Company Number: 03882621
ULTIMATE SPORTS GROUP Plc
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2018
Final
Company information
Chairman’s statement and Chief Executive’s review
Board of directors
Directors’ report
Strategic report
Corporate governance statement
Statement of directors’ responsibilities
Independent auditors’ report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Company statement of financial position
Company statement of changes in equity
Consolidated statement of cash flows
Company statement of cash flows
Notes to the group and parent company financial statements
Annual general meeting notice, notes and proxy form
Pages
1
2
3
4
5-6
7-12
13
14-16
17
18
19
20
21
22
23
24-42
43-46
Executive chairman
Chief executive
Finance director
Non executive director
Non executive director
Registered office
30 City Road
London EC1Y 2AB
Company website
www.ultimatesportsgroup.me
Nominated advisor
Cantor Fitzgerald Europe
One Churchill Place
London
E14 5RB
Brokers
Cantor Fitzgerald Europe
One Churchill Place
London
E14 5RB
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham, Surrey GU9 7DR
Company information
Directors
R L Owen
G Simmonds FCA
D Hillel FCA
J Zucker
D J Coldbeck
Secretary
D Hillel FCA
Company number
03882621
Bankers
Barclays Bank Plc
27 Soho Square
London
W1D 3QR
Auditors
Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
Gloucestershire
GL50 3AT
Legal advisors
Howard Kennedy LLP
No 1. London Bridge
London
SE1 9AJ
Page 1
Chairman’s statement and Chief Executive’s review
Ultimate Sports Group Plc (“USG” or the “Company”)
We are reporting a total comprehensive loss from continuing activities of £144,485 before tax against a total
comprehensive loss before tax and discontinued activities for the prior year of £780,192. There were no discontinued
activities in the year ended 31 December 2018, whilst in the prior year there was a profit from discontinued activities
after tax of £53,567. USG‘s consolidated cash balances as at 31 December 2018 were £535,329 (2017- £129,611) The
directors are not recommending the payment of a dividend.
FUNDRAISE
As set out in the circular to shareholders issued in February 2018, the Company raised £537,500 (before legal and other
professional expenses) by the issue of 10,750,000 new shares at 5p per share following approval obtained from
shareholders at the General Meeting in March 2018.
SUBSTANTIAL SHAREHOLDERS
The Company welcomes the involvement of Mr Richard Bernstein as a strategic shareholder following on from the
fundraising concluded in March 2018. The Company also entered into an agreement with Mr Bernstein pursuant to
which he will seek to introduce the Company to potential investment or acquisition opportunities. To date Mr Bernstein
has carried out and continues to undertake initial due diligence on potential introductions at his own expense with
follow up work undertaken by the Company.
PANTHEON LEISURE PLC (“PANTHEON “)
USG holds 85.87% of the issued share capital of Pantheon which in turn owns 100% of the operating business of a Sport
and Leisure division which trades as Sport in Schools Ltd and The Elms Sport in Schools (“ESS”).
Pantheon as a group made a profit of £32,817 for the year ended 31 December 2018 (2017 (profit - £2,950).
SPORT IN SCHOOLS LIMITED
On a turnover of £1,546,733 (2017- £1,368,710) ESS contributed a much- improved divisional profit of £100,754 (2017 -
£28,255). The improved result is a combination of increased turnover by virtue of additional schools engaged, increased
income from existing schools due to an increase in government subsidies, improved weather conditions resulting in less
working days lost in 2018 and tighter control of overheads.
CORPORATE GOVERNANCE CODE
In accordance with changes to AIM Rules regarding corporate governance our Annual Report & Accounts and Company
website reflect compliance with (and any departures from) the Guidance set out in the QCA Corporate Governance
Code.
PROSPECTS
We continue to pursue, from a firm financial base, a strategy of developing the business of ESS and to carefully appraise
all acquisition opportunities, including those proposed by Mr Bernstein.
R L Owen (Chairman)
G M Simmonds (Chief Executive)
26 June 2019
Page 2
Board of directors
Richard Owen - Executive Chairman
Richard is a non-executive director of Aeorema Communications Plc, a company traded on AIM. Richard has extensive
experience and involvement in corporate and strategic planning, acquisitions and finance. Richard holds various
company directorships.
Geoffrey Simmonds - Chief Executive Officer
Geoffrey qualified as a chartered accountant in 1966. He has extensive involvement and experience in corporate and
strategic planning, acquisitions and finance. Geoffrey holds various other company directorships.
David Hillel - Finance Director
David is a chartered accountant, having qualified in 1966 and has extensive experience in the affairs of family run
businesses of varying sizes and specialises in property dealing, development and investment companies. He is a fellow
of the Institute of Chartered Accountants in England and Wales.
John Zucker - Non-Executive Director
John is a solicitor with considerable company and commercial experience. He is a consultant in the corporate
department at law firm, Veale Wasbrough Vizards LLP.
David Coldbeck - Non-Executive Director
David worked for HSBC Bank plc for 32 years during which time he undertook various managerial roles in Retail and
Corporate Banking, ultimately being appointed Area Director in London, a position he held for nine years prior to his
retirement in 1999. David holds various other company directorships.
Page 3
Directors report
Company Number 03882621
The directors present their report and financial statements for the group and parent company for the year ended 31
December 2018.
Results and dividends
The loss of the group before and after tax is given on page 17. The directors do not recommend the payment of a
dividend.
Directors
The directors holding office during the year were:
R L Owen
G Simmonds
D Hillel
J Zucker
D Coldbeck
Directors’ interests
At the date of this report the directors held the following beneficial interests in the ordinary share capital:
Ordinary shares
No.
Share options &
warrants
2,444,672
R L Owen
2,557,092
G Simmonds
109,607
D Hillel
449,373
J Zucker
D Coldbeck
100,000
Details of directors’ remuneration are given in note 10 in the notes to the accounts.
250,000
250,000
-
-
-
Substantial Interests
At the date of this report, the following had an interest of 3% or more in the ordinary share capital of the company:
R Bernstein
G Simmonds
R L Owen
R Rowan
D Kyte
N Slater
J Shulman
Ordinary shares
9,068,354
2,557,092
2,444,672
2,000,000
1,700,000
1,271,986
1,250,000
Percentage
27.02
7.62
7.28
5.96
5.07
3.79
3.72
Auditors
In accordance with Section 489 of the Companies Act 2006, a resolution proposing that Hazlewoods LLP be re-
appointed as auditors of the company will be put forward at the forthcoming Annual General Meeting.
So far as the directors are aware, there is no relevant audit information of which the company’s auditors are unaware
and the directors have taken all steps that they ought to have taken as directors in order to make themselves aware of
any relevant audit information and to establish that the company’s auditors are aware of that information.
By order of the board.
D Hillel
Company secretary
26 June 2019
Page 4
Strategic report
Principal activities, fair review of the business and future developments
The principal activity of Ultimate Sports Group Plc (“the company”) is to make investments in or to acquire early stage
companies operating in the sectors of sport, technology and general investment.
The trading subsidiaries during 2018 were Reverse Take-Over Investments Limited, Ultimate Player Limited and Sport in
Schools Limited.
Reverse Take-Over Investments Limited specialises in the formation and development of shell companies. Following the
company’s disposal of its remaining interests in investments for re-sale in 2017, new opportunities identified
subsequently have not resulted in new investment transactions in the year ended 31 December 2018.
Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. As a result of the
decision taken by the Board in 2017 to delay future plans for further website development, the company has restricted
its expenditure to recurring website maintenance, ongoing marketing and company administration costs. The
company’s loss for the year was £32,399 (2017: loss £587,536) after having fully impaired website development costs of
£462,073).
Sport in Schools Limited continued providing sports coaching in schools, camps and after school clubs and continues to
expand its operations. The company’s turnover for the year was £1,546,733 with a profit for the year of £100,754 (2017
turnover £1,368,710 and profit of £28,255). The improved result is a combination of increased turnover by virtue of
additional schools engaged, increased income from existing schools due to an increase in government subsidies,
improved weather conditions resulting in less working days lost in 2018 and tighter control of overheads.
The group’s key performance indicators are measured by reference to growth in turnover and profit of its trading
subsidiaries, details of which are also given in note 6 of the notes to the group financial statements.
Principal risks and uncertainties
The main business risks to the group’s trading operations are:
The group’s sports coaching activities in schools rely on the continuation of government policy regarding preparation,
planning and assessment time for teachers and compliance with the government recommended amount of time to be
devoted to sports and physical education.
The main financial risks to the group are market, credit and liquidity risks.
Credit risks arise from trade receivables where the party fails to discharge their obligation in relation to the financial
instrument. To minimise this risk, management has appropriate credit assessment methods to establish credit
worthiness of new customers and monitor receivables by regularly reviewing aged receivable reports. There is no
concentration of credit risk.
Liquidity risk arises in relation to the group’s management of working capital and the risk that the company or any of its
subsidiary undertakings will encounter difficulties in meeting financial obligations as and when they fall due. To
minimise this risk the liquidity position and working capital requirements are regularly reviewed by management.
Further explanation of these risks is set out in note 31 to the financial statements.
The directors do not consider changes in interest rates have a significant impact on the group’s cost of finance or
operating performance.
Page 5
Strategic report
Environmental policy
The group recognises the importance of environmental responsibilities and where practicable has an environmental
policy in place, which includes the recycling of paper and all office material. The directors believe the nature of its
activities has a minimal effect on the environment.
Health and safety
The company recognises the importance of safeguarding the health, safety and welfare of all employees in the group
and the relevant subsidiary undertakings have health and safety policies in place.
