Company Number: 03882621
CATENA GROUP Plc
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2019
Company information
Chairman’s statement and Chief Executive’s review
Board of directors
Directors’ report
Strategic report
Corporate governance statement
Report of the audit committee
Statement of directors’ responsibilities
Independent auditor’s report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Parent Company statement of financial position
Parent Company statement of changes in equity
Consolidated statement of cash flows
Parent Company statement of cash flows
Pages
1
2
3
4
5-6
7-11
12
13
14-17
18
19
20
21
22
23
24
Notes to the group and parent company financial statements
25-47
CEO and Interim Chairman
Finance director
Non- executive director
Non- executive director
Non- executive director
Registered office
30 City Road
London EC1Y 2AB
Company website
www.catenagroup.co.uk
Nominated advisor
Zeus Capital Limited
82 King Street
Manchester M2 4WQ
Brokers
Zeus Capital Limited
82 King Street
Manchester M2 4WQ
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham, Surrey GU9 7DR
Company information
Directors
M Farnum-Schneider
D Hillel
J Zucker
D J Coldbeck
J Murray
Secretary
D Hillel
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 9BG
Page 1
Chairman’s statement and Chief Executive’s review
Catena Group Plc (“Catena”, the “Group” or the “Company”)
We are reporting a total comprehensive loss from all activities of £218,208 before tax against a total comprehensive loss
of £144,485 in the previous year. This year’s results include £30,058 of losses from discontinued activities (2018 -
£32,399). Catena’s consolidated cash balances as at 31 December 2019 were £636,779 (2018: £535,329). The directors
are not recommending the payment of a dividend.
FUNDRAISE
As set out in the circular to shareholders issued in July 2019, the Company raised £290,000 (before legal and other
professional expenses) by the issue of 2,000,000 new shares at 14.5p per share in order to assist with the Group’s working
capital requirements.
SPORT IN SCHOOLS LIMITED
Our focus in 2019 in terms of trading was the ongoing development of our sports coaching trading activities through
Sport in Schools Ltd. The company’s turnover increased by almost 9% to £1,683,272 producing a profit of £119,705
representing an increase of 19% on the previous year. The improved financial performance results from a combination
of increased turnover by virtue of additional schools engaged (142, in the academic year 2019/20 as compared with 133
schools in the previous academic year), increased income from existing schools and tighter control of overheads.
As indicated in our Strategic Review, since the end of year, trading has been severely impacted by school closures in
March 2020 brought on by the Covid-19 pandemic. This has had an adverse impact on cash flows. In response, the Group
has taken aggressive action to reduce costs, claim under the Government job support schemes and raise further funds
under the Government backed loan scheme. These actions will enable the business to resume full operations when
schools re-open in September 2020 and mitigate against further curtailment in sports activity in schools or indeed further
school closures.
With regards to the Sport in Schools Activities, the directors anticipate a return to profitability provided that no further
restrictions in school operations arise.
PANTHEON LEISURE PLC (“PANTHEON”)
Catena, holds 85.87% of the issued share capital of Pantheon Leisure Plc which in turn owns 100% of the operating
business Sport in Schools Ltd, trading as The Elms Sport in Schools (“ESS”). Pantheon as a group made a loss of £35,477
for the year ended 31 December 2019 (2018: profit of £32,817). The group profit took into account £99,490 of non-
recurring professional fees associated with land and drainage issues at the Elms Sport in Schools recognised in the year,
which have now been fully resolved.
CORPORATE GOVERNANCE CODE
In accordance with changes to the 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 AND INVESTMENT OPPORTUNITIES
In late 2019, Catena identified the enormous growth potential of businesses operating in the machine learning and
artificial intelligence (AI) sector; announcing in January 2020 the change of our name and the refocused strategy toward
investment and acquisitions in this sector. In March 2020, Catena began its strategic transformation by acquiring a 9.1%
stake in Insight Capital Partners Ltd (“Insight”), as well as a six-month option to increase our ownership to 30%, funded
by a £1.5 million share placing and £0.5 million issue of convertible loan notes. We have been very satisfied with the
progress made by Insight to date and are continuing to build our engagement and strategy with Insight.
M Farnum-Schneider
Chief Executive Officer and Interim Chairman
1 September 2020
Page 2
Board of directors
Matthew Farnum-Schneider – Chief Executive Officer and Interim Chairman
Matthew is an experienced senior executive, having most recently been a Managing Director and Senior Adviser to the
CEO at Credit Suisse between 2015-2019, prior to which he was Managing Director for corporate strategy at Prudential
PLC. He was a founder and inaugural Chairman of the Global Infrastructure Investor Association, which under his
leadership grew to become the leading advocacy association for the infrastructure investor community, representing
more than 70 investors holding more than $650 billion in assets. Between 2009-2013, Matthew served in President
Obama’s administration both as Director of International Economics for the White House National Security Council and
as COO of the International Development Finance Corporation. Earlier in his career he structured derivative hedging
solutions at Barclays Capital and the Royal Bank of Scotland and served in President Clinton’s White House as a senior
adviser.
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 and was a founder and the managing partner of Roiter Zucker for over 30 years. He continues to practice
as a consultant solicitor. John is also a trustee of a charitable trust.
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.
John Murray - Non-Executive Director
John was most recently a Managing Director at Credit Suisse acting as Senior Adviser to the CEO. He joined Credit Suisse
in 2015 from Prudential plc where he served as Group Communications Director and member of the Group Executive
Committee. John was previously Director of Communications at the Financial Services Authority, a founding partner of
London-based financial PR consultancy, Powerscourt Limited, and Director of Strategy and Communications at Telewest
plc (now part of Virgin Media). Prior to this, John had a successful career in journalism, culminating in the position of
Executive Editor of The Daily Express.
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 2019.
Results and dividends
The loss of the group before and after tax is given on page 18. The directors do not recommend the payment of a dividend.
Directors
The directors holding office during the year were:
M Farnum-Schneider
R L Owen
G Simmonds
D Hillel
J Zucker
D Coldbeck
Appointed 01.08.2019
Resigned 25.03.2020
Resigned 01.08.2019
Directors’ interests
At the date of this report the directors held the following beneficial interests in the ordinary share capital:
M Farnum-Schneider
D Hillel
J Zucker
D Coldbeck
Ordinary shares
No.
Share options &
warrants
100,000
109,607
449,373
100,000
4,000,000
-
-
-
Details of directors’ remuneration are given in note 8 in the notes to the accounts.
Substantial Interests
At the date of this report, the following had notified an interest of 3% or more in the ordinary share capital of the
company:
R Bernstein
D Kyte
R L Owen
R Rowan
Schroder & Co Bank AG
G Simmonds
J Shulman
Ordinary shares
10,746,000
3,270,000
2,444,672
2,000,000
2,000,000
1,857,091
1,250,000
Percentage
27.16
8.27
6.18
5.06
5.06
4.69
3.16
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.
