Northamber
Report & Accounts
Year ended 30 June 2015
northamber
Total Distribution™
Celebrating
over
years
northamber
Total Distribution™
CONTENTS
Summary Information
Chairman’s Statement
Strategic Report
Report of the Directors
4
5-6
7-11
12-14
Report to Shareholders by the Board on Directors’ Remuneration
15-16
Corporate Governance
Statement of Directors’ Responsibilities
Directors and Advisers
Report of the Independent Auditor
Statement of Comprehensive Income
Statements of Changes in Equity
Statements of Financial Position
Statements of Cash Flows
Notes to the Financial Statements
Notice of Meeting
17-22
23
24
25-26
27
28-29
30-31
32-33
34-50
51-52
3
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 SUMMARY INFORMATION
Northamber plc and its subsidiaries are primarily distributors of computers, peripheral equipment and
related services to resellers who then sell on to the general public and corporations – the end users.
The company’s shares were admitted to trading on AIM a market operated and regulated by the London
Stock Exchange under stock symbol “NAR.”
The shares were formerly traded on the full listing of the London Stock Exchange
Summary of last five years’ trading
Years ending 30 June
2015
£’000
2014
£’000
2013
£’000
2012
£’000
2011
£’000
Revenue
(Loss)/Profit before tax
(Loss)/earnings per share
Net Assets per share
Dividends per share (net)
65,452
(886)
(3.15)p
72.7p
0.6p
62,865
(1,155)
(4.10)p
76.4p
0.6p
77,521
(1,047)
(3.49)p
81.0p
1.05p
100,615
37
(0.01)p
85.7p
1.3p
121,083
(106)
(0.34)p
86.5p
2.0p
4
CHAIRMAN’S STATEMENT
Results
The year to 30 June 2015 has proved to be one of contrasting fortunes, with the positive performance in the
first half underpinning year on year revenue growth of 4.14%, followed in the second half by events largely
beyond our control.
My positive statement at the interim stage, announcing an overall 18.1% sales increase over the equivalent
period last year, enabled a relatively confident and buoyant view of the Company’s progress. That was
supported by our management accounts showing we had broken back into operating profit in March 2015.
At the time, I raised a commercially prudent note of caution and that then prove well founded. On 19
March, and just a week after the interims, Microsoft announced the cancellation of Windows 9 and the
proposed “summer launch” of Windows 10 later in 2015, later identified as 29 July.
After the earlier removal of support for XP and the criticisms of Windows 8, the resultant uncertainty
created within the Commercial User sector, running business critical legacy software and peripheral devices,
was such that a strong hiatus was created in the otherwise normal anticipated demand run-rates.
The effect has been clearly demonstrated by the recent release of HP’s globally depressed Q3 2015 results
and the actions both Lenovo and other brands took as the result of overstocks of unsold product.
Whilst seeking to support new product sales during the uncertainty, Microsoft simultaneously announced
the offer of free upgrades from Windows 7 and 8 to Windows 10. Commercial users, however, proved
understandably reticent to risk any unnecessary data or incompatible hardware or software exposures.
The then eventual release of Windows 10 and inevitable press reports of discovered aspects or problems and
awaited ‘fixes’, served to continue the hiatus. Whilst commercial users continue to seek to fully understand
the new operating system’s exact capabilities, or limitations, and the effect on their established in-use legacy
software and hardware, they are largely refusing to commit to further hardware or software purchases.
Despite the Windows 10 interruption, the results for the whole year showed an increase in turnover of
£2.6m (4.1%) and a £269,000 reduction in the comparative pre-tax loss from £1,155,000 to £886,000.
Also, with further ongoing actions to refine trading, we were again able to increase our gross margin from
6.8% to 7.0%. This is a trend we have been achieving from our ongoing moves away from the remaining
empty revenue products.
Whilst we are exiting “empty revenue” products, a shareholder’s view of the reported trading profile might
be distorted. Our focus remains on generating higher margins but also with greater scope to add value and
increase the potential for even closer trading relationships with our vendors and reseller customer base.
It is worth recalling that we began some time ago to move the emphasis of the business from the initial
concentration on PC hardware, to the “softer” type of product and which has a greater level of application
complexity and which require a greater level of expertise to operate and install. This transition can only be at
an evolutionary pace and which is effectively in line with the requirements of both customers and suppliers.
Support for our achievements are in securing prestigious awards. MicroScope Ace’s 2015 Hardware
Distributor of the Year, plus CRN’s Specialist Distributor of the Year Channel Awards 2014 and now a
2015 finalist. These example the progress achieved from the changes to our strategy and also demonstrate
the valued support provided by existing and new vendors.
5
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 CHAIRMAN’S STATEMENT (CONTINUED)
Balance Sheet
Our usual and expected ongoing care of the Group’s resources in relation to fixed and current assets and
cash management, enables our ability to absorb the result of slower growth and consequential losses during
the overly extended transition period driven by Windows 10.
Cash balances at the end of the trading year were £5.4 million compared with £5.1 million at the end of last
year. We delivered effective gains through both reduced debtor and creditor days during the year and also
increased the stock turn in the year whilst retaining our overall Working Capital Ratio.
Current Cash Position
The Net Assets per share, include property assets at depreciated costs which ignore development
opportunities, did decline slightly from 76.4p per share to 72.7p per share, compared with the average
share price during the year of 38.2p per share.
Dividend
After consideration of our debt free balance sheet and cash position, your board is proposing a final dividend
of 0.3p per share same as last year. Together with the 0.3p interim dividend, totals 0.6p for the year.
Board
After almost five years and a heavy international travel burden, Gordon Hamilton has indicated that he
feels it time he reduced his level of non-executive commitments and disappointingly will not be seeking
re-election. We are unreserved in our gratitude for his cool and worthy contributions.
Also, I am now closing on the age of 71, so it is clearly time I commence the process to enable my own
executive role to be downsized and will seek to assume a more non-executive chairman’s role. The search for
an executive managing director is already under way.
Staff
Again I cannot express any greater appreciation for the dedication and effort produced by the staff during
this period and we continue to drive changes in strategy.
Outlook
The current sales hiatus for both hardware and peripherals, driven by insufficient certainty within the
commercial user sector, is beyond any influence we might have and is totally driven by understandable
caution and uncertainty surrounding Windows 10. That has driven an even greater spur to the pace of
implement of our planned strategy.
After too many years in this sector, we remain prudently optimistic that we will continue to reverse the
trend in the Company of the last few years and provide a profitable business for the future.
No matter the quality of the strategy, against shifting external effects, it cannot but take time to deliver the
desired end results.
Although remaining optimistic regarding the future of the Company, at this point in time I am unable to
forecast the immediate future with any certainty but will continue to use our very best endeavours to deliver
change and continue to aggressively dilute our empty revenue exposure to the commercial impossibilities of
the mainstream hardware based sector.
6
D.M. Phillips, Chairman
22 October 2015
STRATEGIC REPORT
This report provides an overview of the company’s strategy, its business model and a review of how the
company has performed for the year. It also sets out the principal risks involved in its business and the
financial position of the company at the year end. There are also some comments and observations on the
future prospects for the company.
1. The Company’s Strategy
As explained below in the notes on the business model, the company is not directly involved with the
ultimate users of the products it sells. Acting as a hub through which manufacturers provide products
to resellers for sale to the ultimate end user.
This being the case requires us to develop strategies with both suppliers and resellers to satisfy the
needs of those ultimate users of the products.
Our strategy always has been to assess the requirements of the end users and then source quality
products and services from reliable brand named manufacturers and make them available to resellers at
the best prices in the most efficient time frame. With an ever changing product range it has also been
part of our strategy to support fresh new products which will be attractive to end users.
In addition to the supply of hardware and software products we also ensure that our customers are
provided with the technical support either directly or through the suppliers which they may require to
effectively use the high tech products we sell. Thus ensuring quality of supply and satisfaction to users.
2. The Business Model
The Group has, since its inception, been involved in the distribution of electronics and computer related
products. Initially this was predominantly printers but has been extended over the years to include not
only computers themselves but also a wide range of peripheral and ancillary related products.
The Group has a two pronged approach in driving the business, being both demand driven and supply
driven. The demand drivers are the requirements of our customers where we strive to provide a wide
range of products and get them to the customer in the quickest possible time and at acceptable prices.
The supply drivers are the requirements of our suppliers – the vendors. Vendors in the main are one
of two types, there is the major brand type of supplier who is looking for us to increase its turnover, to
physically get them to the customer and bear the risk of the customer defaulting. The second type of
supplier differs only in that they tend to be the smaller producers, who often develop new or innovative
products and are looking for a method of reaching an established wide ranging customer base which
is beyond their own resources.
Our business model is to satisfy all those wants by providing a marketing and selling operation to
optimise the penetration of the products to the customers and a distribution facility which includes
warehousing and bulk breaking using sophisticated systems and procedures to achieve a first class
delivery service.
3. Key Performance Indicators
The group has an extensive management reporting system and uses a wide variety of information
in its everyday management of the business, including both those of a financial and non financial
nature. This information is tailored to the various aspects of the business with individual managers
being responsible for variances in movements within their particular sphere of operations to the
executive management of the company. The majority of this information is highly sensitive and it is
considered by the directors that it would be commercially disadvantageous to the company to identify
the information used in a public document such as this Annual Report.