D Hillel
Company secretary
26 June 2019
Page 6
Corporate governance statement
The corporate governance framework which the Company operates is based upon practices which the Board believes
are appropriate and proportional to the size and complexity of the Company and its business. The Board has chosen to
adhere to the Quoted Companies Alliance Corporate Governance Code for small and mid-size quoted companies (“QCA
code”).
The QCA code identifies 10 principles that they consider to be appropriate and asks companies to provide an
explanation on how they meet those principles. The Board has considered these principles and how the Company
meets them given the size of the Company. The results of our review are set our below. Over the period under review,
the Company has not changed its strategic focus of developing the business of ESS and continuing to carefully appraise
all acquisition opportunities. The Company has not yet progressed the latter and as such, does not propose to make
amendments to the corporate governance framework it is operating.
These disclosures are set out on the basis of the current Company and the Board highlights where it has departed from
the Code presently. The Board will continue to develop its governance processes in the coming year where appropriate.
1.
Establish a strategy and business model which promotes long-term value for shareholders:
Ultimate Sports Group Plc has a long-established reputation in the field of school sports coaching for children and
related activities. It continues to seek ways of growing this business activity in and around London.
The Board has established a strategy which seeks to promote long-term value for shareholders and has identified the
following key areas of operation to focus on improving on the Group’s performance going forward;
•
Enter into new agreements with schools in the London area
• Generate operational efficiencies and synergies within ESS
• Growth by expansion of business activities and acquisition
The Company’s strategy is to make investments in or to acquire early stage companies operating in the sectors of sport,
technology and general investment, attracting businesses through our network of contacts (including current
shareholders). Given the size of the Company and the historic limited cash resources, we believe the strategy and
business model we have adopted is consistent with our goal of promoting long term value for shareholders, however
expansion of business and assessments of acquisition opportunities can be time consuming, present challenges and can
be costly.
2.
Seek to understand and meet shareholder needs and expectations:
The Company recognises the importance of engaging with its shareholders and reports formally to them when its full-
year and half-year results are published. The Chairman and Chief Executive Officer present the results to existing
shareholders, potential investors, brokers and the media, where appropriate. The Non-Executive Directors are also
available to discuss any matter with shareholders. There is no analyst coverage.
Meetings with these different groups are reported on at monthly board meetings by either the Chairman or the Chief
Executive Officer to ensure that shareholders’ views are communicated to the Board as a whole. This process enables
the Board to be kept aware of shareholders’ opinions on strategy and governance, and for them to understand any
issues or concerns.
Shareholders are encouraged to attend the annual general meeting at which the Group’s activities and results are
considered, and questions answered by the Directors. General information about the Group is also available on the
Company’s website www.ultimatesportsgroup.me.
The Group has not historically announced the detailed results of shareholder voting to the market, however, the Board
intends to do so going forward.
Page 7
Corporate governance statement
3.
Take into account wider stakeholder and social responsibilities and their implications for long-term success:
The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships
across a range of stakeholder groups, which include the Group’s employees, customers, suppliers, and regulatory
authorities. The Group also encourages feedback from schools, pupils and parents of pupils through ongoing dialogue.
The Group’s operations take account of the need to balance the needs of all these stakeholder groups while
maintaining focus on the Board’s primary responsibility to promote the success of the Group for the benefit of its
shareholders.
The Group endeavours to take account of feedback received from stakeholder groups, making amendments to working
arrangements and operational plans where appropriate and where such amendments are consistent with the Group’s
long-term strategy.
The Group considers its actions and likely impact that they may have on the environment and seeks to mitigate any
negative impact wherever practicable. Through the various procedures and operating systems, the Group complies with
health and safety and environmental legislation relevant to its activities.
4.
Embed effective risk management, considering both opportunities and threats, throughout the organisation:
The Board has overall responsibility for the Group’s internal control systems and for monitoring their effectiveness. The
Board, with the assistance of the Audit Committee, maintains a system of internal controls to safeguard shareholders’
investment and the Group’s assets, and has established a continuous process for identifying, evaluating and managing
the significant risks the Group faces.
The directors are responsible for the Group’s system of internal control. Although no system of internal control can
provide absolute assurance against material misstatement or loss, the Group’s system is designed to provide the
directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately. The
key procedures that have been established and which are designed to provide effective internal control are as follows:
• management structure – the Board meets regularly and minutes of its meetings are maintained;
•
financial reporting – budgets are prepared and then presented to and, if appropriate, approved by, the Board.
Any material variances from budgeted to actual results are investigated; and
investment appraisal – the Company has a clearly defined framework for capital expenditure requiring
approval the Board where appropriate.
•
Further details of the business risks and how they are mitigated as far as possible are contained in The Strategic Report
in these financial statements. Both the Board and senior management are responsible for reviewing and evaluating risk
on an ongoing basis and the Executive Directors regularly review trading performance, discuss budgets and forecasts
and any new risks associated with trading, the outcome of which is reported to the Board.
Staff (including those of the subsidiary) are also reminded on an annual basis that they should seek approval from the
Chairman or Chief Executive Officer if they, or their families, plan to trade in the Company’s shares
5.
Maintain the Board as a well-functioning, balanced team led by the Chair:
The members of the Board have a collective responsibility and legal obligation to promote the interests of the Company
and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality
of, and approach to, corporate governance lies with the Chairman of the Board.
The QCA Code requires that the Boards of AIM companies have an appropriate balance between executive and non-
executive directors of which at least two should be independent. The Board has considered its current establishment –
being two non-executive directors (both independent), and three executive directors – and is satisfied it meets this
requirement. The Board is supported by one committee, the Audit committee.
The Chairman, Richard Owen, is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its
role, setting its agenda and ensuring that the Directors receive accurate, timely and clear information. The Chairman
also ensures effective communication with shareholders and facilitates the effective contribution of the other Non-
Executive Directors. The Company is satisfied that the current Board is sufficiently resourced to discharge its
governance obligations on behalf of all stakeholders.
Page 8
Corporate governance statement
Non-executive directors are required to attend all Board and Board Committee meetings convened each year and to be
available at other times as required for face-to-face and telephone meetings with the executive team and investors.
To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are
distributed to all Directors in advance of Board and Committee meetings. All Directors have access to the advice and
services of David Hillel who is both the Finance Director and the Company Secretary and is responsible for ensuring that
the Board procedures are followed and that applicable rules and regulations are complied with. In addition, procedures
are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if
necessary, at the Company’s expense.
Meetings held during the period under review (year ended 31 December 2018) and the attendance of Directors is
summarised below:
Richard Owen Geoffrey
David Hillel
John Zucker
David Coldbeck
Simmonds
8/10
10/10
10/10
8/10
8/10
N/A
N/A
N/A
1
1
Full time
Full time
Part time:-three
to four days per
month
One to two days
per month
One to two days
per month
Board meetings
in a
(10 held
year)
Audit
Committee
held in a year)
(1
Time
commitment
The Board is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is
ultimately responsible for the management, governance, controls, risk management, direction and performance of the
Group. Further details of the composition of the Board is given in the Directors Report.
6.
Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities:
The Board currently comprises three Executive and two Non-Executive Directors with an appropriate balance of sector,
financial and public market skills and experience. The experience and knowledge of each of the Directors gives them
the ability to constructively challenge the strategy and to scrutinise performance. The Board also has access to external
advisors where necessary.
Richard Owen, Chairman
Term of office: Appointed as Chairman on 19 November 1999;
Background and suitability for the role: Richard is a non-executive director of Aeorema Communications Plc, a company
traded on AIM. Richard has extensive experience and involvement in corporate and strategic planning, acquisitions and
finance.
With his long experience of public markets, Richard is able to balance the sometimes differing views of investors and
executive directors. He has negotiated a number of commercial transactions, both for the Company and externally.
Time commitment: full time
Page 9
Corporate governance statement
Geoffrey Simmonds, Chief Executive Officer
Term of office: Appointed as Chief Executive Officer on 19 November 1999;
Background and suitability for the role: Geoffrey qualified as a chartered accountant. He has extensive involvement and
experience in corporate and strategic planning, acquisitions and finance. Geoffrey holds various other company
directorships.
Time commitment: full time
David Hillel, Finance Director
Term of office: Appointed as Finance Director on 31 December 2006;
David is a chartered accountant, having qualified in 1966 and has extensive experience in the affairs of family run
businesses of varying sizes and specialises in property dealing, development and investment companies. He is a fellow
of the Institute of Chartered Accountants in England and Wales.
Time commitment: three to four days per month
John Zucker - Non-Executive Director
Term of office: Appointed as non-executive Director on 26 November 1999; a member of the Audit Committee,
Time commitment: one to two days per month
John is a solicitor with considerable company and commercial experience. He is a consultant in the corporate
department at law firm, Veale Wasbrough Vizards LLP.
David Coldbeck - Non-Executive Director
Term of office: Appointed as non-executive director on 26 November 1999; a member of the Audit Committee,
Time commitment: one to two days per month
David worked for HSBC Bank plc for 32 years during which time he undertook various managerial roles in Retail and
Corporate Banking, ultimately being appointed Area Director in London, a position he held for nine years prior to his
retirement in 1999. David holds various other company directorships.
Throughout their period in office the Directors are continually updated on the Group’s business environment in which it
operates, corporate social responsibility matters and other changes affecting the Group by briefings and meetings with
senior personnel. They are reminded by the Company Secretary of these duties and are also updated on changes to the
legal and governance requirements of the Group, and upon themselves as Directors, on an ongoing and timely basis.
The Company's Nominated Adviser (“NOMAD”) assists with AIM matters and ensures that all Directors are aware of
their responsibilities. The Directors also have access to the Company’s lawyers and auditors as and when required and
are able to obtain advice from other external bodies when necessary.
