CONSOLIDATED DIRECTORS’
REPORT & FINANCIAL STATEMENTS
Year ended 30 June 2020
Contents
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4
6
8
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15
19
25
26
27
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58
60
62
Overview
Chairman’s Statement
Chief Executive Officer's Report
Strategic Report
Directors’ Report
Corporate Governance Statement
Independent Auditor’s 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 3
Overview
REFRESHUpdated brandlaunchedCLIMBNamed #37 in C&IT TopUK Event Agencies 2019AWARDAwarded 2 x International Davey Awards - InmarsatAWARDEvent Production Awards:Best Visual Spectacular - BBC StudiosAWARD(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:23)(cid:29)(cid:28)(cid:22)(cid:21)(cid:20)(cid:19)(cid:18)(cid:17)(cid:29)(cid:31)(cid:20)(cid:26)(cid:21)(cid:16)(cid:15)(cid:14)(cid:26)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:23)(cid:29)(cid:13)(cid:12)(cid:29)(cid:16)(cid:11)(cid:26)(cid:29)(cid:10)(cid:26)(cid:21)(cid:20)AWARDGlobal Campaign Experience Awards: Silver Winner - WSJKITNew Virtual Platform LaunchedNEW YORKUS office openedEVENTFUL EXPERIENCESNew incentives offering launchedISLAFounding members of new sustainability initiativeGLOBALTECH CLIENTOnboardedPLAYBOOKStrategic Insights Launch: Brand PlaybookAWARDCN Agency Awards: Innovation AwardLOCKDOWNAll events cancelled, postponed or transferred to virtualOUTREACHTo new and existing clients about digital offeringWEBSITENew website launched VIRTUALFirst global SLT event delivered digitally in lock down EVENTFULNew AcquisitionCAMPAIGN‘Take An Extra Hour’ community campaign launchTRAINING New apprenticeship scheme launchedH1 (Jul19–Dec19)H2 (Jan20–Jun20)Beyond (July20–Oct20)MIPCOMGlobal first – sustainable, reusabledouble decker stand for BBC Studioscelebrating ‘Best of British’ deliveredMARCH 1st 2019/20 revenues at £4.8M before lockdown (up 108% on previous year: £2.3M 2018/19)STRATEGICHIRESAppointment of seniorindustry figuresAWARDC&IT Awards: Best Corporate Event - WSJ
A E O R E M A C O M M U N I C AT I O N S P LC
4
REFRESHUpdated brandlaunchedCLIMBNamed #37 in C&IT TopUK Event Agencies 2019AWARDAwarded 2 x International Davey Awards - InmarsatAWARDEvent Production Awards:Best Visual Spectacular - BBC StudiosAWARD(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:23)(cid:29)(cid:28)(cid:22)(cid:21)(cid:20)(cid:19)(cid:18)(cid:17)(cid:29)(cid:31)(cid:20)(cid:26)(cid:21)(cid:16)(cid:15)(cid:14)(cid:26)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:23)(cid:29)(cid:13)(cid:12)(cid:29)(cid:16)(cid:11)(cid:26)(cid:29)(cid:10)(cid:26)(cid:21)(cid:20)AWARDGlobal Campaign Experience Awards: Silver Winner - WSJKITNew Virtual Platform LaunchedNEW YORKUS office openedEVENTFUL EXPERIENCESNew incentives offering launchedISLAFounding members of new sustainability initiativeGLOBALTECH CLIENTOnboardedPLAYBOOKStrategic Insights Launch: Brand PlaybookAWARDCN Agency Awards: Innovation AwardLOCKDOWNAll events cancelled, postponed or transferred to virtualOUTREACHTo new and existing clients about digital offeringWEBSITENew website launched VIRTUALFirst global SLT event delivered digitally in lock down EVENTFULNew AcquisitionCAMPAIGN‘Take An Extra Hour’ community campaign launchTRAINING New apprenticeship scheme launchedH1 (Jul19–Dec19)H2 (Jan20–Jun20)Beyond (July20–Oct20)MIPCOMGlobal first – sustainable, reusabledouble decker stand for BBC Studioscelebrating ‘Best of British’ deliveredMARCH 1st 2019/20 revenues at £4.8M before lockdown (up 108% on previous year: £2.3M 2018/19)STRATEGICHIRESAppointment of seniorindustry figuresAWARDC&IT Awards: Best Corporate Event - WSJ 5
Chairman’s Statement
This year saw a complete reshaping of the events
business. It went from live to virtual overnight. Our
industry was faced with event cancellations, national
lock downs and global travel bans. Despite these major
challenges, I am pleased to report the Group has finished
the year in a strong, secure, and promising position.
Notwithstanding the challenges we have all faced in
recent months with the COVID-19 pandemic, Aeorema has
adapted quickly to the changes in the live events industry
and is now capitalising on the increasing requirement for
virtual and hybrid events.
The Group was able to make a first significant acquisition
within the year and diversify its operating businesses to
meet the requirements of the new environment.
In March, the Group acquired Eventful Ltd (“Eventful”).
Eventful provides venue sourcing, strategic event planning
and management and incentive travel services. The
acquisition was immediately earnings enhancing and
gave Aeorema access to the venue sourcing market which
rounded out the Group's offering to clients. It also opened
doors to new clients and opportunities to cross-sell.
Despite the challenges I am pleased to report Eventful
posted profits before tax of £11,223 for the 3 month period
post-acquisition. The team recently launched a pioneer
incentive product that helps clients continue to use this
strong motivation tool and, despite the current travel
challenges, this has had a good initial client reaction.
The Group has made significant executive appointments
during the year. We also made some strategic hires
from a highly successful creative and award-winning
brand experience agency delivering events worldwide,
including creating a new senior Strategy Director role.
This team gave us an opportunity to strengthen our brand
engagement and strategic skills and has diversified and
enhanced the offering to existing and new clients, as well
as providing the Group with a wider and valuable network
of blue-chip contacts across multiple industries, offering
opportunities for cross-selling. With the integration of the
team complete and them now working together sharing
client relationships, some significant introductions have
been made which has led to some significant and highly
profitable work from a major multinational technology
client. Several other global clients are expected to follow
due to this new team's expertise.
As we have reported in recent months, we anticipated
making a loss for the year as a result of the postponement
and cancellation of a number of live events. We saw
revenue decrease 19% to £5,475,425 (2019: £6,765,280)
resulting in an operating loss (pre-exceptional items) of
£175,043 (2019 profit: £384,483). The Group’s cash position
remains in excess of £1 million as at the date of this
announcement. However given continuing uncertainties,
the Board is not recommending the payment of a full year
dividend. It is the Board’s intention to return to paying
dividends as soon as possible.
Outlook
As mentioned, there has been a major shift in traditional
event delivery and the ways clients communicate with their
stakeholders. Even ahead of the COVID-19 pandemic, it
was clear that there were going to be a number of changes
to the live events industry and the way live events were
being run and staged. There was already an increasing
focus put on digital and hybrid events, particularly with the
desire for a more environmentally sustainable method of
running events, but the immediate impact of the COVID-19
pandemic created an acceleration of the need for digital
and hybrid events. Aeorema, with its experience and ability
to be agile, has been quick to adapt.
A E O R E M A C O M M U N I C AT I O N S P LC
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The Board and I want to congratulate and thank all the
staff. They have faced unique challenges with great energy
and commitment. They have protected cash flow and
have also driven new initiatives. They have contained
costs and critically they have maintained morale and
creativity in the most trying of circumstances.
We also want to thank our shareholders. Your support has
been excellent and very much appreciated and we remain
motivated by this support to grow revenue and profit.
