More annual reports from Norman Broadbent:
2023 ReportNORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Annual Report and Financial Statements For the year ended 31 December 2020 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Contents 2 4 6 9 The Norman Broadbent Group CEO’s Review Strategic Report Directors’ Report 11 Corporate Governance 12 Directors’ Remuneration Report 14 Independent Auditors’ Report 22 Consolidated Statement of Comprehensive Income 23 Consolidated Statement of Financial Position 24 Company Statement of Financial Position 25 Consolidated Statement of Changes in Equity 26 Company Statement of Changes in Equity 27 Consolidated Statement of Cash Flow 28 Company Statement of Cash Flow 29 Notes to the Financial Statements 54 Notice of Annual General Meeting 58 Officers and Professional Advisors Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 1 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS The Norman Broadbent Group The Norman Broadbent Group is a leading Professional Services firm focussing on Talent Acquisition & Advisory Services. As a business we have a simple and straightforward objective: to help our clients manage and successfully drive change, mitigate risk, grow, and succeed. Our portfolio of integrated services, coupled with our #ClientFirst philosophy, collaborative innovative culture, and trusted brand, makes us a proven business partner. Increasingly, clients see us as a problem-solving partner offering a bespoke mix of progressive high‐quality Search, Interim Management, Research & Insight, Assessment & Development solutions. With a range of services designed to meet customer needs at different stages in their growth or the economic cycle, our innovative and flexible approach enables us to help clients in a creative and bespoke way. By operating within sector ‘hubs’ as opposed to siloed service lines, we are able to service clients better and more collaboratively. The Group’s strategy is to further develop, strengthen, and scale our complementary portfolio of Talent Acquisition & Advisory services. This could be achieved via further selective hires, new partnerships, and greater innovation. Ultimately our aim is to help clients make better informed, more effective buying decisions to ensure successful outcomes. Our Portfolio of Services Board Advisory: Helping you recruit and build a diverse and impactful Board which is ‘future-fit’ d o r a v i s y r o B A d Lead Sea r e r s h i c h Leadership Acquisition Leadership Advisory Interim Management: Connecting you with immediately available high- calibre Interim Executives, teams, and Independent Consultants to deliver specific programmes of change and transformation t n e m e g a m i r e t n I n a M R e Research & Insight: Delivering bespoke, value- added research and business intelligence on markets, people, and competitors, helping you make better, more informed decisions s e I n arch & sight & e nt m e nt p m s e l o s A s s e D e v p S E o x l e u t i o n s c u t i v e Leadership Search: Helping you recruit business-critical, high- impact leadership talent Executive Solutions: A range of ‘agile, progressive and alternative’ solutions for Executive appointments and succession hires, team- builds, long-term hiring programmes, and recovering failing projects Assessment & Development: Using data and insight, helping you mitigate risk, inform strategy, develop/retain people, and build business cases to achieve optimal outcomes We have a simple and straightforward objective: to help our clients manage and successfully drive change, mitigate risk, grow, and succeed. This, coupled with our #ClientFirst philosophy, collaborative innovative culture, and trusted brand, makes us a proven business partner. Increasingly, clients see us as a problem-solving partner offering a bespoke mix of high-quality Search, Interim Management, Research & Insight, and Assessment & Development solutions. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 2 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Financial Highlights • Year on year NFI decrease of 18% driven by Covid 19 pandemic. This was largely mitigated by quick and decisive cost control measures. • Positive EBITDA and gross margin increase to 80%. • 15 day improvement in debtors days (to 57 days) assisting with Group liquidity. • £250,000 Coronavirus Business Interruption Loan secured in December 2020. • New Invoice Finance Facility active in early 2021 improved cashflow into the Group. • 25% of 2020 Group NFI generated via referrals further evidencing our internal collaborative business culture. • Further improved NFI mix evidences ongoing creation of a more balanced Group. Group Revenue – £000 3 2 5 , 6 4 1 4 , 9 6 8 4 , 1 1 6 1 8 , 7 2017 2018 2019 2020 Group NFI – £000 9 3 0 5 , 4 4 6 6 , 7 0 6 7 , 6 8 2 6 , 2017 2018 2019 2020 EBITDA 8 3 2 9 6 ) 3 2 5 1 , ( ) 1 0 6 ( 2017 2018 2019 2020 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 3 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS CEO’s Review for the year ended 31 December 2020 Results for the financial year The table below summarises the results of the Group: Continuing operations Revenue Cost of sales Net fee income (gross profit) Operating expenses EBITDA Depreciation and amortisation Group operating profit/(loss) Net finance cost Profit/(loss) before tax Income tax Profit/(loss) after tax Year ended 31 December 2020 £000’s Year ended 31 December 2019 £000’s 7,816 (1,530) 6,286 (6,217) 69 (222) (153) (40) (193) – (193) 11,486 (3,879) 7,607 (7,369) 238 (93) 145 (61) 84 – 84 Mike Brennan Group Chief Executive Strategic review Since my appointment as Group CEO, our team has worked hard to build the ‘new’ Norman Broadbent Group. Our approach – to build a complementary, relevant, and synergistic range of services – proved to be of significant benefit during the pandemic as the needs of clients shifted during unprecedented times. As the need for our Search- driven service slowed during the pandemic for example, calls for Interim Management expertise grew as clients wanted short-term immediate solutions to previously unencountered business problems. Our aim has always been to build a ‘hedged’ and balanced business which could cater to client needs at different points in their evolution or the economic cycle. This portfolio approach coupled with our collegiate team-based approach enabled us to trade through the pandemic. to reduced turnover £7,816,000 2020 trading and business review In 2020, as a direct result of the Covid 19 Pandemic, (2019: Group £11,486,000) whilst overall net revenues after associate and interim costs in the continuing businesses reduced to £6,286,000 (2019: £7,607,000). Although we continued to invest in innovative entrepreneurial talent, a focus on cost management ensured that operating expenses reduced significantly to £6,217,000 (2019: £7,369,000). EBITDA has reduced from £238,000 in 2019 to £69,000 in 2020. In October 2020, the Group agreed to acquire the outstanding non controlling interest of 25% in Norman Broadbent Interim Management Ltd for a combination of cash and Norman Broadbent PLC shares. This formed part of a restructuring exercise which has now combined all existing Norman Broadbent trading subsidiaries into the Norman Broadbent Executive Search business. This has allowed a simplified and more cost effective business structure. Additionally, the business has reorganised to operate under a number of client focused sector and functional based hubs. Financial position As at 31 December 2020, consolidated net assets were £1,106,000 (2019: £1,365,000) with net current liabilities of (£504,000) (2019: Net Current Liabilities of (£219,000). Group cash amounted to £367,000 (2019: £432,000). Net cash inflow from operations in 2020 was £515,000 (2019 outflow: £182,000). Net cash outflow from financing activities amounted to £492,000 (2019: inflow £21,000). At 31 December 2020 the Group had £577,000 (2019: £950,000) of funds drawn down against the revolving invoice discounting facility against UK trade receivables of £1,449,000 (2019: £2,733,000). The Directors continue to monitor and manage the Group’s working capital carefully. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 4 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS CEO’s Review continued Covid-19 As concerns about Covid-19 began to emerge in March, we moved swiftly to ensure we were appropriately positioned to deal with a period of extended uncertainty. Staffing changes were made, and a small number of team members were furloughed or released from their contracts. Our remaining colleagues moved quickly to remote working. Summary Having posted a positive set of 2019 Group results, we came into 2020 with good momentum and plans for further growth. We opened a new office in the North of England, relocated to better Central London offices, and were actively seeking to appoint additional team members in both centres. Then, we, like many businesses, were impacted by the Covid-19 pandemic. The early and decisive actions taken by us, combined with our broader portfolio of services have continued into 2021 and leave us better placed to respond to these challenges than many. Similarly, our collaborative and innovative culture will stand us in good stead when compared to more traditional and siloed competitors. I and the Board would like to thank our shareholders for their continuing support, and our clients for placing their trust in us. I would also like to pay tribute to our team who have made considerable sacrifices during the Covid-19 crisis. It is an honour to be their CEO, and I am proud of their achievements, much of which is down to their hard work, dedication, and commitment. Mike Brennan Group Chief Executive 21 May 2021 As the business embraced technology to assist in remote working and continued candidate and client interaction, trading continued uninterrupted as staff seamlessly adapted to the new working environment. This not only highlights the agility of the Norman Broadbent team, but also evidences the strength of our 40-year old brand and how the Group’s more diverse portfolio of services are particularly relevant in today’s markets. Building on those strengths and our investment in digital marketing, both Interim and Solutions have seen continued business opportunities from existing and new clients. With a slowdown in the market (particularly in Search) there was some reduction in revenues. These however were largely offset by the sensible and prudent cost measures taken. Additional emphasis was placed on cash collections and we subsequently saw a reduction in debtor days during 2020. This, combined with modest positive EBITDA, helped protect cashflow and the Group’s cash position. Arrangements for AGM The AGM will take place on June 25th, 2021 at 10 AM. In light of Covid-19, shareholder attendance at the meeting will be primarily via Zoom conferencing software. Shareholders attending via Zoom who wish to vote on the AGM’s resolutions will need to do so by proxy. Full details on how to gain access to the meeting and vote by proxy are provided in the notes to the notice of AGM set out on page 56. Board Changes Alan Howarth joined the Board as Non Executive Chair on 1st August 2020 replacing Brian Stephens who resigned from the Board on 26th August 2020. The Board would like to thank Brian for his considerable contributions over the past 10 years and we wish him well for the future. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 5 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Strategic Report The business model The Norman Broadbent Group is a leading Professional Services firm focussing on Talent Acquisition & Advisory Services. Since our formation nearly 40 years ago we have developed a range of complementary services consisting of Board & Leadership Search, Senior Interim Management, Research & Insight, Leadership Consulting, and Solutions. With a range of services designed to meet customer needs at different stages in their growth or the economic cycle, our innovative and flexible approach enables us to help clients in a creative and bespoke way. By operating within sector ‘hubs’ as opposed to siloed service lines, we are able to service clients better and more collaboratively. As a result of this collaboration, c.25% of 2020 NFI was generated via internal cross-referrals. Strategy and objectives The Group’s strategy is to further develop, strengthen and scale our complementary portfolio of Talent Acquisition & Advisory services. This could be achieved via further selective hires, new partnerships and greater innovation. Ultimately our aim is to help clients make better informed, more effective buying decisions to ensure successful outcomes. Results for the financial year Group revenue from continued operations reduced in the year by 32% to £7,816,000 (2019: £11,486,000), with gross profit of £6,286,000 (2019: £7,607,000). Operating expenditure decreased to £6,439,000 (2019: £7,462,000). The Group EBITDA has reduced to £69,000 in 2020, (2019 EBITDA : £238,000) with an operating loss from continued operations in 2020 of £153,000 (2019 operating profit £145,000) and a retained loss in 2020 of £193,000 (2019: retained profit £84,000). Cash flow and balance sheet Net cash inflow from operations in 2020 was £515,000 (2019: net cash outflow from operations £182,000). Net trade receivables at the year-end were £1,449,000 (2019: £2,733,000). Net cash outflow from financing activities was £492,000 (2019: net cash inflow of £21,000). At 31 December 2020, the Group had £577,000 (2019: £950,000) of funds drawn down against the revolving invoice discounting facility against UK trade receivables of £1,449,000 (2019: £2,733,000). Earnings per share The retained loss for 2020 has resulted in a reported loss per share of 0.59 pence (2019: profit per share 0.04 pence). Going concern In light of the current financial position of the Group and on consideration of the business’ forecasts and projections, taking account of possible in trading performance, the Directors have a reasonable expectation that the Group has adequate available resources to continue as a going concern for the foreseeable future. For the going these reasons, they continue to adopt concern basis in preparing their annual report and financial statements. changes Directors’ duties The Directors of the Company, as those of all UK companies must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows: ‘A Director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to: (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) the likely consequences of any decisions in the long- term; the interests of the company’s employees; the need to foster relationships with suppliers, clients and others; the company’s business the impact of community and environment; the company’s operations on the the desirability of the company maintaining a reputation for high standards of business conduct; and the need to act fairly as between shareholders of the Company’ As part of their induction, a Director is briefed on their duties and they can access professional advice on these, from the Company Secretary, Nomad, or if they judge it necessary, from an independent advisor. The following paragraphs summarise how the Directors fulfil their duties: Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 6 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Strategic Report continued Monitoring, risk and KPIs The Directors have a responsibility for identifying risks facing each of the businesses and for putting in place procedures to mitigate and monitor risks. Our Board meetings incorporate, amongst other agenda items, a review of monthly management accounts, operational and financial KPIs, major issues and monthly update and review of a risk register that addresses the risks facing the business. The most important KPIs used in monitoring the business are set out in the following table: Business Environment Demand for services is affected by global and UK specific economic conditions and the level of economic activity in the regions and industries in which the Group operates. When conditions in the economy deteriorate or economic activity slows, many companies hire fewer permanent employees or rely on internal human resource departments to recruit staff. The Group attempts to mitigate this risk by operating across various diverse sectors where demand for such services is stronger. Key performance indicators NFI EBITDA Debtor days 2020 2019 £6,286,000 £69,000 57 days £7,607,000 £238,000 72 days The Directors monitor revenue against annual targets, which are adjusted each year to ensure the Group remains on target to achieve its strategic growth plan. Further, given the significant restructuring and refocus of the group in the recent past, the Directors expect Group revenues and operating profits to improve over the next few years. The principal risks faced by the Group in the current economic climate are considered to be financial, business environment and people related. Financial risks arising from the Group’s The main financial operations are the adequacy of working capital, interest rate, liquidity and credit risk. These are monitored regularly by the Board and are disclosed further in notes 2 and 17 of the financial statements. The business is in the later stages of the turnaround process and is budgeted to be self-funding. In turnarounds there is always a risk that the process could take longer than anticipated which could lead to short term working capital pressures. In the event of such an occurrence the Company anticipates working closely with its supportive shareholders to access short term working capital funding. Covid-19 Pandemic On 23 March 2020 the UK economy was placed in a state of lockdown as part of the Government’s response to the emerging pandemic. The Group reacted by making individuals staffing changes with a small number of furloughed or released from their contracts with the remaining team members moving to remote working. As the lockdown was lifted, the Group’s offices have reopened with the majority of staff continuing to work remotely. The Group was successful in securing a £250,000 CBILS loan and also rearranged a more favourable Invoice Finance Facility in early 2021. Combined with improved collections and debtor days, these facilities have helped to improve the Group’s liquidity. People The Group’s most vital resource remains its employees and the Directors remain committed to retaining and recruiting quality staff who share the Group’s culture and values. In a people intensive business, the resignation of key staff, which could lead to them taking clients, candidates and colleagues to another employer, is a significant risk. The Group aims to mitigate this risk by offering competitive remuneration structures, whilst also insisting on employment contracts that contain restrictive covenants that limit a leaver’s ability to approach existing clients, candidates and employees. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 7 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Strategic Report continued Cautionary statement The Group’s Strategic Report has been prepared solely to provide additional information to shareholders to assess for those the Company’s strategies and the potential strategies to succeed. The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information. The Directors, in preparing this Strategic Report, have complied with s414C of the Companies Act 2006. The Strategic Report has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Norman Broadbent plc and its subsidiary undertakings when viewed as a whole. Mike Brennan Director Steve Smith Director 21 May 2021 21 May 2021 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 8 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Group Directors’ Report The Directors present their report and the audited financial statements for the year ended 31 December 2020. Substantial share interests As at 21st May 2021, the Company had been notified of the following significant interests in its issued share capital: General information Norman Broadbent plc (‘the Company’) and its subsidiaries (together ‘the Group’) is a leading Professional Services firm with a specific focus on Talent Acquisition & Advisory Services. The Company is a public listed company incorporated in England and Wales. Its registered address is Millbank Tower, 21-24 Millbank, London SW1P 4QP and its listing is on the AIM Market of the London Stock Exchange. Downing LLP Ennismore Fund Management Ltd Moulton Goodies Ltd P Casey P Searle Premier Miton Group Plc Ordinary shares of 1.0p each % 11,840,909 21.44% 9,646,742 7,666,059 6,787,505 3,401,360 3,323,362 17.47% 13.88% 12.29% 6.16% 6.02% Review of developments and future prospects The CEO’s Review on pages 4 to 5 reviews the activities of the Group including updates on recent and future developments and a full business review can be found in the Strategic Report on page 6 to 8. Results and dividends The results of the Group for the year ended 31 December in the Consolidated Statement of 2020 are set out Comprehensive Income. The Directors do not dividends (2019: £Nil). recommend payment of any Loss after tax for the year amounted to £193,000 (2019: profit after tax of £84,000). Directors The Directors who served during the year are as follows: Mike Brennan Will Gerrand (resigned 11 April 2020) Steve Smith (appointed 30 March 2020) Fiona McAnena Brian Stephens (resigned 26 August 2020) Alan Howarth (appointed 1 August 2020) As far as the Directors are aware, no other entities or individuals held 3% or more of the shares in issue. Employee involvement The Group has well established communications and consultation procedures with all employees. These continually evolve to meet the changing needs of the business considered valuable by both management and staff. and are Employment of disabled persons It is the Group’s policy to give a full and fair consideration to the employment and promotion of disabled persons where they appear suitable, having regard to their particular aptitudes and abilities. Where existing employees become disabled it is the Group’s policy to find them alternative suitable employment within the Group where possible. Energy and carbon usage The Company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is lower than 40,000kWh. The Directors’ interests in the shares of the Company are shown in the Directors’ Remuneration Report on pages 12 to 13. Risks and uncertainties Please refer to the Strategic Report on page 7. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 9 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Group Directors’ Report continued Key performance indicators Please refer to the Strategic Report on page 6. Diversity policy The Group is committed to promoting equal opportunities both as an employer and as a provider of services. The Group makes every effort to prevent discrimination or other unfair treatment against any of its staff, potential staff or users of its services, regardless of sex, race, colour, nationality, ethnic or national origins, marital status, family circumstances, disability, sexual orientation, political or religious belief. The Group is opposed to racist and sexist practices and attitudes and is committed to translating this into all aspects of its everyday work. Statement of directors’ responsibilities Each of the Directors at the date of approval of this report confirms: 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 prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) 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 Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to: (cid:2) select suitable accounting policies and then apply them consistently; (cid:2) make judgements and accounting estimates that are reasonable and prudent; (cid:2) (cid:2) state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that 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 Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Website publication The Directors are responsible for ensuring the annual report and financial statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the and United Kingdom governing the preparation dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends the financial statements to the on-going integrity of contained therein. Statement of disclosure to auditor (a) Each of the Directors at the date of approval of this report confirms there is no relevant information of which the Group’s auditors are unaware; and (b) The Directors have taken all the 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 Group’s auditors are aware of that information. Auditors Kreston Reeves LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint them is being proposed at the forthcoming Annual General Meeting. Approved by the Board of Directors and signed on behalf of the Board. Mike Brennan Director 21 May 2021 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 10 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Corporate Governance Internal controls and risk management The Directors acknowledge their responsibility for the Group’s system of internal control of which the objectives are: a) b) c) Safeguarding the Group’s assets. Ensuring proper accounting records are maintained. Ensuring that the financial information used within the business and for publication is reliable. The key procedures that have operated during the financial year are set out below: a) b) The Board meets monthly to review all aspects of the Group’s performance concentrating mainly on financial and development. performance, business risks A number of matters are reserved for the Board’s specific approval including major capital expenditure, banking and dividend policy. internal control, the In establishing the systems of Directors have implemented a control environment, risk management procedures and reporting processes appropriate to the size of the Group. The system of internal control is designed to manage rather than eliminate risk. Further procedures will continue to be adopted in respect of all the Group’s activities to further improve financial control. Trading and cash flows can be unpredictable. However, after making appropriate enquiries the Directors have formed a judgement that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. The Company is quoted on the Alternative Investment Market (‘AIM’) and is therefore not required to comply with the provisions of UK Corporate Governance Code. However, from the 28th of September 2018, under AIM rule 26, the Company has adopted as far as possible the principles of the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). The QCA Code identifies ten principles to be followed in order for companies to deliver growth in long-term shareholder value, encompassing an efficient, effective and dynamic management good communication to promote confidence and trust. Set out below is a summary of how, at 31 December 2020, the Company was complying with the key requirements of the QCA code accompanied framework by Board committees The Audit Committee consists of directors, as required. the Non-Executive is chaired by Alan Howarth and meets The Remuneration Committee consists of the Non- Executive Directors. Alan Howarth chairs the committee. The remuneration of the Non-Executive Directors is determined by the Board. At present the committee annually reviews the level of Directors’ and other senior employees’ remuneration packages. Disclosure of Directors’ remuneration is provided in the Directors’ Remuneration Report. (“Nomad”) The AIM Compliance Committee consists of all Directors. In accordance with AIM Rule 31 the Group is required to have in place sufficient procedures, resources and controls to enable its compliance with the AIM Rules; seek advice regarding its from its nominated adviser compliance with the AIM Rules whenever appropriate and take that advice into account; provide the Group’s Nomad with any information it requests in order for the Nomad to carry out its responsibilities under the AIM Rules for Companies and the AIM Rules for Nominated Advisers; ensure that each of the Group’s Directors accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and ensure that each Director discloses without delay all information which the Group needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that information is known to the director or could with reasonable diligence be ascertained by the Director. Having reviewed relevant Board papers and met with the Group’s Executive Board and the Nomad to ensure that such is the case, the AIM Committee is satisfied that the Group’s obligations under AIM Rule 31 have been satisfied during the period under review. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 11 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Directors’ Remuneration Report The Remuneration Committee was established to keep under review the remuneration and terms of employment of Executive Directors and to recommend such remuneration and terms and changes thereof to the Board. The Remuneration Committee’s composition, responsibilities and operation comply with UK Corporate Governance Code. In forming its remuneration policy, the Remuneration Committee confirms that it has complied with UK Corporate Governance Code. An explanation of how the Company has applied the principles and the extent to which the provisions in the Code have been complied with appears below. Unaudited information Under the Company’s Articles of Association, the Board may delegate any of its powers, authorities and discretions to a sub-committee of the Board. The Remuneration Committee comprises of the two Non- Executive Directors. The Remuneration Committee is formally constituted with written terms of reference. No individual Director participates when his own remuneration is under consideration. In formulating its remuneration policy, the Remuneration Committee has given full consideration to the relevant sections of UK Corporate Governance Code issued by the Committee on Corporate Governance. There follows the full text of the Remuneration Report for the year ended 31 December 2020 which has been approved and adopted by the Board of Directors for submission to the shareholders. Composition Alan Howarth chairs the Remuneration Committee, and Fiona McAnena is the second member. Policy for Executive Directors To attract, motivate and retain high calibre executives by rewarding them with appropriate salary, bonus scheme, benefits and share option packages. a) Salary Salaries are reviewed annually, and the Remuneration Committee takes account of similar companies in its industry by reference to published information for similar jobs as well as individual performance. b) c) d) e) f) Bonus The Company operates a discretionary bonus scheme for Executive Directors. The scheme is based on achieving agreed levels of profitability within the part of the Group they are directly involved with. Bonus payments are non-pensionable. Benefits When appropriate, Executives are provided with medical insurance and life assurance. Pension The Company’s defined contribution pension scheme is available to all Executive Directors. Share Options The Chief Executive Officer and the former Chief Financial Officer held share options. Service Contracts All Executive Directors are employed on rolling contracts subject to between three and twelve months’ notice from either the executive or the Group. The Remuneration Committee reviews each case of early termination individually in order to ensure compensation settlements are made which are appropriate to the circumstances, taking care to ensure that poor performance is not rewarded. Policy for Non-Executive Directors The Board is responsible for determining the fees payable to Non-Executive Directors. The Executive Directors seek to advise the Board on the level of fees based on external evidence of fees paid to Non-Executive Directors of similar companies. Directors’ Interest in Contracts Brian Stephens & Company Ltd provided the services of B Stephens to the Company. B Stephens is a Director of Brian Stephens & Company Ltd. There were no other contracts subsisting at the end of the year in which a director of the Company was materially interested. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 12 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Directors’ Remuneration Report continued Directors’ Interest in Shares and Share Options Details of the interests of those Directors that held office during the period, all of which are beneficial, in the shares of Norman Broadbent plc on the dates specified are as follows: (a) Ordinary Shares 31 December 2020 31 December 2019 Mike Brennan Brian Stephens(1) Will Gerrand Fiona McAnena Steve Smith Ordinary Shares of 1.0p each 1,135,487 334,621 66,667 63,333 50,000 Ordinary Shares of 1.0p each 1,095,481 334,621 66,667 63,333 – % 2.06 0.61 0.12 0.11 0.09 % 1.70 0.61 0.12 0.11 – Notes (1) All of B Stephens shares are held in the name of Davycrest Nominees Limited (b) Share Options: 31 December 2020 31 December 2019 Mike Brennan Will Gerrand Share Options Ordinary Share of 1.0p Each 1,851,852 – Share Options Ordinary Share of 1.0p Each 1,851,852 1,054,191 % Diluted 3.22 – % Diluted 3.22 1.84 Audited information: Directors’ Emoluments The emoluments of the Directors of the Company for the year ended 31 December 2020 were as follows: Executive Directors Mike Brennan Will Gerrand Steve Smith Total Non-Executive Directors Alan Howarth Fiona McAnena Brian Stephens Total Salary and fees £000 Bonus £000 Benefits £000 Pensions £000 184 41 88 313 13 16 9 38 – – – – – – – – 2 – 1 3 – – – – 15 – 4 19 – – – – Total 2020 £000 201 41 93 335 13 16 9 38 Total 2019 £000 292 171 – 463 – 20 20 40 * Note, in light of the Covid-19 crisis, from April 2020 Mike Brennan took a temporary 30% reduction in salary, Steve Smith, took a temporary 20% reduction and Fiona McAnena and Brian Stephens took 40% reductions. From August 2020, Alan Howarth took a 40% reduction in salary. From April 2021, all salaries were returned to contracted levels. Alan Howarth Chairman of the Remuneration Committee 21 May 2021 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 13 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report to the Members of Norman Broadbent plc Opinion We have audited the financial statements of Norman Broadbent plc (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2020 which comprise the consolidated statement of comprehensive income, consolidated and company statements of financial position, consolidated and company statements of changes in equity, consolidated and company statements of cash flow and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. In our opinion the financial statements: (cid:2) (cid:2) (cid:2) give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2020, and of the Group’s loss for the year then ended; have been properly prepared in accordance with IFRSs as adopted by the European Union; and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to SME listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included interrogating management prepared forecasts through to 31 December 2023, comparing previously prepared forecasts to actual results for prior year and discussion with management was undertaken in order to gain an understanding of their plans for the financing of the Group. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. An overview of the scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We performed a full scope audit on five components of the business representing 100% of the Group’s revenue, 100% of the Group’s loss before tax and 100% of the Group’s net assets. Our audit approach is consistent with the previous year. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 14 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued 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. This is not a complete list of all risks identified by our audit. KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THIS MATTER Going concern The Group reported an operating loss from continued operations in the year to 31 December 2020 of £0.2m compared with an operating profit of £0.1m in 2019. The Consolidated Statement of Financial Position shows a net asset position at 31 December 2020 of £1.1m (2019: £1.4m) with cash at bank of £0.4m (2019: £0.4m). At the date that these financial statements were approved the Group had no overdraft facility, the only borrowings were its receivable finance (Metro Invoicing) which is 100% secured by the Group’s trade receivables and a and a CBILS loan with Metro Bank. In light of the historic loss-making position of the Group, the uncertain economic climate due to Covid-19 and the potential liquidity issues that could arise without on-going external finance going concern has been considered a focus area. We have reviewed the Group’s results and financial position and have assessed the ability of the Group to meet its future financial obligations based upon its available resources. We have obtained and interrogated management prepared forecasts running to the end of December 2023 which support management’s assessment of the Group’s ability to continue as a going concern. This included analysing the reasonableness of assumptions used and narrative provided by management, including their summary of the impact that Covid-19 has had on the Group and what actions they have taken to mitigate this. We also compared previously prepared forecasts to actual results for the prior year to gain assurance over the ability of management to prepare accurate and reliable forecasts. Sensitivity analysis was undertaken on the forecasts to stress test different levels of revenue drop. Discussion with management was undertaken in order to gain an understanding of their plans for the financing of the Group. Also discussion with management was undertaken regarding their plans for the subsidiaries where the trade has been transferred into Norman Broadbent Executive Search Limited. Management informed us that their intention is to close these subsidiaries and the financial statements for these companies have not been prepared on the going concern basis. However as their trades have been transferred into Norman Broadbent Executive Search Limited, a company who’s financial statements are prepared on a going concern basis, this hasn’t impacted on our conclusion whether the Group is a going concern. Based upon the audit work we have performed we have been able to reach our conclusions relating to going concern included in this report. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 15 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued KEY AUDIT MATTER Valuation of investments Included within the parent company accounts is an amount of £1.7m (2019: £1.6m) within fixed asset investments representing the cost less provision for any impairment in value of the Group’s subsidiaries. Investments are tested annually by management for impairment which requires the use of estimation techniques which may have a high degree of inherent uncertainty. We have focused on this area due to the value of the investments in the parent company accounts, and the fact that there was judgment involved in determining whether any provision for impairment was required. Impairment of goodwill Goodwill arose on the acquisition of subsidiaries and is included within the consolidated statement of financial position at cost less impairment. There is historical capitalised goodwill on the balance sheet totalling £1.4m (2019: £1.4m) in relation to the brand name and client loyalty. We have focused on this area due to the value of the goodwill in the consolidated accounts, and the fact that there was judgment involved in determining its value and whether any provision for impairment was required. HOW OUR AUDIT ADDRESSED THIS MATTER A breakdown of the investments by company was ledger including obtained and agreed to the nominal statutory information. A comparison of the investment amount and the net assets figure of each company was undertaken to build an assessment of any potentially required provisions. The directors provided a report on the valuation of each investment, taking into account forecasts for a period of 5 years up to December 2025, looking at the expected profitability of the ongoing trading subsidiary along with impairment. Sensitivity analysis was any potential undertaken on the forecasts to stress test different levels of revenue drop. Past budgets and forecasts were compared to actual results to gain assurance over the ability of management to prepare accurate and reliable forecasts. No issues arose from our work to suggest that the valuation of investments was materially misstated. A breakdown of the goodwill was obtained and agreed to expectations from previous years. The directors provided a report on the impairment of goodwill taking into account forecasts for a period of 5 years up to December 2025, looking at the profitability along with any potential impairment. Sensitivity analysis was undertaken on the forecasts to stress test different levels of revenue drop. Prior budgets and forecasts were compared to actual results to gain assurance over the ability of management to prepare accurate and reliable forecasts. The assumptions applied to generate the 5 year forecasts up to December 2025 were reviewed to help determine their accuracy. A calculation of the net present value of the future cash flows was undertaken to support the carrying value of goodwill within the financial statements. This calculation was compared to industry averages and key competitors’ expected growth rates. Further discussion with management was undertaken in line with these results which also addressed the financing of the Group and continued support available to the Group from its major shareholders. No issues arose from our work to suggest that valuation of goodwill was materially misstated. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 16 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued KEY AUDIT MATTER Revenue recognition The Group has four main sources of revenue: (A) Executive search placement fees, generated through high level executive search recruitment services, the positions generally being at senior management level. (B) Interim management placement fees, generated through placing members into Board positions for short periods of time. (C) Leadership and consulting fees, generated through consultative services in relation to recruitment. (D) Solutions placement fees, generated through slightly less complex searches to fill slightly less senior roles. We have focused on this area as revenue is a key driver of the Group’s performance and represents a higher risk area for potential fraud. Recoverability of intercompany debtors The parent company was owed £5.4m (2019: £5.3m) by other Group companies. Amounts are initially recognised at fair value and subsequently measured at amortised cost less any necessary provision for impairment. We have focused on this area due to the material value of intercompany debtors receivable due to the parent company and the recoverability concerns given certain Group companies have been incurring losses. HOW OUR AUDIT ADDRESSED THIS MATTER We discussed the revenue recognition policies with management and independently with sales staff clarifying any discrepancies and specifically looking through contracts in progress and cash receipts compared to the timing of revenue recognised. We have also performed walkthrough tests to understand the revenue recognition processes in place for all types of income. To test revenue transactions during the year, we undertook directional testing selecting the sample from the sales pipeline for the year and tracing from assignment number through to the financial statements. Analytical review of sales has been performed via a comparison to both 2019 and 2020 performance with any unusual discrepancies queried. Cut off testing was also performed around the year end to ensure revenue was being recorded in the correct period. No issues arose from our work to suggest that revenue recognition was materially misstated. The Group continues to comply with IFRS 15. A breakdown of intercompany balances due by company was obtained and agreed to the nominal ledger. A comparison of the debtor amount and the historical profitability/net assets figure of each company was undertaken to build an assessment of potentially required provisions. Reports prepared by directors in relation to going concern and subsidiary investment valuation including the 5 year forecasts up to December 2025 were reviewed. Sensitivity analysis was undertaken on the forecasts to stress test revenue drop. Prior budgets and different results to gain forecasts were compared to actual assurance over the ability of management to prepare accurate and reliable forecasts. levels of These forecasts have been used to substantiate recoverability of amounts owed by Group companies. No issues arose from our work to suggest that intercompany debtors owed to parent company were materially misstated. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 17 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued KEY AUDIT MATTER Calculation of right of use asset Although the Group adopted IFRS 16 last year, this is the first year the change in accounting standards has had a significant impact on the Group’s figures. We have focused on this area due to the calculation being new for the Group and also as there are significant accounting estimates included within the calculation. HOW OUR AUDIT ADDRESSED THIS MATTER We received the Group’s calculation for the right of use asset and the corresponding liability, which we agreed to the trial balance. We agreed the initial asset and liability calculation to supporting documentation and identified the key accounting estimates within the subsequent calculation. We obtained explanation for the interest rate used and agreeing to supporting information, as well as sensitivity analysis, No issues arose from our work to suggest that the right of use asset or the corresponding liability was materially misstated. How we tailored the audit scope We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the parent company, the accounting processes and controls, and the industry in which they operate. We determined there to be five entities in scope for our Group audit, Norman Broadbent PLC is the parent entity holding investments throughout the Group with Norman Broadbent Executive Search, Norman Broadbent Interim Management, Norman Broadbent Consulting and Norman Broadbent Solutions representing the trading activities for the Group. Our application of materiality We determined materiality for the Group to be £77,000. We reported all audit differences found in excess of £3,900 to the directors and the management board. For each Group company within the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across each Group company was between £75,000 and £6,000. We determined Group materiality to be £77,000 based on a calculation of 1% of Group revenue for the year, Group result for the year being considered the key determinant of Group performance. The Group’s parent company is AIM listed and therefore the number of users and the level of interest in the financial statements is expected to be higher than a non-quoted company. Therefore, the significance of balances is expected to be greater and consequently 1% of Group turnover has been assessed as the most appropriate basis for materiality. We determined component materiality for the parent company to be 2% of gross assets and for each of the trading Group companies 2% of turnover based upon each Group company’s activities and risk profile, limited to Group materiality. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 18 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued 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: (cid:2) (cid:2) 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 the 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: (cid:2) (cid:2) (cid:2) 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 (cid:2) we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors’ responsibilities statement set out on page 10, 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. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 19 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued Auditor’s Responsibilities for the Audit of the Financial Statements The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non- compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, Statement of Recommended Practice and taxation legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure. Audit procedures performed by the engagement team included: (cid:2) Detailed discussions were held with management to identify any known or suspected instances of non-compliance with laws and regulations. (cid:2) (cid:2) Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud. Testing of internal controls procedures relating to expenditure potentially more susceptible to fraud and other irregularities including cash and payroll. (cid:2) Challenging assumptions and judgements made by management in its significant accounting estimates, concentrating on the calculations used in the Group’s assessment of potential impairment of the goodwill and investment values. (cid:2) Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business. (cid:2) Reading minutes of meetings of those charged with governance. (cid:2) Use of data analytics – enabling 100% interrogation of the general ledger transactions with a focus on transactions that exhibit unusual characteristics, meriting further investigation. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. 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. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 20 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Independent Auditor’s Report continued As part of an audit in accordance with ISAs (UK), we exercise professional scepticism throughout the audit. We also: judgment and maintain professional (cid:2) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. (cid:2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. (cid:2) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. (cid:2) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern. (cid:2) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. (cid:2) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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. Samantha Rouse FCCA DChA (Senior Statutory Auditor) For and on behalf of Kreston Reeves LLP, Statutory Auditors and Chartered Accountants London 21 May 2021 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 21 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Consolidated Statement of Comprehensive Income For the year ended 31 December 2020 Continuing operations Revenue Cost of sales Gross profit Operating expenses Operating profit/(loss) from continued operations Net finance cost Profit/(loss) on ordinary activities before income tax Income tax expense Profit/(loss) from continuing operations Profit/(loss) for the period Total comprehensive income/(loss) for the year Profit/(loss) attributable to: – Owners of the Company – Non-controlling interests Profit/(loss) for the year Total comprehensive income/(loss) attributable to: – Owners of the Company – Non-controlling interests Total comprehensive income/(loss) for the year Profit/(loss) per share – Basic – Diluted Adjusted profit/(loss) per share – Basic – Diluted profit/(loss) per share – continuing operations – Basic – Diluted Note 1 3 7 4 6 8 8 8 2020 £000 7,816 (1,530) 6,286 (6,439) (153) (40) (193) – (193) (193) (193) (322) 129 (193) (322) 129 (193) (0.59)p (0.59)p (0.59)p (0.59)p (0.59)p (0.59)p 2019 £000 11,486 (3,879) 7,607 (7,462) 145 (61) 84 – 84 84 84 22 62 84 22 62 84 0.04p 0.04p 0.06p 0.06p 0.04p 0.04p The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 22 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Consolidated Statement of Financial Position as at 31 December 2020 Non-current assets Intangible assets Property, plant and equipment Prepayments and accrued income Deferred tax assets 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 Loan notes Bank overdraft and interest bearing loans Provisions Obligations under finance leases Total current liabilities Net current liabilities Non Current Liabilities Bank Loans Obligations under finance leases Total non-current liabilities Total liabilities Total assets less total liabilities Equity Issued share capital Share premium account Retained earnings Equity attributable to owners of the company Non-controlling interests Total equity Note 10 11 13 6 13 14 15 16 16 21 20 16 20 18 18 2020 £000 1,363 332 145 69 1,909 1,547 367 1,914 3,823 1,645 – 577 – 196 2,418 (504) 250 49 299 2,717 1,106 2019 £000 1,363 87 65 69 1,584 2,948 432 3,380 4,964 2,315 119 950 215 – 3,599 (219) – – – 3,599 1,365 6,279 13,763 (18,936) 1,106 – 1,106 6,266 13,706 (18,632) 1,340 25 1,365 These financial statements were approved by the Board of Directors on 21 May, 2021. Signed on behalf of the Board of Directors M Brennan Director Company No 00318267 S Smith Director The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 23 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Company Statement of Financial Position as at 31 December 2020 Non-current assets Investments Prepayments and accrued income Total non-current assets Current Assets Trade and other receivables Cash and cash equivalents Total current assets Total assets Current Liabilities Loan notes Trade and other payables Total current liabilities Net current assets Non Current Liabilities Bank Loans Total non current liabilities Total liabilities Total assets less total liabilities Equity Issued share capital Share premium account Retained earnings Total equity Note 12 13 13 14 16 15 16 18 18 2020 £000 1,686 66 1,752 5,383 12 5,395 7,147 – 1,605 1,605 3,790 250 250 1,855 5,292 2019 £000 1,643 65 1,708 5,391 14 5,405 7,113 119 1,646 1,765 3,640 – – 1,765 5,438 6,279 13,763 (14,750) 5,292 6,266 13,706 (14,624) 5,348 These financial statements were approved by the Board of Directors on 21 May, 2021. Signed on behalf of the Board of Directors M Brennan Director Company No 00318267 S Smith Director The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 24 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Consolidated Statement of Changes in Equity for the year ended 31 December 2020 Attributable to owners of the Company Share Retained premium earnings £000 £000 Non- Total controlling interests £000 equity £000 Consolidated Group Balance at 1 January 2019 Profit for the year Total comprehensive income for the year Credit to equity for share based payments Total transactions with owners of the Company, recognised directly in equity Total transactions with owners of the Company Balance at 31 December 2019 Balance at 1 January 2020 Loss for the year Total comprehensive income for the year Transactions with owners of the Company, recognised directly in equity: Issue of ordinary shares Credit to Equity for Share Based Payments Total transactions with owners of the Company Purchase of non-controlling interests Total transactions with owners of the company Share capital £000 6,266 – – – – – 13,706 – (18,667) 22 1,305 22 – – – – 22 13 13 13 22 13 13 13 6,266 6,266 – – 13,706 (18,632) 13,706 – (18,632) (322) – (322) 1,340 1,340 (322) (322) 13 – 13 13 57 – 57 57 – 3 3 15 18 70 3 73 15 88 Total equity £000 1,268 84 84 13 13 13 1,365 1,365 (193) (193) 70 3 73 (139) (66) (37) 62 62 – – – 25 25 129 129 – – – (154) (154) Balance at 31 December 2020 6,279 13,763 (18,936) 1,106 – 1,106 Share Capital This represents the nominal value of shares that have been issued by the Company. Share Premium This reserve records the amount above the nominal value received for shares issued by the Company. Share premium may only be utilised to write off any expenses incurred or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares. Retained Earnings This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the Company’s shareholders. The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 25 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Company Statement of Changes in Equity for the year ended 31 December 2020 Company Balance at 1 January 2019 Loss for the year Total comprehensive income for the year Transactions with owners of the Company, recognised directly in equity: Credit to equity for share based payments Issue of ordinary shares Attributable to owners of the Company Share capital £000 6,266 – Share premium £000 13,706 – – – – – – – Retained earnings £000 (14,625) (12) (12) Total equity £000 5,347 (12) (12) 13 – 13 – Balance at 31 December 2019 6,266 13,706 (14,624) 5,348 Balance at 1 January 2020 Loss for the year Total comprehensive income for the year Transactions with owners of the Company, recognised directly in equity: Credit to equity for share based payments Issue of ordinary shares – – – 13 – – – 57 (129) (129) (129) (129) 3 – 3 70 Balance at 31 December 2020 6,279 13,763 (14,750) 5,292 Share Capital This represents the nominal value of shares that have been issued by the Company. Share Premium This reserve records the amount above the nominal value received for shares issued by the Company. Share premium may only be utilised to write off any expenses incurred, or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares. Retained Earnings This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the Company’s shareholders. The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 26 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Consolidated Statement of Cash Flow for the year ended 31 December 2020 Notes (i) 11 16 16 (ii) Net cash inflow/(used) in operating activities Cash flows from investing activities and servicing of finance Net finance cost Payments to acquire tangible fixed assets Net cash used in investing activities Cash flows from financing activities Repayment of borrowings New Loans received Payment of finance lease liabilities Proceeds from issue of share capital Increase/(Decreased) invoice discounting Net cash from financing activities Net decrease in cash and cash equivalents Net cash and cash equivalents at beginning of period Effects of exchange rate changes on cash balances held in foreign currencies Net cash and cash equivalents at end of period Analysis of net funds Cash and cash equivalents Borrowings due within one year Borrowings due within more than one year Net debt Note (i) Reconciliation of operating profit/(loss) to net cash from operating activities Operating profit/(loss) from continued operations Depreciation/impairment of property, plant and equipment Share based payment charge Fixed Asset Write Off Decrease/(Increase) in trade and other receivables (Decrease)/Increase in trade and other payables Decrease in Provisions Taxation paid Net cash generated from operating activities Note (ii) Reconciliation of movement of debt Net decrease in cash and cash equivalents New Borrowings Repayment of Borrowings Decrease/(Increase) invoice discounting Exchange difference on cash and cash equivalents Movement in Borrowings for the Period Net Borrowings at the Start of the Period Net Borrowings at the end of the Period The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 27 2020 £000 515 (23) (65) (88) (119) 250 (180) (70) (373) (492) (65) 432 – 367 367 (577) (250) (460) 2020 £000 (153) 222 7 3 1,321 (670) (215) – 515 2020 £000 (65) (250) 119 373 – 177 (637) (460) 2019 £000 (182) (61) (30) (91) (153) – – – 174 21 (252) 684 – 432 432 (1,069) – (637) 2019 £000 145 93 13 5 (703) 290 (25) – (182) 2019 £000 (252) – 153 (174) – (273) (364) (637) NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Company Statement of Cash Flow for the year ended 31 December 2020 Net cash used in operating activities Cash flows from investing activities and servicing of finance Interest paid Disposal of Investments Net cash used in investing activities Cash flows from financing activities Proceeds/(Repayment) of borrowings New Loans Net cash inflows from equity placing Net cash from financing activities Net (decrease) in cash and cash equivalents Net cash and cash equivalents at beginning of period Net cash and cash equivalents at end of period Analysis of net funds Cash and cash equivalents Borrowings due within one year Borrowings due after one year Borrowings after one year Net funds Notes (i) 16 18 (ii) Note (i) Reconciliation of operating profit/(loss) to net cash from operating activities Operating profit/(loss) Share based payment charge Decrease/(Increase) in trade and other receivables (Decrease)/Increase in trade and other payables Net cash used operating activities Note (ii) Reconciliation of movement of debt Net (decrease)/increase in cash and cash equivalents New Borrowings Repayment of Borrowings Movement in Borrowings for the Period Net Borrowings at the Start of the Period Net Borrowings at the end of the Period The accompanying notes form an integral part of these financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 28 2020 £000 (151) (8) (44) (52) (119) 250 70 201 (2) 14 12 12 – (250) – (238) 2020 £000 (120) 3 6 (40) (151) 2020 £000 (2) (250) 119 (133) (105) (238) 2019 £000 (93) (20) – (20) (153) – – (153) (266) 280 14 14 (119) – – (105) 2019 £000 8 13 (198) 84 (93) 2019 £000 (266) – 153 (113) 8 (105) NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements for the year ended 31 December 2020 1. Significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to both years presented unless otherwise stated. 