Board composition is always a factor for contemplation in relation to succession planning. The Board will seek to take
into account any Board imbalances for future nominations, with areas taken into account including board
independence. The Company considers that at this stage of its development and given the current size of its Board, it is
not necessary to establish a formal Nominations Committee. Instead, appointments to the Board are made by the
Board as a whole. This position, however, is reviewed on a regular basis by the Board.
Page 10
Corporate governance statement
7.
Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement:
Given the small size and complexity of the Company and the limited resources, the Board has not appointed external
consultants to evaluate the performance of the directors and board overall. The Board acknowledges that it is non-
compliant with its processes to evaluate the performance of the Board.
In view of the size of the Group, decisions that would fall within the scope of Nomination or Remuneration Committees
are dealt with by the full Board.
8.
Promote a corporate culture that is based on ethical values and behaviours:
The Board seeks to maintain the highest standards of integrity in the conduct of the Group’s operations. An open
culture is encouraged within the Group, with communications to staff regarding the Group’s progress when
appropriate.
The Group is committed to providing a safe environment for its staff and all other parties for which the Group has a
legal or moral responsibility.
9.
Maintain governance structures and processes that are fit for purpose and support good decision-making by
the Board:
The Chairman also ensures effective communication with shareholders. Geoffrey Simmonds is the group’s Chief
Executive Officer and is responsible for the operational management of the Group and the implementation of Board
strategy and policy. By dividing responsibilities in this way, no one individual has unfettered powers of decision-making.
The appropriateness of the Board’s composition and corporate governance structures is reviewed on an ad hoc basis by
the Chairman together with the other Directors, and these will evolve in parallel with the Group’s objectives, strategy
and business model as the Group develops.
Board Committees
The Board has established an Audit Committee. Functions that would otherwise be carried out by Nomination and
Remuneration Committees are dealt with by the Board as a whole.
The Audit Committee comprises the two non- executive directors John Zucker and David Coldbeck. Its primary
responsibility is to monitor the quality of internal controls, ensuring that the financial performance of the Group is
properly measured and reported on, and for reviewing reports from the Group’s auditors relating to the Group’s
accounting and internal controls, in all cases having due regard to the interests of shareholders.
The Audit Committee meets at least once a year to review the Group’s interim and final results and liaises with the
Group’s Auditors.
In view of the size of the Group, decisions that would fall within the scope of a Remuneration Committee are dealt with
by the full Board which includes setting the level of remuneration for both Directors and Key management personnel,
determine terms and conditions of service, including the grant of share options, having due regard to the interests of
shareholders.
10.
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders:
Aside from the distribution to shareholders of an Annual Report and an Interim Report at the half year, shareholders
are invited to attend an annual general meeting each year and other meetings where their input and approval is
required. The company website is regularly updated for announcements and information and is easily accessible on-
line www.ultimatesportsgroup.me. Comments and written communications from Shareholders and other stakeholders
are welcome.
Page 11
Corporate governance statement
The Board has ultimate responsibility for reviewing and approving the Annual Report and Financial Statements and it
has considered and endorsed the arrangements for their preparation, under the guidance of its Audit Committee. The
directors confirm that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
Audit Committee Report
The Audit Committee consists of John Zucker and David Coldbeck. The Committee meets at least once a year and more
frequently if required. The Committee is responsible for monitoring the quality of internal controls, ensuring the
financial performance of the Company is being properly measured and reported on, meeting with the auditors and
reviewing reports from the auditors relating to accounting and internal controls.
Aside from the distribution to shareholders of an Annual Report and an Interim Report at the half year, shareholders
are invited to attend an annual general meeting each year and other meetings where their input and approval is
required.
The company website is regularly updated for announcements and information and is easily accessible on- line.
Comments and written communications from Shareholders and other stakeholders are welcome.
Richard Owen
Geoffrey Simmonds
26 June 2019
Page 12
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have, as required by the AIM Rules of the London Stock Exchange, elected to prepare the financial statements
in accordance with International Financial Reporting Standards as adopted by the European Union. 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 company and the group and of the profit or loss of the group for that period. In preparing
these financial statements the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with IFRS’s as adopted by the
European Union; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company and the group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions, and disclose with reasonable accuracy at any time the financial position of the company and
the group 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 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 any corporate and financial information included on
the company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Page 13
Independent auditors’ report to the shareholders of Ultimate Sports Group Plc
Opinion
We have audited the financial statements of Ultimate Sports Group plc (the ‘company’) and its subsidiaries (the ‘group’)
for the year ended 31 December 2018 which comprise the consolidated statement of comprehensive income, the
consolidated and company statements of financial position, the consolidated and company statements of cash flows,
the consolidated and company statements of changes in equity, and the related notes, 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.
In our opinion, the financial statements:
•
•
•
give a true and fair view of the state of the group’s and parent company’s affairs as at 31 December 2018 and
of the group’s loss for the year then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which 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 the parent company’s ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified
misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free
from material misstatement, we define materiality as the magnitude of a misstatement or an omission from the
financial statements or related disclosures that would make it probable that the judgement of a reasonable person,
relying on the information, would have been changed or influenced by the misstatement or omission. We also
determine a level of performance materiality, which we use to determine the extent of testing needed, to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole.
Page 14
Independent auditors’ report to the shareholders of Ultimate Sports Group Plc
We established materiality for the group’s financial statements as a whole to be £15,000, which is 1% of the value of
the group’s turnover and 10% of the group’s operating loss. The parent company does not trade and has no external
sources of finance and hence materiality is assessed in the context of its balance sheet, we considered that the same
level of materiality could be applied to the parent company, representing 2% of the net assets of the parent company.
An overview of the scope of our audit
Our audit approach was based on obtaining a thorough understanding of the group’s business and is risk-based. We
undertook substantive testing on significant transactions, balances and disclosures, the extent of which was based on
various factors such as our overall assessment of the control environment, the effectiveness of controls over individual
systems and the management of specific risks. In arriving at our opinions set out in this report, we highlight the
following risks that in our judgement had the greatest effect on the financial statements.
Audit risk
Carrying value of investments in subsidiary companies
The parent company’s statement of financial
position includes investments in subsidiary
companies with a carrying value of £505,755.
In the light of the trading performance of the
group there is a risk that the carrying value of
this investment could be impaired.
Going concern
Trading conditions of the group have previously
indicated the existence of material uncertainty,
which may cast significant doubt about the
company and the group’s ability to continue as a
going concern.
How we responded to the risk
Our work included obtaining an understanding of
the results of the trading subsidiary for the year
and the basis of forecast trading results. We then
considered from this analysis whether there was a
reasonable expectation that the carrying value of
the investments could be recovered from the
higher of: future cash flows generated from the
trading entities from continuing trading
operations; and the sale of the underlying
business.
Our audit work included, but was not limited to:
•
•
considering new funds available from
capital raised during the year; and
review of forecasts prepared by
management to support the going
concern assumption.
The directors’ considerations in preparing the
accounts on a going concern basis are set out in
note 5.
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.
•
•
Page 15
Independent auditors’ report to the shareholders of Ultimate Sports Group Plc
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and its environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
•
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
the group and parent company financial statements are not in agreement with the accounting records and
returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 13, 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: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
………………………………......................
David Main (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor
Windsor House
Bayshill Road
Cheltenham
GL50 3AT
26 June 2019
Page 16
Consolidated statement of comprehensive income for the year ended 31 December 2018
Continued activities
Revenue
Cost of sales
Gross profit
Administrative expenses
Notes
6
2018
£
2017
£
1,547,006
(725,638)
821,368
(965,943)
1,369,193
(769,310)
599,883
(833,533)
Operating Loss before exceptional items
(144,575)
(233,650)
-
(563,325)
(144,575)
(796,975)
718
(628)
-
(144,485)
-
(144,485)
-
(144,485)
(149,121)
4,636
(144,485)
-
-
-
-
(3,714)
20,497
(780,192)
17,572
(762,620)
53,567
(709,053)
(709,470)
417
(709,053)
(1,838)
331
(1,507)
(149,121)
4,636
(710,977)
417
(144,485)
(710,560)
15
(0.0051)p
-
(0.0051)p
(0.0319)p
(0.0001)p
(0.0320)p
Exceptional item and non- recurring costs
Operating loss
Finance income
Finance costs
Other gains and losses
Loss before taxation
Taxation
Loss after taxation from continuing activities
Profit for the year from discontinued activities
Attributable to:
Equity holders of the parent company
Non-controlling interests
8
9
11
12
13
14
7
Other comprehensive loss
Losses on available-for-sale investments taken
to equity
Taxation on items taken directly to equity
14
Other comprehensive loss
Comprehensive loss attributable to:
Equity holders of the parent company
Non-controlling interests
Total comprehensive loss
Loss per share (basic and diluted)
Loss from operations per share
Other comprehensive loss per share
Total comprehensive loss per share
The notes on pages 24 to 42 form part of these financial statements.
Page 17
Consolidated statement of financial position as at 31 December 2018
Notes
2018
Non-current assets
Goodwill and other intangibles
Property, plant and equipment
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
Borrowings
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Retained earnings
Equity attributable to shareholders of the parent
company
Non- controlling interests
Total Equity
17
19
20
21
24
25
£
59,954
13,168
73,122
89,760
535,329
625,089
698,211
239,911
-
239,911
239,911
2017
£
60,054
12,923
72,977
68,981
129,611
198,592
271,569
173,661
2,000
175,661
175,661
458,300
95,908
2,388,664
782,031
325,584
(2,979,116)
517,163
(58,863)
458,300
2,281,164
393,454
325,584
(2,840,795)
159,407
(63,499)
95,908
The financial statements were approved and authorised for issue by the board on 26 June 2019 and signed on its behalf
by:
R L Owen
Director
G Simmonds
Director
Company registration number 03882621
The notes on pages 24 to 42 form part of these financial statements.