We have introduced innovative ways of running virtual
events and making them more successful; we have
launched a robust and flexible technology platform to
help run virtual events and this has had a very positive
response from clients; we have launched a New York office
to service our clients there and to enter the extremely
large USA events market – this office has already enabled
us to win projects that we would not have won without
it. We will continue to look for ways to help our clients
in this environment and grow our business and revenue
and although we believe the physical events business will
return, it will be different with many hybrid, physical and
virtual events. With our foundations, and the exceptional
hard work undertaken by every member of the team
so far this year, we are ideally positioned to be a leader
in this new market.
M Hale
Chairman
16 October 2020
7
Chief Executive Officer's Report
The Year of the Great Reset. This year we saw a
complete shift from traditional channels to virtual world
communications. I am as proud as ever of our Cheerful
Twentyfirst and Eventful teams, who were at the coal-face
as live events were wiped off the board and replaced with
virtual briefs.
Our agencies embraced the pivot to virtual events like
a new pitch, exploring best practice and creative ways
to break out of the traditional mould and to build an
experience to suit. The enlarged team moved quickly
and strategically to pioneer the rapid shift to virtual
and brought our clients with us along the way. Through
March, April and May we focused our agency approach
on supporting our clients through this transition, and
developing their trust with virtual and its opportunities.
And there are so many opportunities.
It is difficult to pick one highlight from this financial year.
I’m delighted to share several moments that stand out.
The Cheerful Twentyfirst agency rebrand in September
2020, where our new bold colours and dynamic logo
aligned our branding with our modern agency values.
We celebrated multiple major award wins, including the
Global Campaign Experience Awards and Creative Team
of the Year for the second year running. Our experiential
projects with new clients, who shared, “I’ve worked
with different production companies over the years, but
Cheerful Twentyfirst is far and away the best – words
cannot describe how good you are.” Then there is our
international work in Cannes, where we delivered a
revolutionary and sustainable brand activation that
continues to garner attention for innovation and creative
flair to this day.
We have continued to invest in new offerings with the
Eventful team and new talent as we see the shape of
the agency adapting to virtual communications. Most
notably, we welcomed our Strategy Director, Hannah
Luffman, alongside new senior appointments in technical
and creative. Hannah’s reputation for client-work
and experience in audience engagement has proved
invaluable to our growth.
8
The development of the Group’s offering to now
include strategy and virtual experiences as chargeable
avenues has reignited opportunities across the board.
Excitingly and off the back of this, we are seeing bigger
conversations and a bigger ‘piece of the pie’ with returning
and new clients alike. I am optimistic that the momentum
already seen in Q1 2020-2021 reflects continued positive
growth ahead for both operating businesses. A strong
finish to a challenging year, we continue to make waves
in the UK and globally as Game Changers in purpose,
strategy, creative and value.
Steve Quah
Chief Executive Officer
16 October 2020
Outlook
Our delivery in the world of Virtual events has been
enhanced by the curation of our own robust platform.
We believe we were the first agency to curate a solution
that holistically responded to clients’ needs: agency
creative, communications strategy and branding,
packaged alongside a tried and tested platform offering.
Fondly named KIT, launched post-period end, the
platform is a sophisticated solution that hosts and
delivers online events, with refined engagement tools
that address specific needs. The secure technology is
brandable and scalable, while giving users a personalised
experience. Since KIT’s launch in September, we have had
many client requests for platform demonstrations.
Our expansion into the US was a historic moment for
the agency. In September 2020 we very proudly opened
our New York office and appointed New York talent. The
expansion has already been highly successful and looks
to yield strong traction with current US clients and in
new opportunities. Within the first 10 business days of
opening, we secured three new clients with live projects
already underway on the East and West Coasts.
In equally as exciting news, our incentives business
Eventful is unveiling a luxury product that will charter
a new course for corporate rewards within the UK. In
partnership with luxury hotels, we see this new offering as
a significant opportunity to lead the way in restructuring
and re-energising the local travel and incentives market
both locally and abroad.
AEOREMA COMMUNICATIONS PLC 9
Strategic Report
The Board presents its Strategic Report on the Group for the year ended 30 June 2020.
Principal activities
Aeorema Limited trading as Cheerful Twentyfirst is a live events agency with film capabilities
that specialises in devising and delivering corporate communication solutions. Eventful
Limited is a consultative, high-touch service, assisting clients with venue sourcing, event
management and incentive travel.
Business review
The results for the year show revenue was £5,475,425 (2019: £6,765,280), operating loss
pre-exceptional items was £175,043 (2019: operating profit pre-exceptional items of
£384,483) and loss before taxation was £217,924 (2019: profit before taxation of £382,244).
The Group had net assets of £1,699,799 at the year-end (2019: £1,914,384) and net current
assets of £978,484 (2019: £1,509,388).
During the eight month period prior to the outbreak of the coronavirus, the Group continued
to deliver large-scale events, including two highly successful events for new clients in
January 2020, and produce films for both existing and new clients from a variety of different
industry sectors using the Group’s creative expertise. The Group was significantly affected
by the impact of the COVID-19 pandemic. The international lockdowns, restrictions on
national and international travel and social distancing measures imposed by Governments
worldwide led to the cancellation and postponement of all planned events between March
and June 2020, historically the Group’s busiest and most profitable months during the
financial year.
Despite COVID-19 preventing the Group delivering any live face-to-face events during
March to June 2020, the Group successfully adapted its services and delivered several
virtual events during the period. The Group is keen to continue providing this service as an
alternative while the COVID-19 pandemic is ongoing, and has successfully won several new
virtual events to be delivered in the new financial year.
The Group also hired a new Director of Strategy in May 2020. This has proved to be a highly
successful appointment, with the Director of Strategy winning several new clients, including
a large multi-national technology firm.
On 23 March 2020 Aeorema Communications plc acquired 100% of the share capital in
Eventful Limited. When analysing the benefits of the acquisition, the Board considered there
to be significant opportunities for cross-selling between Aeorema Limited and Eventful
Limited. These cross-selling opportunities expected when making the acquisition have
proved correct, with Aeorema Limited pitching and winning events for Eventful Limited
clients. Despite the challenges created by the COVID-19 pandemic, Eventful Limited has
successfully vacated its old office in South London and moved to Aeorema’s offices in
Central London, as well as integrating the finance, marketing and management operations
in an attempt to achieve synergies and reduce costs.
1 0
Strategic Report Continued
The Group has used the support provided by the UK government, including the Coronavirus
job retention scheme and tax deferrals, while also reducing overheads to maintain a strong
cash position despite the impact of COVID-19 on the business during the latter months of the
financial year. Despite the new clients and virtual events the Group has won, the challenges
created by the social and economic impact of COVID-19 remain severe. The Board recognises
the challenges facing the Group, monitoring the situation on a daily basis and is prepared to
reduce overheads further should this become necessary.
Key performance indicators
Year
Revenue
Operating (loss) /
profit pre-exceptional items
(Loss) / profit before taxation
2020
£
2019
£
2018
£
2017
£
5,475,425
6,765,280
4,820,167
4,156,592
(175,043)
(217,924)
384,483
382,244
299,735
61,629
258,453
247,750
The Group experienced a 19% decrease in revenue during the year. This was as a
consequence of the COVID-19 pandemic. Up until March 2020, the Group was experiencing
a highly successful financial year, with several live events booked for June 2020. However,
the outbreak of COVID-19 led to the cancellation of all events, except a few which became
virtual events, between March and June.
Film revenue dropped by 12% in comparison with the previous year. During the lockdown
members of the moving image department continued to deliver film production and
editing services, largely unaffected by the impact of COVID-19. However, the significant fall
in revenue was due to the cancellation of a large proportion of the Group’s events between
March and June 2020, for which the moving image department would have produced and
edited film content.
Eventful Limited experienced a 17% decrease in revenue, compared with the previous year.
The fall in revenue was partly a consequence of the COVID-19 pandemic and the subsequent
cancellation and postponement of events between March and June 2020. The decrease
in revenue was also due to higher than usual revenue in the previous year.