As permitted under s414C(11) Certain required Directors’ Report disclosures are made in the Strategic Report due to
their strategic importance.
By order of the board.
D Hillel
Company secretary
1 September 2020
Page 4
Strategic report
Principal activities, fair review of the business and future developments
The principal activity of Catena Group Plc (the “Company” or the “Group”) is to acquire and grow businesses operating
in high performing industries.
The trading subsidiaries during 2019 were Sport in Schools Limited and Ultimate Player Limited.
Reverse Take-Over Investments Limited, which was formerly active, specialised in the formation and development of
shell companies and has not actively traded since the disposal of its remaining interests in investments for re-sale in 2017.
No new investments were made in the year ended 31 December 2019 and the company is unnecessary for the future
activities of the Group. With no future plans for the company the Board has, since the year end, filed an application with
Companies House to remove the company from the register.
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 £1,683,272 with a profit for the year of £119,705 (2018
turnover £1,546,733 and profit of £100,705). The improved result is a combination of increased turnover by virtue of
additional schools engaged, increased income from existing schools and tighter control of overheads. The divisional loss
from the sports and leisure segment was £35,477 for the year ended 31 December 2019 (2018: profit of £32,817). The
divisional loss takes into account £99,490 of non-recurring professional fees associated with land and drainage issues at
the Elms Sport in Schools incurred in the year which are now fully resolved.
Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. Following the Board’s
decision in 2017 to delay future website development, Ultimate Player has since then restricted its expenditure to
recurring website maintenance and company administration costs. The company’s loss for the year was £30,059 (2018:
loss £32,399). Since the year end the company has closed-down the website and for that reason this activity has been re-
classified as a discontinued activity in these financial statements.
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:
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 impact of the Covid-19 pandemic could still significantly impact future trading, if
further wide-spread school closures occur or if there is long-term curtailment in the level of sports activities within the
schools. The directors are unable to predict or evaluate the extent of the impact this might have on future trading but
are pleased with the Government’s prioritisation of normal school operations in its response to the Covid-19 pandemic.
The main financial risks to the Group are 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 27 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
Going Concern, subsequent events and the impact of the Covid-19 pandemic
The school closures resulting from the nationwide lockdown and progressing through more recent staged easing of
lockdown has meant that 2020 is unlikely to generate sufficient turnover to deliver an operating profit from its main
trading activity, Sport in Schools Limited. Prior to the pandemic, forecast levels of turnover for 2020 were expected to
result in increased profits in the current year.
The Group has sought to mitigate the financial impact of business disruption through closure by utilising the UK
Government’s (or HMG’s) Covid-19 financial assistance schemes; including the Furlough Worker Scheme, the Coronavirus
Job Retention Scheme, the Retail, Hospitality and Leisure Grant Fund and a Coronavirus Business Interruption Loan of
£240,000 which is repayable over 5 years commencing in July 2021. The directors also intend to apply for the Coronavirus
Job Retention grants when available in early 2021, subject to conditions at that time. The financial support programmes
have broadly insulated the business from any further short-term impacts and will enable it to resume full operations as
the conditions improve.
With the Government’s prioritisation of September school re-opening, it is expected that the provision of sports coaching
in schools will resume and return to levels prior to the pandemic. The vast majority of the schools with whom Sport n
Schools work have indicated their intention to re-start their sport programmes either as the term begins in September
or with a delayed start later in the term.
In accordance with the Financial Reporting Council’s ‘Guidance on the Going Concern Basis of Accounting and Reporting
on Solvency and Liquidity Risks’ (issued April 2016), the directors are required to provide disclosures regarding the going
concern basis of accounting. Based on forecasts prepared, the directors have a reasonable expectation that the Group
has adequate resources available to continue in operational existence for the foreseeable future and has continued to
adopt the going concern basis in preparing the financial statements. However, the ongoing impacts of the global
pandemic continue to evolve and it is difficult for the directors to predict with certainty whether there will be further
restrictions on the way in which schools operate and in particular their approach to provision of sports coaching in
schools. Any further wide-spread and long-term restrictions would impact future revenues and profits and could lead to
the Group having insufficient resources to continue as a going concern, without further external funds being raised or
government support. Further details regarding the adoption of the going concern basis can be found in note 5 in the
financial statements.
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.
SECTION 172 STATEMENT
This section serves as our section 172 statement and should be read in conjunction with the rest of the Strategic Report
set out on pages 6 and 7 (inclusive) and the Corporate Governance Statements on pages X and X (inclusive). The Directors
are fully aware of their duty to promote the success of the Company in accordance with section 172 of the Companies
Act 2006. Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of
shareholders and employees in their decision making.
M Farnum-Schneider
Chief Executive Officer and Interim Chairman
1 September 2020
Page 6
Corporate governance statement
Chairman’s Introduction
High standards of corporate governance are a key priority for the Board of Catena Group Plc and the Board has adopted
the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) as the basis of the Group’s
governance framework. It is the responsibility of the Board to ensure that the Group is managed for the long-term benefit
of all shareholders and stakeholders, with effective and efficient decision-making. Corporate governance is an important
aspect of this, reducing risk and adding value to our business.
The Directors acknowledge the importance of the ten principles set out in the QCA Code and, in this section, the Group’s
current approach to complying with those principles is set out.
M Farnum-Schneider, Interim Chairman
The corporate governance framework within which the Group operates is based upon practices which the Board believes
are appropriate and proportionate 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 Group meets them given the
size of the Group. The results of our review are set our below.
Over the period under review, the Group had not changed its strategic focus of developing the business of ESS and
continuing to carefully appraise all acquisition opportunities. However, in early 2020, the Company outlined a re-focused
strategy toward machine learning and artificial intelligence which has begun with its March 2020 investment in Insight
Capital Partners Ltd. At this time, it 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 Group and the Board highlights where it has departed from the
QCA 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:
Catena 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, as well as executing against its new strategic focus in artificial
intelligence and machine learning.
The Board has established a strategy which seeks to promote long-term value of ESS for shareholders and has identified
the following key areas of operation to focus on improving the 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
However, the priority of the Group at this time is to leverage the enormous growth potential in artificial intelligence and
machine learning by pursuing further investment and acquisition opportunities as announced in January 2020. In March
2020, Catena began its strategic transformation by acquiring a 9.1% stake in Insight Capital Partners Ltd (“Insight”) as
well as a six-month option to increase our ownership to 30%. We have been very satisfied with the progress made by
Insight to date and are actively considering exercising our option and/ or pursuing additional corporate actions to further
leverage the enormous potential this sector provides.
Page 7
Corporate governance statement
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 Chief Executive, also acting as Interim Chairman, presents 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 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: catenagroup.co.uk.
Since January 2020, the Board has announced the detailed results of shareholder voting to the market.
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’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 at least 10 times per annum 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
of 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
section of the Annual Report. 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 subsidiaries) are also reminded on an annual basis that they should seek approval from the
Interim Chairman and Chief Executive if they, or their families, plan to trade in the Company’s shares.