Page 18
Consolidated statement of changes in equity
Share
capital
£
Share
premium
£
Merger
reserve
£
Fair value
reserve
£
Retained
earnings
£
To equity
holders of
the parent
company
£
Non-
controlling
interest
£
Total
£
Balance at 1 January 2017
2,048,664
393,454
325,584
(1,507)
(2,123,512)
642,683
(63,916)
578,767
Issue of new shares
232,500
Share issue costs
Released on sale of available for sale
investments
Deferred tax on items taken directly
to equity
Loss for the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Reserves at 1 January 2018
2,281,164
393,454
325,584
Issue of new shares
107,500
430,000
Share issue costs
Share based payments
Loss for the year
-
-
-
(41,423)
-
-
-
-
-
-
At 31 December 2018
2,388,664
782,031
325,584
-
-
1,838
(331)
-
-
-
-
-
-
-
-
232,500
(7,813)
(7,813)
-
-
1,838
(331)
-
-
-
-
232,500
(7,813)
1,838
(331)
(709,470)
(709,470)
417
(709,053)
(2,840,795)
159,407
(63,499)
95,908
-
-
537,500
(41,423)
10,800
10,800
-
-
-
(149,121)
(149,121)
4,636
(2,979,116)
517,163
(58,863)
537,500
(41,423)
10,800
(144,485)
458,300
The notes on pages 24 to 42 form part of these financial statements.
Page 19
Company statement of financial position as at 31 December 2018
Non-current assets
Investment in subsidiaries
Property, plant and equipment
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
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Retained earnings
Total equity
Notes
2018
£
2017
£
18
19
20
21
25
505,755
-
505,755
361,793
413,656
775,449
1,281,204
319,715
319,715
319,715
961,489
516,468
1
516,469
342,203
81,459
423,662
940,131
284,317
284,317
284,317
655,814
2,388,664
782,031
325,584
(2,534,790)
2,281,164
393,454
325,584
(2,344,388)
961,489
655,814
The financial statements were approved and authorised for issue by the board on 26 June 2019 and signed on its behalf
by:
R L Owen
Director
G Simmonds
Director
Company registration number 03882621
The notes on pages 24 to 42 form part of these financial statements.
Page 20
Company statement of changes in equity
Share
capital
£
Share
premium
£
Merger
reserve
£
Retained
earnings
£
Total
£
At 1 January 2017
2,048,664
393,454
325,584
(1,316,258)
1,451,444
Issue of new shares
232,500
Share issue costs
Loss for the year
-
-
-
-
-
-
-
-
-
232,500
(7,813)
(7,813)
(1,020,317)
(1,020,317)
At 1 January 2018
2,281,164
393,454
325,584
(2,344,388)
655,814
Issue of new shares
107,500
430,000
Share issue costs
Share based payments
Loss for the year
-
-
-
(41,423)
-
-
-
-
-
-
-
-
537,500
(41,423)
10,800
10,800
(201,202)
(201,202)
At 31 December 2018
2,388,664
782,031
325,584
(2,534,790)
961,489
The notes on pages 24 to 42 form part of these financial statements.
Page 21
Consolidated statement of cash flows for the year ended 31 December 2018
Note
2018
£
2017
£
Cash flow from all operating activities
Loss before taxation from continuing activities
Profit before taxation from discontinued activities
32c
Adjustments for:
Finance income
Finance expense
Impairment and amortisation of intangible assets
Share based payments
Other gains and losses
Depreciation
Loss/ (profit) on disposed tangible assets
Operating cash flow before working capital movements
(Increase)/decrease in receivables
Increase/(decrease) in payables
(144,485)
-
(144,485)
(718)
628
100
10,800
-
7,507
1
(126,167)
(20,779)
66,250
(780,192)
53,567
(726,625)
-
3,714
520,792
-
(103,097)
26,145
(30,865)
(309,936)
28,720
(48,886)
Net cash absorbed by operations
(80,696)
(330,102)
Taxation
-
17,241
Cash flow from investing activities
Finance income
Property, plant and equipment acquired
Intangible asset development costs
Proceeds on sale of property, plant and equipment
Net proceeds on sale of business
Proceeds on disposal of available for sale investments
718
(7,753)
-
-
-
-
-
(9,820)
(16,300)
33,187
82,600
48,334
Net cash (absorbed)/from investing activities
(7,035)
138,001
Cash flow from financing activities
Finance expense
Funds from share issue
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents in the year
32b
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
(628)
496,077
(2,000)
493,449
405,718
129,611
535,329
(3,714)
224,687
(45,939)
175,034
174
129,437
129,611
A statement of cash flows from discontinued activities is set out in note 32c.
The notes on pages 24 to 42 form part of these financial statements.
Page 22
Company statement of cash flows for the year ended 31 December 2018
Cash flow from operating activities
Loss before tax
(201,202)
(1,020,317)
Notes
2018
£
2017
£
Adjustments for:
Finance income
Finance expense
Share based payments
Other gains
Provision for impairment in value of investments in
subsidiaries
Provision for intra group indebtedness
Depreciation and write offs
Loss/(profit) on disposed tangible assets
Operating cash flow before working capital movements
Increase in receivables
Increase in payables
(17,218)
-
10,800
-
10,713
78,765
-
1
(118,141)
(81,855)
35,398
(16,500)
3,714
-
(1,034)
90,103
889,245
18,592
(30,865)
(67,062)
(242,954)
1,244
Net cash absorbed by operations
(164,598)
(308,772)
Cash flow from investing activities
Finance income
Proceeds on sale of property, plant & equipment
Proceeds on sale of investments for resale
Net cash inflow from investing activities
Cash flow from financing activities
Funds from share issue
Finance expense
Hire purchase repayments
Net cash from financing activities
Net increase /(decrease) in cash and cash equivalents in
the year
32b
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
718
-
-
718
496,077
-
-
496,077
332,197
81,459
413,656
-
33,187
2,721
35,908
224,687
(3,714)
(42,439)
178,534
(94,330)
175,789
81,459
The notes on pages 24 to 42 form part of these financial statements
Page 23
Notes to the group and parent company financial statements
1.
General information
Ultimate Sports Group Plc is a public company limited by shares, domiciled and incorporated in England and Wales and
its activities are as described in the strategic report on pages 5 to 7.
These financial statements are prepared in pounds sterling being the currency of the primary economic environment in
which the group operates.
2.
Basis of Accounting
The consolidated financial statements of the group and the financial statements of the parent company for the year
ended 31 December 2018 have been prepared under the historical cost convention and are in accordance with
International Financial Reporting standards (“IFRS”) as adopted by the EU. These policies have been applied
consistently except where otherwise stated.
For the purpose of the preparation of these consolidated financial statements, the group has applied all standards and
interpretations that are effective for accounting periods beginning on or after 1 January 2018. The adoption of new
standards and interpretations in the year has not had a material impact of the group’s financial statements.
IFRS 15
The group has adopted IFRS 15 retrospectively in its consolidated financial statements for the year ended 31 December
2018. IFRS 15 replaces all existing revenue requirements in IFRS and sets out principles for recognising revenue that
must be applied using a 5-step model. Revenue should only be recognised when (or as) control of goods or services is
passed to the customer, when distinct ‘performance obligations’ are met, at the amount to which the entity expects to
be entitled. The group has completed its assessment of IFRS and has not identified any material differences between
the group’s current revenue recognition policy and the requirements of IFRS 15.
Future standards in place but not yet effective.
No new standards, amendments or interpretations to existing standards that have been published and that are
mandatory for the Group’s accounting periods beginning on or after 1 January 2019, or later periods, have been
adopted early. The following standards and amendments are not yet applied at the date of authorisation of these
financial statements:
IFRS 16 – Leases (effective 1 January 2019)
•
• Annual Improvements to IFRS Standards 2015 - 2017 Cycle (effective 1 January 2019)
•
• Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020)
• Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020)
IAS 12 – Income taxes (effective 1 January 2019)
Except for IFRS 16, see below, the group does not believe that there will be a material impact on the financial
statements from the adoption of these standards / interpretations.
IFRS 16 requires the recognition of an asset and liability by introducing a lessee accounting model. As at 31 December
2018, the group would recognise an asset and liability in respect of leases of approximately £79,000.
There were no material changes in the financial statements as a result of adopting new or revised accounting standards
during the year.
Page 24
Notes to the group and parent company financial statements
3.
Significant accounting policies
(a)
Basis of consolidation
The financial statements of the group incorporate the financial statements of the company and entities
controlled by the company, which are its subsidiary undertakings. Control is achieved where the company has
the power to govern the financial and operating policies of its subsidiary undertakings so as to benefit from
their activities.
(b)
(c)
Details of subsidiary undertakings are set out in note 18.
All intra-group transactions and balances have been eliminated in preparing the consolidated financial
statements.
Revenue
Revenue arises from the disposal of available-for-sale investments and income from sports and leisure
activities undertaken by the company and its subsidiary undertakings. In the case of sports and leisure
activities it represents invoiced and accrued amounts for services supplied in the year, exclusive of value added
tax and trade discounts.
Intangible assets
Goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in
the fair value of the identifiable assets and liabilities of subsidiary entities at the date of acquisition. Goodwill is
initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment
losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment
is recognised immediately in the statement of comprehensive income and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the group’s cash generating units
expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been
allocated are tested for impairment annually, or more frequently when there is an indication that the unit may
be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit,
the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit then
to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An
impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the amount of goodwill is included in the
determination of the profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS’s has been retained at the previous UK
GAAP amounts subject to being tested for impairment at that date.