The shift from an operating profit pre-exceptional items and profit before taxation for the
year ended 30 June 2019 to an operating loss pre-exceptional items and the loss before
taxation for the year ended 30 June 2020 is a consequence of the COVID-19 pandemic and
its impact on the Group’s ability to continue delivering live events.
AEOREMA COMMUNICATIONS PLC
1 1
Strategic Report Continued
Cashflows
Net cash outflow from operating activities was £99,006 compared with a net cash inflow
of £981,846 for the year ended 30 June 2019. The cash position decreased by £489,944 to
£1,721,217 (2019: £2,211,161). The decrease in cash and cash equivalents at the year-end
was due to the impact of the global COVID-19 pandemic and subsequent loss of revenue
between March and June 2020 as a consequence of the outbreak.
Capital expenditure
Total capital expenditure, including expenditure on tangible assets, was £61,400 compared
with £48,731 for the year ended 30 June 2019.
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 23 to the financial statements.
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.
1 2
Strategic Report Continued
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 an adverse effect
on the Group’s performance. Further details of risks, uncertainties and financial instruments
are contained in note 26.
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
16 October 2020
AEOREMA COMMUNICATIONS PLC
1 3
Directors’ Report
The directors present their annual report and financial statements for the year ended 30
June 2020. 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 2019:
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
As a consequence of the ongoing COVID-19 pandemic, the Board have decided that no
final dividend will be paid to the shareholders. It is the Board’s intention to return to paying
dividends as soon as possible.
Financial instruments
Details of financial instruments are given in note 26 to the financial statements.
Shareholdings
At 16 October 2020, 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
S Perring
Barnard Nominees Ltd
B Smith
M Lauber
Number
of shares
1,895,000
481,010
140,000
80,000
Number
of shares
1,297,292
521,807
474,666
434,666
300,000
280,000
Percentages
held
20.6
5.2
1.5
0.9
Percentages
held
14.0
5.6
5.1
4.7
3.2
3.0
1 4
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.
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.
AEOREMA COMMUNICATIONS PLC
1 5
Directors’ Report Continued
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.
Section 172(1) of the Companies Act 2006
The Directors believe that they have effectively implemented their duties under section
172 of the Companies Act 2006. The Company has considered the long-term strategy of the
business below and consider that this strategy will continue to deliver long term success
to the business and its stakeholders.
The Group is committed to maintaining an excellent reputation and strives to achieve high
standards. We are highly selective about which co-contractors and freelancers are used to
deliver best value while maintaining an awareness of the environmental impact of the work
that they do and strive to reduce their carbon footprint.
The Directors recognise the importance of wider stakeholders in delivering their strategy
and achieving sustainability within the business. The main stakeholders in the company
are considered to be the employees, suppliers and customers. Their importance to the
business is considered below in the Corporate Governance Statement.
In ensuring that all our stakeholders are considered as part of every decision process
we believe we act fairly between all members of the Company.
On behalf of the Board
On behalf of the Board
S Haffner
Director
16 October 2020
1 6
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.
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 companies
(Aeorema Limited, Eventful Limited and Cheerful Twentyfirst, Inc.) 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, as evidenced by the acquisition
of Eventful Limited during the year. 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.
AEOREMA COMMUNICATIONS PLC
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Corporate Governance Statement Continued
The business is focused on building strong relationships with clients, staff, suppliers and
freelancers. 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
updates 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 skillsets 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.
1 8
Corporate Governance Statement Continued
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. 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 review the full year and interim financial statements, consider
the impact of new accounting standards under IFRS on the Company’s financial statements,
as well as the implications of any significant events or circumstances that occur in the
accounting period. The Audit Committee review the Company’s financial performance
throughout the year and monitor the integrity of any formal market announcements. They
also monitor the Company’s internal financial controls, ensuring all internal financial controls
and risk management systems are effective, and suggest improvements where necessary.
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. This involves setting and approving the performance measures
on which the pay scales are based. Richard Owen chairs the Remuneration Committee.
Details of Directors’ remuneration is set out in note 21 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 2020, 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 89%-100%. The Board’s attendance record for the year ended
30 June 2020 was as follows;
• Mike Hale – 100%
• Richard Owen – 89%
• Stephen Haffner – 100%
• Andrew Harvey – 100%
• Steve Quah – 100%
AEOREMA COMMUNICATIONS PLC
1 9
Corporate Governance Statement Continued
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;
(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. The Board also recognises that Richard Owen’s length of
service exceeds the QCA’s guidelines regarding independence but nevertheless believes that
he brings independent judgement to bear on all matters concerning the Company.
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.
2 0
Independent Auditor’s 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 2020 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 Statements of Cash 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 2020 and of its loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs
as adopted by the European Union;
the parent company financial statements have been 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.
AEOREMA COMMUNICATIONS PLC
2 1
Independent Auditor’s Report Continued
to the Members of Aeorema Communications plc
However, because not all future events or conditions can be predicted, this statement is not
a guarantee as to the company’s ability to continue as a going concern. For example, it is
difficult to evaluate all of the potential implications of the current COVID-19 outbreak on the
company’s trade, employees, customers, suppliers and the wider economy.
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 generates revenue facilitating live
events, film production and through event
management services.
Revenue is recognised based on the
satisfaction of performance obligations
and an assessment of when control is
transferred to customers. In applying this
policy, a certain amount of judgement is
required.
Incomplete or inaccurate income
recognition could have a material impact
on the Groups earnings and we identified
revenue recognition as a risk that required
particular audit attention.
How our audit addressed
the key audit matter
We performed analytical review and cut off
testing to ensure that revenue is properly
recognised and recorded in the correct
accounting period.
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.
2 2
Independent Auditor’s Report Continued
to the Members of Aeorema Communications plc
Key audit matter – group
Going concern
The Group was significantly affected by
the impact of the COVID-19 pandemic.
International lockdowns, restrictions
on travel and social distancing measures
have resulted in a significant loss of
revenue. Consequently we identified going
concern as a risk that required particular
audit attention.
How our audit addressed
the key audit matter
We reviewed detailed forecasts prepared by
management to support the going concern
assumption and reviewed underlying
assumptions for reasonableness.
We obtained a breakdown of revenue
included in those forecasts and verified a
sample of future income to documentary
evidence to assess the likelihood of that
income being received.
We compared expected future cash
requirements of the group to cash balances
and funding available at the time of
approval of these financial statements.
Acquisition of Eventful Limited
During the year the group acquired Eventful
Limited. Accounting for the acquisition was
identified as a risk that required particular
audit attention.
We reviewed documentation surrounding
the acquisition to confirm the appropriate
recognition of Investment and Goodwill in
the parent company and group respectively.
Right of use of asset (under IFRS16)
In the current financial year the group
applied IFRS16 leases for the first time.
IFRS16 introduces new requirements to
lease accounting removing the distinction
between operating and finance leases and
requiring the recognition of a right-of-use
and a lease liability for all leases, except
short-term leases and leases of low value.
We identified accounting for leases as a risk
that required particular audit attention.
We have reviewed the single entity financial
statements of Eventful Limited and the
accounting thereof in the consolidated
financial statements of Aeorema
Communications Plc.
We reviewed detailed workings and
disclosures prepared by management to
support the recognition of a right-to-use
asset and corresponding lease liability,
including the related prior year adjustment.
We reviewed lease agreements and
confirmed that the asset and liability
recognised are in line with expected costs
over the course of the lease agreements and
reviewed the basis of discount rate applied
in the net present value calculations.
There were no key audit matters in respect of the parent company.
AEOREMA COMMUNICATIONS PLC
2 3
Independent Auditor’s Report Continued
to the Members of Aeorema Communications plc
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 £19,000, 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 £1,000, as well as differences below those thresholds that, in our view, warranted
reporting on qualitative grounds.