7
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 STRATEGIC REPORT (CONTINUED)
Some of the broader KPIs which are used and which have been reported elsewhere in our Annual
Reports are the following:-
Ratio
Revenue
Gross Profit
Stock Turn
Debtor Days
Good Debtors (Net Trade Receivables)
Creditor Days
Net Assets per share
Working Capital Ratio *1
Format
2014-15
2013-14
£m
%
Times
Days
£m
Days
Pence
Times
65.5
7.03
13.5
47
10.0
34
72.7
2.1
62.9
6.80
11.6
56
11.6
41
76.4
2.1
*1 Working Capital Ratio is calculated by adding Inventory and Net Trade Receivables, divided by Trade Payables
Debtor days have decreased due to change of mix in customers with varying credit terms.
Net Assets per share have fallen due to dividend payments and the loss reported for the period.
4. Performance Review
As reported at the half way stage, the performance for the first half of the year was an improvement
on previous periods in recent years. Even so margins continued to be tight and there was considerable
speculation about a number of factors, including inter alia, the Windows 10 introduction and a move
to consolidation in some areas in the distribution sector.
For some time the company has been following a strategy of change away from the basic hardware
type products which are in the main physically larger type products with relatively low margin and
subject to great price pressure, towards more application intensive type products where there is greater
scope for adding value and gaining margin.
Although this process of change was already initiated in previous periods it was intensified in the
current year and particularly during the second half of the period. However such changes need very
careful planning and implementation to minimise the inevitable consequences which usually includes
not only significant costs upfront before the benefits of the changes are manifest but also some tail off
of some parts of the existing business.
Some of these consequences occurred, as was to be expected, during the year. The delayed introduction
of Windows 10 did indeed impact on the whole market with significantly reduced demand particularly
during the second half of the year. Also there was a continuation of the move towards consolidation in
some parts of the industry, particularly in relation to those parts of the industry towards the ultimate
consumer end of the industry. This also impacted adversely on the company in the second half of the
year, although steps are being taken to also benefit from this consolidation effect elsewhere.
The underlying changes which have been and are continuing to be made to the structure of the business
will, it is anticipated, make significant improvements in both turnover and margins in due course,
although it will take a little time before they are seen to be fully effective and reflected in results.
The net impact of this somewhat fluid situation is that during the second half of the year there was
a decline in turnover compared with the first half and although there was an increase in the gross
margin, the net effect was an increase in the loss for the second half compared with the first half year.
However for the year as a whole Turnover increased by £2.6m (4.1%) to £65.45m and the operating
loss was reduced by £293,000 to £932,000 compared with the previous year.
8
STRATEGIC REPORT (CONTINUED)
5. Financial Review and Position
Turnover increased by £2.6m (4.14%) compare with the previous year. With the disappointing results
it became even more imperative to exercise strict controls over the working capital, even though this
has always been a high priority in the management of the company. We were able to reduce debtor
days from 56 last year to 47 for the current year under review and at the same time reduce creditor days
from 41 last year to 34 this year.
As a result of the above, our cash balance at the end of financial year was £5.44m compared with
£5.08m at the end of last year, an increase of £0.36m whilst remaining debt free.
Some 39.3% of the Net Assets comprise the depreciated holding value of freehold properties, 26.6%
cash and the balance working capital. The Net Assets were 72.7p per share which represented more
than the highest share price of 41.5p in the year.
6. Principal Risks and Uncertainties
Financial Risks
The group uses various financial instruments, including cash, equity, trade receivables and trade payables
in the course of its operations.
The use of these instruments gives rise to risks associated with exchange rate risk, liquidity risk, interest
rate risk and credit risk. The directors review and agree policies to deal with each of these risks as
summarised below.
Exchange Rate Risk
The group purchases some of its products in foreign currency. Foreign currency purchases are subject
to close management supervision. The directors are informed regularly of the potential impact of
exchange rate movements on the business and act to mitigate any adverse movement wherever possible.
It is the group’s policy not to speculate in derivative financial instruments in either sterling or foreign
currencies, nor to hedge translation or currency exposures.
Liquidity Risk
The group seeks to manage financial risk of liquidity by ensuring it has sufficient cash resources
available to meet foreseeable needs at all times through cash flow forecasting.
Interest Rate Risk
The group’s exposure to interest rate risk is principally with its cash asset.
It is the policy of the Group not to have long term loans or other financial instruments except in
particular circumstances and when specifically approved by the board. There have been no changes in
the role of financial instruments during the year.
9
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 STRATEGIC REPORT (CONTINUED)
Credit Risk
The group and company’s principal financial assets are cash and trade receivables. The credit risk
associated with cash is reduced through deposits being split across a number of banks. The credit risk
arising from the group and company’s trade receivables is reduced through prescribing credit limits for
customers based on a combination of payment history and third party credit references. Credit limits
are reviewed on a regular basis in conjunction with debt ageing and collection history.
Other Principal Risks and Uncertainties
Other than the risks stated above and the marketing risk, which is addressed below, in the opinion of
the directors, the principal operating risks are as stated in the section on Internal Control on page 21.
The risks and uncertainties associated with the business model are set out below.
The model depends in part on working closely with the brand names in the industry as it is often the
products from these vendors which form the core of the business, and in part on the development
of new vendors particularly for the innovative products which are integral to the IT industry. Co-
operation with vendors is therefore key and this risk of attrition is addressed by a combination of
mutual co-operation with vendors on the range of products being offered, the pricing of those products
and the marketing of those products. The company’s continual search for new and improved products,
particularly in peripherals, from new vendors also improves the range of products we can offer and
thereby attract more customers to ourselves which enhances our attraction to the vendors and reduces
the risk of loss of vendors.
The existence of the group’s facilities such as the warehouse, the sales staff, the control systems and
not least the financial soundness of the company means that we can offer a distribution facility which
is quick and efficient, an attraction to both vendors and customers. The principal risks involved in
these requirements are that the warehouse could be destroyed or made inoperable – the cost of such
eventuality is of course covered by insurance, including loss of profits cover, but the operation is such
that alternative accommodation could quickly be brought into action, or alternatively – a warehousing
function could be subcontracted at very short notice. Although such an event would have costs attached
and would cause some disruption in the business, it would be far from catastrophic.
All systems within the group, including the control systems, are backed up securely on a daily basis,
thus limiting the risk to one day’s operations. The financial soundness of the company is a matter which
is constantly in the minds of the senior staff and directors of the company. Systems are in place to
ensure that any deviation from the norm is immediately brought to the attention of staff and directors.
These systems have a proven history as shown in the strength of the balance sheet. Not only has the
company sufficient working capital to enable it to meet its requirements, but it believes that it has an
untapped resource in borrowing on its substantial assets should it require to do so.
Market Risk
The group is subject to both general market conditions and particularly to those affecting its own
particular industry. The company is a distributor of other businesses’ products and is therefore dependent
on the suppliers of such products to continue to provide products which are required by the customers
of the company, at prices which are acceptable to those customers. This is managed within the company
by being alert to all the movements in the market place relating to both products and suppliers and to
negotiating with existing and prospective suppliers for the supply of goods on the best possible terms
to enable the company to trade effectively.
Where products are bought in foreign currency, the company manages the risk inherent in such
currencies by continuously updating its rates of conversion in calculating its costs to ensure prices
remain competitive and in order to minimise the currency conversion risk.
10
STRATEGIC REPORT (CONTINUED)
The Company recognises the importance of providing additional services to its customers in relation
to next day deliveries, credit limits, handling queries efficiently and maintaining a strong relationship
with the customer and in this way aims to resist the competitive pressures in the sector.
7. Future Prospects
Your board’s long term approach to investment decisions is well documented and often referenced
in these statements. This approach was continued in the second half as we invested in a significant
number of new staff who joined us with the necessary skills to develop our new focus categories
and help drive the business forward. This coupled with other investments in new vendors, customer
acquisition and our renewed strategy leave us excited about the revenue and margin opportunities for
the coming year as we continue on an accelerated path to recovery and profitability.
We see significant potential in both our existing vendors and categories and some new categories we
are exploring. We will continue our customer-centric focus and ensuring that our offering and service
levels allow our customers to profitably grow their business and consequently grow ours.
By order of the Board
J.P. Henry
Operations Director
22 October 2015
11
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 REPORT OF THE DIRECTORS
The directors have pleasure in presenting their report and the accounts for the year ended 30 June 2015.
The financial statements include the individual entity Northamber plc and its wholly owned subsidiary
Anitass Limited. Anitass Limited owns the freehold of the premises at Weybridge which is the group’s
distribution centre. The other subsidiaries of Northamber plc are dormant and not material to the financial
statements for the year to 30 June 2015.
Principal Activities
The group’s and company’s principal activities are those of specialist supply of computer hardware,
computer printers and peripheral products, computer telephony products and other electronic transmission
equipment.
Financial Risks
The group uses various financial instruments including cash, equity and various items such as trade
receivables and trade payables that arise directly from its operations. The existence of these instruments
exposed the group to a number of financial risks, the main ones being exchange rate risk, liquidity risk,
interest rate risk and credit risk. The directors review and agree policies for managing each of these risks
and these are summarised in the Strategic Report.
Corporate Governance
The Corporate Governance Report on pages 17 to 22 forms part of the Directors’ Report and is incorporated
into this report by reference.
Dividends
The following dividends were paid in the year ended 30 June 2015
Ordinary dividends
Previous year’s final dividend paid
Interim paid
2015
£’000
84
84
168
2014
£’000
84
84
168
The final proposed dividend of 0.3p (2014: 0.3p) will be paid on 15 January 2016 to all members on the
register at the close of business on 4 December 2015.