Development costs are expensed in arriving at the operating profit or loss for the year unless the directors are
satisfied as to the technical, commercial and financial viability of individual project. In this situation, the
expenditure is recognised as an asset and is reviewed for impairment on an annual basis.
Any impairment is recognised immediately in the income statement in administrative expenses and is not
subsequently reversed.
Page 25
Notes to the group and parent company financial statements
3.
(d)
Significant accounting policies
Plant and equipment
Plant and equipment is stated at cost less depreciation. Depreciation is provided at rates calculated to write
off the cost less their estimated residual value over their expected useful lives.
The rates applied to these assets are as follows:
Plant & equipment
Motor vehicles
25% & 10% straight line
33.3% - straight line
(e)
(f)
(g)
Operating leases
Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain
with the lessor, are charged against revenue as and when incurred.
Deferred taxation
Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for
taxation and accounting purposes. The deferred tax balance is not discounted.
The recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient
taxable profits in the future to absorb the reversal of the underlying timing differences.
Trade receivables
Trade receivables are recognised at fair value. A provision for impairment of trade receivables is established
where there is objective evidence that the company or group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or liquidation and default or delinquency of payments are considered
indicators that the trade receivable is impaired. The amount of the provision is the difference between the
asset’s carrying amount and the present value of estimated future cash flows. The carrying amount of the
asset is reduced through the use of an allowance account and the amount of the loss is recognised in the
income statement within administrative expenses. When a trade receivable is uncollectable it is written off
against the allowance account for trade receivables.
(h)
Investments
Investments are classified as available for sale, are measured at fair value. Gains or losses in changes in fair
value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at
which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for
the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.
Fair value of quoted investments is based on current bid prices. If an investment is suspended from trading, fair
value is based on quoted bid prices on the first day that trading recommences following suspension.
Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company
balance sheet.
(i)
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks. Bank overdrafts are
shown as borrowings within current liabilities.
Page 26
Notes to the group and parent company financial statements
3.
(j)
Significant accounting policies (continued)
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the
assets of the group after deducting all of its liabilities.
Ordinary shares are classified as equity. Incremental costs directly attributable to new shares are shown in
equity as a deduction from the proceeds.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over the period of the borrowing using the effective
interest method.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the date of the statement of financial position.
4.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the group’s financial statements requires the directors 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 the director’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.
Deferred tax asset
At the present time the directors’ do not consider that there is sufficient certainty regarding the utilisation of
tax losses available in the group. As a result, no deferred tax asset has been recognised.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating
units to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the
future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to
calculate present value. The carrying amount of goodwill is the deemed cost on first time application of IFRS.
Details of the impairment review calculation are given in note 17.
Impairment of intangible assets
The carrying value of intangible assets comprising unamortised website costs are determined by reference to
an assessment of future income generated by the UltimatePlayer.me platform. Having regard to the Board’s
decision to delay future plans for further website development, all unamortised costs have been fully impaired
as an exceptional item in 2017 (note 8).
5.
Going concern
The directors have prepared financial forecasts covering the 12 months following approval of these financial
statements, which show the Group can continue to carry on trading within its existing finance facilities over
that period.
In view of the above, the directors consider it appropriate to prepare the financial statements on a going
concern basis.
Page 27
Notes to the group and parent company financial statements
Business segment analysis
6.
Segmental information with regard to continuing and non- continuing activities is disclosed below and is based on the
different business activities in the group.
All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.
Year ended 31 December 2018
Sports and
leisure
£
Social media
website
£
Consolidated
£
Revenue
1,546,733
273
1,547,006
Segment operating profit/(loss)*
100,754
(32,399)
68,355
Group operating expenses**
Operating loss
Finance revenues less finance costs
Loss before taxation
Taxation
Loss after taxation from continuing
activities
Year ended 31 December 2017
(212,930)
(144,575)
90
(144,485)
-
(144,485)
Sports and
leisure
£
Social media
website
£
Consolidated
£
Revenue
1,368,710
483
1,369,193
Segment operating profit/(loss)*
28,255
(587,536)
(559,281)
Group operating expenses**
Operating loss
Other gains and losses
Finance revenues less finance costs
Loss before taxation
Taxation relating to the social media website
Loss after taxation from continuing
activities
Discontinued activities
53,567
(53,567)
(237,694)
(796,975)
20,497
(3,714)
(780,192)
17,572
(762,620)
53,567
(709,053)
*Segment operating profit in relation to Sports and Leisure is after charges for depreciation of £7,507 (2017: £7,553).
Segment operating losses in relation to the social media website is after charges for amortisation and impairment of
£Nil (2017: £520,792).
** ‘Group operating expenses’ represent the costs of running the group as a whole. The directors consider that the
costs of running Pantheon Leisure Plc of £68,824 (2017: £53,370) form part of these costs as opposed to forming part of
the segmental costs of the sports and leisure division.
Page 28
Notes to the group and parent company financial statements
Sports and
leisure
£
86,555
Social media
website
£
1,388
Consolidated
£
87,943
Financial position at 31 December 2018
Segment assets
Non segmental assets
Consolidated total assets
Segmental liabilities
203,071
-
Non segmental corporate liabilities
Capital additions
Depreciation/amortisation and impairment
7,753
7,507
-
-
Financial position at 31 December 2017
Sports and
leisure
£
55,714
Social media
website
£
1,846
Segment assets
Non segmental assets
Consolidated total assets
610,268
698,211
203,071
36,840
239,911
Consolidated
£
57,560
214,009
271,569
Segment liabilities
158,457
4,162
162,619
Non segmental corporate liabilities
13,042
175,661
Capital additions
Depreciation/amortisation and impairment
9,820
7,553
16,300
520,792
Non segmental assets include group cash balances of £535,329 (2017: £129,611), goodwill of £59,954 (2017: £59,954),
other assets and receivables of £14,985 (2017: £24,444). Non segmental liabilities include trade and other payables of
£36,840 (2017: £13,042).
Sports and leisure segment assets include £nil (2017: £2,727) from discontinued activities. Segment liabilities include
£nil (2017: £8,638) from discontinued activities.
7.
Discontinued activities
Revenue
Cost of sales and expenses
Operating loss
Net proceeds on disposal
2018
£
-
-
-
-
-
2017
£
11,015
(40,048)
(29,033)
82,600
53,567
Football Partners Limited ceased small-sided football league activities in December 2016 and disposed of its trade for
£100,000 in 2017.
Page 29
Notes to the group and parent company financial statements
8. Exceptional item and non- recurring costs
Exceptional item:
Development cost - full impairment
Non- recurring costs:
Website expenditure and amortisation
9. Operating loss
The operating loss is stated after charging
/(crediting):
Auditors’ remuneration – audit services
Operating lease rentals – land and buildings
Depreciation of property, plant and equipment
Amortisation – Website development
Impairment – Website development
2018
£
-
-
-
2018
£
18,900
17,635
7,753
-
-
2017
£
462,073
101,252
563,325
2017
£
20,875
13,507
26,145
58,719
462,073
Included in the audit fee for the group is an amount of £7,000 (2017: £6,700) in respect of the Company.
The auditors received fees of £1,630 (2017: £1,250) in respect of the provision of services in connection with advice
relating to the group’s interim results, and general advice.
10.
(a) Staff Costs
Employee benefit costs were as follows:
Group
Wages and salaries
Social security costs
Pension contributions
Share based payment
The average numbers of employees, including directors during the year, were as follows:-
Administration, sales and coaching staff
(b) Directors’ remuneration
An analysis of directors’ remuneration (who are the key management personnel) is
set out below:
Salary and consultancy fees
Executive directors
Non-executive directors
Page 30
2018
£
1,152,825
58,061
12,634
10,800
1,234,320
2017
£
1,128,737
67,549
7,019
-
1,203,305
No.
94
No.
115
2018
£
2017
£
21,250
32,859
16,250
5,000
21,250
32,859
-
32,859
Notes to the group and parent company financial statements
The total cost of key management personnel being the executive directors and including employers’ national insurance
was £21,250 (2017: £32,859).
The following amounts were paid for the services of the directors in the year:
R L Owen
G Simmonds
D Hillel
J Zucker
D J Coldbeck
There were no directors’ benefits (2017- £17,859).
11.
Finance income
Interest revenue – bank deposits
12.
Finance costs
Bank overdraft interest
Interest on obligations under hire purchase
agreements
13.
Other gains and losses
Profit on disposal of available for sale investments
2018
£
Salaries and
benefits
2017
£
Salaries and
benefits
13,750
-
2,500
2,500
2,500
21,250
15,996
16,863
-
-
-
32,859
2018
£
718
2017
£
2018
£
628
2017
£
-
-
-
628
3,714
3,714
2018
£
-
2017
£
20,497
Investments in AIM listed companies were disposed of in 2017 giving rise to gains of £20,497 before fair value
adjustments of £1,838 recognised in the Statement of Other Comprehensive Income in that year.
Page 31
Notes to the group and parent company financial statements
14.
Taxation
Deferred tax (credit)/charge
Origination and reversal of temporary differences
Total deferred tax (credit)/(charge
Research and development tax credits
Tax credit in income statement
No income tax charge arises based on the loss for the year (2017: nil).
2018
£
2017
£
-
-
-
-
(331)
(331)
(17,241)
(17,572)
The group has unutilised tax losses of £6,443,000 (2017: £6,311,000) which includes £2,380,000 (2017: £2,364,000) in
relation to the company’s subsidiary undertakings. Where it is anticipated that future taxable profits will be available to
utilise these losses a deferred tax asset or a reduction in deferred tax liability is recognised as appropriate.