Page 8
Corporate governance statement
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. Following the resignation of Richard
Owen in March 2020 this responsibility now falls on the Matthew Farnum-Schneider, who has temporarily taken over as
the Group’s Interim Chairman as well as remaining Chief Executive Officer.
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 three non-executive directors (one independent), and two executive directors – and is satisfied it meets this
requirement with the understanding that an additional independent non-executive director will be appointed in the
coming months. In May 2020, the Board appointed John Murray to act as a non-executive director. The Board is
supported by one committee, the Audit committee.
The Interim Chairman, who is also the Group’s Chief Executive Officer, 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. He 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.
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 adhered to 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 2019) and the attendance of Directors is
summarised below:
Matthew
Farnum-
Schneider
Richard
Owen1
Geoffrey
Simmonds2
David
Hillel
John
Zucker
David
Coldbeck
Board Meetings
Audit Committee
4/4
11/11
7/7
11/11
5/11
9/11
N/A
N/A
N/A
N/A
1/1
1/1
Time Commitment
Full-time
Full-time
Full-time
3-4 days
per month
1-2 days
per month
1-2 days per
month
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.
1 Resigned March 2020
2 Resigned July 2019
Page 9
Corporate governance statement
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities:
The Board currently comprises two Executive and three 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. Further details of the Board are included in the Annual Report on page 3.
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 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 as well as 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.
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 and will continue to review this requirement as
the size and the complexity of the Group evolves.
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. Culture
is key to successfully implementing the Company’s strategy and achieving its objectives. Thus, the Board prioritises the
establishment and maintenance of a culture of integrity, transparency and excellence.
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 ensures effective communication with shareholders. The Group’s Chief Executive 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. In the current circumstances, where the Chief
Executive is serving as Interim Chairman, the Independent Non-Executive Director provides additional oversight of
decision-making.
The appropriateness of the Board’s composition and corporate governance structures are reviewed on an ad hoc basis
by the Board as a whole, and these will evolve in parallel with the Group’s objectives, strategy and business model as the
Group develops.
Page 10
Corporate governance statement
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 three non-executive directors. 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.
In accordance with the QCA Code, the Audit Committee now meets at least three times 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,
determining 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.
Catena’s website is regularly updated for regulatory announcements and other required information and is accessible
online at: catenagroup.co.uk
Comments and written communications from Shareholders and other stakeholders are welcome.
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, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Group’s position and performance,
business model and strategy.
M Farnum-Schneider
Chief Executive Officer and Interim Chairman
1 September 2020
Page 11
Report of the Audit committee
The primary objective of the Committee is to assist the Board in overseeing the systems of internal control
and external financial reporting of the Company. It performs this role by taking reasonable steps to establish
that:
•
•
•
•
the external and internal audit arrangements are appropriate and effective;
the compliance arrangements are appropriate and effective;
fraud prevention and whistleblowing arrangements are established, which are designed to minimise
potential for fraud and financial impropriety; and
the annual report and accounts, related internal control disclosures and any other publicly available
financial information are reviewed and scrutinised.
The Committee has undertaken this role during the course of the year and reviewed all significant issues
concerning the financial statement.
The principal matter the Committee considered concerning the 2019 financial statements was the
appropriateness of the going concern assessment after consideration of the impact arising from the COVID
19 (Coronavirus) on the Company and its group. The Committee has reviewed key management judgement
prior to publication of the 2019 financial statements concerning this issue.
David Coldbeck and John Zucker
Audit Committee
1 September 2020
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 auditor’s report to the shareholders of Catena Group Plc
Opinion
We have audited the financial statements of Catena Group plc (the “Parent Company”) and its subsidiaries (the “Group”)
for the year ended 31 December 2019 which comprise the consolidated statement of comprehensive income, the
consolidated and company statements of financial position, the consolidated and parent company statements of cash
flows, the consolidated and parent 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 (“IFRS”) 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 2019 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 Financial Reporting Council’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.
Material uncertainty related to Going Concern
We draw attention to note 5 to the financial statements, which sets out the directors’ view on the impacts of Covid-19
on the group’s ability to continue as a going concern. This note explains that the directors are not able to predict ongoing
developments in relation to the Global Covid-19 pandemic and in particular the impact that this might have on the
planned re-opening of schools, the provision of sports education and hence the impact that this could have on the group’s
business and cash flows. As stated in note 5, these conditions indicate that a material uncertainty exists that could cast
doubt on the group’s ability to continue as a going concern if further external funds cannot be raised or if further
government support is not provided. Our opinion, as set out under the heading “Opinion” above is not modified in respect
of this matter.
Our audit work included:
•
•
•
•
review of forecasts prepared by management and approved by the directors to support the going concern
assumption;
considering the current level of available cash resources and debt servicing requirements of the Group;
considering the likely impact on cash flows of a further reduction or suspension of activities arising from a
reduction or cessation in level of activities; and
evaluating the adequacy and appropriateness of the directors’ disclosures in respect of the implications of the
Covid-19 pandemic and its implications on the going concern assumption.
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.
Page 14
Independent auditor’s report to the shareholders of Catena Group Plc
In addition to the matter described under the heading ‘material uncertainty related to Going Concern above, we have
determined the matter below to be a key audit matter to be communicated in our report.
Description of Key Audit Matter
Completeness of Income
Verification of completeness of income and
ensuring that this is allocated to the correct
accounting periods is an assumed risk in most
businesses
requiring particular
consideration.
and one
How we responded
We obtained an understanding of systems and
processes in place to record revenues and carried
out tests of the controls in place to capture
income. We also carried out substantive audit
procedures on a test basis. We also carried out
substantive tests to ensure revenue was correctly
allocated between accounting periods.
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.
We established materiality for the group’s financial statements as a whole to be £25,000, which is 1.5% of the value of
the group’s turnover and 11% of the group’s loss for the year. 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 2.4% 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. This
included gaining an understanding of the legal and regulatory framework applicable to the group and parent company,
the structure of the group and parent company and the business sector in which it operates. We considered the risks of
acts by the group which were contrary to applicable law and regulations including fraud. We designed our audit
procedures to respond to those identified risks , including non-compliance with laws and regulations which are material
to the financial statements. We focussed on laws and regulations that could give rise to a material mis-statement in the
financial statements, including but not limited to the Companies Act 2006.
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. We also made enquiries of management and reviewed minutes of
directors’ meetings.
Our tests included, but were not limited to, obtaining evidence about amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by irregularities, including fraud or error.
The risks of material misstatement are considered under the heading of “key audit matters” in this report.