Directors
The current directors of the company are listed on page 24. There has been no change in the directors
during the year.
Share Capital
At 30 June 2015, the company had 28,158,735 (2014: 28,158,735) Ordinary shares of 1p each issued. The
shares have no special rights and there is no restriction on their voting rights.
The company repurchased no ordinary shares of 1p each in the year.
12
REPORT OF THE DIRECTORS (CONTINUED)
Substantial Shareholdings
The company has been notified that the following shareholders held beneficial interest of 3 per cent or
more of the company’s issued share capital at 30 June 2015.
Mr D.M. Phillips
BNY(OCS) Nominees Limited
Mr H.W. Matthews
Quiros Limited
Purchase of Own Shares
Ordinary Shares of 1p each
61.23%
11.24%
3.57%
3.32%
At the end of the year, the directors had authority, under the shareholders’ resolutions of 12 December
2014 to purchase through the market 2,815,874 (2014: 2,815,874) of the company’s ordinary shares at
prices ranging between 1p and 105% (2014: 1p and 105% ) of the average middle market quotations for
those shares as derived from the Daily Official List of the London Stock Exchange on the ten dealing days
immediately preceding the day on which the shares are contracted to be purchased. This authority expires
on 15 December 2015, the date of the next Annual General Meeting.
Auditors
A resolution to appoint Grant Thornton UK LLP as the group’s auditors will be proposed at the forthcoming
Annual General Meeting.
Social and Community Policy
The group has a policy of being socially responsible. To this end it treats all its stakeholders and its
neighbours in a fair and reasonable manner in that all its actions are designed to optimise the benefits and
minimise any aggravation to its employees, suppliers and customers as well as those in the community
generally. Operations are conducted in a business-like manner and any nuisance which could possibly arise
from such operations are pre-considered and minimised. Such matters as bulk deliveries are scheduled to
reduce to a minimum any local congestion and car parking is provided to staff to avoid any on street parking
causing any offence.
Environmental Policy
The main environmental matters arising from the company’s operations on the environment, apart from
the matters stated above relating to traffic, are packaging and waste. Due to the type of operation carried
out by the company, i.e. the distribution of computer related products to other than end users, the need
for packaging is crucial to the state and quality of the products eventually received by the end user (the
consumer). Although excess packaging is discouraged, the company is largely in the hands of its suppliers
regarding the packaging actually involved in selling products. Any surplus packaging which remains with
the company is disposed of in an environmentally considered manner. The company attempts wherever
possible to enforce, as one of its terms of trade with its suppliers, the undertaking to dispose of waste and
returned products in accordance with the regulations. Any waste produced by the company is similarly
disposed of.
Amendment of Articles of Association
Unless expressly specified to the contrary in the Articles, the Articles may be amended by a special resolution
of the company’s shareholders.
Appointment and Replacement of Directors
Unless otherwise determined by the company in general meeting, the directors shall not be fewer than two
or more than ten.
A director does not require any shareholding in the company as qualification shares and there is no
restriction on the age of a director.
13
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
REPORT OF THE DIRECTORS (CONTINUED)
Appointment and Replacement of Directors (continued)
A director may be appointed by the company by ordinary resolution, or by the board. A director appointed
by the board holds office only up to the date of the next following annual general meeting and is then
eligible for reappointment. The board or any committee authorised by the board may from time to time
appoint one or more directors to hold any employment or executive office for such period and on such
terms as they may determine and may also revoke or terminate such appointment.
At every annual general meeting of the company, whoever has been appointed by the board since the last
annual general meeting retires from office but is eligible for reappointment. One third of the directors retire
by rotation at each annual general meeting but they are eligible for reappointment. Any non-executive,
director who has been a director of the company for nine years or more, retires each year but is eligible for
reappointment.
Power of the Directors
Subject to the company’s Memorandum of Association, the Articles and any directions given by the
company by special resolution, the business of the company will be managed by the board who may exercise
all the powers of the company, whether relating to the management of the business or not. In particular
the board may exercise all the powers of the company to borrow money, to mortgage or charge any of its
undertaking, property or assets (present and future) and uncalled capital and to issue debentures and other
securities and to give security for any debt, liability or obligation of the company or of a third party.
Contractual Relationships
By the nature of its business, the company has contractual relationships with virtually all of its suppliers.
Such contracts are entered into and terminated on a regular basis with new suppliers being taken on and
with some being terminated either by mutual consent or if, in the opinion of the company, they are no
longer viable. Because product development continues to change dramatically over a relatively short period
of time, such change is not only inevitable, it is also highly desirable to ensure that the company continues
to be able to meet the demands of its customers.
Similarly there are written contracts with all of the company’s customers so that they are fully aware of our
terms of trade and to safeguard as far as possible against any losses arising from trading with them. During
the year to 30 June 2015 there were no significant changes in either the terms of trade encompassed within
these contracts nor any significant change in the range and size of our customers. There are no contractual
arrangements which are considered essential to the business of the group.
Employees
Every effort is made to keep staff as fully informed as possible about the operations and progress of the
company. This is achieved through regular communication from the Operations Director to all staff and
from the CEO to the Operational Management team meetings.
The group encourages its staff to pursue career development and to that end has made available resources
for training courses including video and computer training aids.
Applications received from disabled persons are given full and equal consideration but are small in number
as our type of business does not seem to attract such applicants. The company fulfils its obligations towards
employees who are disabled or who become so whilst in the employment of the company.
By order of the Board
14
J.P. Henry
Operations Director
22 October 2015
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION
Remuneration Committee
The Remuneration Committee comprised the non-executive directors Mr R.F. Heath and Mr A.G.K.
Hamilton, with Mr R.F. Heath the chairman of the committee. This committee meets at least once a year
and decides the remuneration policy that applies to executive directors.
In setting the policy it considers a number of factors including:
(a) the basic salaries and benefits available to executive directors of comparable companies;
(b) the need to attract and retain directors of an appropriate calibre and experience; and
(c) the need to ensure executive directors’ commitment to the continued success of the company by means
of incentive schemes.
The group’s remuneration policy for executive directors is to:
(a) have regard to the directors’ experience and the nature and complexity of their work in order to pay a
competitive salary that attracts and retains management of the highest quality;
(b) link individual remuneration packages to the company’s performance through target-related bonuses
which are not considered to be excessive in terms of salary;
(c) provide employment-related benefits including the provision of a company car, life assurance, insurance
relating to the directors’ duties and medical insurance.
The final determination of an individual director’s remuneration is taken by the board as a whole but with
no director participating in the discussions, nor voting on his own remuneration package.
The non-executive directors each receive a fee for their services which is agreed by the Board following
recommendation by the chairman. The non-executive directors do not receive any pension or other benefits
from the company, nor do they participate in any of the bonus or incentive schemes.
When reviewing or amending remuneration arrangements the committee considers any impact on the
cost to the company, employee behaviour, stakeholders (including shareholders, governance bodies and
employees) best practice, corporate governance and market competitiveness.
Salaries and Benefits
The Remuneration Committee meets at least once a year in order to consider and set the remuneration
packages for executive directors. The remuneration packages are benchmarked to ensure comparability with
companies of a similar size and complexity. The bonuses have regard to personal performance measured
against pre-stated objectives and profitability of the company.
Share Options
There are no share option schemes in force in the group or company.
Contracts of Service
The two executive directors, Mr D.M. Phillips and Mr J.P. Henry, have service contracts. Both contracts are
one year rolling contracts and contain no specific provisions in relation to any termination payments over
and above the notice periods as stated below.
Mr D.M. Phillips
Mr J.P. Henry
- Notice period – six months
- Notice period – six months
The non-executive directors do not have service contracts with the company. The terms of their appointment
are reviewed by the board every two years and are available for inspection on request. Non executive directors
who have been in service for more than nine years are subject to annual election.
15
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION
Directors’ Detailed Emoluments
Details of directors’ emoluments are as follows:
Salaries and Fees
2015
2014
£’000 £’000
Benefits
2015 2014
£’000 £’000
Pension
2015 2014
£’000 £’000
Total
2015 2014
£’000 £’000
Executive
Mr D.M. Phillips
Mr J.P. Henry
Non-Executive
Mr R.F. Heath
Mr A.G.K. Hamilton
-
70
15
70
15
15
100
15
15
115
13
6
-
-
19
30
4
-
-
34
-
10
-
-
10
-
10
-
-
10
13
86
45
84
15
15
129
15
15
159
For the year ended 30 June 2015, Mr D.M. Phillips has waived £180,000 of his salary (2014: £165,000 was
waived).
Directors’ Interests
Interests in Shares
Directors in office at 30 June 2015 had the following beneficial interests in the shares of the company:
Ordinary Shares of 1p each
Mr D.M. Phillips
Mr R.F. Heath
Mr A.G.K. Hamilton
Mr J.P. Henry
30 June 2015 30 June 2014
17,243,055
5,000
-
-
17,243,055
5,000
-
-
Between 30 June 2015 and 5 October 2015 there have been no changes in the interests of the above named
directors in the shares of the company.
The market price of the company’s shares at 5 October 2015 was 42.5p. The range of market prices during
the year was 35.0p to 41.5p
J.P. Henry
By order of the Board
22 October 2015
16
CORPORATE GOVERNANCE
The Corporate Governance Report forms part of the Directors’ Report included here on pages 12 to 14.