1.1 Basis of preparation The consolidated financial statements of Norman Broadbent plc (“Norman Broadbent” ,“the Company” or “the Group”) have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRIC interpretations and the Companies Act 2006 applicable to Companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit or loss. The consolidated financial statements are presented in pounds and all values are rounded to the nearest thousand (£000), except when otherwise indicated. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 1.21. 1.1.1 Going concern The Group reported an operating loss from continued operations in the year to 31 December 2020 of £0.2m compared with an operating profit of £0.1m in 2019. The Consolidated Statement of Financial Position shows a net asset position at 31 December 2020 of £1.1m (2019: £1.4m) with cash at bank of £0.4m (2019: £0.4m). At the date that these financial statements were approved the Group had no overdraft facility, a CBILS loan of £0.25m and its receivable finance facility (Metrobank) which is 100% secured by the Group’s trade receivables. Early 2020 saw the outbreak of the Covid-19 pandemic. This resulted in significant global economic disruption and recovery is expected to be relatively slow and uncertain. In light of the current financial position of the Group and on consideration of the business’ forecasts and projections which have taken account of the impact of Covid-19 and of in trading performance, the Directors have a reasonable expectation that the Group has adequate available resources to continue as a going concern for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing their annual report and financial statements. 1.1.2 Changes in accounting policy and disclosures a) New standards, interpretations and amendments effective The following have been applied for the first time from 1 January 2020 but did not have a material impact on the financial statements: (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) IFRS 3 (amendment) Business Combinations IAS 1 (amendment) Presentation of Financial Statements IAS 8 (amendments) Accounting Policies, Changing in Accounting Estimates and Errors IFRS 17 – Insurance Contracts IFRS 9, IFRS 7 and IAS 39 (amendment) Financial Instruments IFRS 16 (amendments) Leases was adopted during the year. See note 20 for impact on the financial statements. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 29 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.1.2 Changes in accounting policy and disclosures continued b) Standards, amendments and interpretations to existing standards that are not yet effective The following newly issued but not yet effective standards, interpretations and amendments, Mandatory for accounting periods commencing on or after 1 January 2021: (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) IAS 1 – Presentation of Financial Statements IFRS 9, IFRS 7 and IAS 39 (amendments) Financial Instruments IFRS 4 (amendments) Insurance contracts IAS 16 (amendments) Property, Plant and Equipment IAS 37 (amendments) Provisions, Contingent Liabilities and Contingent Assets IFRS 3 (amendments) Business Combinations IAS 41 (amendments) Agriculture The Directors do not expect that the adoption of the Standards and amendments listed above will have a material impact on the financial statements of the Company in future periods. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these Standards until a detailed review has been completed. 1.2 Basis of consolidation and business combinations 1.2.1 Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The Group measures goodwill at the acquisition date as: (cid:2) (cid:2) (cid:2) (cid:2) the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less the net amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. The subsidiaries financial statements were not prepared under IFRS but adjustments were made to bring all the accounting policies in line with IFRS. 1.2.2 Non-controlling interests For each business combination, the Group elects to measure any non-controlling interests in the acquiree either at fair value or at their proportionate share of the acquiree’s identifiable net assets, which are generally at fair value. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 30 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.2.3 Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing if the Group controls another entity. Subsidiaries are fully consolidated from the date on which control consolidated from the date that control ceases. is transferred to the Group. They are de- Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. 1.3 Goodwill Goodwill arising on acquisition of subsidiaries is included in the Consolidated Statement of Financial Position as an asset at cost less impairment. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently where 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 and then to 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. 1.4 Impairment of non-financial assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash- generating units). 1.5 Financial assets and liabilities Financial assets and liabilities are recognised initially at their fair value and are subsequently measured at amortised cost. For trade receivables, trade payables and other short-term financial liabilities this generally equates to original transaction value. 1.6 Property, plant and equipment The cost of property, plant and equipment is their purchase cost, together with any incidental costs of acquisition. Depreciation is calculated so as to write off the cost of the assets, less their estimated residual values, over the expected useful economic lives of the assets concerned. The principal annual rates used for this purpose are: Office and computer equipment – 25% – 50% per annum on cost Fixtures and fittings Land and buildings leasehold Right of use asset – 25% – 33% per annum on cost (or over the life of the lease whichever is shorter) – over 3 – 5 years straight line – straight line over shorter of estimated useful life and lease term 1.7 Trade receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 31 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.8 Cash and cash equivalents Cash and cash equivalents include cash in hand and deposits held at call with banks. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. 1.9 Investments Investments in subsidiary undertakings are stated at cost less provision for any impairment in value. Investments are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not be recoverable an impairment loss is recognised immediately for the amount by which the investment’s carrying amount exceeds its recoverable value. 1.10 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried 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 borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is recognised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. 1.11 Invoice discounting facility The terms of this arrangement are judged to be such that the risk and rewards of ownership of the trade receivables do not pass to the finance provider. As such the receivables are not derecognised on draw-down of funds against this facility. This facility is recognised as a liability for the amount drawn. 1.12 Trade payables Trade payables are non-interest bearing and are initially recognised at fair value and then subsequently measured at amortised cost. 1.13 Operating segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Executive Committee that makes strategic decisions. 1.14 Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in sterling, which is the Company’s functional and the Group’s presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within ‘net finance income’. All other foreign exchange gains and losses are presented in the income statement within ‘operating expenses’. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 32 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.15 Taxation Taxation currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all material taxable timing differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from an initial recognition of goodwill or from the initial recognition (other than in the business combination) of other assets and liabilities in the transaction that affects neither the tax profit nor the accounting profit. Deferred tax is calculated using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 1.16 Revenue Recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. a) Executive search services Executive Search services are provided on a retained basis and the Group generally invoices the client at pre- specified milestones agreed in advance. Typically, this will be in three stages; retainer, shortlist and completion fee. Revenue is recognised on completion of defined stages of work during the recruitment process including the completion of a candidate shortlist and placement of a candidate. The Solutions business is a more flexible model and on occasions will invoice in two stages, initiation and completion. Revenue is deferred for any invoices raised but unearned at the year end. b) Short-term contract and interim business Revenue is recognised as services are rendered, validated by receipt of a client approved timesheet or equivalent. Fixed Term Contracts or Candidate conversions are recognised on client approval and invoice date. c) Assessment, career coaching and talent management Revenue is recognised in line with delivery. Where revenue is generated by contracts covering a number of sessions then revenue is recognised over the contract term based on the average number of sessions taken up. d) Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. 1.17 Pensions The Group operates a number of defined contribution funded pension schemes for the benefit of certain employees. The costs of the pension schemes are charged to the income statement as incurred. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 33 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.18 Leases The company leases its offices and various office equipment. Rental contracts are typically made for fixed periods of 3 to 5 years but may have extension options. Contracts may contain both lease and non-lease components. The company allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of property for which the company is a lessee and for which it has major leases, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Until the 2018 financial year, leases of property, plant and equipment were classified as either finance leases or operating leases. From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the company. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) Fixed payments (including in-substance fixed payments), less any lease incentives receivable; Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date; Amounts expected to be payable by the company under residual value guarantees; The exercise price of a purchase option if the company is reasonably certain to exercise that option; and Payments of penalties for terminating the lease, if the lease term reflects the company exercising that option. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the following: (cid:2) (cid:2) (cid:2) The amount of the initial measurement of lease liability; Any lease payments made at or before the commencement date less any lease incentives received; and Any initial direct costs. Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life. Right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of assets. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 34 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 1. Significant Accounting Policies continued 1.19 Profit or loss from discontinued operations A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale, and represents a separate major line of business or geographical area of operations. Profit or loss from discontinued operations, including prior year components of profit or loss, is presented in a single amount in the income statement. This amount comprises the post-tax profit or loss of discontinued operations. The disclosures for discontinued operations in the prior year relate to all operations that have been discontinued by the reporting date of the latest period presented. 1.20 Share Option Schemes For equity-settled share-based payment transactions the Group, in accordance with IFRS 2, measures their value and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. The fair value of those equity instruments is measured at grant date, using the trinomial method. The expense is apportioned over the vesting period of the financial instrument and is based on the numbers which are expected to vest and the fair value of those financial instruments at the date of grant. If the equity instruments granted vest immediately, the expense is recognised in full. 1.21 Critical accounting judgements and estimates a) b) Impairment of goodwill – determining whether goodwill is impaired requires an estimation of the value in use of cash-generating units (CGUs) to which goodwill has been allocated. The value in use calculation requires an estimation of the future profitability expected to arise from the CGU and a suitable discount rate in order to calculate present value. Impairment of investments – determining whether investments is impaired requires an estimation of the value in use of each subsidiary. The value in use calculation requires an estimation of the future profitability expected to arise from each subsidiary and a suitable discount rate in order to calculate present value. c) Share Options – fair value of options granted is determined using the trinomial valuation model. The significant inputs into the model are share price at grant date, expected price, expected option life and risk free rate. d) Revenue recognition – revenue is recognised based on estimated timing of delivery of services based on the assignment structure and historical experience. Were these estimates to change then the amount of revenue recognised would vary. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 35 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 2 Financial Risk Management The financial risks that the Group is exposed to through its operations are interest rate risk, liquidity risk and credit risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. There have been no substantive changes in the Group’s exposure to financial risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods, unless otherwise stated in this note. The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s Executive Committee. The Board receives monthly reports from the Group Chief Financial Officer, through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as far as possible, without unduly affecting the Group’s competitiveness and flexibility. Further details regarding specific policies are set out below: 2.1 Interest rate risk The Group’s interest rate risk arises from short term borrowings issued at a variable interest rate. At 31 December 2020 the balance outstanding on the invoice discounting facility was £0.6 million (2019: £0.9 million) and this balance increases and decreases in line with the outstanding trade receivables. 2.2 Liquidity risk Liquidity risk arises from the Group’s management of working capital and the finance charges. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, the Group monitors its requirements on a rolling monthly basis. The Board receives cash flow projections as well as monthly information regarding cash balances. At the balance sheet date, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under reasonably expected circumstances. 2.3 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, to assess the credit risk of new customers before entering contracts. Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Board determines concentrations of credit risk by reviewing the trade receivables’ ageing analysis. The Board monitors the ageing of credit sales regularly and at the reporting date does not expect any losses from non-performance by the counterparties other than those specifically provided for (see Note 13). The Directors are confident about the recoverability of receivables based on the blue chip nature of its customers, their credit ratings and the very low levels of default in the past. 2.4 Capital risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the 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. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 36 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 3 Segmental analysis Management has determined the operating segments based on the reports reviewed regularly by the Board for use in deciding how to allocate resources and in assessing performance. The Board considers Group operations from both a class of business and geographic perspective. Each class of business derives its revenues from the supply of a particular recruitment related service, from retained executive search through to executive assessment and coaching. Business segment results are reviewed primarily to operating profit level, which includes employee costs, marketing, office and accommodation costs and appropriate recharges for management time. Group revenues are primarily driven from UK operations. However when revenue is derived from overseas business the results are presented to the Board by geographic region to identify potential areas for growth or those posing potential risks to the Group. i) Class of Business: The analysis by class of business of the Group’s turnover and profit before taxation is set out below: 2020 Revenue Cost of sales Gross profit Operating expenses Depreciation and amort. Finance costs Profit/(Loss) before tax 2019 Revenue Cost of sales Gross profit Operating expenses Depreciation and amort. Finance costs Profit/(Loss) before tax NBES £000 2,124 (9) 2,115 (2,677) (217) (5) (784) NBES £000 3,335 (9) 3,326 (3,502) (89) (15) (280) NBLC £000 321 (57) 264 (452) – (1) (189) NBLC £000 278 (62) 216 (286) – (6) (76) NBS £000 1,647 3 1,650 (1,740) (3) (5) (98) NBS £000 1,830 – 1,830 (1,618) (2) (6) 204 NBIM Unallocated £000 £000 3,724 (1,467) 2,257 (1,348) (2) (4) 903 – – – – – (25) (25) NBIM Unallocated £000 £000 6,043 (3,808) 2,235 (1,971) (2) (14) 248 – – – 8 – (20) (12) ii) Revenue and gross profit by geography United Kingdom Rest of the world Total 2020 Revenue £000 7,143 673 7,816 2019 Revenue £000 10,804 682 11,486 2020 Gross Profit £000 5,613 673 6,286 Total £000 7,816 (1,530) 6,286 (6,217) (222) (40) (193) Total £000 11,486 (3,879) 7,607 (7,369) (93) (61) 84 2019 Gross Profit £000 6,925 682 7,607 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 37 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 4 Profit/(loss) on ordinary activities before taxation Profit/(Loss) on ordinary activities before taxation is stated after charging: Depreciation and impairment of property, plant and equipment Gain on foreign currency exchange Staff costs (see note 5) Operating lease rentals: Land and buildings Auditors’ remuneration: Audit work Non-audit work The Company audit fee in the year was £38,000 (2019: £49,000). 2020 £000 222 – 4,853 – 38 – 2019 £000 93 – 5,725 187 49 – 5 Staff costs The average number of full time equivalent persons (including Directors) employed by the Group during the period was as follows: Sales and related services Administration Staff costs (for the above persons): Wages and salaries Social security costs Defined contribution pension cost Share based payment expense 2020 No. 34 13 47 £000 4,165 550 138 – 4,853 2019 No. 36 16 52 £000 4,933 626 153 13 5,725 The emoluments of the Directors are disclosed as required by the Companies Act 2006 on page 13 in the Directors’ Remuneration Report. The table of Directors’ emoluments has been audited and forms part of these financial statements. This also includes details of the highest paid Director. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 38 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 6 Tax expense (a) Tax charged in the income statement Taxation is based on the loss for the year and comprises: Current tax: United Kingdom corporation tax at 19% (2019: 19%) based on loss for the year Foreign Tax Total current tax Deferred tax: Origination and reversal of temporary differences Tax charge/(credit) (b) Reconciliation of the total tax charge 2020 £000 2019 £000 – – – – – – – – – – The difference between the current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows: Profit/(Loss) on ordinary activities before taxation Tax on profit/(loss) on ordinary activities at standard UK corporation tax rate of 19% (2019: 19%) Effects of: Expenses not deductible Substantial shareholding exemption Capital allowances in excess of depreciation Depreciation in Exces of Capital Allowances Provision Movement Group Relief Losses bought forward utilised Adjustment to losses carried forward Current tax charge for the year (c) Deferred tax At 1 January 2020 At 31 December 2020 Credited to the income statement in 2020 At 31 December 2020 2020 £000 (193) (37) 9 (2) 3 1 – 26 – Tax losses £000 (69) (69) – (69) 2019 £000 22 5 16 12 – – (73) 40 – Total £000 (69) (69) – (69) Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 39 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 6. Tax expense continued At 31 December 2020 the Group had capital losses carried forward of £8,129,000 (2019: £8,130,000). A deferred tax asset has not been recognised for the capital losses as the recoverability in the near future is uncertain. The Group also has £14,131,421 (2019: £13,974,127) trading losses carried forward, which includes £8,987,000 losses transferred from BNB Recruitment Consultancy Ltd in 2011. A deferred tax asset of £1,277,079 (2019: £1,281,415) has not been recognised in the financial statements due to the inherent uncertainty as to the quantum and timing of its utilisation. The analysis of deferred tax in the consolidated balance sheet is as follows: Deferred tax assets: Tax losses carried forward Total 7 Net finance cost Interest payable on Loan Notes and Invoicing facility Total 8 Earnings per share i) Basic earnings per share 2020 £000 69 69 2020 £000 40 40 2019 £000 69 69 2019 £000 61 61 This is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period: Profit/(Loss) attributable to owners of the company Weighted average number of ordinary shares Total ii) Diluted earnings per share 2020 (322,000) 2019 22,000 54,217,990 53,885,570 54,217,990 53,885,570 This is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares in the form of employee share options. For these options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to the outstanding options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The grants of options in 2019 and 2018 have both profitability and share price exercise criteria. Profit/(Loss) attributable to owners of the company Weighted average number of ordinary shares Total 2020 (322,000) 2019 22,000 54,217,990 53,885,570 54,217,990 53,885,570 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 40 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 8 Earnings per share continued iii) Adjusted earnings per share An adjusted earnings per share has also been calculated in addition to the basic and diluted earnings per share and is based on earnings adjusted to eliminate the effects of charges for share based payments. It has been calculated to allow shareholders to gain a clearer understanding of the trading performance of the Group. Basic earnings Profit/(Loss) after tax Adjustments Share based payment charge Adjusted earnings 2020 Basic pence per share Diluted pence per share £000 (322) (0.59) (0.59) – (322) – – (0.59) (0.59) 2019 Basic pence per share Diluted pence per share 0.04 0.02 0.06 0.04 0.02 0.06 £000 22 13 35 9 Profit of parent company As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these accounts. The parent company’s loss for the year amounted to £128,000 (2019: £12,000). 10 Intangible assets Group Balance at 1 January 2019 Balance at 31 December 2019 Balance at 31 December 2020 Provision for impairment Balance at 1 January 2019 Balance at 31 December 2019 Balance at 31 December 2020 Net book value At 1 January 2019 At 31 December 2019 At 31 December 2020 Goodwill arising on consolidation £000 3,690 3,690 3,690 2,327 2,327 2,327 1,363 1,363 1,363 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 41 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 10 Intangible assets continued Goodwill acquired through business combinations is allocated to cash-generating units (CGU) identified at entity level. The carrying value of intangibles allocated by CGU is shown below: At 1 January 2019 At 31 December 2019 At 31 December 2020 Norman Broadbent £000 1,303 1,303 1,303 Norman Broadbent Leadership Consulting £000 60 60 60 Total £000 1,363 1,363 1,363 In line with International Financial Reporting Standards, goodwill has not been amortised from the transition date, but has instead been subject to an impairment review by the Directors of the Group. As set out in accounting policy note 1 on page 31, the Directors test the goodwill for impairment annually. The recoverable amount of the Group’s CGUs are calculated on the present value of their respective expected future cash flows, applying a weighted average cost of capital in line with businesses in the same sector. Pre-tax future cash flows for the next five years are derived from the approved forecasts for the 2021 financial year. The key assumption applied to the forecasts for the business is that return on sales for Norman Broadbent is expected to be a minimum of 4% per annum for the foreseeable future (2019: 5%) and 5% for Norman Broadbent Leadership Consulting (2019: 20%). Return on sales defined as the expected profit before tax on net revenue. There are only minimal non cash flows included in profit before tax. The rate used to discount the forecast cash flows is 8% (2019: 8%). The five year forecasts have been prepared using conservative revenue growth rates to reflect the uncertainty that is still present in the economy. Based on the above assumptions, at 31 December 2020 the recoverable value of the Norman Broadbent CGU is £2,033,784 and the Norman Broadbent Leadership Consulting CGU is £445,398. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 42 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 11 Property, plant and equipment Group Cost Balance at 1 January 2019 Additions Disposals Balance at 31 December 2019 Additions Disposals Balance at 31 December 2020 Accumulated depreciation Balance at 1 January 2019 Charge for the year Disposals Balance at 31 December 2019 Charge for the year Disposals Balance at 31 December 2020 Net book value At 1 January 2019 At 31 December 2019 At 31 December 2020 Land and buildings – leasehold £’000 Right of Use asset £’000 Office and computer equipment £’000 Fixtures and fittings £’000 84 – – 84 10 – 94 83 – – 83 4 – 87 1 1 7 – – – – 408 – 408 – – – – 163 – 163 – – 245 176 30 – 206 48 – 254 142 17 – 159 18 – 177 34 47 77 211 – (5) 206 7 (163) 50 91 76 – 167 37 (157) 47 120 39 3 Total £’000 471 30 (5) 496 473 (163) 806 316 93 – 409 222 (157) 474 155 87 332 The Group had no capital commitments as at 31 December 2020 (2019 : £Nil). Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 43 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 12 Investments Company Cost Balance at 1 January 2019 Balance at 31 December 2019 Additions Balance at 31 December 2020 Provision for impairment Balance at 1 January 2019 Impairment for the year Balance at 31 December 2019 Impairment for the year Balance at 31 December 2020 Net book value At 1 January 2019 At 31 December 2019 At 31 December 2020 Shares in subsidiary undertakings £000 5,796 5,796 139 5,935 4,153 – 4,153 96 4,249 1,643 1,643 1,686 At 31 December 2020 the Company held the following ownership interests: Principal Group investments Norman Broadbent Executive Search Ltd Norman Broadbent Overseas Ltd Norman Broadbent Leadership Consulting Limited Norman Broadbent Solutions Ltd Bancomm Ltd ** Norman Broadbent Ireland Ltd* ** Norman Broadbent Interim Management Ltd Country of incorporation or registration and operation Principal activities Description and proportion of shares held by the Company England and Wales Executive search 100% ordinary shares England and Wales England and Wales England and Wales England and Wales Republic of Ireland England and Wales Executive search Assessment, coaching and talent mgmt. Mezzanine level search Dormant Dormant Interim Management 100% ordinary shares 100% ordinary shares 100% ordinary shares 100% ordinary shares 100% ordinary shares 100% ordinary shares * ** 100 % of the issued share capital of this company is owned by Norman Broadbent Overseas Ltd. These companies are exempt from audit by virtue of provisions in the Companies Act 2006. Where required limited assurance procedures have been completed. The registered office for the subsidiaries are Millbank Tower, 21-24 Millbank London SW1P 4QP with the exception of Norman Broadbent Ireland Limited. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 44 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 13 Trade and other receivables Trade receivables Less: provision for impairment Trade receivables – net Other debtors Prepayments and accrued income Due from Group undertakings Total Non-Current Current Group Company 2020 £000 1,509 (60) 1,449 88 155 – 1,692 145 1,547 1,692 2019 £000 2,782 (49) 2,733 180 100 – 3,013 65 2,948 3,013 2020 £000 – – – 66 15 5,368 5,449 66 5,383 5,449 2019 £000 – – – 125 14 5,317 5,456 65 5,391 5,456 Non-current trade receivables are in relation to the cash consideration due from the sale of SMS in 2016. As at 31 December 2020, Group trade receivables of £797,000 (2019: £1,408,000), were past their due date but not impaired, save as referred to below. They relate to customers with no default history. The aging profile of these receivables is as follows: Up to 3 months 3 to 6 months 6 to 12 months Total Group Company 2020 £000 595 128 74 797 2019 £000 1,120 197 91 1,408 2020 £000 – – – – 2019 £000 – – – – The largest amount due from a single trade debtor at 31 December 2020 represents 8% (2019: 7%) of the total trade receivables balance outstanding. As at 31 December 2020, £60,000 of group trade receivables (2019: £49,000 ) were considered impaired. A provision for impairment has been recognised in the financial statements. Movements on the Group’s provision for impairment of trade receivables are as follows: At 1 January Provision for receivable impairment Receivables written-off as uncollectable At 31 December 2020 £000 49 11 – 60 2019 £000 – 49 – 49 There are no material difference between the carrying value and the fair value of the Group’s and parent Company’s trade and other receivables. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 45 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 14 Cash and cash equivalents Cash at bank and in hand Total Group Company 2020 £000 367 367 2019 £000 432 432 2020 £000 12 12 2019 £000 14 14 There is no material difference between the carrying value and the fair value of the Group’s and parent Company’s cash at bank and in hand. 15 Trade and other payables Trade payables Due to Group undertakings Other taxation and social security Other payables Accruals Total Group Company 2020 £000 150 – 535 30 930 1,645 2019 £000 588 – 649 33 1,045 2,315 2020 £000 18 1,518 – – 69 1,605 2019 £000 79 1,481 – – 86 1,646 There is no material difference between the carrying value and the fair value of the Group’s and parent company’s trade and other payables. 16 Borrowings Maturity profile of borrowings Current Bank overdrafts and interest bearing loans: Invoice discounting facility (see note (a) below) Secured loan notes Non Current Bank Loans Total Group Company 2020 £000 577 – 250 827 2019 £000 950 119 – 1,069 2020 £000 – – 250 250 2019 £000 – 119 119 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 46 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 16 Borrowings continued The carrying amounts and fair value of the Group’s borrowings, which are all denominated in sterling, are as follows: Bank overdrafts and interest bearing loans: Invoice discounting facility Secured loan notes Bank Loans Total Carrying amount Fair value 2020 £000 577 – 250 827 2019 £000 950 119 – 1,069 2020 £000 577 – 250 827 2019 £000 950 119 – 1,069 a) Invoice discounting facilities: Norman Broadbent Executive Search Limited, NBS, NBIM and NBLC operate independent invoice discounting facilities, provided by Bibby Financial Services Limited. Bibby Financial Services Limited holds all assets debentures for each company (fixed and floating charges) and also a cross-corporate guarantee and indemnity deed dated 20 August 2019. The financial terms of the facilities are outlined below: In February 2021 the Group terminated the contract with Bibby Financial Services Limited and opened a new invoice discounting facility with Metro Bank. Norman Broadbent Executive Search Limited: Funds are available to be drawn down at an advance rate of 80% against trade receivables of Norman Broadbent Executive Search Limited that are aged less than 120 days, with the facility capped at £2,000,000. At 31 December 2020, the outstanding balance on the facility of £241,865 (2019: £217,679) was secured by trade receivables of £681,269 (2019: £717,619). Interest is charged on the drawn down funds at a rate of 2.50% (2019: 2.50%) above the bank base rate. Norman Broadbent Solutions Limited: Funds are available to be drawn down at an advance rate of 80% against trade receivables of Norman Broadbent Solutions Limited that are aged less than 120 days, with the facility capped at £2,000,000. At 31 December 2020, the outstanding balance on the facility of £126,483 (2019: £227,997) was secured by trade receivables of £219,534 (2019: £592,863). Interest is charged on the drawn down funds at a rate of 2.50% (2019: 2.50%) above the bank base rate. Norman Broadbent Interim Management Limited: Funds are available to be drawn down at an advance rate of 90% against trade receivables of Norman Broadbent Interim Management Limited that are aged less than 120 days, with the facility capped at £2,000,000. At 31 December 2020, the outstanding balance on the facility of £180,425 (2019: £453,086) was secured by trade receivables of £466,342 (2019: £1,300,602). Interest is charged on the drawn down funds at a rate of 2.50% (2019: 2.50%) above the bank base rate. Norman Broadbent Leadership Consulting: Funds are available to be drawn down at an advance rate of 90% against trade receivables of Norman Broadbent Leadership Consulting Limited that are aged less than 120 days, with the facility capped at £2,000,000. At 31 December 2020 the outstanding balance on the facility of £102,269 (2019: £52,220) was secured by trade receivables of £84,300 (2019: £61,883). Interest is charged on the drawn down funds at a rate of 2.50% above the bank base rate. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 47 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 16 Borrowings continued b) Secured Loan Note The secured loan note was fully repaid during the year. c) Bank Loans In November 2020 the Group received a CBILS Loan of £250,000 for a term of 6 years. No capital or interest is payable in the first 12 months. Thereafter the loan incurs interest at 4.75% above the Metro Bank UK base rate (0.1% at date of signing). 17 Financial instruments The principal financial instruments used by the Group, from which financial instrument risk arises, are summarised below. All financial assets and liabilities are measured at amortised cost which is not considered to be materially different to fair value. Amortised Cost Group Financial Assets Trade and other receivables Other debtors Financial Liabilities Trade creditors Accrual and deferred income Other creditors Secured loan notes Bank Loans – Current Bank Loans – Greater than one year Company Financial Assets Trade and other receivables Amounts owed by group undertakings Financial Liabilities Trade and other payables Amounts owed to group undertakings Secured loan notes Accruals and deferred income Bank loans – Greater than one year 2020 £000 1,449 36 1,485 150 929 30 – 577 250 1,936 2019 £000 2,913 – 2,913 2,315 – – 119 950 – 3,384 Amortised Cost 2020 £000 66 5,368 18 1,518 – 69 250 2019 £000 5,317 – 1,644 – 119 – – In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. Details on these risks and the policies set out by the Board to reduce them can be found in Note 2. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 48 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 18 Share capital and premium Allotted and fully paid: Ordinary Shares: 55,218.870 Ordinary shares of 1.0p each (2019: 53,885,570) Deferred Shares: 23,342,400 Deferred A shares of 4.0p each (2019: 23,342,400) 907,118,360 Deferred shares of 0.4p each (2019: 907,118,360) 1,043,566 Deferred B shares of 42.0p each (2019: 1,043,566) 2,504,610 Deferred C shares of 29.0p each (2019: 2,504,610) Total 2020 £000 552 934 3,628 438 727 6,279 2019 £000 539 934 3,628 438 727 6,266 Deferred A Shares of 4.0p each The Deferred A Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry a right to repayment only after the holders of Ordinary Shares have received a payment of £10,000 per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be varied by the creation or issue of shares ranking pari passu with or in priority to the Deferred A Shares. Deferred Shares of 0.4p each The Deferred Shares carry no right to dividends, distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry a right to repayment only after payment of capital paid up on Ordinary Shares plus a payment of £10,000 per Ordinary Share. The Company retains the right to transfer or cancel the shares without payment to the holders thereof. Deferred B Shares of 42.0p each The Deferred B Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry the right to repayment only after the holders of Ordinary Shares have received a payment of £10 million per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be varied by the creation or issue of shares ranking pari passu with or in priority to the Deferred B Shares. Deferred C Shares of 29.0p each The Deferred Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry the right to repayment only after the holders of Ordinary Shares have received a payment of £10,000 per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof. A reconciliation of the movement in share capital and share premium is presented below: At 1 January 2019 At 31 December 2019 Issued during the year At 31 December 2020 Number of ordinary shares (000s) Ordinary shares (000s) Deferred shares (000s) Share premium (000s) 53,885 53,885 1,333 55,218 539 539 13 552 5,727 5,727 – 5,727 13,706 13,706 57 13,763 Total (000s) 19,972 19,972 70 20,042 During the year £1,333,333 Ordinary Shares were issued at a consideration of 5.25 pence per share. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 49 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 19 Share based payments 19.1 Share Options The Company has an approved EMI share option scheme for full time employees and Directors. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. The Company has no legal or constructive obligation to repurchase or settle the options or warrants in cash. Options under the Company EMI scheme are conditional on the employee completing three years’ service (the vesting period). The EMI options vest in three equal tranches on the first, second and third anniversary of the grant. The options have a contractual option term of either seven or ten years. Movements in the number of share options and their related weighted average exercise prices are as follows: At 1 January 2019 Granted Forfeited At 31 December 2019 Granted Forfeited At 31 December 2020 Approved EMI share option scheme Average exercise price per share (p) 14.41 – – 14.41 – 13.50 14.41 Number of options 3,549,147 – – 3,549,147 – (1,643,614) 1,905,533 Share options outstanding at the end of the year have the following expiry date and exercise prices: Expiry date 2021 2023 2024 2025 Total Exercise price per share (p) Share options 2020 2019 65.5 13.5 13.5 13.5 53,681 1,851,852 – – 62,153 2,051,852 380,951 1,054,191 1,905,533 3,549,147 Out of the 1,905,533 outstanding options (2019: 3,549,147), no options were exercisable at the year-end (2019: None) as they were all ‘underwater’. The significant inputs into the model in valuing the 2019 option grant were weighted average share price of 12 pence at the grant date, exercise price of 13.5p, volatility of 28%, dividend yield of 0% (2019 and 2018: 0%), an expected option life of 10 years (2019 and 2018: 10 years) and an annual risk-free interest rate of 0.652%. The expected volatility was estimated by reference to the historical volatility of the Company’s share price and those of UK quoted companies in a similar business sector. The risk-free interest rate is estimated as the yield on zero coupon UK government bonds of a term consistent with the contractual life of the options granted. No share options were granted during 2020, therefore the same assumptions were used as per the prior year. There was no significant change in the company or shareholding during 2020. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 50 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 20 Leases Finance leases The Group leases its premises and signed a 2 year lease for its London Headquarters in Millbank Tower, London effective March 2020. The Group has adopted IFRS 16 for treatment of the lease. Under IFRS 16 Leases, the Group has recognised within the Consolidated Balance Sheet a right-of-use asset and a lease liability for all applicable leases. Within the Consolidated Income Statement, operating lease rentals charges have been replaced with depreciation and interest expense. Set out below are the new accounting policies of the Group upon adoption of IFRS 16, which have been applied from the date of initial application. Right-of-use assets : The Group recognises right-of-use assets at the commencement date of the lease and are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straightline basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities : At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. Consolidation Statement Rent Depreciation expense Operating profit Finance costs Profit before tax £000 180 (163) 17 (17) – Consolidated Statement of Financial Position As at 1 January 2020 Right of use assets Lease Liabilities £000 £000 Additions Disposals Depreciation expense Interest expense Payments As at 31 December 2020 Impact on Consolidated Balance Sheet Right-of-use assets Total Assets Lease liabilities – less than one year Lease liabilities – more than one year Total Liabilities Equity 408 – (163) – – 245 (408) – – (17) 180 (245) £000 245 245 (196) (49) (245) – Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 51 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 20 Leases continued Operating leases For the 2019 financial statements the Group reccognised the Lease as an Operating Lease, as the lease was terminating in March 2020 and it was not considered material for treatment under IFRS16. As at 31 December 2020, the total future value of minimum lease payments due are as follows: Land and buildings Operating Lease within one year Later than one year and not later than five years Total 21 Provisions At 1 January Provisions made during the year Provisions Utilised during the year At 31 December Current liability Non-current liability At 31 December 2020 £000 – – – 2020 £000 215 – (215) – – – – Group 2019 £000 28 – 28 2019 £000 240 – (25) 215 215 – 215 The Group moved its headquarters in March 2020 to Millbank Tower, London. There are no dilapidations requirements under the lease and therefore no provision for dilapidations has been made. The liability relating to dilapidations in the previous headquarters was settled in full during 2020. 