Page 15
Independent auditor’s report to the shareholders of Catena Group Plc
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether
there is a material misstatement in the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the 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 by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities 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 group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Page 16
Independent auditor’s report to the shareholders of Catena Group Plc
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 parent 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 parent 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 parent company and the parent
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
1 September 2020
Page 17
Consolidated statement of comprehensive income for the year ended 31 December 2019
Notes
2019
£
2018
£
Continuing activities
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Finance income
Finance costs
Loss before taxation
Taxation
Loss after taxation from continuing activities
Loss for the year from discontinued activities
Loss for the year and total comprehensive loss
Attributable to:
Equity holders of the parent company
Non-controlling interests
Loss per share (basic and diluted)
Loss from continuing activities per share
Loss from discontinued activities per share
Loss for the year and total comprehensive loss
per share
6
7
9
10
11
6
12
12
The notes on pages 25 to 47 form part of these financial statements.
1,683,272
(818,158)
865,114
(1,051,971)
1,546,733
(719,067)
827,666
(939,842)
(186,857)
(112,176)
1,273
(2,566)
718
(628)
(188,150)
(112,086)
-
(188,150)
(30,058)
(218,208)
(213,197)
(5,011)
(218,208)
-
(112,086)
(32,399)
(144,485)
(149,121)
4,636
(144,485)
(0.0053)
(0.0010)
(0.0063)
(0.0040)
(0.0011)
(0.0051)
Page 18
Consolidated statement of financial position as at 31 December 2019
Notes
2019
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
Non-current liabilities
Leasing commitments
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
14
16
17
18
18
21
23
23
£
59,954
72,104
132,058
109,635
636,779
746,414
878,472
275,495
49,294
324,789
2018
£
59,954
13,168
73,122
89,760
535,329
625,089
698,211
239,911
-
239,911
553,683
458,300
2,408,664
1,048,031
325,584
(3,164,722)
617,557
(63,874)
553,683
2,388,664
782,031
325,584
(2,979,116)
517,163
(58,863)
458,300
The financial statements were approved and authorised for issue by the board on 1 September 2020 and signed on its
behalf by:
D Hillel
Director
M Farnum-Schneider
Director
Company registration number 03882621
The notes on pages 25 to 47 form part of these financial statements.
Page 19
Consolidated statement of changes in equity
Share
capital
£
Share
premium
£
Merger
reserve
£
Retained
earnings
£
To equity
holders of
the parent
company
£
Non-
controlling
interest
£
Total
£
Balance at 1 January 2018
2,281,164
393,454
325,584
(2,840,795)
159,407
(63,499)
95,908
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
-
-
-
537,500
(41,423)
10,800
(149,121)
(149,121)
4,636
(144,485)
Reserves at 1 January 2019
2,388,664
782,031
325,584
(2,979,116)
517,163
(58,863)
458,300
Adjustment for the adoption of IFRS
16 in relation to leased assets
-
-
Issue of new shares
20,000
270,000
Share issue costs
Share based payments
Loss for the year
-
-
-
(4,000)
-
-
-
-
-
-
-
8,591
8,591
-
-
19,000
290,000
(4,000)
19,000
-
-
-
-
(213,197)
(213,197)
(5,011)
At 31 December 2019
2,408,664
1,048,031
325,584
(3,164,722)
617,557
(63,874)
8,591
290,000
(4,000)
19,000
(218,208)
553,683
The notes on pages 25 to 47 form part of these financial statements.
Page 20
Parent Company statement of financial position as at 31 December 2019
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
2019
£
2018
£
15
16
17
18
21
23
23
505,755
-
505,755
329,056
510,538
839,594
505,755
-
505,755
361,793
413,656
775,449
1,345,349
1,281,204
313,455
313,455
313,455
1,031,894
2,408,664
1,048,031
325,584
(2,750,385)
319,715
319,715
319,715
961,489
2,388,664
782,031
325,584
(2,534,790)
1,031,894
961,489
The financial statements were approved and authorised for issue by the board on 1 September 2020 and signed on its
behalf by:
D Hillel
Director
M Farnum Schneider
Director
Company registration number 03882621
The notes on pages 25 to 47 form part of these financial statements.
Page 21
Parent Company statement of changes in equity
Share
capital
£
Share
premium
£
Merger
reserve
£
Retained
earnings
£
Total
£
At 1 January 2018
2,281,164
393,454
325,584
(2,344,388)
655,814
Issue of new shares
Share issue costs
Share based payments
Loss for the year
107,500
430,000
-
-
-
(41,423)
-
-
-
-
-
-
-
-
537,500
(41,423)
10,800
10,800
(201,202)
(201,202)
At 1 January 2019
2,388,664
782,031
325,584
(2,534,790)
961,489
Issue of new shares
20,000
270,000
Share issue costs
Share based payments
Loss for the year
-
-
-
(4,000)
-
-
-
-
-
-
-
-
19,000
290,000
(4,000)
19,000
(234,595)
(234,595)
At 31 December 2019
2,408,664
1,048,031
325,584
(2,750,385)
1,031,894
The notes on pages 25 to 47 form part of these financial statements.
Page 22
Consolidated statement of cash flows for the year ended 31 December 2019
Note
2019
£
2018
£
Cash flow from all operating activities
Loss before taxation from continuing activities
Loss before taxation from discontinued activities
Adjustments for:
Finance income
Finance expense
Impairment and amortisation of intangible assets
Share based payments
Depreciation
Loss on disposal of tangible assets
Operating cash flow before working capital movements
Increase in receivables
Increase in payables
(188,150)
(30,058)
(218,208)
(1,273)
2,566
-
19,000
18,764
-
(179,151)
(19,875)
27,251
(112,086)
(32,399)
(144,485)
(718)
628
100
10,800
7,507
1
(126,167)
(20,779)
66,250
Net cash absorbed by operations
(171,775)
(80,696)
Taxation
-
-
Cash flow from investing activities
Finance income
Property, plant and equipment acquired
Net cash absorbed by investing activities
Cash flow from financing activities
Funds from share issues
Finance expense
Repayment of leasing liabilities and borrowings
Net cash from financing activities
Net increase in cash and cash equivalents in the year
29
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
1,273
(3,180)
(1,907)
286,000
(2,566)
(8,302)
275,132
101,450
535,329
636,779
718
(7,753)
(7,035)
496,077
(628)
(2,000)
493,449
405,718
129,611
535,329
A statement of cash flows from discontinued activities is set out in note 29 (b).
The notes on pages 25 to 47 form part of these financial statements.
Page 23
Parent Company statement of cash flows for the year ended 31 December 2019
Notes
2019
£
2018
£
Cash flow from operating activities
Loss before tax
(234,595)
(201,202)
Adjustments for:
Finance income
Share based payments
Provision for impairment in value of investments in
subsidiaries
Provision against irrecoverable intra group indebtedness
Loss on disposed tangible assets
(17,773)
19,000
-
81,717
-
(17,218)
10,800
10,713
78,765
1
Operating cash flow before working capital movements
(151,651)
(118,141)
Increase in receivables
(Decrease)/increase in payables
(32,485)
(6,255)
(81,855)
35,398
Net cash absorbed by operations
(190,391)
(164,598)
Cash flow from investing activities
Finance income
Net cash inflow from investing activities
Cash flow from financing activities
Funds from share issues
Net cash from financing activities
Net increase in cash and cash equivalents in the year
29
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
1,273
1,273
718
718
286,000
496,077
286,000
96,882
413,656
510,538
496,077
332,197
81,459
413,656
The notes on pages 25 to 47 form part of these financial statements
Page 24
Notes to the group and parent company financial statements
1.