The Group is committed to high ethical values and professionalism in all its activities. As an essential
part of this commitment the Group supports the highest standards in corporate governance. The Board
is accountable to the company’s shareholders for good governance and this statement and the Directors’
remuneration report describe how the principles of good governance set out in the UK Corporate
Governance Code, published by the Financial Reporting Council are applied within the company. We
do not comply with the UK Corporate Governance Code. However, we have reported on our Corporate
Governance arrangements by drawing upon best practice available, including those aspects of the UK
Corporate Governance Code we consider to be relevant to the company and best practice.
CORPORATE GOVERNANCE POLICY
The group’s policy on Corporate Governance is published on the group’s web site which is
www.northamber.com.
DIRECTORS
Board of Directors
The group is led and controlled through the Board of Directors, which during the year comprised two
executive and two non-executive directors. Biographical details of each director in office during the year
appear on page 24.
All directors have access to the advice and services of the company secretary and the board has established
a procedure whereby any director may seek independent professional advice in the furtherance of his duties
at the company’s expense. All directors are able to allocate sufficient time to the company to discharge their
responsibilities.
As required by the company’s articles of association, directors offer themselves for re-election at least once
every three years.
Non-Executive Directors
The board considers that the non-executive directors were independent throughout the year. The non-
executive directors actively contribute to the functioning of the board and bring a range of views and
experience from different fields.
As part of their role, the non executive directors constructively challenge and develop proposals on strategy.
The non executive directors scrutinise the performance of management in meeting agreed goals and
objectives and monitor the reporting of performance. They satisfy themselves on the integrity of financial
information and that financial controls and systems of risk management are robust and defensible. They
determine appropriate levels of remuneration of executive directors and have a prime role in appointing
and, where necessary, removing executive directors, and in succession planning.
The senior independent non executive director, as included in the biographical details on page 24, is
available to shareholders if they have concerns which contact through the normal channels of chairman or
other executive directors has failed to resolve or for which such contact is inappropriate.
17
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 CORPORATE GOVERNANCE (CONTINUED)
Main Board Responsibilities
The board meets formally at regular intervals during the year. Meetings are chaired by the executive
chairman. The board is responsible for the overall direction and strategy of the group to secure optimum
performance. The board has specified those areas of operations in the group which are specifically in its
domain and may not be delegated; these matters include:-
•
•
•
•
•
•
•
determination of the group’s objectives and strategy
all financial information which is published, including the interim results and management statements
and the annual report and all other corporate communications
decisions and recommendations on dividends
changes in the group’s business, its capital and corporate structure or its risk profile
changes in the scope or operation of the group’s internal control structure
all board changes or changes in the company secretary
the remuneration policy of the senior executives
All board members receive weekly summary financial information and monthly management accounts.
All financial information which is to be published is also circulated for discussion and approval prior to
publication. Information on other matters, as required, is also circulated by the company secretary. Any
board member may request the company secretary to report on any specific matter and prepare information
for discussion at the board meetings.
The board of the company comprises only four members and whilst formal board meetings are held at
regular intervals, many of the matters are also discussed informally throughout the year. The operations
director normally chairs the operations committee of the company which holds weekly meetings. It is at
these meetings that the decisions of the board are communicated to the senior management who also sit on
the operations committee. It is also this forum which reports back, through the operations director to the
board, on the implementation of the decisions of the board. The operations committee also raises matters
which they consider should be communicated to the board on any aspect of the business which comes
within the matters reserved for the board.
Directors’ Attendance
The following table shows the attendance of directors at the board meetings held in the last year.
No of meetings:
Mr David Michael Phillips
Mr John Phelim Henry
Mr Reginald Frank Heath
Mr Alexander Gordon Kelso Hamilton
Board Meetings
4
4
4
3
18
CORPORATE GOVERNANCE (CONTINUED)
Board Committees
During the year the Audit Committee comprised of two non-executive directors, Mr R.F. Heath and Mr
A.G.K. Hamilton.
Audit Committee
The Audit Committee, currently chaired by Mr A.G.K. Hamilton, comprised the two non-executive
directors, both of whom are considered by the board to be independent and to have sufficient recent and
relevant financial experience to discharge the committee’s duties.
The board considers that the members of the audit committee have the required understanding of:-
•
•
the principles of, content of and developments in financial reporting, including the applicable
accounting standards and statements of recommended practice,
key aspects of the company’s operations, including corporate policies, financing and systems of internal
control
• matters that could influence or distort the presentation of accounts and key information
•
the role of external auditors.
The primary function of the audit committee is to enable the board to monitor the integrity of the company’s
financial reports and manage the board’s relationship with the external auditors. Its other functions include
the review and monitoring of:-
the financial reporting process
the annual audit
the effectiveness of the company’s internal controls and risk management
the independence of the external auditors.
•
•
•
•
• The audit committee reports to the board its findings identifying any matters which it considers
requires that action or improvement is required and makes recommendations on the steps to be taken.
The committee’s terms of reference include all relevant matters required by the Disclosure and Transparency
Rules and the relevant code provisions. The terms of reference of the audit committee have been reviewed
and are available on request by writing to the company secretary at the registered address
Overview of the Actions Taken by the Audit Committee to Discharge its Duties
During the year the audit committee:-
•
•
•
•
•
•
•
reviewed the June 2015 annual report and financial statements and the December half yearly and
financial report. As part of the review the committee received a report from the external auditors on
their audit of the annual report and financial statements
reviewed the effectiveness of the company’s internal controls
reviewed and agreed the scope of the audit work to be undertaken by the external auditors
agreed the fees to be paid to the external auditors for their audit of the 2015 report and financial
statements
reviewed the whistle blowing procedures in place to enable staff to raise concerns in confidence about
possible wrongdoing
considered the requirement for an internal audit function in the company and decided to recommend
to the board that such a function was not necessary at this stage
recommended that the board reappoint the external auditors
19
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 CORPORATE GOVERNANCE (CONTINUED)
External Audit
The engagement and independence of external auditors is considered annually by the Audit Committee
before it recommends its selection to the board.
The Audit Committee concluded that it was in the best interests of the Group for the external auditors to
provide a number of non-audit services during the year due to their experience, expertise and knowledge
of the Group’s operations.
Auditor objectivity and independence was achieved by ensuring that personnel involved in the non-audit
work were not involved in the audit, and by ensuring that management took responsibility for all decisions
made.
The fees paid to the Auditors in the year are disclosed in Note 4 to the Group financial statements.
Grant Thornton also follows its own ethical guidelines and continually reviews its audit team to ensure its
independence is not compromised.
Remuneration Committee
At the year end the Remuneration Committee comprised both non-executive directors and was chaired by
Mr R.F. Heath. The company secretary acts as secretary to the committee. The committee meets at least
once a year and is responsible for setting the remuneration policy and annual salaries that apply to executive
directors.
Operations Committee
The Operations Committee comprises the executive directors and certain senior business managers. It
meets weekly, and deals with the operational matters of the company other than those dealt with by the
Remuneration and Audit Committees or by the full board.
Board Effectiveness
The role of the board is to ensure that the company is managed to optimise the benefits to its stakeholders
including shareholders, staff, customers, suppliers and the community at large. To achieve this objective the
board reserves to itself certain matters such as the formulation of strategy, the assessment of risk, and the
setting of internal control systems. Certain areas of responsibility of the board are dealt with by committees
of the board such as the audit committee and the remuneration committee reporting back to the main
board. The implementation of the decisions of the main board is delegated to the senior management of
the company through the Operations Committee chaired by the operations director.
During the year the board reviewed each aspect of its role to ensure that it was fulfilling its role effectively
and that each director was individually making a full and effective contribution to the process. This was
carried out by the chairman reviewing the individual and collective contribution of the board members
against objectives and by the audit committee reviewing the performance of the chairman.
The result of that review was that, having reviewed each director’s contribution and the requirements of the
company as a whole, each director was effective and that the composition of the board was appropriate and
more than adequate for the time being.
20
CORPORATE GOVERNANCE (CONTINUED)
GOING CONCERN BASIS
The group’s activities together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report and the Directors’ Report on pages 7 to 14. The financial
position of the group, its cash flow and its liquidity position are described in the Chairman’s Statement on
pages 5 to 6. In addition, the Strategic Report also includes the group’s objectives, policies and processes for
managing its capital; its financial risk management objectives; and its exposure to credit risk and liquidity
risk.
The group has considerable financial resources and established market profile and relationships with a
number of suppliers and customers. As a consequence, the directors believe that the company is well placed
to manage its business risks appropriately despite the current economic outlook.
After making enquiries, the directors have formed a judgement, at the time of approving the financial
statements, that there is a reasonable expectation that the company has adequate resources to continue in
operational existence for the foreseeable future. For this reason the directors continue to adopt the going
concern basis in preparing the financial statements.
RELATIONS WITH SHAREHOLDERS
The Directors are available to meet with the group’s institutional shareholders throughout the year at
request.
Notice of the Annual General Meeting (AGM) is circulated to all shareholders at least 21 days prior to the
meeting. Directors attend the AGM and will be available to answer shareholders’ questions.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The board believes that its Annual Reports and financial statements represent a balanced and understandable
assessment of the company’s position and prospects whilst also complying with the legal and regulatory
requirements for financial reporting relevant to the company.
Internal Control
The board of directors has overall responsibility for the group’s systems of internal control and for monitoring
their effectiveness.
The board maintains full control and direction over appropriate strategic, financial, organisational and
compliance issues and has put in place an organisational structure with formally defined lines of responsibilities
and delegation of authority. There are established procedures for planning, capital expenditure, information
and reporting systems and for monitoring the company’s business and its performance. The board has
delegated to executive management the implementation of the systems of internal control within an
established framework that applies within the company.