Factors affecting the tax charge in the year
Loss on ordinary activities before taxation
Loss on ordinary activities before taxation at the standard rate of UK
corporation tax of 19% (2017: 19.25%)
Effects of:
Expenses not deductible for tax purposes
Share based payments
Dividend income
Temporary differences in respect of depreciation and capital allowances
not reflected in deferred tax
Unutilised tax losses not recognised as a deferred tax asset
Adjustment on available-for-sale investments
Research and development tax credits
Tax credit
2018
£
2017
£
(144,485)
(724,787)
(27,452)
(139,521)
5,370
2,052
3,943
(79)
16,166
-
-
-
-
-
-
97,121
42,400
(331)
(17,241)
(17,572)
In 2017 claims for tax credits in relation to research and development costs were made giving rise to cash credits of
£17,241.
15.
Loss per share
Basic loss per share has been calculated on the group’s loss attributable to equity holders of the parent company of
£149,121 (2017: £709,470) and on the weighted average number of shares in issue during the year, which was
29,174,996 (2017:22,211,434).
Comprehensive loss per share is based on the same number of shares and on the comprehensive loss for the year
attributable to the equity holders in the parent company of £149,121 (2017: £710,977).
Page 32
Notes to the group and parent company financial statements
In view of the group loss for the year, share warrants and options to subscribe for ordinary shares in the company are
anti-dilutive and therefore diluted earnings per share information is not presented. There are options outstanding at 31
December 2018 on 307,500 ordinary shares and on 1,500,000 share warrants.
16.
Loss for the financial year
As permitted by Section 400 of the Companies Act 2006, the profit and loss account for the company is not presented
as part of these financial statements.
The consolidated loss for the year of £144,485 (2017-loss: £709,053) includes a loss of £201,202 (2017-loss: £1,020,317)
dealt with in the accounts of the company.
17.
Goodwill, intangibles and development costs
2018
£
Website
development
2018
£
Goodwill and
other
intangibles
2018
£
2017
£
Total
Total
587,187
-
587,187
587,187
-
-
587,187
60,054
-
60,054
-
-
100
100
647,241
-
647,241
587,187
-
100
587,287
630,941
16,300
647,241
66,395
58,719
462,073
587,187
Cost at 1 January
Additions in the year
Cost at 31 December
Amortisation at 1 January
Charged in the year
Impairment write off
Amortisation at 31 December
Carrying value at 31 December
-
59,954
59,954
60,054
Goodwill of £59,954 included above relates to the acquisition of Pantheon Leisure Plc which is included at its deemed
cost on first time application of IFRS.
The Group acquired intangible assets costing £100 in 2013 following the acquisition of a subsidiary. The asset has been
fully impaired and written off in 2018.
Goodwill acquired in a business combination is allocated, at acquisition, to cash generating units (“CGUs”) that are
expected to benefit from that business combination. The carrying amount of goodwill relates wholly to the leisure
activities business segment.
The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value
in use calculations are those regarding forecast revenues and operating costs. Management have taken into account
the following two elements:
(i) Based on current assessments of the Sport in Schools activities made by the directors, they consider that revenues
will continue to grow in 2019 and 2020; and
(ii) Operational costs are monitored and controlled
Development costs
Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. As a result of the
decision taken by the Board in 2017, to delay future plans for further website development, unamortised development
costs were fully impaired and written off as an exceptional item in the prior year (see note 8).
Page 33
Notes to the group and parent company financial statements
18.
Investments in Subsidiaries
Company
Cost
Shares
Loan notes
Total cost at beginning and end of year
Provision for impairment
At 1 January
Increase of provision in year
At 31 December
Carrying value at 31 December
2018
£
1,947,932
220,000
2,167,932
2017
£
1,947,932
220,000
2,167,932
1,651,464
10,713
1,662,177
1,561,361
90,103
1,651,464
505,755
516,468
Included in investments is £220,000 of loan notes which carry an interest coupon of 7.5% and are repayable on demand
at par.
The following companies were subsidiaries at the balance sheet date and the results and year end position of these
companies has been included in these consolidated financial statements. The registered office for all the companies
listed below is at 30 City Road, London EC1Y 2AB.
Subsidiary undertakings
Description and
proportion of
share capital
owned
Country of
incorporation or
registration
Nature of business
Ordinary 100%
Westside Acquisitions Limited
Reverse Take-Over Investments Limited * Ordinary 100%
England & Wales
England & Wales
Holding company
Acquisition and development of
shell companies
Dormant
Investment - inactive
Holding company
Social media website
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales Website data services - inactive
Social media website - inactive
England & Wales
Holding company
England & Wales
Sports coaching in schools
England & Wales
Dormant
England & Wales
Inactive
England & Wales
Dormant
England & Wales
Westsidetech Limited
Westside Mining Plc
Westside Sports Limited
Ultimate Player Limited
Football Data Services Limited
FootballFanatix Limited
Pantheon Leisure Plc **
Sport in Schools Limited ***
Football Partners Limited ***
The Elms Group Limited ***
Footballdirectory.co.uk Limited ****
*
**
***
**** held indirectly through The Elms Group Limited
Ordinary 100%
Ordinary 100%
Ordinary 100%
Ordinary 100%
Ordinary 100%
Ordinary 100%
Ordinary 85.87%
Ordinary 85.87%
Ordinary 85.87%
Ordinary 85.87%
Ordinary 85.87%
331/3% held indirectly through Westside Acquisitions Limited
held indirectly through Westside Sports Limited
held indirectly through Pantheon Leisure Plc
Page 34
Notes to the group and parent company financial statements
19.
Property, plant and equipment
Group
Cost
At 1 January 2017
Additions
Disposals
Cost at 31 December 2017
Additions
Disposals
At 31 December 2018
Depreciation
At 1 January 2017
Charge for the year
Disposals
At 31 December 2017
Charge for the year
Disposals
At 31 December 2018
Carrying value
At 31 December 2018
At 31 December 2017
Company
Cost
At 1 January 2017
Disposals
Cost at 31 December 2017
Disposals
At 31 December 2018
Depreciation
At 1 January 2017
Disposals
Charge for year
At 31 December 2016
Disposals
At 31 December 2017
Carrying value
At 31 December 2018
At 31 December 2017
Plant and
equipment
£
Motor
Vehicles
£
148,443
9,820
(63,691)
94,572
7,753
(1,848)
100,477
137,787
7,553
(63,691)
81,649
7,507
(1,847)
87,309
13,168
12,923
83,662
-
(83,662)
-
-
-
-
62,748
18,592
(81,340)
-
-
-
-
-
Plant and
equipment
£
Motor
Vehicles
£
1,848
-
1,848
(1,848)
-
1,847
-
-
1,847
(1,847)
-
-
1
83,662
(83,662)
-
-
-
62,748
(81,340)
18,592
-
-
-
-
-
Total
£
232,105
9,820
(147,353)
94,572
7,753
(1,848)
100,477
200,535
26,145
(145,031)
81,649
7,507
(1,847)
87,309
13,168
12,923
Total
£
85,510
(83,662)
1,848
(1,848)
-
64,595
(81,340)
18,592
1,847
(1,847)
-
-
1
The company was party to hire purchase agreements in respect of its motor vehicles during the prior year.
Depreciation charged on assets subject to hire purchase agreements in the year was £Nil. (2017: £18,592). The net book
value of these assets at the end of the year and at the end of last year was £Nil.
Page 35
Notes to the group and parent company financial statements
20. Receivables and loan notes
Non-current assets
Company
In 2018, amounts due within one year included £220,000 of loan notes (2017 - £220,000). The loan notes are convertible
into 50 million new shares in Pantheon Leisure Plc (the borrower) at any time before redemption. The loan notes carry
an interest coupon of 7.5% and are repayable on demand at par.
Pantheon Leisure Plc is a subsidiary undertaking of Ultimate Sports Group Plc.
The loan notes are included in investments.
Group
The group has no receivables and loan notes classified as non-current assets.
Current assets
Trade receivables
Other receivables
Amounts due from subsidiary undertakings
Prepayments and deferred expenditure
Group
Company
2018
£
62,768
18,681
-
8,311
89,760
2017
£
24,371
17,375
-
27,235
68,981
2018
£
-
10,166
347,102
4,525
361,793
2017
£
-
318,053
24,150
342,203
The average credit period given for trade receivables at the end of the year is 15 days (2017:6 days). Trade receivables
are stated net of a provision for irrecoverable amounts of £Nil (2017: £Nil).
Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total £1,454,629
(2017: £1,375,864).
The total charge in the year in respect of irrecoverable receivables in the group accounts was £Nil (2017: £Nil).
As at 31 December, the ageing analysis of trade receivables, all of which are due and not impaired is as follows:
2018
2017
21.
Trade and other payables
Trade payables
Other payables
Taxes and social security
Amounts due to subsidiary undertakings
Accruals and deferred income
£
<3 months
62,768
24,371
Group
Company
2018
£
9,760
24,672
99,459
-
106,020
239,911
2017
£
982
1,216
74,981
-
96,482
173,661
2018
£
-
-
-
287,793
31,922
319,715
2017
£
-
-
-
273,573
10,744
284,317
The average credit period taken for trade payables at the end of the year is 8 days (2017: 1 day).
Page 36
Notes to the group and parent company financial statements
22.
Bank overdraft
Sport in Schools Limited has a bank overdraft facility secured by a guarantee of up to £50,000 by Ultimate Sports Group
Plc. The overdraft is repayable on demand.
23.
Deferred tax
The following are the deferred tax liabilities and assets recognised by the group and movements during the current and
previous year:
Deferred tax liabilities
At 1 January 2017
Credited in the income statement
Charged directly to equity
At 31 December 2018 and 31 December 2017
24.