General information
Catena 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 6.
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 2019 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 2019. Except for IFRS 16, the
adoption of new standards and interpretations in the year has not had a material impact of the Group’s financial
statements.
IFRS 16
The Group has adopted IFRS 16 in the financial statements for the first time for the year ended 31 December 2019. IFRS
16 has been applied under the modified retrospective approach and as such there has been no restatement of the prior
year figures. IFRS 16 replaces all existing lease requirements under IAS 17. Under IFRS 16 there is no longer any
distinction between an operating and a finance lease, all leases now result in the recognition of a financial liability and a
‘Right-of-Use’ asset for the lessee. Details of the impact upon transition and on the results and net assets for the year
are shown in Note 22.
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 2020, 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:
• Amendments to References to the Conceptual Framework in IFRS Standards (effective 1 January 2020)
• Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020)
• Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020)
•
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) (effective 1 January 2020)
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) (effective 1 January 2022)
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, in accordance with IFRS 10. 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.
Details of subsidiary undertakings are set out in note 15.
All intra-group transactions and balances have been eliminated in preparing the consolidated financial
statements.
Page 25
Notes to the group and parent company financial statements
3.
Significant accounting policies (continued)
(b)
Revenue recognition
Revenue arises from income from sports and leisure activities undertaken by the Group; representing invoiced
and accrued amounts for services supplied in the year, exclusive of Value Added Tax.
Consideration received from customers in respect of services is only recorded as revenue to the extent that the
Group has performed its contractual obligations in respect of that consideration. Management assess the
performance of the Group’s contractual obligations against the sports and leisure activities as they are delivered.
Revenue from sports and leisure activities is recognised as the activity is provided, with payment due in advance
of the performance obligations.
The IFRS 15 practical expedient has been applied whereby the promised amount of consideration has not been
amended for the effects of a significant financing component as at the contract inception there are no contracts
where the period between transfers of promised services and customer payment is expected to exceed one
year.
Under the Group’s standard contract terms, customers may be offered refunds for cancellation of sports and
leisure activities. It is considered highly probable that a significant reversal in the revenue recognised will not
occur given the consistent low level of refunds in prior years.
(c)
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 26
Notes to the group and parent company financial statements
3.
Significant accounting policies (continued)
(d)
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)
Operating leases
Prior to 1 January 2019: 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.
Post 1 January 2019: Assets held under leases are recognised as assets of the Group at the fair value at the
inception of the lease or if lower, at the present value of the minimum lease payments. The related liability to
the lessor is included in the Statement of Financial Position as a finance lease obligation. Lease payments are
apportioned between interest expenses and capital redemption of the liability. Interest is recognised
immediately in the Consolidated Income Statement, unless attributable to qualifying assets, in which case they
are capitalised to the cost of those assets.
Exemptions are applied for short life leases and low value assets, with payment made under operating leases
charged to the Consolidated Statement of Comprehensive Income on a straight line basis of the period of the
lease.
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.
(f)
(g)
Page 27
Notes to the group and parent company financial statements
3.
Significant accounting policies (continued)
(h)
(i)
(j)
Investments
Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company
balance sheet.
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.
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 carrying value of goodwill at the year end and the impairment review calculation are given in note
14.
Page 28
Notes to the group and parent company financial statements
4.
Critical accounting judgements and key sources of estimation uncertainty (continued)
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 in 2017 to delay future plans for further website development, all unamortised costs have already been
fully impaired.
Valuation of share-based payments
The Company has granted options to acquire its shares to a director. On valuing the fair value of the share
options granted and hence the cost charged to profit or loss, judgements are required regarding key assumptions
applied. See note 25 for further information relating to the assumptions applied.
5.
Going concern
The directors have considered the financial impact of the Covid-19 pandemic having prepared financial forecasts
covering the 12 months following approval of these financial statements. The forecasts take into account both
turnover and cost expectations, Central and local government assistance and a business interruption bank loan
of £240,000 repayable over a 5 year period commencing in July 2021. The forecasts show the Group can continue
to carry on trading within its existing finance facilities over that period. There are however uncertainties
regarding the forecasts, relating to the reopening of UK schools in the Autumn 2020 and the full sports offering
being available. At the date of signing the financial statements the Directors have every expectation that schools
will re-open and physical education will be a permitted subject and recognise the priority the Government has
placed on the normal operation of schools. In view of the this, the directors consider it appropriate to prepare
the financial statements on a going concern basis.
The directors are however not able to predict ongoing developments in relation to the Global Covid 19-
pandemic and in particular whether the current plans relating to the re-opening of schools and the provision of
sports education will proceed as planned, or indeed whether further closures could be imposed in the future.
Any curtailment of activities would impact cash flows generated by the Group and, if the curtailment were wide-
spread and long-term, could cast doubt on the Group’s ability to continue as a Going Concern without further
external funds being raised or government support. This could also impact the carrying value of the investment
by the parent company in its subsidiary companies.
If the Group was unable to continue as a going concern then adjustments would be necessary to re-classify fixed
assets as current assets, to write down the value of assets to their recoverable amount and to make provision
for further liabilities that would arise on discontinuance of the business.
Page 29
Notes to the group and parent company financial statements
Business segment analysis
6.
Business segments are identified based on the different trading activities of the Group.
Segmental information also details the continuing and discontinued activities in the Group.
All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.
Year ended 31 December 2019
Sports and
leisure
(continuing
activity)
£
Social media
website
(discontinued
activity)
£
Consolidated
£
Revenue from services
1,683,272
71
1,683,343
Segment operating profit/(loss)*
20,215
(30,058)
(9,843)
Group operating expenses**
Operating loss
Finance revenues less finance costs
Loss before taxation
Taxation
Loss after taxation from all activities
Year ended 31 December 2018
(207,072)
(216,915)
(1,293)
(218,208)
-
(218,208)
Sports and
leisure
(continuing
activity)
£
Social media
website
(discontinued
activity)
£
Consolidated
£
Revenue from services
1,546,733
273
1,547,006
Segment operating profit/(loss)*
100,754
(32,399)
68,355
Group operating expenses**
Operating loss
Other gains and losses
Finance revenues less finance costs
Loss before taxation
Taxation
Loss after taxation from continuing
activities
(212,930)
(144,575)
90
(144,485)
-
(144,485)
*Segment operating profit in relation to Sports and Leisure is after charges for depreciation of £8,485 (2018: £7,507) and
exceptional professional fees relating to a drainage issue of £99,490.
