Steve brings over
thirty years of unique insight, innovation and experience to the company
and continues to focus the team on delivering game changing events for all
clients. With a passion for creating award winning live experiences, Steve
has produced over 300 corporate productions and numerous live events
for some of the world’s largest brands including Vodafone, Google, Oath,
Clifford Chance, LG, Disney, AOL, News UK and Microsoft to name but a few.
Andrew Harvey
Managing Director
Andrew Harvey is the Managing Director and has over twenty years’
experience producing events, branded content and interactive projects.
Andrew joined Cheerful Twentyfirst in 1999 and helped significantly grow
the branded content division winning numerous awards. Andrew has worked
at many levels within the company including Account Manager, Head of
Moving Image, Senior Event Producer and Director of Operations. Andrew
has delivered award winning projects for global brands including HSBC,
Nokia, McKinsey & Company, GE Alstom, Oliver Wyman, PubMatic and
Babcock. Andrew currently oversees all aspects of the agency’s operations.
AEOREMA COMMUNICATIONS PLC 5 4
Notice of Annual General Meeting
Aeorema Communications plc (Incorporated and registered in England and Wales with company number 4314540)
NOTICE IS HEREBY GIVEN that the Annual General
Meeting of Aeorema Communications plc will be held
at the offices of Harris & Trotter LLP, 64 New Cavendish
Street, London W1G 8TB on 14 November 2019 at 11 a.m.
for the transaction of the following business:
As Ordinary Business to consider and, if thought fit,
pass the following resolutions which will be proposed as
Ordinary Resolutions:
1. To receive and adopt the report of the directors of the
Company and the audited accounts for the Company
for the year ended 30 June 2019.
2. To re-appoint Stephen Haffner as a Director of the
Company, who retires in accordance with Article 122 of
the Company’s Articles of Association.
3. To re-appoint Hazlewoods LLP as auditors of the
Company and to authorise the Directors to fix their
remuneration.
4. To declare a final dividend on the ordinary shares of
12.5 pence each in the capital of the Company for the
year ended 30 June 2019 of 1 pence per ordinary share.
As Special Business to consider and, if thought fit, pass
the following resolutions of which Resolution 5 will be
proposed as an Ordinary Resolution and Resolutions 6
and 7 will be proposed as Special Resolutions:
5. That the directors of the Company be generally
and unconditionally authorised pursuant to and in
accordance with section 551 of the Act (the "Act") to
exercise all the powers of the Company to allot shares
in the Company and/or to grant rights to subscribe for,
or to convert any security into, shares in the Company
("Rights") up to a maximum nominal amount of
£1,000,000, provided that this authority shall expire
at the end of the next annual general meeting of the
Company to be held after the date of the passing of this
Resolution or, if earlier, fifteen months from the date of
the passing of this Resolution save that the Company
may prior to the expiry of such period make any offer or
agreement which would or might require shares to be
allotted or Rights to be granted after such expiry and the
directors of the Company shall be entitled to allot shares
in the Company and to grant Rights pursuant to any such
offer or agreement as if this authority had not expired.
6. That, subject to the passing of Resolution 5 set out
above, the directors of the Company be empowered
pursuant to section 570 of the Act to allot equity
securities (within the meaning of section 560 of the Act)
for cash pursuant to the authority conferred on them
by Resolution 5 above, as if section 561(1) of the Act did
not apply to such allotment provided this power shall
be limited to:
(i) the allotment of equity securities in connection with
a rights issue, open offer or other offer of equity
securities open for acceptance for a period fixed by
the directors of the Company to holders of equity
securities on the register on a fixed record date
where the equity securities respectively attributable
to the interests of such holders are proportionate
(as nearly as may be practicable) to their respective
holdings of such equity securities or in accordance
with the rights attached thereto (but subject to such
exclusions or other arrangements as the directors of
the Company may deem necessary or expedient in
relation to treasury shares, fractional entitlements
or legal or practical problems under the laws of, or
the requirements of any recognised body or stock
exchange in, any territory or by virtue of shares
being represented by depositary receipts or any
other matter); and
(ii) the allotment to any person or persons (otherwise
than pursuant to sub-paragraph (i) of this
Resolution above) of equity securities up to an
aggregate nominal amount of £1,000,000, provided
that the power given by this Resolution shall expire
at the end of the next annual general meeting of the
Company to be held after the date of the passing
of this Resolution or, if earlier, fifteen months from
the date of the passing of this Resolution, save that
the directors of the Company shall be entitled to
make offers or agreements before the expiry of
such power which would or might require equity
securities to be allotted after such expiry and the
directors of the Company shall be entitled to allot
equity securities pursuant to any such offers or
agreements as if the power conferred hereby had
not expired.