Borrowings
Fair value
gains
£
Tax losses
offset
£
Total
£
(331)
331
-
-
331
-
(331)
-
-
331
(331)
-
There were no borrowings outstanding at 31 December 2018 (2017- £2,000)
25. Issued and fully paid share capital
Ordinary shares
At 1 January 2017
Shares issued in the year
At 1 January 2018
Subdivision of ordinary shares
New shares issued in the year
At 31 December 2018
Number of
ordinary 10p
shares
20,486,638
2,325,000
22,811,638
(22,811,638)
-
-
Number of
ordinary 1p
shares
-
-
-
Number of
deferred 9p
shares
-
-
-
22,811,638
10,750,000
33,561,638
22,811,638
-
22,811,638
£
2,048,664
232,500
2,281,164
-
107,500
2,388,664
Following a capital reorganisation in March 2018 in which each existing share of 10p each was subdivided into one new
ordinary share of 1p each and 1 deferred share of 9p each, the company raised £537,500 before costs from a placing at
a price of 5p per share resulting in the issue of a further 10,750,000 ordinary shares of 1p each.
Ordinary shares of 1p each:
Shareholders are entitled to receive dividends or distributions in the event of a winding up with rights to attend and
vote at general meetings.
Deferred shares of 9p each:
Shareholders are entitled to receive 0.1p for each £999,999 of dividends or other distributions in the event of a winding
up with no rights to attend and vote at general meetings.
At 31 December 2018 the company’s issued shares carry no rights to fixed income.
The market price of the company’s shares at 31 December 2018 was 20.00p and the price range during the financial
year was 8.50p and 20.88p.
Page 37
Notes to the group and parent company financial statements
26. Share warrants and options
Warrants
In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants
were issued exercisable at a price of 10p and 25p respectively per new ordinary share.
Further details are given in note 30.
Options
In January 2011 the company adopted an unapproved share option scheme details of which are given in note 30
To date the company has granted options to acquire 577,500 ordinary shares to key executives and employees engaged
in the development of the social network. At the year end and at the date of this report there are options to acquire
307,500 ordinary shares in issue.
27. Financial commitments
The group is committed to making the following future minimum lease payments under non-cancellable operating
leases which fall due as follows:
Within one year
Land and buildings
Other
Between two and five years
Land and buildings
Other
After five years
Land and buildings
28. Reserves
2018
£
2017
£
10,868
5,636
16,358
-
43,472
6,417
47,193
-
24,453
90,846
35,321
98,872
Retained earnings represent the cumulative retained profit or loss of the group.
Share premium is the amount subscribed for share capital in excess of nominal value and is a capital reserve required
by UK company law.
The merger reserve is a non-statutory reserve and represents the difference between the fair value and nominal value
of the shares exchanged for shares on acquisition of Reverse Take-Over Investments Plc which took place in 2003.
The fair value reserve represents the cumulative surplus and deficits on recognition of available-for-sale investments at
fair value, less tax attributable to the net surplus.
Page 38
Notes to the group and parent company financial statements
29. Related parties
Details of the remuneration of directors is given in note 10. In addition to the information given in that note, the
following provides further details of related party transactions involving the company and its directors.
The directors are the key management personnel of the group.
Simmonds & Co
The group made payments of £26,500 (2017-£38,904) as contributions towards office and secretarial costs to
Simmonds & Co, Chartered Accountants, a practice in which G Simmonds is sole proprietor. No amounts were due at 31
December 2018 (2017 – £Nil).
In March 2017, G Simmonds was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to
these new warrants are given in note 30.
R Owen
The company paid for office facilities to R Owen of £13,611 (2017- £ 23,686). No amounts were due to R Owen at the
31 December 2018 (2017- Nil).
In March 2018, R Owen was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to these
new warrants are given in note 30.
30.
Share-based payment transactions
Warrants
In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants
were issued exercisable at a price of 10p and 25p respectively per new ordinary share.
Warrants are valued using the Black-Scholes option pricing model. The fair value per option granted and the
assumptions used in the calculation are as follows:
Grant date
Share price at grant date
Exercise price
Shares under warrant
Expected volatility
Option life (years)
Expected life (years)
Risk-free interest rate
Fair value per option
13 March 2018
15p per share
10p per share
250,000
100.0%
3 years
3 years
1.25%
3.15p
13 March 2018
15p per share
25p per share
250,000
100.0%
3 years
3 years
1.25%
2.8p
In accordance with IFRS2, the fair value of the warrants issued and recognised as a charge in the accounts for the year is
£10,800. In arriving at this amount, the expected volatility is based on historical volatility, the expected life is the
average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK government bond
for a term consistent with the assumed option life.
Page 39
Notes to the group and parent company financial statements
30.
Share-based payment transactions (continued).
Options
At the date of this report, options to acquire 577,500 ordinary shares share have been granted to employees or key
executives involved in the group’s trading operations. To date options over 270,000 shares have lapsed and there
remain options over 307,500 shares that are exercisable.
Grant date
Share price at grant date
Exercise price
Shares under option
Expected volatility
Option life (years)
Expected life (years)
Risk-free interest rate
Fair value per option
17 January 2011
25p per share
25p per share
210,000
17.0%
10 years
10 Years
2.0%
0.4p
6 March 2014
27.5p per share
27.5p per share
167,500
20.9%
7 Years
7 Years
2.0%
0.07p
30 April 2014
27.5p per share
27.5p per share
200,000
20.9%
7 Years
7 Years
2.0%
0.07p
In accordance with IFRS2, the fair value of the share options issued and recognised as a charge in the accounts for the
year is £Nil (2017 - £Nil). In arriving at the amount, the expected volatility is based on historical volatility, the expected
life is the average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK
government bond for a term consistent with the assumed option life.
31.
Capital management and financial instruments
The group is solely equity funded which represents the group’s capital.
The group’s objectives when maintaining capital are:
- To safeguard the entity’s ability to continue as a going concern, so that it can begin to provide returns for
shareholders and benefits for other stakeholders; and
- To provide an adequate return to shareholders by pricing products and services commensurately with the level
of risk.
The group sets the amounts of capital it requires in proportion to risk. The group manages its capital structure and
makes adjustments to it in light of changes in economic conditions and risk characteristics of the underlying assets. In
order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, or sell assets to reduce debt.
Capital for the group comprises all components of equity – share capital of £2,388,664 (2017: £2,281,164), share
premium of £782,031 (2017: £393,454), other reserves of £325,584 (2017: £325,584), the retained deficit of £2,979,116
(2017: £2,840,795) and debts which comprises loans of £Nil (2017: £2,000).
During the year ended 31 December 2018 the group’s strategy was to preserve net cash resources by limiting cash
absorbed from losses and through good cash management.
Financial assets and financial liabilities are recognised in the group’s balance sheet when the group becomes a party to
the contractual provision of the instrument.
At 31 December 2018 and 31 December 2017, there were no material differences between the fair value and the book
value of the group’s financial assets and liabilities. All financial assets and liabilities are measured at amortised cost.
Relevant financial assets and liabilities are set out below.
Page 40
Notes to the group and parent company financial statements
31.
Capital management and financial instruments (continued).
Financial assets
Cash and cash equivalents
Due from subsidiary undertakings
Trade and other short- term receivables
Financial liabilities (which are included at
amortised cost)
Trade and other short- term payables
Due to subsidiary undertakings
Loans
Group
Company
2018
£
2017
£
2018
2017
£
£
535,329
-
70,395
605,724
34,432
-
-
34,432
129,611
-
32,571
162,182
2,198
-
2,000
4,198
413,656
347,102
-
760,758
-
287,793
-
287,793
81,459
318,053
-
399,512
-
273,573
-
273,573
The group’s financial instruments comprise cash and cash equivalents, receivables, payables, loan obligations that arise
directly from its operations
Amounts shown in trade and other short term receivables exclude prepayments and deferred expenditure for the
group of £8,311 (2017: £27,235) and VAT recoverable of £11,054 (2017: £9,175) for the group and for the company
£4,522 (2017: £Nil) of short term receivables and VAT recoverable of £10,166 (2017: £7,430).
Trade and short- term payables exclude deferred income and accruals of £106,020 (2017: £96,482), tax and social
security creditors of £99,459 (2017: £74,981). For the company - for tax and accruals of £31,922 (2017: £10,744).
The group has not adopted a policy of using financial derivatives and does not rely on the use of interest rate hedges.
In common with other businesses, the group is exposed to risks that arise from its use of financial instruments. There
have been no substantive changes to the group’s response to financial instrument risk and the methods used to
measure them from previous periods.
The main risks arising from the group’s financial instruments are market, credit and liquidity risks.
Market risk arises mainly from uncertainty about future prices of available-for-sale investments held by the group. The
board monitors movements in the carrying value of its investments on a regular basis. As there are no remaining
investments there is no longer any market risk attributable to investments.
Credit risk arises from trade receivables where the party fails to discharge their obligation in relation to the instrument.
To minimise this risk, management have appropriate credit assessment methods to establish credit worthiness of new
customers and monitor receivables by regularly reviewing aged receivable reports. There is no concentration of credit
risk other than in respect to cash held on deposit at the company’s bank as set out above.
The amount exposed to risk in respect of trade receivables at 31 December 2018 was £62,768 (2017: £24,371).
Page 41
Notes to the group and parent company financial statements
Liquidity risk arises in relation to the group’s management of working capital and the risk that the company or any of its
subsidiary undertakings will encounter difficulties in meeting financial obligations as and when they fall due. To
minimise this risk the liquidity position and working capital requirements are regularly reviewed by management.
The directors do not consider changes in interest rates have a significant impact on the group’s cost of finance or
operating performance.
As the group’s operations are conducted in the United Kingdom, risks associated with foreign currency fluctuations are
not relevant.