** ‘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 £57,192 (2018: £68,824) form part of these costs as opposed to forming part of the
segmental costs of the sports and leisure division.
Page 30
Notes to the group and parent company financial statements
Financial position at 31 December 2019
Segment assets
Non segmental assets
Consolidated total assets
Sports and
leisure
(continuing
activity)
£
174,818
Social media
website
(discontinued
activity)
£
1,946
Consolidated
£
176,764
701,708
878,472
Segmental liabilities
294,769
3,577
298,346
Non segmental corporate liabilities
Capital additions and leased assets
Depreciation/amortisation and impairment
3,180
8,485
-
-
Financial position at 31 December 2018
Sports and
leisure
(continuing
activity)
£
86,555
Social media
website
(discontinued
activity)
£
1,388
Segment assets
Non segmental assets
Consolidated total assets
Segmental liabilities
203,071
-
Non segmental corporate liabilities
26,443
324,789
Consolidated
£
87,943
610,268
698,211
203,071
36,840
239,911
Capital additions
Depreciation/amortisation and impairment
7,753
7,507
-
-
Non segmental assets include group cash balances of £636,779 (2018: £535,329), goodwill of £59,954 (2018: £59,954),
other assets and receivables of £4,975 (2018: £14,985). Non segmental liabilities include trade and other payables of
£26,443 (2018: £36,840).
Page 31
Notes to the group and parent company financial statements
7. Operating loss
The operating loss is stated after charging /(crediting):
Auditors’ remuneration – audit services
Operating lease rentals – land and buildings (short term leases)
Depreciation of property, plant and equipment
2018
£
2018
£
18,700
15,600
18,764
18,900
17,635
7,753
Included in the audit fee for the group is an amount of £7,150 (2018: £7,000) in respect of the Company.
The auditors received fees of £900 (2018: £1,630) in respect of the provision of services in connection with advice relating
to the Group’s interim results, and general advice.
8.
(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
Directors of the Company
Directors of subsidiary undertakings
Senior management and operatives
Sports coaches
Sales
Administration
Average number of personnel in the year
2019
£
1,270,709
74,001
22,363
19,000
1,388,482
2018
£
1,152,825
58,061
12,634
10,800
1,234,320
No.
Re-stated
No.
6
2
2
117
3
3
133
5
2
4
101
2
5
119
The comparative figures for average number of employees has been restated to enable comparability.
(b) Directors’ remuneration – Catena Group Plc
An analysis of directors’ remuneration (who are the key management personnel) is
set out below:
Salary and consultancy fees
Pension contributions
Share based payments
Executive directors
Non-executive directors
2019
£
2018
£
45,753
50
19,000
64,803
54,803
10,000
64,803
21,250
-
-
21,250
16,250
5,000
21,250
The total cost of key management personnel being the executive directors and including employers’ national insurance
was £45,753 (2018: £21,250).
Page 32
Notes to the group and parent company financial statements
8.
(a) Staff Costs
The following amounts were paid for the services of the directors in the year:
Salaries and benefits
R L Owen
M Farnum-Schneider
G Simmonds
D Hillel
J Zucker
D J Coldbeck
2019
£
20,000
5,336
2,917
7,500
5,000
5,000
45,753
2018
£
13,750
-
-
2,500
2,500
2,500
21,250
There were no directors’ benefits in 2019 (2018 - Nil).
The share options to which the cost indicated above referred were issued to M Farnum-Schneider.
There was one director for who defined contribution pension contributions of £50 was paid in the year (2018 - Nil).
9.
Finance income
Interest revenue – bank deposits
10.
Finance costs
Bank overdraft interest
Interest on IFRS 16 lease liability
11.
Taxation
Deferred tax (credit)/charge
Origination and reversal of temporary differences
Tax charge for the year
Tax charge/credit in income statement
No income tax charge arises based on the loss for the year (2018: nil).
2019
£
2018
£
1,273
718
2019
£
-
2,566
2,566
2018
£
628
-
628
2019
£
2018
£
-
-
-
-
-
-
The Group has unutilised tax losses of £5,245,000 (2018: £6,443,000) which includes £960,000 (2018: £2,380,000) 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.
Page 33
Notes to the group and parent company financial statements
Taxation (continued)
11.
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% (2018: 19%)
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
2019
£
2018
£
(218,208)
(144,485)
(41,460)
(27,452)
18,816
3,610
-
1,008
18,025
5,370
2,052
3,943
(79)
16,166
Tax charge/credit
-
-
12.
Loss per share
Basic loss per share has been calculated on the Group’s loss attributable to equity holders of the parent company of
£213,197 (2018: £149,121) and on the weighted average number of shares in issue during the year, which was 34,438,352
(2018: 29,174,996).
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 £213,197 (2018: £149,121).
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 2019 on 4,160,000 ordinary shares and on 1,500,000 share warrants. Post year end 4,000,000 new ordinary
shares were subscribed for, which would have significantly changed the number of shares in calculating the loss per share
if the transaction had happened before the year end.
Loss for the financial year
13.
As permitted by Section 400 of the Companies Act 2006, the profit and loss account for the parent company is not
presented as part of these financial statements.
The consolidated loss for the year of £218,208 (2018: loss of £144,485) includes a loss of £234,595 (2018: loss of
£201,202) dealt with in the accounts of the parent company.
Page 34
Notes to the group and parent company financial statements
14.
Goodwill, intangibles and development costs
2019
£
Website
development
2019
£
Goodwill and
other
intangibles
2019
£
2018
£
Total
Total
587,187
-
587,187
587,187
-
587,187
60,054
-
60,054
100
-
100
647,241
-
647,241
587,287
-
587,287
647,241
-
647,241
587,187
100
587,287
Cost at 1 January
Additions in the year
Cost at 31 December
Amortisation at 1 January
Impairment write off
Amortisation at 31 December
Carrying value at 31 December
-
59,954
59,954
59,954
• 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
was 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,
without the financial impact of the Covid -19 pandemic, revenues would have continued to grow in 2020 and
2021; 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 in in that year.
Page 35
Notes to the group and parent company financial statements
15.
Investments in subsidiaries
Parent 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
2019
£
1,947,932
220,000
2,167,932
2018
£
1,947,932
220,000
2,167,932
1,662,177
-
1,662,177
1,651,464
10,713
1,662,177
505,755
505,755
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.
Description and
proportion of share
capital owned
Subsidiary undertakings
Westside Acquisitions Limited
Ordinary 100%
Reverse Take-Over Investments Limited * Ordinary 100%
Country of
incorporation or
registration
England & Wales
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 ****
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%
Nature of business
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
331/3% held indirectly through Westside Acquisitions Limited
held indirectly through Westside Sports Limited
held indirectly through Pantheon Leisure Plc
*
**
***
**** held indirectly through The Elms Group Limited
The segmental reporting for sports and leisure provides details of assets and liabilities and results for the year for the
Pantheon Leisure sub-group. Details are given in note 6.