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.
2 4
Independent Auditor’s Report Continued
to the Members of Aeorema Communications plc
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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on pages 13 and
14, 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/auditorsresponsibilites.
This description forms part of our auditor’s report.
AEOREMA COMMUNICATIONS PLC
2 5
Independent Auditor’s Report Continued
to the Members of Aeorema Communications plc
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
16 October 2020
2 6
Notes
2020
£
2019
£
2
3
4
5
6
7
5,475,425
6,765,280
(3,629,770)
(4,584,117)
1,845,655
2,181,163
82,601
–
(2,103,299)
(1,796,680)
(175,043)
384,483
(23,184)
–
(198,227)
384,483
556
611
(20,253)
(2,850)
(217,924)
382,244
20,497
(86,687)
(197,427)
295,557
10
10
(2.16920)p
3.26564p
N/A
3.22011p
Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2020
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Operating (loss) / profit pre–exceptional items
Exceptional items
Operating (loss) / profit post exceptional items
Finance income
Finance costs
(Loss) / profit before taxation
Taxation
Loss) / profit and total comprehensive income for the year
attributable to owners of the parent
(Loss) / 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 30 to 57 are an integral part of these financial statements.
AEOREMA COMMUNICATIONS PLC 2 7
Statement of
Financial Position
As at 30 June 2020
Non–current assets
Intangible assets
Property, plant and equipment
Right–of–use assets
Investments in subsidiaries
Deferred taxation
Total non–current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Total current liabilities
Non–current liabilities
Lease liabilities
Deferred taxation
Provisions
Total non–current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Other reserve
Capital redemption reserve
Retained earnings
Group
2020
£
Notes
Company
2019
£
2020
£
2019
£
11
12
13
14
15
16
17
18
18
8
19
573,931
85,952
379,530
–
7,611
365,154
58,071
13,486
–
–
–
–
–
–
–
–
1,141,540
614,751
30,253
–
1,047,024
436,711
1,171,793
614,751
597,497
1,721,217
1,612,345
2,211,161
657,986
11,298
977,427
3,606
2,318,714
3,823,506
669,284
981,033
3,365,738
4,260,217
1,841,077
1,595,784
(1,186,670)
(2,223,027)
(191,136)
(88,397)
(85,070)
(68,490)
(16,475)
(74,616)
–
–
–
–
(1,340,230)
(2,314,118)
(191,136)
(88,397)
(300,689)
–
(25,020)
–
(7,529)
(24,186)
(325,709)
(31,715)
(1,665,939)
(2,345,833)
–
–
–
–
–
–
–
–
–
–
1,699,799
1,914,384
1,649,941
1,507,387
20
1,154,750
1,131,313
1,154,750
1,131,313
9,876
16,650
81,358
257,812
179,353
7,063
16,650
34,261
257,812
467,285
9,876
16,650
81,358
257,812
129,495
7,063
16,650
34,261
257,812
60,288
Equity attributable to owners of the parent
1,699,799
1,914,384
1,649,941
1,507,387
The notes on pages 30 to 57 are an integral part of these
financial statements.
The profit for the financial year of the holding company
was £159,712 (2019: £68,878).
The financial statements were approved and authorised
by the board of directors on 16 October 2020 and were
signed on its behalf by
A Harvey, Director
Company Registration No. 04314540
S Haffner, Director
2 8
Consolidated Statement of
Changes in Equity
For the year ended 30 June 2020
Company
Share capital
£
Share
premium
£
Merger
reserve
£
At 30 June 2018
1,131,313
7,063
16,650
IFRS 16 adjustments
–
–
–
Adjusted balance
at 1 July 2018
Comprehensive
income for the year,
net of tax
Dividends paid
Share–based
payment
1,131,313
7,063
16,650
–
–
–
–
–
–
–
–
–
Other
reserve
£
Capital
redemption
reserve
£
Retained
earnings
£
Total equity
£
–
–
–
–
–
34,261
257,812
249,829
1,662,667
–
(10,222)
(10,222)
257,812
239,607
1,652,445
–
–
–
295,557
295,557
(67,879)
(67,879)
–
34,261
At 30 June 2019
1,131,313
7,063
16,650
34,261
257,812
467,285
1,914,384
Comprehensive
income for the year,
net of tax
Dividends paid
Share–based
payment
Share issue
–
–
–
–
–
–
23,437
2,813
–
–
–
–
–
–
47,097
–
–
–
–
–
(197,427)
(197,427)
(90,505)
(90,505)
–
–
47,097
26,250
At 30 June 2020
1,154,750
9,876
16,650
81,358
257,812
179,353
1,699,799
The prior year adjustment relating to the first time adoption of IFRS 16 is explained on page
35 of these financial statements.
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 23.
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 30 to 57 are an integral part of these financial statements.
AEOREMA COMMUNICATIONS PLC 2 9
Company Statement of
Changes in Equity
For the year ended 30 June 2020
Company
Share capital
£
Share
premium
£
Merger
reserve
£
At 30 June 2018
1,131,313
7,063
16,650
Comprehensive
income for the year,
net of tax
Dividends paid
Share-based
payment
–
–
–
–
–
–
–
–
–
Other
reserve
£
Capital
redemption
reserve
£
Retained
earnings
£
Total equity
£
–
–
–
34,261
257,812
59,289
1,472,127
–
–
–
68,878
68,878
(67,879)
(67,879)
–
34,261
At 30 June 2019
1,131,313
7,063
16,650
34,261
257,812
60,288
1,507,387
Comprehensive
income for the year,
net of tax
Dividends paid
Share-based
payment
Share issue
–
–
–
–
–
–
23,437
2,813
–
–
–
–
–
–
47,097
–
–
–
–
–
159,712
159,712
(90,505)
(90,505)
–
–
47,097
26,250
At 30 June 2020
1,154,750
9,876
16,650
81,358
257,812
129,495
1,649,941
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 23.
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 30 to 57 are an integral part of these financial statements.
Statement of
Cash Flows
For the year ended 30 June 2020
Net cash flow from operating activities
Cash flows from investing activities
Payment for Acquisition of Subsidiary, net of cash acquired
Finance income
Purchase of intangible assets
Purchase of property, plant and equipment
Repayment of leasing liabilities
Dividends received by the Company
3 0
Notes
25
6
11
12
Group
2020
£
2019
£
(99,006)
981,846
(128,331)
556
(10,000)
(61,400)
(101,258)
–
611
–
(48,731)
(91,000)
Cash (used) / generated in investing activities
(300,433)
(139,120)
Cash flows from financing activities
Dividends paid to owners of the Company
Cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(90,505)
(67,879)
(90,505)
(67,879)
(489,944)
774,847
2,211,161
1,436,314
1,721,217
2,211,161
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
Group
2020
£
2019
£
1,721,217
2,211,161
Company
2020
£
11,298
Notes
16
1,721,217
2,211,161
11,298
2019
£
3,606
3,606
The notes on pages 30 to 57 are an integral part of these financial statements.
AEOREMA COMMUNICATIONS PLC 3 1
Notes to the Consolidated
Financial Statements
For the year ended 30 June 2020
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 COVID-19 pandemic had a significant impact on the Group. The imposition of
international lockdowns and subsequent disruption caused to international travel meant
that all physical events between March and June 2020 were either postponed or cancelled.
Like most companies within the events industry, both Aeorema Limited and Eventful Limited
had the majority of their jobs either cancelled or postponed until later in 2020 or early 2021.
Aeorema Limited successfully held a few virtual events for a key client as a substitute for
the physical events that could no longer take place, and the moving image department
continued to produce and edit films remotely throughout the lockdown.
In response to the UK government’s introduction of the Coronavirus job retention scheme
the Group furloughed several employees (see note 3) and arranged deferrals and payment
plans with HMRC for several outstanding tax liabilities.