The group’s control systems address key business and financial risks. The board considers the greatest risks
to be related to the realisable value of current assets, principally inventories and trade receivables. Particular
attention is paid to all matters relating to purchasing, inventories, revenues, trade receivables, cash, capital
expenditure and foreign exchange. Comprehensive documented procedures are used and are available to all
staff via the extensive computer system.
A system of control is designed to manage rather than eliminate the risk of failure to achieve business
objectives, and can only provide reasonable and not absolute assurance against material misstatement or
loss. As and when areas of improvement are brought to the attention of the board and management steps
are taken to further embed internal control and risk management into the operations of the business.
21
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 CORPORATE GOVERNANCE (CONTINUED)
The board has considered the need for internal audit but has decided that because of the size of the group
it cannot be justified at present.
A review of internal control was undertaken by the board in February 2015. The conclusion of this review
was that the systems and operations of the internal controls including financial, operational and compliance
controls remained effective and appropriate to the operations of the company.
Other Matters
The Directors have published the company’s Corporate Governance policies which the directors consider
are relevant to the company on the company’s website.
Induction programmes for new directors are specifically designed for each director as appointed as the
content varies depending on the background and experience of the appointee. There is therefore no standard
induction programme for new directors.
By order of the Board
J.P. Henry
Operations Director
22 October 2015
22
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors’ 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 to prepare the group financial statements and have elected to prepare the parent company
financial statements in accordance with International Financial Reporting Standards as adopted by the
European Union (IFRSs). 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 and profit or loss of the
group and the company for that period. In preparing these financial statements, the directors are required
to:
select suitable accounting policies and then apply them consistently;
•
• make judgments and accounting estimates that are reasonable and prudent;
•
state whether applicable IFRSs 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 company 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 enable them to ensure that the financial statements and the remuneration report comply with
the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors confirm that:
•
•
in so far as each is aware there is no relevant audit information of which the company’s auditors are
unaware; and
the directors have taken all steps that they ought to have taken as directors to make themselves aware
of any relevant audit information and to establish that the auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
D.M. Phillips
Chairman
22 October 2015
23
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 DIRECTORS AND ADVISERS
Non-Executive Directors
Alexander Gordon Kelso Hamilton *† (Age 70) FCA
Senior independent non executive director.
Non executive director of Barloworld Ltd, Netbank Private Wealth Ltd and Petra Diamonds Ltd.
Gordon Hamilton was a partner in Deloitte & Touche LLP (and predecessor practices) for more than 30
years and retired as a senior audit partner in 2006.
Reginald Frank Heath *† (Age 74) FCIS, FIMI
Non executive director.
Reginald Heath has over 30 years’ experience in the motor trade, formerly being Director of Motor
Operations at Inchcape plc.
* Member of Remuneration Committee
† Member of Audit Committee
Executive Directors
David Michael Phillips (Age 70)
Executive chairman
David Phillips is the founder of Northamber plc and has been actively involved with the company since its
inception in the 1970s.
John Phelim Henry (Age 53)
Operations director
John Henry joined Northamber plc in 1992 in the Sales Department. He was promoted to Operations
Director in 2012.
Registered Office
Namber House
23 Davis Road
Chessington
Surrey
KT9 1HS
Registrars
Computershare Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Registered Auditors
Grant Thornton UK LLP
Chartered Accountants
No.1 Dorset Street
Southampton
SO15 2DP
24
Bankers
Allied Irish Bank (GB)
Mayfair Branch
10 Berkeley Square
London
W1J 6AA
Barclays Bank plc
6 Clarence Street
Kingston upon Thames
Surrey
KT1 1NY
Nominated Advisor & Broker
Cantor Fitzgerald Europe
One Churchill Place
Canary Wharf
London
E14 5RB
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
We have audited the financial statements of Northamber plc for the year ended 30 June 2015 which
comprise the group and parent company statement of financial position, the group and company statement
of comprehensive income, the group and parent company statements of cash flow, the group and parent
company statements of changes in equity and the related notes. 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.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 23, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance
with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us
to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting
Council’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 30 June 2015 and of the group’s and the group’s loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements.
25
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(CONTINUED)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
Mark Bishop
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Southampton
22 October 2015
26
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2015
Revenue
Cost of sales
Gross Profit
Distribution costs
Administrative costs
Loss from operations
Investment revenue
Loss before tax
Tax (charge)/credit
2015
Total
£’000
2014
Total
£’000
65,452
(60,851)
62,865
(58,593)
4,601
4,272
(2,950)
(2,583)
(2,549)
(2,948)
(932)
(1,225)
46
70
(886)
(1,155)
(2)
-
Notes
3
4
6
7
Loss for the year
(888)
(1,155)
Other comprehensive income
-
-
Loss for the year and total comprehensive loss
(888)
(1,155)
Basic and diluted loss per ordinary share
9
(3.15)p
(4.10)p
27
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2015
Share
Capital
£’000
Share
Retained
Capital
Premium Redemption Earnings
Reserve
Account
£’000
£’000
£’000
Total
Equity
Total
£’000
Balance at 1 July 2013
281
5,734
1,505
15,326
22,846
Dividends
Transactions with owners
Loss and total comprehensive loss
for the year
-
-
-
-
-
-
-
-
-
(168)
(168)
(168)
(168)
(1,155)
(1,155)
Balance at 30 June 2014
281
5,734
1,505
14,003
21,523
Dividends
Transactions with owners
Loss and total comprehensive loss
for the year
-
-
-
-
-
-
-
-
-
(168)
(168)
(168)
(168)
(888)
(888)
Balance at 30 June 2015
281
5,734
1,505
12,947
20,467
28
NORTHAMBER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
At 30 June 2015
Share
Capital
£’000
Share
Retained
Capital
Premium Redemption Earnings
Reserve
Account
£’000
£’000
£’000
Total
Equity
Total
£’000
Balance at 1 July 2013
281
5,734
1,505
14,792
22,312
Dividends
Transactions with owners
Loss and total comprehensive loss
for the year
-
-
-
-
-
-
(168)
(168)
-
-
(168)
(168)
(1,612)
(1,612)
Balance at 30 June 2014
281
5,734
1,505
13,012
20,532
Dividends
Transactions with owners
Loss and total comprehensive loss
for the year
-
-
-
-
-
-
-
-
(168)
(168)
(168)
-
(168)
(1,354)
(1,354)
Balance at 30 June 2015
281
5,734
1,505
11,490
19,010
29
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2015
Non current assets
Property, plant and equipment
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Notes
2015
£’000
2014
£’000
10
12
13
14
8,129
8,333
4,519
10,176
5,441
5,053
11,689
5,076
20,136
21,818
28,265
30,151
15
(7,798)
(8,628)
(7,798)
(8,628)
(7,798)
(8,628)
20,467
21,523
17
281
5,734
1,505
12,947
281
5,734
1,505
14,003
Equity shareholders’ funds
20,467
21,523
The financial statements on pages 27 to 50 were approved by the board of directors on 22 October 2015
and were signed on its behalf by:
D.M. Phillips
Chairman
J.P. Henry
Operations Director
30
NORTHAMBER PLC
COMPANY STATEMENT OF FINANCIAL POSITION
At 30 June 2015
Non current assets
Property, plant and equipment
Investments
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Tax assets
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Notes
2015
£’000
2014
£’000
10
11
12
13
14
16
1,873
6,588
8,461
4,519
10,175
5,424
-
1,943
6,588
8,531
5,053
11,692
5,071
14
20,118
21,830
28,579
30,361
15
(9,569)
(9,829)
(9,569)
(9,829)
(9,569)
(9,829)
19,010
20,532
17
281
5,734
1,505
11,490
281
5,734
1,505
13,012
Equity shareholders’ funds
19,010
20,532
The financial statements on pages 27 to 50 were approved by the board of directors on 22 October 2015
and were signed on its behalf by:
D.M. Phillips
Chairman
J.P. Henry
Operations Director
Company Registration number: 01499584
31
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2015
Cash from operating activities
Operating (loss) from continuing operations
Depreciation of property, plant and equipment
(Profit) on disposal of property, plant and equipment
2015
£’000
(932)
247
-
2014
£’000
(1,225)
265
(1)
Operating (loss)/ profit before changes in working capital
(685)
(961)
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash (used)/generated from operations
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Interest received
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Cash flows from financing activities
Dividends paid to equity shareholders
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
534
1,513
(829)
533
(2)
531
46
-
(44)
2
(168)
(168)
365
5,076
1,712
(3,214)
1,497
(966)
-
(966)
70
30
(26)
74
(168)
(168)
(1,060)
6,136
Cash and cash equivalents at end of year
5,441
5,076
32
NORTHAMBER PLC
COMPANY STATEMENT OF CASH FLOWS
For the year ended 30 June 2015
Cash from operating activities
Operating (loss) from continuing operations
Depreciation of property, plant and equipment
(Profit) on disposal of property, plant and equipment
2015
£’000
(1,395)
114
-
2014
£’000
(1,681)
132
(2)
Operating (loss) before changes in working capital
(1,281)
(1,551)
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash (used)/generated from operations
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Interest received
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Cash flows from financing activities
Dividends paid to equity shareholders
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
534
1,514
(248)
519
-
519
46
-
(44)
2
(168)
(168)
353
5,071
1,712
(3,217)
2,119
(937)
-
(937)
70
30
(26)
74
(168)
(168)
(1,031)
6,102
Cash and cash equivalents at end of year
5,424
5,071
33
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1. General information
Northamber plc is a company incorporated and domiciled in the United Kingdom under the Companies
Act 2006. The address of the registered office is given in the shareholder information on page 52. The nature
of the company’s operations and its principal activities are set out in the Strategic Report and the Directors’
Report on pages 7 to 14.
2. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU.
The financial statements have been prepared under the historical cost basis.
The financial statements cover the individual entity Northamber plc and one subsidiary Anitass
Limited, all other subsidiaries are dormant and not material to the financial statements for the year to
30 June 2015 or 30 June 2014.
The directors of Anitass Limited, the subsidiary of Northamber Plc, have claimed audit exemption,
for the year ended 30 June 2015 under Section 479A (Subsidiary Companies) of Companies Act
2006. The Board of Northamber PLC have provided a guarantee on behalf of the Parent Company
undertaking stating that it guarantees Anitass Limited under the section 479C of the Companies Act
2006. Northamber Plc guarantees all outstanding liabilities to which Anitass Limited is subject at 30
June 2015 until they are satisfied in full and the guarantee is enforceable against Northamber Plc by
any person to whom the subsidiary company is liable in respect of those liabilities
The principal accounting policies adopted are set out below.
Adoption of new and revised standards
The Group will apply relevant new standards from their effective date. The directors do not anticipate
that any of the standards and interpretations issued by the IASB and IFRIC that have an effective
date after the date of the financial statements will have a material impact on the Group’s financial
statements in the period of initial application.
IFRS 9 ‘Financial Instruments’ (2014)
The IASB recently released IFRS 9 ‘Financial Instruments’ (2014), representing the completion of its
project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. The new standard
introduces extensive changes to IAS 39’s guidance on the classification and measurement of financial
assets and introduces a new ‘expected credit loss’ model for the impairment of financial assets. IFRS 9
also provides new guidance on the application of hedge accounting.
The Group’s management have yet to assess the impact of IFRS 9 on these consolidated financial
statements. The new standard is required to be applied for annual reporting periods beginning on or
after 1 January 2018.
IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 ‘Revenue’, IAS 11
‘Construction Contracts’, and several revenue-related Interpretations. The new standard establishes a
control-based revenue recognition model and provides additional guidance in many areas not covered
in detail under existing IFRSs, including how to account for arrangements with multiple performance
obligations, variable pricing, customer refund rights, supplier repurchase options, and other common
complexities.
34
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
IFRS 15 is effective for reporting periods beginning on or after 1 January 2017. The Group’s
management have not yet assessed the impact of IFRS 15 on these consolidated financial statements.
Key sources of estimation uncertainty and critical accounting judgements
Estimation uncertainty
Inventories
Initial measurement of inventories is at cost. Subsequent to initial recognition the group measures
inventories at the lower of cost and net realisable value. Impairment losses are recognised as and when
they occur. The write down is determined on an item by item basis or based on a group of items where
such an assessment is not practical.
Receivables
Provision against trade receivables is made when there is objective evidence that the Group will not
be able to collect all amounts due to it in accordance with the original terms of those receivables. The
amount of the write-down is determined as the difference between the asset’s carrying amount and the
present value of estimated future cash flows.
Critical accounting judgements
The directors do not consider there to be any critical accounting judgements.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods provided in the normal course of business, net of discounts, VAT and other sales
related taxes.
Sales of goods are recognised when goods are delivered and title has passed.
Investment revenue is accrued on a time basis in accordance with the effective interest rate method.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company as lessee
Rentals payable under operating leases are charged to profit or loss on a straight line basis over the
term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a
straight line basis over the lease term.
35
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Foreign currencies
Transactions in currencies other than pounds sterling, the functional currency of all group entities, are
recorded at the rates of exchange prevailing on the date of the transactions. At each reporting date,
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing on the reporting date. Exchange differences arising on the settlement of monetary items,
and on the retranslation of monetary items, are included in profit or loss for the period.
Loss from operations
Loss from operations is stated before investment income and finance costs.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense in the period
in which they are incurred. The Group has no defined benefit retirement schemes.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net
profit as reported in the profit or loss because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s liability for current tax is calculated using tax rates that have been enacted, or substantially
enacted, by the reporting 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 taxable temporary 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 differences arise from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither
the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated at the tax rates that are substantially enacted in the period when the liability
is settled or the asset is realised. Deferred tax is charged or credited to the profit or loss, except when it
relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax balances have not been discounted.
Property, plant and equipment
Land and buildings are held for use in the production or supply of goods and services, or for
administrative purposes and are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment
loss.
36
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Depreciation is charged so as to write off the cost of assets less any residual value, other than land, over
their estimated useful lives, using the straight line method, on the following bases:
Land and Buildings:
Freehold premises
Plant and equipment
4-7% on freehold buildings, freehold improvements 25% straight line
25% straight line
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Material residual value estimates are updated as required, but at least annually.
Impairment of tangible assets
At each balance sheet date, the group reviews the carrying amounts of its tangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss (if any). Where the asset does not generate cash flows that are independent from
other assets, the Company estimates the recoverable amount of the cash generating unit to which the
asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss
is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a revaluation increase.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is on the FIFO basis and
comprises direct materials. Net realisable value represents the estimated selling price less costs to be
incurred in marketing, selling and distribution.
Cost of inventories is based on original cost as amended by credits subsequently received or agreed
with suppliers in respect of specific products. The provision for obsolete and slow moving stock is
determined by frequent and regular reviews of stock, its ageing and rate of sale, provisions are made
which enable such obsolete stock as not returned to suppliers and slow moving stock to be sold at no
loss.
Consignment stock
Consignment stock is not recorded since the risks and benefits associated with the consignment stock
do not pass to the Company. Company held consignment stock on behalf of vendors and the legal title
does not generally pass to the Company until the sale to the end customer by the Company. This is as
per the specified terms in the contracts with the vendors.
37
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Investments
Investment in subsidiaries is held at cost less any provision for impairment.
Financial instruments
Financial assets are classified as loans and receivables. Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. Loans
and receivables include trade receivables, cash and cash equivalents and are initially recognised at fair
value plus transaction costs. Loans and receivables are measured subsequent to initial recognition at
amortised cost using the effective interest method, less provision for impairment. Any change in their
value through impairment or reversal of impairment is recognised in profit or loss.
Provision against trade receivables is made when there is objective evidence that the company will not
be able to collect all amounts due to it in accordance with the original terms of those receivables. The
amount of the write-down is determined as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the original effective interest rate.
An assessment for impairment is undertaken at least at each reporting date.
A financial asset is derecognised only where the contractual rights to the cash flows from the asset
expire or the financial asset is transferred and that transfer qualifies for derecognition. A financial asset
is transferred if the contractual rights to receive the cash flows of the asset have been transferred or the
company retains the contractual rights to receive the cash flows of the asset but assumes a contractual
obligation to pay the cash flows to one or more recipients. A financial asset that is transferred qualifies
for derecognition if the company transfers substantially all the risks and rewards of ownership of the
asset, or if the company neither retains nor transfers substantially all the risks and rewards of ownership
but does transfer control of that asset.
Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when
the company becomes a party to the contractual provisions of the instrument. Financial liabilities
are initially recognised at fair value plus transaction costs. Financial liabilities subsequent to initial
recognition are recorded at amortised cost using the effective interest method, with interest related
charges recognised as an expense in finance charges in the income statement. Finance charges,
including premiums payable on settlement or redemption and direct issue costs, are charged to the
income statement on an accruals basis using effective interest method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise. A
financial liability is derecognised only when the obligation is extinguished, that is, when the obligation
is discharged or cancelled or expires.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and highly liquid investments
that are readily convertible into known amounts of cash and which are subject to an insignificant risk
of changes in value.
Equity
Equity comprises the following:
Share Capital
Share Premium
- represents the nominal value of equity shares.
- represents the excess over nominal value of the fair value of consideration
received for equity shares, net of expenses of the share issue.
38
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Capital Redemption Reserve
Retained Earnings
–
–
represents the nominal value of shares which have been
redeemed and cancelled.
represents retained earnings.
The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any
related income tax benefit) to the extent that they are incremental costs directly attributable to the
equity transaction that otherwise would have been avoided. The costs of an equity transaction that is
abandoned are recognised as an expense.
Capital management
The Group manages its equity as capital. The company’s policy is to not have external debt finance and
pay dividends as appropriate whilst maximising the long term return to stakeholders.
In line with Group policy, the group has no external debt finance hence gearing is not measured. The
company have paid final and interim dividends in the year.
Equity comprises the items detailed within the principal accounting policy for equity and financial
details can be found in the statement of financial position. The company adheres to the capital
maintenance requirements set out in the Companies Act.
Going Concern basis
The going concern basis of preparing the financial statements has been adopted as in the view of the
directors, as set out in the notes on Corporate Governance, the company has adequate resources to
continue in operational existence for the foreseeable future.
3. Segmental reporting
Management has determined that there is only one operating segment of the group as the total
business of the company is the sourcing and distribution of computer related products and this is
how information is reported to the Chief Operating Decision Maker. The board in carrying out its
strategic planning and decision making has, necessarily, to take consideration of the inter relatedness
of the product range and the customer base and thus treat the operations of the group as a whole. All
decisions on the allocation of resources impacts on all aspects of the group. Information presented to
the Chief Operating Decision Maker is the same as is reported in these financial statements.