22 Pension costs The Group operated several defined contribution pension schemes for the business. The assets of the schemes were held separately from those of the Group in independently administered funds. The pension cost represents contributions payable by the Group to the funds and amounts to £195,000 (2019: £155,000). At the year-end £16,000 of contributions were outstanding (2019: £16,000). Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 52 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notes to the Financial Statements continued 23 Related party transactions The following transactions were carried out with related parties: (a) Purchase of services: Brian Stephens & Company Ltd Total 2020 £000 9 9 2019 £000 20 20 Brian Stephens & Company Ltd invoiced the Group for the provision of services of B Stephens of £9,000 (2019 total: £20,000). B Stephens is a director of Brian Stephens & Company Ltd. All related party expenditure took place via “arms-length” transactions. (b) Key management compensation: Key management includes Executive and Non-Executive Directors. The compensation paid or payable to the directors can be found in the Directors’ Remuneration Report on page 13. (c) Year-end payables arising from the purchases of services: Brian Stephens & Company Ltd Total 2020 £000 – – 2019 £000 – – Payables to related parties arise from purchase transactions and are due one month after date of purchase. Payables bear no interest. 24 Contingent liability The Company is a member of the Norman Broadbent plc Group VAT scheme. As such it is jointly accountable for the combined VAT liability of the Group. The total VAT outstanding in the Group at the year-end was £383,000 (2019: £481,000). Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 53 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notice of Annual General Meeting Notice is hereby given that the 82nd Annual General Meeting (“AGM”) of Norman Broadbent plc will be held at 10.00 am at 7th Floor Millbank Tower, 21-24 Millbank, London SW1P 4QP (and by Zoom conference software meeting) on 25 June 2021 to consider and, if thought fit, pass the following resolutions, of which resolutions 1 to 5 will be proposed as ordinary resolutions and resolution 6 will be proposed as a special resolution: Ordinary Resolutions 1 To receive and adopt the statement of accounts of the Company for the year ended 31 December 2020 together with the reports of the Directors and Auditors thereon. 2 3 4 5 To re-elect Fiona McAnena, who is retiring by rotation in accordance with the articles of the Company and who offers herself for re-election as a Director of the Company. To re-elect Alan Howarth, who only holds office until the date of this AGM in accordance with the articles of the Company and who automatically offers himself up for election. To appoint Kreston Reeves LLP as Auditors to act as such until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors of the Company to fix their remuneration. That in substitution for all existing and unexercised authorities and powers, the directors of the Company be generally and unconditionally authorised for the purpose of section 551 Companies Act 2006 (the Act): (a) (b) to exercise all or any of the powers of the Company to allot shares of the Company or to grant rights to subscribe for, or to convert any security into, shares of the Company (those shares and rights being together referred to as Relevant Securities) up to a total nominal value of £182,222 to those persons at the times and generally on the terms and conditions as the directors may determine (subject always to the articles of association of the Company); and further; to allot equity securities (as defined in section 560 of the Act) up to a total nominal value of £ 369,966 (that amount to be reduced by the nominal value of any Relevant Securities allotted under the authority in paragraph a above) in connection with a rights issue or similar offer in favour of ordinary shareholders where the equity securities respectively attributable to the interest of all ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them subject only to those exclusions or other arrangements as the directors of the Company may consider appropriate to deal with fractional entitlements or legal and practical difficulties under the laws of, or the requirements of any recognised regulatory body in any, territory, PROVIDED THAT this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting or on the date which is six months after the next accounting reference date of the Company (if earlier) save that the directors of the Company may, before the expiry of that period, make an offer or agreement which would or might require relevant securities or equity securities (as the case may be) to be allotted after the expiry of that period and the directors of the Company may allot relevant securities or equity securities (as the case may be) under that offer or agreement as if the authority conferred by this resolution had not expired. Special Resolution 6 That if resolution 5 above is passed, the directors of the Company be authorised to allot equity securities (as defined in section 560 of the Act) for cash under the authority given by that resolution 5 and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Act did not apply to that allotment or sale, the authority to be limited to: 6.1 the allotment of equity securities or sale of treasury shares in connection with a rights issue or similar offer in favour of ordinary shareholders where the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them subject only to those exclusions or other arrangements as the directors of the Company may consider appropriate to deal with fractional entitlements or legal and practical difficulties under the laws of, or the requirements of any recognised regulatory body in any, territory; and Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 54 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notice of Annual General Meeting continued 6.2 the allotment of equity securities or sale of treasury shares (otherwise than under paragraph 6.1 above) up to a total nominal amount of £55,218 representing approximately 10% of the current share capital of the Company, that authority to expire at the end of the next annual general meeting of the Company (or, if earlier, at the close of business on the date that is 15 months following the date of this meeting) but, in each case, before its expiry the Company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority expires and the directors of the Company may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired. By order of the Board: R Robinson FCA Company Secretary Registered Office Millbank Tower 21-24 Millbank London SW1P 4QP www.normanbroadbent.com 21 May, 2021 Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 55 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notice of Annual General Meeting continued Notes: 1 Due to the ongoing COVID-19 pandemic the Company’s view, which is supported by the Chartered Governance Institute (“ICSA”) is that attendance at a general meeting by a shareholder, other than one specifically required to form the quorum for that meeting, is not essential for work purposes. The Company has therefore arranged for a quorum to be present in person at the General Meeting, and all Shareholders are strongly encouraged to vote on the Resolutions by appointing the Chair of the meeting (who will be present in person) as their proxy before the deadline of 10.00 a.m. on 23 June 2021. (EA to the CEO) at Accordingly, we hereby notify Shareholders that anyone seeking to attend the Annual General Meeting in person will be refused entry. The Company intends to provide shareholders access to the AGM by using the conferencing software, Zoom. Shareholders will need to register to attend the meeting by writing to Ms Stephanie Alexander the Companies registered address, or by emailing to stephanie.alexander@normanbroadbent.com. Deadline for registration is 23 June 2021 and instructions for access to the Zoom meeting will be sent or emailed by 24 June 2021 at the latest. The Company is keen to improve communications with Shareholders and therefore Shareholders are advised to send any questions for the Board at the AGM prior to the meeting in accordance with the instructions included within the Notice of Annual General Meeting. Shareholders will not be able to vote via Zoom, and are therefore strongly urged to vote by appointing the Chair of the meeting as their proxy by completing their form of proxy in accordance with the instructions printed on the form of proxy. This measure is designed to promote the health and wellbeing of the Company’s Shareholders, its employees and the wider community, which is of upmost importance. 2 3 A member entitled to attend and vote at the meeting is also entitled to appoint a proxy to exercise his rights to attend, speak and vote at the meeting instead of him/her. The proxy need not be a member of the Company. More than one proxy may be appointed to exercise the rights attaching to different shares held by the member, but a member may not appoint more than one proxy to exercise rights attached to any one share. A form of proxy is enclosed with this notice for use at the meeting. In order to be valid an appointment of proxy (together with any authority under which it is executed or a copy of the authority certified notarial) must be returned by one of the following methods: • • • in hard copy form by post, by courier or by hand to the Company’s registrars: Link Group, Central Square, 10th Floor, 29 Wellington Street, Leeds, LS1 4DL. via www.signalshares.com; or in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out below and in each case must be received by the Company not less than 48 hours before the time of the meeting. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the AGM and any adjournment thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment, or instruction, made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA 10) by the latest time(s) for receipt of proxy appointments specified in the Notice of Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) of the Uncertificated Securities Regulations 2001. CREST members and where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 56 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Notice of Annual General Meeting continued system timings and limitations will therefore apply in relation to the input of CREST Proxy instructions. It is therefore the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of any other joint holders. For these purposes seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding. In the case of a corporation, the form of proxy must be executed under its common seal or signed on its behalf by a duly authorised attorney or duly authorised officer of the corporation. Copies of all contracts of service and letters of appointment of any Director with the Company are available for inspection at the Company’s registered office during business hours on any weekday (Saturdays and public holidays excluded) and will be available for inspection at the place of the meeting 30 minutes before it is held until its conclusion. A copy of this notice and other information required by s311A Companies Act 2006 can be found at www.normanbroadbent.com. You may not use any electronic address provided in the Notice of AGM or any relate d document to communicate with the Company for any purpose other than as expressly stated. The Company, pursuant to Regulation 41 of the Uncertified Securities Regulations 2001, specifies that only those shareholders registered in the register of members at close of business two days priors to the meeting shall be entitled to attend and vote, whether in person or by proxy, at the meeting, in respect of the member of ordinary shares registered in their name at that time. Changes to entries in the register of members after such time shall be disregarded in determining the rights of any person to attend or vote at the meeting. If the meeting is adjourned, entitlements to attend and vote will be determined by reference to the register of members of the Company at close of business two days prior to the adjourned meeting. Any member attending the meeting (or viewing by Zoom) has the right to ask questions. The Company must cause to be answered any such questions relating to the business being dealt with at the meeting but no answer needs to be given if to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information or if the answer has already been given on a website in the form of an answer to a question or, finally, if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered. 4 5 6 7 8 9 10 Votes can be registered online via the registrar’s website at www.signalshares.com. Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 57 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Officers and Professional Advisors Board of Directors MIKE BRENNAN Group CEO STEVE SMITH Group CFO/COO (appointed on 30/03/20) FIONA MCANENA Non-Executive Director ALAN HOWARTH Non-Executive Chair (appointed 01/08/20) Professional Advisers COMPANY SECRETARY Richard Robinson REGISTERED OFFICE Millbank Tower 21- 24 Millbank London SW1P 4QP COMPANY NUMBER 318267 NOMINATED ADVISER & BROKER WH Ireland Group plc 24 Martin Lane London EC4R 0DR REGISTRARS Link Group Central Square 10th Floor 29 Wellington Street Leeds LS1 4DL SOLICITORS Gateley PLC 1 Paternoster Square London EC4M 7DX PRINCIPAL BANKERS Metro Bank plc One Southampton Row London WC1B 5HA AUDITORS Kreston Reeves LLP 168 Shoreditch High Street London E1 6RA Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 58 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS THIS PAGE INTENTIONALLY LEFT BLANK Norman Broadbent plc ANNUAL REPORT AND ACCOUNTS 2020 59 NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS Printed by Michael Searle & Son Limited NORMAN B ROADBENT BOARD | SEARCH | INTERIM | CONSULTING | INSIGHT | SOLUTIONS www.normanbroadbent.com 2021 Norman Broadbent all rights reserved
Continue reading text version or see original annual report in PDF format above