Although the COVID-19 pandemic resulted in all the Group’s live events being cancelled,
including Cannes Lions, the pandemic has created opportunities for the Group to expand
its offering to clients. The Group maintains its core businesses (physical events and
exhibitions, moving image and venue sourcing), however, the Group has also shifted its
focus towards providing virtual events via online platforms for clients. The impact of the
COVID-19 pandemic on social distancing and international travel may be long-lasting, and
the Group has successfully moved towards providing virtual events, delivering several virtual
events post year end for both existing and new clients, with more in the pipeline, as well as
launching a new online platform which can be used by clients to host their virtual events.
The Group has also expanded its operations by launching a new US subsidiary, Cheerful
Twentyfirst Inc. The Group has delivered several events for US based clients and UK based
clients with US based subsidiaries. The opening of a US subsidiary offers the Group’s US
based clients and new potential US clients the opportunity to work with a company that
operates in the same time zone and can therefore provide an improved service and uses
the same currency. The opening of a new office in the US is already proving successful with
several new briefs received from US based clients since the launch post year end.
3 2
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
After reviewing the Group’s detailed forecasts for the next financial year, other medium term
plans and considering the risks outlined in note 26, 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 2019. Their adoption has not had a material impact
on the financial statements:
•
IFRS 9 ‘Financial Instruments’, effective 1 January 2019;
• Annual Improvements to IFRS Standards 2015 – 2017 Cycle (effective 1 January 2019);
•
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) (effective
1 January 2020);
• COVID-19-Related Rent Concessions (Amendment to IFRS 16) (Effective 1 June 2020).
The following new standards, amendments to standards and interpretations have been
applied for the first time from 1 July 2019 and their adoption have had a material impact
on the financial statements:
•
IFRS 16 ‘Leases’, effective 1 January 2019 (see page 35 for more details).
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 Company’s accounting periods beginning on or
after 1 July 2020 have been adopted early.
The following standards and amendments are not yet applied at the date of authorisation
of these financial statements:
• 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.
AEOREMA COMMUNICATIONS PLC 3 3
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary
undertakings drawn up to 30 June 2020. 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.
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 the 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.
3 4
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
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.
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.
AEOREMA COMMUNICATIONS PLC 3 5
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
Intangible assets – other
Intangible assets are stated in the financial statements at cost less accumulated
amortisation and any impairment value. Amortisation is provided to write off the cost less
estimated residual value of intangible assets over its expected useful life (which is reviewed
at least at each financial year end), as follows:
Intellectual property
25% straight line
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 amortised assets still in use are retained in the financial statements.
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
Straight line over the life of the lease
(five years)
Fixtures, fittings and equipment
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.
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.
3 6
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
Investments
Fixed asset investments are stated at cost less provision for diminution in value.
Leases
In the current year, the Group, for the first time, has applied IFRS 16 Leases. IFRS 16
introduces new or amended requirements with respect to lease accounting. It introduces
significant changes to the lessee accounting by removing the distinction between operating
and finance leases and requiring the recognition of a right-of-use asset and a lease liability
at the lease commencement for all leases, except for short-term leases and leases of low
value assets. The impact of the adoption of IFRS 16 on the Company’s financial statements
is described below.
The date of initial application of IFRS 16 for the Company is 1 July 2019.
The Group has applied IFRS 16 using the full retrospective approach, with restatement of the
comparative information. The application of IFRS 16 has resulted in the profit before taxation
for the year ended 30 June 2019 increasing by £7,234 to £382,244 (previously £375,010). The
application of IFRS 16 has also resulted in the Group’s net assets decreasing by £2,988 to
£1,914,384 (previously £1,917,372).
IFRS 16 changes how the Group accounts for leases previously classified as operating leases
under IAS 17, which were off-balance-sheet.
Applying IFRS 16, for all leases (except as noted below), the Group:
a) recognises right-of-use assets and lease liabilities in the statement of financial position,
initially measured at the present value of future lease payments;
b) recognises depreciation of right-of-use assets and interest on lease liabilities in the
statement of profit or loss; and
c) separates the total amount of cash paid into a principal portion (presented within
financing activities) and interest (presented within operating activities) in the statement
of cash flows.
Lease incentives (e.g. free rent period) are recognised as part of the measurement of the right-
of-use assets and lease liabilities whereas under IAS 17 they resulted in the recognition of a
lease incentive liability, amortised as a reduction of rental expense on a straight-line basis.
Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36
Impairment of Assets. This replaces the previous requirement to recognise a provision
for onerous lease contracts.
For short term leases (lease term of 12 months or less) and leases of low-value assets (such
as photocopiers), the Group has opted to recognise a lease expense on a straight-line basis
as permitted by IFRS 16. This expense is presented within administrative expenses in the
consolidated statement of comprehensive income.
AEOREMA COMMUNICATIONS PLC 3 7
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
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
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.
3 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
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 23 to the financial statements.
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 9
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
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 2020 there is only a single reportable segment.
All revenue represents sales to external customers. Four customers (2019: five) are defined
as major customers by revenue, contributing more than 10% of the Group revenue.
Customer One
Customer Two
Customer Three
Customer Four
Major customers in the current year
Major customers in prior year
2020
£
1,336,172
841,905
701,353
585,636
2019
£
–
905,578
–
951,189
3,465,066
1,856,767
2,916,027
4,772,794
The geographical analysis of revenue from continuing operations by geographical location
of customer is as follows:
2020
2019
2020
2019
Geographical
market
Revenue
UK
£
UK
£
5,255,473
6,693,163
Europe
£
71,424
Europe
£
61,764
2020
Rest of the
World
£
2019
Rest of the
World
£
2020
Total
£
2019
Total
£
148,528
10,353
5,475,425
6,765,280
Revenue from contracts with customers
Other revenue
Total revenue
2020
£
2019
£
5,420,350
6,696,305
55,075
68,975
5,475,425
6,765,280
Contract assets and liabilities from contracts with customers have been recognised
as follows:
Deferred income
Accrued income
2020
£
293,281
49,890
2019
£
333,305
245,989
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 2020
3 Other income
Other income
Coronavirus job retention scheme government grant
4 0
2020
£
82,601
2019
£
–
During the year the Group received government grants under the UK government’s
coronavirus job retention scheme.
4 Operating profit
Operating profit is stated after charging or crediting:
Cost of sales
Depreciation of fixtures, fittings and equipment
Amortisation of intangible assets
Administrative expenses
Depreciation of right-of-use assets
(Profit) / 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
Interest on lease liabilities
Staff costs (see note 22)
5 Exceptional items
2020
£
2019
£
31,871
21,525
417
–
89,392
(726)
6,000
19,000
20,253
80,915
9,229
6,000
17,000
2,850
1,570,373
1,221,559
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
£23,184 (2019: £nil) related to the acquisition of Eventful Limited. This cost has been included
in the consolidated Statement of Comprehensive Income as an operating exceptional cost.
6 Finance income
Finance income
Bank interest received
2020
£
556
2019
£
611
AEOREMA COMMUNICATIONS PLC 41
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
7 Taxation
The tax charge comprises:
Current tax
Prior period adjustment
Current year
Deferred tax (see note 8)
Current year
2020
£
2019
£
–
(5,357)
2,288
74,616
(5,357)
76,904
(15,140)
(15,140)
9,783
9,783
Total tax charge in the statement of comprehensive income
(20,497)
86,687
Factors affecting the tax charge for the year
Profit / (loss) on ordinary activities before taxation from continuing operations
(217,924)
382,244
Profit / (loss) on ordinary activities before taxation multiplied by standard rate
of UK corporation tax of 19% (2019: 19%)
(41,406)
72,626
Effects of:
Non-deductible expenses
Prior period adjustment
Total tax charge
20,909
–
11,773
2,288
20,909
14,061
(20,497)
86,687
The Group has estimated losses of £375,762 (2019: £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 subsidiaries
Aeorema Limited and Eventful Limited, therefore no deferred tax asset has been
recognised in respect of this amount.