Since the year end, the following dormant or inactive companies listed below are in the process of being removed from
the Register at Companies House:
Westside Acquisitions Limited, Reverse Take-Over Investments Limited, Westsidetech Limited, Football Data Services
Limited, Footballfanatix Limited, Football Partners Ltd and Football Directory.co.uk Limited.
Page 36
Notes to the group and parent company financial statements
16.
Property, plant and equipment
Group
Cost
At 1 January 2018
Additions
Disposals
Cost at 1 January 2019
Adjustment for leased assets
Additions
At 31 December 2019
Depreciation
At 1 January 2018
Charge for the year
Disposals
At 1 January 2019
Adjustment for leased assets
Charge for the year
At 31 December 2019
Carrying value
At 31 December 2019
At 31 December 2018
Plant and
equipment
£
Right of Use
Assets:
Property
£
Total
£
94,572
7,753
(1,848)
100,477
-
3,180
103,657
81,649
7,507
(1,847)
87,309
-
8,485
95,794
-
-
-
-
154,180
-
154,180
-
-
-
-
79,660
10,279
89,939
94,572
7,753
(1,848)
100,477
154,180
3,180
257,837
81,649
7,507
(1,847)
87,309
79,660
18,764
185,733
7,863
64,241
72,104
13,168
-
13,168
Right of Use Assets represent premises from which the Group operates in relation to its sports and leisure activities.
Right of Use
Assets:
Property
Plant and
equipment
£
1,848
(1,848)
-
1,847
(1,847)
-
-
-
-
-
-
-
-
-
Total
£
1,848
(1,848)
-
1,847
(1,847)
-
-
Parent Company
Cost
At 1 January 2018
Disposals
Cost at 1 January and 31 December 2019
Depreciation
At 1 January 2018
Disposals
At 1 January 2019 and 31 December 2019
Carrying value
At 1 January and 31 December 2019
Page 37
Notes to the group and parent company financial statements
17. Receivables and loan notes
Non-current assets
Parent company
In 2019, amounts due within one year included £220,000 of loan notes (2018: £220,000). The loan notes are convertible
into 50 million new shares in Pantheon Leisure Plc 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 Catena 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
Parent Company
2019
£
81,575
22,314
-
5,746
109,635
2018
£
62,768
18,681
-
8,311
89,760
2019
£
-
4,975
324,081
-
329,056
2018
£
-
10,166
347,102
4,525
361,793
The average credit period given for trade receivables at the end of the year is 18 days (2018: 15 days). Trade receivables
are stated net of a provision for irrecoverable amounts of £Nil (2018: £Nil).
Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total £1,536,742
(2018: £1,454,629).
The total charge in the year in respect of irrecoverable receivables in the group accounts was £Nil (2018: £Nil).
As at 31 December, the ageing analysis of trade receivables, all of which are due and not impaired is as follows:
£
<3 months
81,575
62,768
2019
2018
Page 38
Notes to the group and parent company financial statements
18.
Trade and other payables
Due within one year:
Group
Parent Company
IFRS 16 lease liability
Trade payables
Other payables
Taxes and social security
Amounts due to subsidiary undertakings
Accruals and deferred income
2019
£
8,333
5,048
14,564
98,656
-
148,894
275,495
2018
£
-
9,760
24,672
99,459
-
106,020
239,911
2019
£
-
-
-
-
287,013
26,442
313,455
2018
£
-
-
-
-
287,793
31,922
319,715
The average credit period taken for trade payables at the end of the year is 12 days (2018: 8 days).
Due after one year:
Group
Parent Company
IFRS 16 lease liability
2019
£
49,294
49,294
2018
£
2019
£
2018
£
-
-
-
-
-
-
Further information regarding IFRS 16 lease liabilities is provided in note 22.
19.
Bank overdraft
Sport in Schools Limited has a bank overdraft facility secured by a guarantee of up to £50,000 by Catena Group Plc. The
overdraft is repayable on demand.
20.
Deferred tax
There were no deferred tax liabilities or assets recognised by the Group during the current and previous year.
21. Issued and fully paid share capital
Ordinary shares
At 1 January 2018
Subdivision of ordinary shares
New 1p shares issued in the year
At 1 January 2019
New shares issued in the year
At 31 December 2019
Number of
ordinary 10p
shares
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
2,000,000
35,561,638
-
22,811,638
-
22,811,638
-
22,811,638
£
2,281,164
-
107,500
2,388,664
20,000
2,408,664
In July 2019, the Company raised £290,000 (before issue costs of £4,000) from the issue of 2,000,000 1p shares for 14.5p
per share.
Page 39
Notes to the group and parent company financial statements
21. Issued and fully paid share capital (continued)
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.
As at 31 December 2019 the Company’s issued shares carry no rights to fixed income.
The market price of the Company’s shares at 31 December 2019 was 26p and the price range during the financial year
was between 12.5p and 29p.
22. Obligations under leases
Group
As at 31 December 2018, under IAS 17, the Group was committed to making the following future minimum lease
payments under non-cancellable operating leases which fell 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
2018
£
10,868
5,636
43,472
6,417
24,453
90,846
The amount of non-cancellable operating lease payments recognised as an expense during 2018 was £17,635.
IFRS 16
For the year ended 31 December 2019, the following amounts have been recognised under IFRS 16 in relation to
property leases:
Additions to ‘right-of-use’ assets upon adoption of IFRS 16
Depreciation adjustment upon adoption of IFRS 16
Depreciation charged on ‘right-of-use’ assets recognised
Interest expense recognised on lease liability
Expenses incurred in relation to ‘short-term’ leases
Obligation at the year end in relation to ‘short-term’ leases
Total cash outflow in the year in relation to leases
Page 40
2019
£
154,180
79,660
10,279
2,566
20,572
2,650
31,440
Notes to the group and parent company financial statements
23. Reserves
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.
24. Related parties
Details of the remuneration of directors is given in note 8. 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 monthly payments totalling £8,750 (2018: £26,500) as contributions towards office and secretarial costs
to Simmonds & Co, Chartered Accountants, a practice in which G Simmonds is sole proprietor. Following his resignation
as a director on 1 August 2019, his practice continued to receive monthly fees for consultancy services totalling £6,250
to December 2019. Amounts due at 31 December 2019 totalled £2,500 (2018: £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 25.
M Farnum – Schneider
Following his appointment as a director on 1 August 2019, the company granted options to acquire 4,000,000 ordinary
shares in the Company with exercise prices ranging from 20 pence per share to 60 pence per share between 2020 and
2025. More detailed information is given in note 25 below.
R Owen
The Company paid for office facilities to R Owen of £168 (2018: £ 13,611). No amounts were due to R Owen at the 31
December 2019 (2018: £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 25.
Page 41
Notes to the group and parent company financial statements
25.
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
Warrant life (years)
Expected life (years)
Risk-free interest rate
Fair value per warrant
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
£Nil (2018: £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.