Although the sales of the group are predominantly to the UK there are sales to other countries and
the following schedule sets out the split of the sales for the year. Revenue is attributable to individual
countries based on the location of the customer. There are no non current assets outside the UK.
Year to 30 June 2014
Total Segment revenue
Year to 30 June 2015
Total Segment revenue
UK
£’000
Other
£’000
Total
£’000
62,645
220
62,865
65,226
226
65,452
One customer accounted for more than 10% of the group’s revenue for the year, being £11.8m.
39
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
4. Loss from operations
Operating loss is stated after (crediting)/charging:
Foreign exchange loss/(gains)
Depreciation of property, plant and equipment
Amounts written off inventory
(Profit) on disposal of property, plant and equipment
Operating lease charges – land and buildings
Fees paid to the company’s auditor
for the audit of the company annual financial statements
for non-audit services
2015
£’000
11
247
49
-
6
42
4
2014
£’000
16
265
232
(1)
6
42
3
No profit and loss account for Northamber plc has been presented as permitted by Section 408 of the
Companies Act 2006.
The retained loss for the financial year dealt within the financial statements of the parent company,
Northamber plc, was £1,354,000 (2014: loss of £1,612,000) and is stated after taxation.
5. Staff costs
The average monthly number of persons (including executive directors) employed by the company
during the year was:
Sales
Administration
Warehouse
Engineering
Their aggregate remuneration comprised:
Staff costs:
Wages and salaries
Social security costs
Other pension costs
2015
Number
32
37
18
2
2014
Number
29
35
20
2
89
86
2015
£’000
2,851
297
81
2014
£’000
2,757
290
77
3,229
3,124
40
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Included in the above is key management personnel compensation of £129,000 (2014: £159,000). Full
details of director’s remuneration are set out in the Report to Shareholders by the Board on Directors’
Remuneration on page 16. The company has identified the key management personnel as the executive
and non-executive directors and all their remuneration received amounts to short-term employment
benefits.
6. Investment revenue
Bank interest receivable
Other interest receivable
Rental income
7. Tax on loss/profit on ordinary activities
Current taxation
UK corporation tax: credit for the year
Adjustment in respect of prior periods
Loss relief against prior year
Deferred tax:
Credit for the year
Charge/(credit) for the year
Group
2015
£’000
26
-
20
2014
£’000
66
1
3
46
70
Group
2015
£’000
2014
£’000
-
2
-
-
2
-
-
-
-
-
The charge for the year can be reconciled to the profit per the Statement of comprehensive income as
follows:
Loss on ordinary activities before tax
Tax at the UK corporation tax rate of 20.75% average (2014:20%)
Losses carried forward
Expenses not deductible for tax purposes
Depreciation in excess of capital allowances
Adjustment in respect of prior periods
Total actual amount of (credit)/charge for the year
Group
2015
£’000
2014
£’000
(886)
(1,155)
(184)
144
(40)
12
28
2
2
(231)
155
(76)
31
45
-
-
The Group has tax losses of £2,085,000 (2014: £1,449,000) to carry forward.
41
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
8. Dividends
Amounts recognised as distribution to equity holders in the period:
Dividends paid in year
Final – for year ended 30 June 2014
Interim – for year ended 30 June 2015
2014
Pence Per
Share
£’000
2013
Pence Per
Share
£’000
0.30
0.30
0.60
84
84
168
0.30
0.30
0.60
0.30
84
84
168
84
Proposed final for the year ended 30 June 2015
0.30
84
The proposed final dividend is subject to approval at the Annual General Meeting and has not been
included as a liability in these financial statements.
9. Loss per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
2015
£’000
2014
£’000
Loss for the year attributable to equity holders of the parent company
(888)
(1,155)
Number of shares
2015
Number
2014
Number
Weighted average number of ordinary shares for the purpose
of basic earnings per share and diluted earnings per share
28,158,735
28,158,735
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by
the weighted average number of ordinary shares in issue during the year. Both basic and diluted earnings
per share have been calculated using the loss attributable to shareholders of the parent company as the
numerator; therefore no adjustments to loss were necessary in 2014 and 2015
Net Assets per share, as disclosed within the summary of the last five years of trading, is calculated by
dividing the net assets as disclosed in the consolidated statement of financial position by the number
of ordinary shares in issue at the year end.
42
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
10. Property, plant and equipment
Land and
Buildings
£’000
Plant and
Equipment
£’000
Group
Cost
At 1 July 2013
Additions
Disposals
At 30 June 2014
Depreciation
At 1 July 2013
Depreciation charge for the year
Disposals
At 30 June 2014
Net book value at 30 June 2014
Group
Cost
At 1 July 2014
Additions
Disposals
At 30 June 2015
Depreciation
At 1 July 2014
Depreciation charge for the year
Disposals
At 30 June 2015
Net book value at 30 June 2015
9,252
-
-
9,252
823
189
-
1,012
8,240
9,252
-
-
9,252
1,012
189
-
1,201
8,051
Total
£’000
10,666
26
(47)
1,414
26
(47)
1,393
10,64
1,242
76
(18)
1,300
93
2,065
265
(18)
2,312
8,333
1,393
44
-
10,645
44
-
1,437
10,689
1,300
58
-
1,358
79
2,312
247
-
2,560
8,129
The directors obtained independent valuations on the land and buildings made on a going concern
basis for existing use terms. The valuer has assessed the fair value of the land and buildings held by
the company to be £9,000,000 (2014: £9,000,000), which exceeds the carrying amount by £949,000
(2014: £760,000).
43
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Company
Cost
At 1 July 2013
Additions
Disposals
At 30 June 2014
Depreciation
At 1 July 2013
Depreciation charge for the year
Disposals
At 30 June 2014
Net book value at 30 June 2014
Company
Cost
At 1 July 2014
Additions
Disposals
At 30 June 2015
Depreciation
At 1 July 2014
Depreciation charge for the year
Disposals
At 30 June 2015
Net book value at 30 June 2015
Land and
Buildings
£’000
Plant and
Equipment
£’000
2,573
-
-
2,573
667
56
-
723
1,850
2,573
-
-
2,573
723
56
-
779
1,794
1,414
26
(47)
1,393
1,242
76
(18)
1,300
93
1,393
44
-
1,437
1,300
58
-
1,358
79
Total
£’000
3,987
26
(47)
3,966
1,909
132
(18)
2,023
1,943
3,966
44
-
4,010
2,023
114
-
2,137
1,873
44
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
11. Investment in group companies
Company
Cost
At 1 July 2014 and 30 June 2015
Total
£’000
6,588
In the opinion of the directors, the value of the company’s investment is not less than the amount
included in the company statement of financial position. The investment relates to Anitass Limited.
Country of Incorporation
Name
England
Anitass Limited
Solution Point Limited
England
Solution Technology Limited England
Thripple-Thrift Limited England
% owned
100
99
100
100
Status
Operational
Dormant
Dormant
Dormant
12. Inventories
Goods for resale
Group and Company
2015
£’000
4,519
2014
£’000
5,053
Cost of sales include £60,703,000 (2014: £58,494,000) inventory expensed in the year’s statement
of comprehensive income. In the opinion of the directors, the net realisable value of inventories held
at 30 June 2015 against which provision has been made was £3,819,000 net of the provision. (2014:
£3,390,000).
13. Trade and other receivables
Group
2015
£’000
2014
£’000
Company
2015
£’000
2014
£’000
Trade receivables
Less provision for impairment of receivables
10,096
(57)
11,669
(79)
10,096
(57)
11,669
(79)
Net trade receivables
10,039
11,590
10,039
11,590
Other receivables
Prepayments
69
68
42
57
68
68
42
60
10,176
11,689
10,175
11,692
An allowance has been made for estimated at risk amounts from the sale of goods of £57,000 (2014: £79,000).
The allowance has been determined by assessing each individual debtor as well as making assessments
based on past experience and knowledge of the customers and the prevailing economic conditions.
The group is exposed to credit risk on its trade and other receivables due to the credit terms offered to
its customers. In the opinion of the directors there is no particular credit risk in any one customer. It is
confirmed that the fair value of trade receivables is not materially different from the carrying value. Trade
receivables are not interest bearing.
45
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
The average days credit is 47 days (2014: 56 days). The company uses a rigorous and detailed assessment of
each prospective customer before supplying goods up to a pre-determined credit level, and customers are
regularly re-assessed to determine current levels of credit limits.
In the opinion of the directors the provision made for bad debts, as shown below, is appropriate and that
no further provision is required. In the opinion of the directors the fair value of the trade receivables is not
materially different from the amounts disclosed.
All financial assets that are neither past due nor impaired are considered to be fully recoverable.
Trade receivables older than credit terms
Ageing of past due but not impaired receivables is as follows
30 - 60 days past due
60 - 90 days past due
90+ days past due
Total
Group and Company
2015
£’000
175
16
43
234
2014
£’000
199
11
72
282
As at 30 June 2015 trade receivables of £57,000 (2014: £79,000) were impaired: the ageing of these trade
receivables was
30 - 60 days past due
60 - 90 days past due
90+ days past due
Total
Trade and other receivables allowance for doubtful debts
Balance at beginning of period
Amounts written off as uncollectable
Potential impairment increase/(reduction)
Total
Group and Company
2015
£’000
-
20
37
57
2014
£’000
-
16
6
79
Group and Company
2015
£’000
79
-
(22)
57
2014
£’000
235
(26)
(130)
79
The other classes within trade and other receivables do not contain impaired assets. The maximum exposure
to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The
group does not hold any collateral as security.