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
8 Deferred taxation
Property, plant and equipment temporary differences
Temporary differences
Tax losses
At 1 July
Transfer to Statement of Comprehensive Income
At 30 June
4 2
2020
£
(13,978)
(8,664)
30,253
2019
£
(8,555)
1,026
–
7,611
(7,529)
(7,529)
15,140
7,611
2,254
(9,783)
(7,529)
9 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.
10 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. In view of the
group loss for the year, options to subscribe for ordinary shares in the company are anti-
dilutive and therefore diluted earnings per share information is not presented.
The following reflects the income and share data used and dilutive earnings per
share computations:
Basic earnings per share
(Loss) / 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
2020
£
2019
£
(197,427)
295,557
9,101,356
9,050,500
1,020,000
1,020,000
10,121,356
10,070,500
AEOREMA COMMUNICATIONS PLC 4 3
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
11 Intangible fixed assets
Group
Cost
At 30 June 2018
At 30 June 2019
Acquisitions
At 30 June 2020
Impairment and amortisation
At 30 June 2018
At 30 June 2019
Charge for the year
At 30 June 2020
Net book value
At 30 June 2018
At 30 June 2019
At 30 June 2020
Goodwill
£
Intellectual
Property
£
Total
£
2,728,292
2,728,292
–
–
2,728,292
2,728,292
199,194
10,000
209,194
2,927,486
10,000
2,937,486
2,363,138
2,363,138
–
2,363,138
365,154
365,154
–
–
417
417
–
–
2,363,138
2,363,138
417
2,363,555
365,154
365,154
564,348
9,583
573,931
Goodwill arose for the Group on consolidation of its subsidiaries, Aeorema Limited and
Eventful Limited.
4 4
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
During the year the Company acquired 100% shareholding in Eventful Limited. The goodwill
on acquisition is formed as follows;
Assets acquired
Cash
Liabilities
Total acquired
Cash consideration
Share issue consideration
Contingent consideration
Total consideration
Goodwill
£
91,036
225,111
(35,649)
280,498
353,442
26,250
100,000
479,692
199,194
The Company incurred costs associated with the acquisition of Eventful Limited of £23,184.
These costs included legal and professional fees and stamp duty. These costs have
been included in the consolidated Statement of Comprehensive Income as an operating
exceptional cost (see note 5).
For the period post-acquisition Eventful Limited had revenue of £53,517 and a profit before
taxation of £11,223. For the year ended 30 June 2020 Eventful Limited had revenue of
£255,688 and a profit before taxation of £64,686.
Impairment – Aeorema Limited and Eventful Limited
Goodwill has been tested for impairment based on its future value in use resulting in the
carrying value above. The future value has been calculated on a discounted cash flow basis
using the 2020-21 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 is assumed that
revenue will return to pre-COVID-19 levels for the year ended 30 June 2022 and future growth
will be 2% for venue sourcing activities and 5% for event and moving image production
activities. Using these assumptions, which are based on past experience and future
expectations, there was no impairment in the year.
AEOREMA COMMUNICATIONS PLC 4 5
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
12 Property, plant and equipment
Group
Cost
At 30 June 2018
Additions
Disposals
At 30 June 2019
Additions
Acquisition of subsidiary
Disposals
At 30 June 2020
Depreciation
At 30 June 2018
Charge for the year
Eliminated on disposal
At 30 June 2019
Charge for the year
Eliminated on disposal
At 30 June 2020
Net book value
At 30 June 2018
At 30 June 2019
At 30 June 2020
Leasehold land
and buildings
£
Fixtures, fittings
and equipment
£
58,536
–
–
119,030
48,731
(29,112)
Total
£
177,566
48,731
(29,112)
58,536
138,649
197,185
–
–
–
59,591
1,809
(26,867)
59,591
1,809
(26,867)
58,536
173,182
231,718
58,536
–
–
58,536
–
–
58,536
–
–
–
81,986
21,525
(22,933)
80,578
31,871
(25,219)
87,230
37,044
58,071
85,952
140,522
21,525
(22,933)
139,114
31,871
(25,219)
145,766
37,044
58,071
85,952
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
13 Right-of-use assets
Group
Cost
At 30 June 2018
At 30 June 2019
Additions
Disposals
At 30 June 2020
Depreciation
At 30 June 2018
Charge for the year
At 30 June 2019
Charge for the year
Eliminated on disposal
At 30 June 2020
Net book value
At 30 June 2018
At 30 June 2019
At 30 June 2020
4 6
Leasehold
£
404,574
404,574
455,436
(404,574)
455,436
310,173
80,915
391,088
89,392
(404,574)
75,906
94,401
13,486
379,530
AEOREMA COMMUNICATIONS PLC
47
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
14 Non-current assets – Investments
Company
Cost
At 30 June 2018
Increase in respect of share-based payments
At 30 June 2019
Increase in respect of share-based payments
Acquisition of subsidiary
At 30 June 2020
Provision
At 30 June 2018
At 30 June 2019
At 30 June 2020
Net book value
At 30 June 2018
At 30 June 2019
At 30 June 2020
Shares in subsidiary
£
3,274,703
34,261
3,308,964
47,097
479,692
3,835,753
2,694,213
2,694,213
2,694,213
580,490
614,751
1,141,540
Holdings of more than 20%
The Company holds more than 20% of the share capital of the following companies:
Subsidiary undertakings
Aeorema Limited
Eventful Limited
Twentyfirst Limited (Dormant)
Country of
registration or
incorporation
Shares held
Class
England and Wales
Ordinary
England and Wales
Ordinary
England and Wales
Ordinary
%
100
100
100
The registered address of Aeorema Limited, Eventful Limited and Twentyfirst Limited
is 64 New Cavendish Street, London, W1G 8TB.
4 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
15 Trade and other receivables
Trade receivables
Related party receivables
Other receivables
Prepayments and accrued income
Group
2020
£
2019
£
306,198
1,156,689
Company
2020
£
–
2019
£
–
–
76,112
215,187
–
641,134
960,063
38,280
417,376
5,002
11,850
4,910
12,454
597,497
1,612,345
657,986
977,427
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 £157,239 (2019: £32,616) were past due but not impaired.
These amounts are still considered recoverable. The ageing of these trade receivables is
as follows:
Less than 90 days overdue
More than 90 days overdue
16 Cash at bank and in hand
Bank balances
Group
2020
£
33,712
123,527
157,239
Group
2020
£
2019
£
1,721,217
2,211,161
Company
2020
£
11,298
1,721,217
2,211,161
11,298
2019
£
9,339
23,277
32,616
2019
£
3,606
3,606
AEOREMA COMMUNICATIONS PLC 4 9
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
17 Trade and other payables
Trade payables
Related party payables
Taxes and social security costs
Other payables
Accruals and deferred income
Group
2020
£
2019
£
209,770
1,258,646
Company
2020
£
6,001
2019
£
7,043
–
67,355
67,355
–
381,777
113,582
481,541
388,869
–
59,677
100,000
515,835
17,780
–
–
13,999
88,397
1,186,670
2,223,027
191,136
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.
18 Leases
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Lease liabilities
Current
Non-current
Group
2020
£
2019
£
379,530
13,486
379,530
13,486
85,070
300,689
16,475
–
385,759
16,475
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
19 Provisions
Group
At 1 July 2019
Charged to statement of comprehensive income
At 30 June 2020
Current
Non-current
5 0
Leasehold
dilapidations
£
Total
£
24,186
24,186
834
834
25,020
25,020
–
25,020
25,020
–
25,020
25,020
Leasehold dilapidations relate to the estimated cost of returning a leasehold property
to its original state at the end of the lease in accordance with the lease terms. The main
uncertainty relates to estimating the cost that will be incurred at the end of the lease.