32. Notes to statement of cash flows
a)
Analysis of net funds
Group
Cash and cash equivalents
Borrowings
Net funds
Company
Cash and cash equivalents
Net funds
(b) Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents in the year
Cash outflow on borrowings repaid in the year
Movement in net funds
(c) Statement of cash flows from discontinued activities
Cash flow from discontinued activities
Profit/(loss) before tax
Adjustments for:
Gain on disposal of trade
Movements in working capital
Increase in debtors
Decrease/(Increase) in creditors
Cash generated/absorbed from operations
Investing activities
Net proceeds on disposal of trade
Net cash used in investing activities
Financing activities
Repayment of borrowings
Net cash used in financing activities
Net cash increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Page 42
At 1 January
2018
£
Cash Flow
£
At 31 December
2018
£
129,611
(2,000)
127,611
405,718
2,000
407,718
81,459
81,459
332,197
332,197
Group
£
405,718
2,000
407,718
535,329
-
535,329
413,656
413,636
Company
£
332,197
-
332,197
2018
£
2017
£
-
-
-
13,865
13,865
-
-
-
13,865
(13,865)
-
53,567
(82,600)
(914)
(42,084)
(72,031)
82,600
82,600
(2,000)
(2,000)
8,569
(22,434)
(13,865)
Notice of an annual general meeting
Ultimate Sports Group Plc
(the “Company”)
(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 03882621)
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the Hellenic Centre 16/18
Paddington Street, London W1U 5AS on 24 July 2019 at 11.30am for the transaction of the following business.
Ordinary Business
To consider, and, if thought fit, pass the following resolutions which will be proposed as Ordinary Resolutions:
1.
2.
3.
To receive and adopt the financial statements of the Company for the year ended 31 December 2018 with
the Directors’ and auditors’ report thereon.
To re-appoint D Hillel as a Director of the Company, who retires by rotation in accordance with Article 23 of
the Company's Articles of Association.
To re-appoint Hazlewoods LLP Chartered Accountants, as auditors to the Company and to authorise the
Directors to agree and fix their remuneration.
Special Business
To consider, and, if thought fit, pass the following resolutions which will be proposed as to Resolution 4 as an Ordinary
Resolution and as to Resolution 5 as a Special Resolution:
4.
THAT the Directors of the Company be generally and unconditionally authorised pursuant to and in
accordance with section 551 of the 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”) provided that such power is limited to the allotment of shares in the Company and/or
the grant of Rights up to an aggregate nominal amount of £100,000 provided that this authority shall expire
at the end of the next annual general meeting of the Company to be held after the date of the passing of this
Resolution or, if earlier, fifteen months from the date of the passing of this Resolution save that the Company
may prior to the expiry of such period make any offer or agreement which would or might require shares in
the Company to be allotted and/or Rights to be granted after such expiry and the Directors of the Company
shall be entitled to allot shares in the Company and/or to grant Rights pursuant to any such offer or
agreement as if this authority had not expired.
5. THAT, subject to the passing of Resolution 4 above, the Directors of the Company be empowered pursuant to
section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash
pursuant to the authority conferred on them by Resolution 4 above, as if section 561 of the Act did not apply
to such allotment provided this power shall be limited to the allotment to any person or persons of equity
securities up to an aggregate nominal amount of £100,000 provided that the power given by this Resolution
shall expire at the end of the next annual general meeting of the Company to be held after the date of the
passing of this Resolution or, if earlier, fifteen months from the date of the passing of this Resolution, save
that the Directors of the Company shall be entitled to make offers or agreements before the expiry of such
power which would or might require equity securities to be allotted after such expiry and the Directors of the
Company shall be entitled to allot equity securities pursuant to any such offers or agreements as if the power
conferred hereby had not expired.
Company Secretary
By order of the Board
D Hillel
26 June 2019
Registered Office:
30 City Road
London EC1Y 2AB
Page 43
Notice of an annual general meeting
A member entitled to attend and vote at the above meeting is entitled to appoint a proxy or proxies to
attend, speak and vote instead of him. A proxy may demand, or join in demanding, a poll. A proxy need
not be a member of the Company.
A Form of Proxy is enclosed for your use if desired. The instrument appointing a proxy must reach the
Company’s Registrars, Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR
not less than 48 hours (excluding non-working days) before the time of holding of the meeting.
Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001 and paragraph 18(c) of The
Companies Act 2006 (Consequential Amendments) (Uncertificated Securities) Order 2009, the Company
specifies that only those members registered on the Company’s register of members 48 hours before the
time of the Meeting shall be entitled to attend and vote at the Meeting. In calculating the period of 48 hours
mentioned above no account shall be taken of any part of a day that is not a working day 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.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company's register of members in respect of the joint
holding (the first-named being the most senior).
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To
appoint more than one proxy, you should contact Share Registrars Limited of The Courtyard, 7 West Street,
Farnham, Surrey GU9 7DR.
In the case of a member which is a company, the proxy form must be executed under its common seal or
signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or
any other authority under which the proxy form is signed (or a duly certified copy of such power or authority)
must be included with the proxy form.
Except as provided above, members who have general queries about the meeting should telephone Share
Registrars Limited on 01252-821390 (no other methods of communication will be accepted). You may not
use any electronic address provided either in this notice of annual general meeting or any related documents
(including the chairman's letter and the form of proxy) to communicate with the Company for any purposes
other than those expressly stated.
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 business 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.
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
.
Page 44
Notice of an annual general meeting
Form of Proxy
Ultimate Sports Group Plc
(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 03882621)
(the “Company”)
For use at the Annual General Meeting of the above -named company to be held at the Hellenic Centre 16/18
Paddington Street, London W1U 5AS on 24 July 2019 at 11.30am.
I/We (name(s) in full) ……………………………………………………………………………………...
(BLOCK LETTERS)
of ……………………………………………………………………………………………………………
being (a) holder(s) of ordinary shares of 5p each in Ultimate Sports Group Plc hereby appoint the Chairman of the
meeting/or
*………………………………………………………………………………………………………………
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 24
July 2019, and at every adjournment thereof. I/We wish my/our proxy to vote as shown below in respect of the
resolutions set out in the notice of the Annual General Meeting.
Ordinary Resolutions
For
Against
Vote
Withheld**
1. To receive and adopt the financial statements of the Company for the
year ended 31 December 2018 with the Directors’ and auditors’ report
thereon.
2. To re-appoint D Hillel as a Director of the Company, who retires by
rotation in accordance with Article 23 of the Company's articles of
association.
3. To re-appoint Hazlewoods LLP, Chartered Accountants, as auditors to
the Company and to authorise the Directors to agree and fix their
remuneration.
4. To authorise the Directors generally and unconditionally to allot shares
and/or to grant rights to subscribe for or to convert any security into
shares in accordance with Section 551 of the Companies Act 2006,
subject to certain specified limitations.
Special Resolution
5. To authorise the Directors to dis-apply the statutory rights of pre-
emption in relation to certain allotments of equity securities, subject to
certain limitations.
*You may, if you wish, in the space provided insert the name(s) of the person(s) of your choice to attend and vote at
the meeting on your behalf
**Please note that if the "Vote Withheld" box is marked with a ''X", the Shareholder will not be counted in the
calculation of votes "For" and "Against" and the Shareholder will not be taken to have given his/her/their discretion to
the Proxy, on how to vote.
Signature…………………………………
Date……………………………………..
Page 45
Notice of an annual general meeting
Notes
1.
2.
3.
4.
5.
6.
7.
8.
A member entitled to attend and vote at the meeting is also entitled to appoint a proxy or proxies to
exercise all or any of his rights to attend, speak and vote at the meeting instead of him. A proxy may
demand, or join in demanding, a poll. A proxy need not be a member of the Company.
Completion and return of the form of proxy will not preclude ordinary shareholders from attending or voting
at the meeting, if they so wish.
To be effective, this proxy form must be lodged with the Company’s Registrars, Share Registrars Limited by
post at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR not later than 48 hours (excluding non-
working days) before the time of the meeting, or any adjournment thereof, together, if appropriate, with the
power of attorney or other authority (if any) under which it is signed or a notarial certified copy of such
power or, where the proxy form has been signed by an officer on behalf of a corporation, a notarial certified
copy of the authority under which it is signed.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company's register of members in respect of the joint
holding (the first-named being the most senior). Any alterations made in this proxy should be initialled.
In the case of a member which is a corporation this proxy form must be given under its common seal or be
signed on its behalf by an attorney or officer duly authorised. Any power of attorney or any other authority
under which the proxy form is signed (or a duly certified copy of such power or authority) must be included
with the proxy form.
Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001 and paragraph 18(c) of The
Companies Act 2006 (Consequential Amendments) (Uncertificated Securities) Order 2009, the Company
specifies that only those members registered on the Company’s register of members 48 hours before the
time of the Meeting shall be entitled to attend and vote at the Meeting. In calculating the period of 48 hours
mentioned above no account shall be taken of any part of a day that is not a working day. Changes to entries
on the relevant register of members after that time shall be disregarded in determining the rights of any
person to attend or vote at the meeting.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares, you may not appoint more than one proxy to exercise rights attached to any one share. To
appoint more than one proxy, you will need to complete a separate proxy form in relation to each
appointment. Please contact Share Registrars Limited for the purpose of requesting additional proxy forms.
You will need to state clearly on each proxy form how many shares the proxy was appointed in relation to. A
failure to specify the number of shares each proxy appointment relates to or specifying a number of shares in
excess of those held by the member will result in the proxy appointment being invalid.
Except as provided above, members who have general queries about the meeting should telephone Share
Registrars Limited on 01252-821390 (no other methods of communication will be accepted). You may not
use any electronic address provided either in this notice of annual general meeting or any related documents
(including the chairman's letter and the directors’ letter and explanatory note in respect of electronic
communications) to communicate with the Company for any purposes other than those expressly stated.
Page 46