Options
In January 2011, the Company adopted an unapproved share option scheme and on 1 August 2019, the Company granted
options over 4,000,000 ordinary shares in the Company as part of a director’s compensation agreement. Details of the
options are set out below:
Outstanding at start of year
Granted during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
The movements in the weighted average exercise price of the options were as follows:
Outstanding at start of the year
Granted during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
£
2018
£
307,500
4,000,000
(147,500)
4,160,000
160,000
307,500
-
-
307,500
307,500
2019
£
2018
£
26.4
45.0
26.2
44.3
26.6
26.4
-
-
26.4
26.4
The weighted average contractual life of options outstanding at the year end is 4.5 Years (2018: 4 years).
Page 42
Notes to the group and parent company financial statements
25.
Share-based payment transactions (continued)
Share options (continued)
The fair value of the equity instruments granted was determined using the Black Scholes Model. This model was selected
as it is an industry standard model. The only conditions attached to the options is continuing employment. The inputs
into the model for options outstanding at the year-end were as follows:
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
Share options granted in the year to M Farnum-Schneider
Grant date
Share price at grant date
Exercise price
Shares under option
Expected volatility
Option life (years)
Expected life (years)
Vesting period (years)
Risk-free interest rate
Small company discount factor
Fair value per option
1 August 2019
17p per share
20p per share
1,000,000
43.1%
3 years
3 Years
0.5 to 1 Years
0.57%
35%
2.5p
1 August 2019
17p per share
40p per share
1,000,000
43.1%
3 years
3 Years
1 to 2 years
0.57%
35%
2.5p
1 August 2019
17p per share
60p per share
2,000,000
43.1%
3 years
3 Years
2 to 3 Years
0.57%
35%
0.7p
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.
In accordance with IFRS 2, the fair value of the share options issued and recognised as a charge in the accounts for the
year is £19,000 (2018: £Nil).
Page 43
Notes to the group and parent company financial statements
26.
Transition to IFRS 16
The financial statements for the year ended 31 December 2019 are prepared applying IFRS 16 ‘Leases’, using the modified
retrospective approach and as such there has been no restatement of prior year figures. The following table details the
initial impact of applying IFRS 16 as at the transition date of 1 January 2019:
Assets and liabilities included at 31 December 2018
Finance lease obligations at 31 December 2018
Operating lease obligations as at 31 December 2018
Relief option for short-term and low value leases
Gross lease liabilities at 1 January 2019
Discounting
Lease liabilities at 1 January 2019
Present value of finance lease liabilities as at 31 December 2018
Additional lease liabilities as a result of the initial application of IFRS 16 as at 1 January 2019
1 January 2019
£
-
90,846
(12,053)
78,793
(12,864)
65,929
-
65,929
The lease liabilities were discounted at the borrowing rate as at 1 January 2019, which was determined to be 5%.
Effect on group net assets
Group net assets at 31 December 2018 as stated
Right of Use Asset recognised
IFRS 16 lease liability adjustments referred to above
Revised carrying value at 1 January 2019
27.
Capital management and financial instruments
The Group is solely equity funded which represents the Group’s capital.
£
458,300
74,520
(65,929)
466,891
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 £2,408,664 (2018: £2,388,664), share
premium of £1,048,031 (2018: £782,031), other reserves of £325,584 (2018: £325,584), and the retained deficit of
£3,164,722 (2018: £2,979,116).
During the year ended 31 December 2019 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.
Page 44
Notes to the group and parent company financial statements
27.
Capital management and financial instruments (continued)
At 31 December 2019 and 31 December 2018, 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.
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
IFRS 16 lease liabilities
Due to subsidiary undertakings
Group
Company
2019
£
2018
£
2019
2018
£
£
636,779
-
98,943
735,722
19,612
57,627
-
77,239
535,329
-
70,395
605,724
34,432
-
-
34,432
510,538
324,081
-
872,870
-
-
287,013
287,013
413,656
347,102
-
760,758
-
-
287,793
287,793
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 £5,746 (2018: £8,311) and VAT recoverable of £4,946 (2018: £11,054) for the Group and for Catena of £2,775 (2018:
£4,522) of short term receivables and VAT recoverable of £2,200 (2018: £10,166).
Trade and short-term payables referred to above excludes deferred income and accruals of £148,894 (2018: £106,020),
and tax and social security creditors of £98,656 (2018: £99,459).
For the parent company, trade and short-term payables excludes tax and accruals of £26,442 (2018: £31,922).
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 credit and liquidity risks.
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 2019 was £81,575 (2018: £62,768).
Page 45
Notes to the group and parent company financial statements
27.
Capital management and financial instruments (cont.)
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. As explained in
note 5 the subsidiary company, Sport in Schools Limited is susceptible to any further impact on the provision of sports
teaching in schools, which in turn could negatively impact both the liquidity of that parent company and the group.
The directors do not consider changes in interest rates have a significant impact on the Group’s cost of finance or
operating performance.
All financial assets are due within one year. The maturity analysis can be seen in note 17.
As the Group’s operations are conducted in the United Kingdom, risks associated with foreign currency fluctuations are
not relevant.
28. Post balance sheet events
Since the year end the Group has been affected by the Covid-19 pandemic. See the Strategic Report and Note 5 for
further details of the impact of this on the Group.
In March 2020 £1.5 million before expenses was raised by way of an issue of 4,000,000 new Ordinary Shares at a price of
25 pence per shares and the issue of £0.5 million convertible loan notes. £1.5 million of the net proceeds were used to
finance an investment in Insight Capital Partners Limited.
29. 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
At 1 January
2019
£
Cash Flow
£
At 31 December
2019
£
535,329
-
535,329
413,656
413,636
101,450
-
101,450
96,882
96,882
636,779
-
636,779
510,538
510,538
Page 46
Notes to the group and parent company financial statements
29. Notes to statement of cash flows (continued)
(b) Statement of cash flows from discontinued activities
Ultimate Player Limited
Cash flow from discontinued activities
(loss) before tax
Adjustments for:
Increase in debtors
Decrease/(Increase) in creditors
Cash generated/absorbed from operations
Investing activities
Net cash used in investing activities
Financing activities
Additional borrowings
Net cash from financing activities
2019
£
2018
£
(30,058)
(32,399)
(538)
30,012
(584)
357
32,917
875
-
-
-
-
-
-
-
-
Net cash decrease 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
(584)
2,090
1,506
875
1,215
2,090
Football Partners Limited
Cash flow from discontinued activities
(loss) before tax
Adjustments for:
Increase in debtors
Decrease/(Increase) in creditors
Cash generated/absorbed from operations
Investing activities
Net cash used in investing activities
Financing activities
Additional borrowings
Net cash from financing activities
Net cash decrease 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 47
2019
£
2018
£
-
-
-
-
-
-
-
-
-
-
-
-
-
13,865
13,865
-
-
-
-
13,865
(13,865)
-