46
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
14. Cash and cash equivalents
Bank balances and cash in hand
Cash and cash equivalents in statement
of cash flows
15. Trade and other payables
Trade payables
Inter group payables
Other payables
VAT
Other tax and social security
Accruals and deferred income
Corporation Tax
Group
2015
£’000
5,441
2014
£’000
5,076
Company
2014
£’000
5,071
2015
£’000
5,424
5,441
5,076
5,424
5,071
Group
2015
£’000
6,848
-
36
608
84
222
-
2014
£’000
7,984
-
40
305
92
200
7
Company
2014
£’000
7,984
1,253
40
267
92
193
-
2015
£’000
6,848
1,805
36
578
84
218
-
7,798
8,628
9,569
9,829
The financial liabilities shown above are those which were outstanding at 30 June 2015. The average
credit period taken for trade payables is 34 days (2014: 41 days).
The directors consider that the fair values of trade and other payables are not materially different from
those disclosed above. Trade payables are not interest bearing.
The liquidity in trade and other payables is managed by the company through the management of its
cash resources as referred to in the Strategic Report, to ensure that for all practical purposes creditors
are paid in accordance with the credit terms agreed with the suppliers.
16. Tax liabilities
Corporation tax (payable) / receivable
Group
2015
£’000
-
2014
£’000
(7)
Company
2014
£’000
14
2015
£’000
-
47
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
17. Share capital Group and Company
At 30 June 2015 and 2014
Issued and fully paid shares of 1p each
At 30 June 2015 and 2014
Number
80,000,000
28,158,735
£’000
2,000
281
The company has one class of ordinary shares which carry no right to fixed income.
18. Capital commitments
There were no capital commitments at 30 June 2015 (2014: £Nil).
19. Operating lease arrangements
Group
2015
£’000
2014
£’000
Company
2014
£’000
2015
£’000
Minimum lease payments under operating
leases recognised in profit or loss for the year
6
6
607
607
At 30 June 2015, the group had commitments for future minimum lease payments under non-
cancellable operating leases, which fall due as follows:
One year
Between one and five years
Group
2015
£’000
6
6
2014
£’000
6
6
Company
2014
£’000
607
757
2015
£’000
607
757
12
12
1,364
1,364
The freehold of the warehouse was purchased on 23 April 2012 by Anitass Limited, a 100% subsidiary
of Northamber plc.
48
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
20. Related party transactions
Mr D.M. Phillips is the ultimate controlling party of the company.
During the year, the company paid £601,000 (2014: £601,000) rent to Anitass Limited, a wholly
owned subsidiary. At the year end Northamber plc owed Anitass Ltd £1,804,000 (2014: £1,253,000).
At the year end, £0.59 million (2014: £1.73 million) was held by the company on Mr D.M. Philips’
behalf.
Interest of £10,909 (2014: £14,530) earned during the year, is included within the balance of £0.59
million (2014: £1.73 million).
21. Post balance sheet events
There were no material post balance sheet events, adjusting or non-adjusting.
22. Contingent liabilities
During the year to 30 June 2007, the company granted a 175 year lease for an enterprise zone investment
property in Arbroath.
The company retains the freehold interest, which has a negligible value, and a contingent liability of
£702,000 exists in respect of the clawback of enterprise zone tax allowances which will only occur if
the retained freehold interest is disposed of before 2017. The directors believe that any realisation of
this liability has an extremely low level of probability.
23. Financial instruments exposure
The interest rate exposure of the financial assets and liabilities of the group and company as at 30 June
2014 is shown in the table below. The table includes trade receivables and payables as these do not
attract interest and are therefore subject to fair value interest rate risk.
Based on exposure at the reporting date, currency movements are not considered likely to have a
material effect on profits or equity.
Note 13 above refers to further matters relating to credit risk as does the Strategic Report under the
heading of Financial Risk.
Floating
£’000
Zero
£’000
Total
£’000
Group
Financial assets – loans and receivables
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
5,322
40
79
-
5,441
-
-
-
10,108
10,108
5,322
40
79
10,108
15,549
49
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
Total
Floating
£’000
-
-
-
-
-
Zero
£’000
6,580
160
112
36
6,888
Total
£’000
6,580
160
112
36
6,888
Company
Financial assets – loans and receivables
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
Total
Floating
£’000
Zero
£’000
Total
£’000
5,305
40
79
-
5,424
Floating
£’000
-
-
-
-
-
-
-
-
10,107
10,107
Zero
£’000
6,576
160
112
36
6,884
5,305
40
79
10,107
15,531
Total
£’000
6,576
160
112
36
6,884
The directors estimate that an increase or decrease in annual average interest rates of 0.5% would
increase/decrease profit before tax by approximately £26,000 (2014: £28,000).
Type of Financial Instrument
All financial assets are classified as loans and receivables and all financial liabilities are held at amortised
cost.
Maturity of Financial Instruments
All financial liabilities are classified as current and are due within 60 days.
50
NOTICE OF MEETING
Notice is hereby given that the Annual General Meeting of Northamber plc will be held at 23 Davis Road,
Chessington, Surrey KT9 1HS on 15 December 2015 at 12 noon for the following purposes:-
1. To receive and adopt the company’s accounts for the year ended 30 June 2015 and the directors’ and
auditors’ reports thereon.
2. To propose the following ordinary resolution: That the directors’ remuneration report for the year
ended 30 June 2015 be received and approved.
3. To declare a dividend on the ordinary shares of the company.
4. Re-elect Mr R.F. Heath as a director.
5. Re-elect Mr D.M. Phillips as a director.
6. To re-appoint Grant Thornton UK as auditors and to authorise the directors to fix their remuneration.
ORDINARY RESOLUTION
7 THAT the directors be generally and unconditionally authorised to allot equity securities (as defined
by Section 560 of the Companies Act 2006 (“the Act”), up to an aggregate nominal amount of
£187,725 (such amount to be reduced by the nominal amount of any Relevant Securities allotted
under paragraph 10 below) in connection with an offer by way of a rights issue:
(a) to holders of ordinary shares in proportion (as nearly as may be practicable) to their respective
holdings; and
(b) to holders of other equity securities as required by the rights of those securities or as the directors
otherwise consider necessary, but subject to such exclusions or other arrangements as the board
may deem necessary or expedient in relation to treasury shares, fractional entitlements, record
dates, legal or practical problems in or under the laws of any territory or the requirements of any
regulatory body or stock exchange;
SPECIAL RESOLUTIONS
8 THAT the directors be authorised to allot equity securities pursuant to Resolution 7 above up to
an aggregate nominal amount of £93,862 as if Section 561 of the Companies Act 2006 (existing
shareholders’ rights of pre-emption)
(a) did not apply to the allotment, or
(b) applied to the allotment with such modifications as the directors may determine
(c) provided that this authority shall, unless renewed, varied or revoked by the company, expire on the
12 March 2017 or, if earlier, the date of the next Annual General Meeting of the company save
that the company may, before such expiry, make offers or agreements which would or might require
equity securities to be allotted and the directors may allot equity securities in pursuance of such
offer or agreement notwithstanding that the authority conferred by this resolution has expired.
9 THAT the company be and is hereby unconditionally and generally authorised to make market
purchases (within the meaning of Section 693(4) of the Companies Act 2006 of ordinary shares of 1p
in the capital of the company, provided that:
(a) the maximum number of shares hereby authorised to be acquired is 2,815,874 representing 10 per
cent of the present issued share capital;
(b) the minimum price which may be paid for such shares is 1p per share (exclusive of all expenses);
51
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 NOTICE OF MEETING (CONTINUED)
(c) the maximum price which may be paid for such shares is, in respect of a share contracted to be
purchased on any day, an amount (exclusive of expenses) equal to 105 per cent of the average
middle market quotations of the ordinary shares of the company as derived from the Daily Official
List of The London Stock Exchange on the 10 dealing days immediately preceding the day on
which the shares are contracted to be purchased;
(d) the authority hereby conferred shall (subject to sub-clause (e) below) expire on the date of the next
Annual General Meeting of the company after the passing of this resolution; and
(e) the company may make a contract to purchase its own shares under the authority hereby conferred
prior to the expiry of such authority which will, or may be, executed wholly or partly after the expiry
of such authority, and may make a purchase of its own shares in pursuance of any such contracts.
By Order of the Board
J.P. Henry
Operations Director
Registered Office:
Namber House
23 Davis Road,
Chessington,
Surrey,
KT9 1HS
Notes:
(1) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and, on
a poll, vote instead of him or her. A proxy need not be a member of the company. Completion and
return of a form of proxy will not prevent a member from attending and voting at the meeting.
(2) The instrument appointing a proxy and the power of attorney (if any) under which it is signed must
be deposited at the offices of the registrars of the company, not less than forty-eight hours before the
time of the meeting.
(3) There will be available for inspection at the registered office of the company during normal business
hours from the date of this Notice until the date of the Annual General Meeting and, at the place of
the Annual General Meeting, from at least fifteen minutes prior to and until the conclusion of the
Annual General Meeting:
(a) copies of the executive directors’ service agreements with the company; and
(b) the Register of Directors’ Interests.
52
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53
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2015 THIS PAGE IS INTENTIONALLY LEFT BLANK
54
Northamber plc • Namber House
23 Davis Road • Chessington • Surrey • KT9 1HS
UK Telephone: (+44) 020 8296 7000
Fax: (+44) 020 8296 7060 | www.northamber.com