20 Share capital
Authorised
28,000,000 Ordinary shares of 12.5p each
At 1 July 2018
At 30 June 2019
At 30 June 2020
2020
£
2019
£
3,500,000
3,500,000
Number
Ordinary
shares
£
9,050,500
1,131,313
9,050,500
1,131,313
9,238,000
1,154,750
During the year 187,500 shares were issued as part of the overall consideration for the
acquisition of Eventful Limited.
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 23 for details of share options outstanding.
AEOREMA COMMUNICATIONS PLC
51
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
21 Directors’ emoluments
The remuneration of directors of the Company is set out below.
Salary, fees,
bonuses and ben-
efits in kind
2020
£
Salary, fees,
bonuses and
benefits in kind
2019
£
Pensions
2020
£
Pensions
2019
£
13,333
14,250
19,333
146,050
112,643
20,000
15,000
20,000
122,004
91,352
–
–
–
6,469
5,219
305,609
268,356
11,688
–
–
–
925
1,533
2,458
Total
2020
£
13,333
14,250
19,333
152,519
117,862
Total
2019
£
20,000
15,000
20,000
122,929
92,885
317,297
270,814
The share options held by directors who served during the year are summarised below:
Grant
date
25 April 2013
Number
awarded
300,000
Exercise
price
16.50p
Earliest
exercise date
Expiry
date
25 April 2016
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 24).
M Hale
S Haffner
R Owen
S Quah
A Harvey
Name
S Quah
S Quah
A Harvey
5 2
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
22 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
2020
Number
28
2019
Number
21
2020
Number
5
2019
Number
5
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
2020
£
2019
£
1,333,194
1,068,710
159,082
105,471
31,000
47,097
13,117
34,261
Company
2020
£
46,917
2019
£
55,000
–
–
–
–
–
–
1,570,373
1,221,559
46,917
55,000
23 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
29.0p
26.0p
Exercise period
From
To
25 April 2016
24 April 2023
17 November 2020
22 August 2028
14 June 2022
14 June 2029
Number of
options
2020
300,000
600,000
120,000
Number of
options
2019
300,000
600,000
120,000
1,020,000
1,020,000
AEOREMA COMMUNICATIONS PLC 5 3
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
Details of the number of share options and the weighted average exercise price outstanding
during the year are as follows:
Outstanding at beginning of the year
Granted during the year
Outstanding at end of the year
Exercisable at the end of the year
Weighted
average
exercise price
2020
£
0.25
-
0.25
0.17
Number of
options
2020
1,200,000
-
1,020,000
300,000
Weighted
average
exercise price
2019
£
0.17
0.29
0.25
0.17
Number of
options
2019
300,000
720,000
1,020,000
300,000
The exercise price of options outstanding at the year-end was £0.250 (2019: £0.250) and their
weighted average contractual life was 6.6 years (2019: 7.6 years).
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
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
Grant date
Model used
Share price at grant date
Exercise price
Contractual life
Risk free rate
Expected volatility
Expected dividend rate
Fair value option
5 4
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
2020
£
2019
£
47,097
34,261
24 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
2020
£
2019
£
641,134
960,063
67,355
67,355
The company received dividends during the year of £300,000 (2019: £200,000) from its
subsidiary, Aeorema Limited. The company transferred a VAT receivable of £22,977 (2019:
£22,810) 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 £27,667 (2019: £40,000).
Aeorema Limited paid expenses totalling £503,734 (2019: £121,718) on behalf of Aeorema
Communications plc during the year.
During the year, Aeorema Limited made a net transfer of cash of £110,505 to Aeorema
Communications plc (2019: £82,879).
AEOREMA COMMUNICATIONS PLC 5 5
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
The compensation of key management (including directors) of the Group is as follows:
Short-term employee benefits
Post-employment benefits
2020
£
2019
£
338,293
294,997
11,689
2,458
349,982
297,455
The share options held by directors of the Company are disclosed in note 21. During the
year, a charge of £41,556 (2019: £33,761) 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
2020
£
14,250
14,700
2019
£
15,000
11,850
28,950
26,850
At the year end, the Group had an outstanding trade payable balance to Harris and Trotter
LLP of £5,640 (2019: £4,500).
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
25 Cash flows
Cash flows from operating activities
Profit / (loss) before taxation
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible fixed assets
Dividends received by the Company
Loss on disposal of fixed assets
Share-based payment expense
Finance income
Interest on lease liabilities
Increase / (decrease) in trade and other payables
(Increase) / decrease in trade and other receivables
Taxation paid
Cash generated / (used) from operating activities
5 6
Group
2020
£
2019
£
(217,924)
382,244
31,871
89,392
417
–
1,648
47,097
(556)
20,253
21,525
80,915
–
–
6,179
34,261
(611)
2,851
(27,802)
527,364
(1,075,254)
972,235
1,014,847
(506,053)
(10,797)
(11,700)
(99,006)
981,846
AEOREMA COMMUNICATIONS PLC
5 7
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
26 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
2020
£
Company
2019
£
2020
£
2019
£
432,202
1,487,328
641,134
960,063
1,721,217
2,211,161
11,298
3,606
–
–
1,141,540
614,751
2,153,419
3,698,489
1,793,972
1,578,420
734,131
1,318,322
173,356
188,260
206,716
17,780
74,398
13,999
922,391
1,525,038
191,136
88,397
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 2020 was £306,198 (2019: £1,156,689). 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 £1,367,633 (2019: £1,960,169).
5 8
Notes to the Consolidated
Financial Statements Continued
For the year ended 30 June 2020
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 £1,721,217 (2019:
£2,211,161). 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 £1,699,799
(2019: £1,914,384).
27 Pension costs defined contribution
The Group makes pre-defined contributions to employees' personal pension plans.
Contributions payable by the Group for the year were £31,000 (2019: £13,117). At the end of
the reporting period £5,608 (2019: £1,605) of contributions were due in respect of the period.
28 Dividends
On the 12 December 2019 a final dividend of 1 pence per share (total dividend £90,505) was
paid to holders of fully paid ordinary shares.
In respect of the current year, and as a consequence of the ongoing COVID-19 pandemic,
the Board have decided that no final dividend will be paid to shareholders.
29 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 2020 the
Company had no potential liability under the terms of the registration.
30 Post balance sheet events
On 1 July 2020 Cheerful Twentyfirst, Inc., a wholly owned subsidiary of Aeorema
Communications plc, was incorporated in the United States of America.
31 Control
There is no overall controlling party.
AEOREMA COMMUNICATIONS PLC 5 9
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
6 0
This page has been intentionally left blank
AEOREMA COMMUNICATIONS PLC 61
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.
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 35 years’ accounting experience having qualified
as a chartered accountant in 1989. He has spent over 30 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 was formerly 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.
6 2
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 brand experiences, Steve
has produced over 400 corporate productions and numerous live events
for some of the world’s largest brands including Vodafone, Google, KPMG,
Clifford Chance, LG, Disney, BBC, 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, Mars Wrigley, White & Case, GE Alstom, Oliver Wyman, PubMatic and
Babcock. Andrew currently oversees all aspects of the agency’s operations.
AEOREMA COMMUNICATIONS PLC 6 3
Notice of Annual General Meeting
Aeorema Communications plc (Incorporated and registered in England and Wales with company number 4314540)
Set out below is the notice (the "Notice") of the 2020
annual general meeting (the "2020 AGM") of Aeorema
Communications plc (the "Company"). At the time of the
publication of the Notice, restrictions on public gatherings
remain in place as a consequence of the ongoing COVID-19
pandemic. Accordingly the directors of the Company
(the "Directors") believe it is in the best interests of the
Company and its shareholders to hold the 2020 AGM as a
closed meeting with a minimum number of shareholders
present. The Company will ensure that the legal
requirements to hold the 2020 AGM are satisfied through
the attendance of a minimum number of Directors and/
or employee shareholders and the format of the 2020 AGM
will be purely functional. Unfortunately this means that
shareholders cannot be admitted to the 2020 AGM.