5 5
7. That the Company be and is hereby generally and
unconditionally authorised in accordance with Section
701 of the Act to make market purchases (within the
meaning of Section 693(4) of the Act) on the AIM Market
of the London Stock Exchange plc of ordinary shares
of 12.5 pence each in the capital of the Company
("Ordinary Shares") provided that:
(i) the maximum number of Ordinary Shares
hereby authorised to be purchased is 905,000
Ordinary Shares;
(ii) the minimum price (exclusive of expenses) which
may be paid for an Ordinary Share is 1 pence;
(iii) the maximum price (exclusive of expenses) which
shall be paid for an Ordinary Share shall be an
amount equal to 105 per cent. of the average middle
market quotations taken from the AIM Appendix to
the Daily Official List of the London Stock Exchange
for the five business days immediately preceding
the day on which the Ordinary Share is contracted
to be purchased;
(iv) unless renewed the authority hereby conferred
shall expire on the earlier of the Company’s Annual
General Meeting in 2019 or eighteen months from
the passing of this Resolution unless such authority
is renewed, varied or revoked prior to such time;
and
(v) the Company may make a contract or contracts
to purchase Ordinary Shares under the authority
hereby conferred prior to the expiry of such
authority which will or may be executed wholly or
partly after the expiry of such authority and may
make a purchase of Ordinary Shares in pursuance
of any such contract or contracts.
By order of the Board
Stephen Haffner
Company Secretary
Registered Office:
64 New Cavendish Street, London W1G 8TB
Dated: 21 October 2019
Notes:
(1) A member entitled to attend and vote at the above-mentioned annual general
meeting (the "Meeting") is entitled to appoint a proxy or proxies to exercise any
or all of his rights to attend, speak and vote at the Meeting instead of him. All
members are entitled to attend and vote at the Meeting, whether or not they
have returned a form of proxy.
(2) Please note that a hard copy form of proxy is not included with this notice:
You can vote either:
• by logging on to www.signalshares.com and following the instructions;;
•
You may request a hard copy form of proxy directly from the registrars,
Link Asset Services, on Tel: 0371 664 0300. Calls cost 12p per minute plus
your phone company’s access charge. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open
between 09:00 – 17:30, Monday to Friday excluding public holidays in
England and Wales.
•
in the case of CREST members, by utilising the CREST electronic proxy
appointment service in accordance with the procedures set out below.
The instrument appointing a proxy must reach the Company’s registrars, Link
Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3
4TU not less than 48 hours before the time of holding of the Meeting.
(3) CREST members who wish to appoint a proxy or proxies through the CREST
electronic proxy appointment service may do so for the Meeting (and any
adjournment of the Meeting) by using the procedures described in the CREST
Manual (available from www.euroclear.com/site/public/EUI). CREST Personal
Members or other CREST sponsored members, and those CREST members
who have appointed a service provider(s), should refer to their CREST sponsor
or voting service provider(s), who will be able to take the appropriate action on
their behalf.
In order for a proxy appointment or instruction made by means of CREST to be
valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be
properly authenticated in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required for such instructions,
as described in the CREST Manual. The message must be transmitted so as to
be received by the issuer’s agent (ID RA10) by 11 a.m. on 12 November 2019. For
this purpose, the time of receipt will be taken to mean the time (as determined
by the timestamp applied to the message by the CREST application host) from
which the issuer’s agent is able to retrieve the message by enquiry to CREST in
the manner prescribed by CREST. After this time, any change of instructions to
proxies appointed through CREST should be communicated to the appointee
through other means.
CREST members and, where applicable, their CREST sponsors or voting service
providers should note that Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any particular message. Normal
system timings and limitations will, therefore, apply in relation to the input
of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member, or
sponsored member, or has appointed a voting service provider(s), to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as
shall be necessary to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting system providers are
referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings. The Company may treat
as invalid a CREST Proxy Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
(4) Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001,
the Company specifies that only those members of the Company on the
register as at close of business, 48 hours before the time set for the Meeting
shall be entitled to attend or vote at the Meeting in respect of the number
of shares registered in their name at the time. Changes to the register of
members after that time will be disregarded in determining the rights of any
person to attend or vote at the Meeting.
(5) A copy of the register of Directors’ interests in shares in the Company and
copies of the Directors’ service contracts of more than one year’s duration
will be available for inspection at the registered office of the Company during
office hours only on any weekday (excluding Saturdays, Sundays and public
holidays) from the date of this notice until the date of the Meeting and at the
place of the Meeting for at least 15 minutes prior to and during the Meeting.
AEOREMA COMMUNICATIONS PLC
5 6