NOTICE IS HEREBY GIVEN that the Annual General
Meeting of Aeorema Communications plc will be held as a
closed meeting on 1 December 2020 at 10.00 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 2020.
2. To re-appoint Michael Hale as a Director of the
Company, who retires in accordance with Article 122 of
the Company’s Articles of Association.
However, the Company strongly encourages shareholders
to vote on the resolutions to be put to the 2020 AGM
by following the instructions set out below in the
notes to the Notice. Shareholders are urged to
appoint the Chairman as the proxy, as any other
appointed person will not be able to access, attend
or participate in the Annual General Meeting. As
shareholders will not be able to exercise their usual
right to ask questions at the Annual General Meeting,
the Company has put in place measures to accept and
respond to questions which shareholders may have
relating to the business of the Annual General Meeting.
Further details of these arrangements are set out in the
notes at the end of the Notice.
3. To re-appoint Hazlewoods LLP as auditors of the
Company and to authorise the Directors to fix their
remuneration.
As Special Business to consider and, if thought fit, pass
the following resolutions of which Resolution 4 will be
proposed as an Ordinary Resolution and Resolutions 5
and 6 will be proposed as Special Resolutions:
4. That the directors of the Company (the "Directors") be
generally and unconditionally authorised pursuant to
and in accordance with section 551 of the Companies
Act 2006 (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 £384,500, 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 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 4
5. That, subject to the passing of Resolution 4 set out
above, the Directors 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 4
above, as if section 561(1) of the Act did not apply to
such allotment provided this power shall be limited to:
6. 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 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 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 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 £115,475, 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 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 shall
be entitled to allot equity securities pursuant to any
such offers or agreements as if the power conferred
hereby had not expired.
(i) the maximum number of Ordinary Shares hereby
authorised to be purchased is 923,800 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 2021 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: 9 November 2020
AEOREMA COMMUNICATIONS PLC 6 5
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 are charged at the standard
geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the
applicable international rate. We 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 10.00 a.m. on 29 November 2020. 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
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.
6 7
Explanatory Notes to the
Notice of Annual General Meeting
This year, six Resolutions are proposed at the Annual
General Meeting and the purpose of each of the
Resolutions is as follows:
Ordinary Business
Resolution 1: The Accounts and Reports
The Directors will present their report and the audited
financial statements for year ended 30 June 2020, together
with the auditors’ report thereon.
Resolution 2: Re-election of retiring director
The articles of association of the Company (the "Articles")
require that a proportion of the Directors are to retire at
each Annual General Meeting. Accordingly Michael Hale is
therefore retiring and offering himself for re-appointment.
Resolution 3: Appointment of Auditors
The Company is required to appoint auditors at each
Annual General Meeting at which accounts are laid
before shareholders, to hold office until the next such
meeting. This Resolution proposes that Hazlewoods LLP
be re-appointed as auditors for the current year and to
authorise the Directors to fix their remuneration.
Special Business
Resolution 4: Directors’ power to allot securities
Section 549 of the Companies Act 2006 (the "Act")
stipulates that the Directors cannot allot shares or rights
to subscribe for shares in the Company (other than the
shares allotted in accordance with an employee share
scheme) unless they are authorised to do so by the
shareholders in a general meeting. The Directors’ general
authority to allot shares was granted at the annual general
meeting held in 2019 and is due to expire at the conclusion
of the Annual General Meeting in 2020. Resolution 4
seeks a new general authority from shareholders for
the Directors to allot ordinary shares up to an aggregate
nominal value of £384,500 (being 3,076,000 ordinary
shares), representing approximately 33.29 per cent of the
nominal value of the issued ordinary share capital of the
Company as at the date of the notice. The Directors do
not have any present intention of exercising this authority,
but they consider it desirable that the specified amount
of ordinary shares be available for issue so that they can
more readily take advantage of possible opportunities.
Unless renewed, revoked, varied or extended, this
authority will expire at the earlier of the date which is
15 months from the passing of this resolution and the
conclusion of the next Annual General Meeting of the
Company.
Resolution 5: Disapplication of pre-emption rights
If the Directors wish to allot any shares for cash in
accordance with the authority proposed in Resolution
4, the Act requires that new shares must generally
be offered first to shareholders in proportion to their
existing holdings. These are the pre-emption rights of
shareholders. In certain circumstances, it may be in the
interests of the Company for the Directors to be able to
allot some shares for cash without having to offer them
first to existing shareholders.
In line with common practice, Resolution 5 therefore
seeks approval for an authority to empower the Directors
to allot shares for cash other than in accordance with the
statutory pre-emption rights, in connection with a rights
issue and other pre-emptive offers and otherwise up to
a maximum nominal amount of £115,475 (being 923,800
ordinary shares) representing approximately 10 per cent of
the nominal value of the issued ordinary share capital of
the Company.
In addition, there are legal, regulatory and practical
reasons why it may not always be possible to issue
new shares under a rights issue to some shareholders,
particularly those resident outside the UK. To cater for
this, this Resolution also permits the Directors to make
appropriate exclusions or arrangements to deal with such
difficulties.
Unless renewed, revoked, varied or extended, this
authority will expire at the earlier of the date which is
15 months from the passing of this resolution and the
conclusion of the next Annual General Meeting of the
Company.
Resolution 6 – Share buybacks
This resolution is to renew the authority for the Directors
to purchase the Company’s own ordinary shares under
6 8
certain stringent conditions. This resolution specifies
the maximum number of ordinary shares which may
be acquired (being 923,800 ordinary shares which are
approximately 10 per cent of the Company’s issued
ordinary share capital as at 6 November 2020) and the
maximum and minimum prices at which shares may be
bought. The Directors do not have any present intention
of using the authority which will be used only when the
Directors consider that it would be in the best interests
of the shareholders generally and the effect would be to
enhance earnings per share. Shares purchased will be
cancelled or held as treasury shares as defined in section
724(5) of the Act.
At 6 November 2020, no treasury shares were held by the
Company.
The 2020 AGM will be held as a closed meeting with
a minimum number of shareholders present. The
Company will ensure that the legal requirements
to hold the meeting are satisfied through the
attendance of a minimum number of Directors and/
or employee shareholders and the format of the
meeting will be purely functional. Shareholders
will therefore not be admitted to the 2020 AGM.
The Company therefore strongly encourages
Shareholders to vote on the resolutions to be put
to the 2020 AGM by completing a form of proxy
in accordance with the instructions set out in the
Notice. Shareholders are urged to appoint the
Chairman as their proxy, as any other appointed
person will not be able to access, attend or
participate in the Annual General Meeting.
Questions
Normally, any shareholder attending an Annual General
Meeting of the Company would have the right to ask
questions that relate to the business being dealt with at
the Annual General Meeting. However, shareholders will
not be permitted to attend this year's Annual General
Meeting and so should a shareholder have such a question
that they would have raised at the Annual General
Meeting, we ask that they send it by e-mail to questions@
aeorema.com prior to 10.00 a.m. on 29 November 2020.
The Company will publish these questions (other than
any questions which the Directors consider to be frivolous
or vexatious, or which cannot be addressed for legal or
regulatory reasons) and the answers on the Company's
website as soon as practicable after the Annual General
Meeting.
Recommendation
The Directors believe that the proposals in Resolutions
1 to 6 are in the best interests of the Company and its
shareholders as a whole. Accordingly, the Directors
recommend that shareholders vote in favour of each
Resolution as they intend to do in respect of their own
beneficial shareholdings.
AEOREMA COMMUNICATIONS PLC 6 9
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