Annual Report
2018
B2BSG Solutions
In House The Hygiene Management Company
Inspection Services (U.K.)
Ltd
RSA Environmental Health
Job No.: 36078 Proof Event: 1
Customer: PHSC
Project Title: Annual Report 2018
Park Communications Ltd Alpine Way London E6 6LA
T: 020 7055 6500 F: 020 7055 6600
CONTENTS OF THE ANNUAL REPORT
for the year ended 31 March 2018
Company Information
Strategic Report
Report of the Directors
Statement of Directors’ Responsibilities
Corporate Governance Statement
Independent Auditor’s Report
Group Statement of Financial Position
Group Statement of Comprehensive Income
Group Statement of Changes in Equity
Group Statement of Cash Flows
Accounting Policies
Notes to the Financial Statements
Company Financial Statements
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
Form of Proxy
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1
PHSC plc
COMPANY INFORMATION
for the year ended 31 March 2018
DIRECTORS:
S A King
N C Coote
G N Webb MBE
L E Young
SECRETARY:
Lorraine Young Company Secretaries Limited
REGISTERED OFFICE & BUSINESS ADDRESS: The Old Church
31 Rochester Road
Aylesford
Kent
ME20 7PR
REGISTERED NUMBER:
4121793 (England and Wales)
AUDITOR:
SOLICITORS:
REGISTRARS:
NOMINATED ADVISER:
BROKER:
Crowe U.K. LLP
Chartered Accountants & Registered Auditor
40-46 High Street
Maidstone
Kent
ME14 1JH
Gullands
16 Mill Street
Maidstone
Kent
ME15 6XT
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
Strand Hanson Limited
26 Mount Row
London
W1K 3SQ
Novum Securities Limited
8-10 Grosvenor Gardens
London
SW1W 0DH
2
PHSC plc
STRATEGIC REPORT
for the year ended 31 March 2018
FINANCIAL HIGHLIGHTS
• Loss after tax of £0.16m compared with a loss of £0.69m last year
• Underlying EBITDA* profit of £0.14m, up from loss of £0.10m last year
• Group revenue of £7.0m compared with £7.2m last year
• Cash reserves of £0.24m at year end compared to £0.21m last year
• Write-down of £0.20m due to impaired goodwill compared to £0.63m last year
• Group net assets at £5.29m after goodwill impairment compared to £5.5m last year
• Loss per share of 1.09p compared to a loss per share of 4.92p last year
• Final dividend of 0.5p proposed, making a total of 1.0p for the year compared to £nil last year
Loss before tax
Less: interest received
Add: interest paid
Add: depreciation
Add: impairment B to B Links Limited goodwill
Add: impairment Adamson’s Laboratory Services Limited goodwill
Add: redundancy costs regarding closure of Adamson’s Laboratory Services Limited
Fair value movement on contingent consideration
Underlying EBITDA*
31.3.18
£
(145,861)
(3)
3,778
34,590
200,000
–
47,000
–
139,504
31.3.17
£
(720,693)
(471)
2,117
44,089
–
625,191
–
(50,000)
(99,767)
* Underlying EBITDA is calculated as earnings before interest, tax, depreciation, impairment charges, non-recurring
costs and fair value movement on contingent consideration. This is used by the board as a measure of underlying
trading and has been provided to assist shareholders in understanding the Group’s trading activities.
Underlying EBITDA announced as part of the trading update on 8 June 2018 was £184,000. The difference between
this and the final underlying EBITDA of £139,504, represents an audit adjustment for a non-cash provision in respect
of slow moving stock of £45,000. This arose following a review of stock with the security businesses by management
due to the merger of SG Systems (UK) Limited and B to B Links Limited and the subsequent audit of stock in those
entities prior to the finalisation of the accounts. The adjustment is a non-cash adjustment and is included in cost of
sales and impacts profit before tax.
OPERATIONAL HIGHLIGHTS
• Discontinuation of activities related to asbestos management
• Acceleration of plans to merge the two security technology companies
• Progress towards creation of divisional structures for safety and security businesses
On behalf of the board, I present my review of the Group’s activities and performance in the last financial year and share
our views as to the ongoing prospects and challenges that we face in the year ahead.
3
PHSC plc
STRATEGIC REPORT (continued)
for the year ended 31 March 2018
KEY DEVELOPMENTS AND OUTLOOK
PHSC plc, through its trading subsidiaries, has historically been a leading provider of health, safety, hygiene and
environmental consultancy services to the public and private sectors. The Group took a decision to diversify into
security technology and associated systems with the acquisition of B to B Links Limited (B to B) in 2012 and increased
its interest in the sector by acquiring SG Systems (UK) Limited (SG) in 2014. This led to the majority of the Group’s
revenues last year, for the first time, being derived from the security businesses rather than health and safety services.
The pattern has continued with security services accounting for 60% of revenues, health and safety 23% and quality
systems 11%. The remaining 6% of revenues were generated by Adamson’s Laboratory Services Limited (ALS) which, as
previously reported, was closed down during the year.
For our security technology companies, most clients are in the retail sector. This means that our businesses are affected
by the continued decline of the high street, with footfall down as a consequence of on-line sales and, in early 2018,
severely adverse weather conditions. Taken together with general uncertainty over Brexit and the weakness of sterling,
this has led to reduced opportunities and pressure on gross margins. The security businesses in combination produced
a (pre-management charge) profit of £27,000 before a provision for slow moving stock of £45,000 for the Group in
2017/18 compared with a loss of £61,000 in 2016/17, meaning a positive change of £88,000. However, the continuing
uncertainty in the sector has led the board, after consultation with the auditor, to make a provision of £200,000 against
the carrying value of the Group’s security division.
With effect from 1 April 2018, the security businesses of B to B and SG were combined into a single entity named
B2BSG Solutions Limited. Over the coming months it is planned to consolidate the two stock inventories into a single
warehouse, and to amalgamate and streamline the administration, engineering and sales teams. As part of the planned
integration, management conducted a full review of stock and together with the auditor, identified slow moving stock
for which a non-cash provision of £45,000 has been made. There will also be changes in the management and reporting
structure, and we propose to vacate the Amesbury premises in the 2018/19 financial year. These changes will have some
initial cost implications but overall are expected to have a net positive effect on the Group’s finances.
Income for the health and safety businesses continues to originate from a wide range of clients across various sectors,
and we are particularly strong in education, leisure, health and social care, and public transport. We also serve a range
of general commercial, public sector and industrial organisations across the UK. In addition, we conduct statutory
examinations of plant and equipment such as pressure systems, lifting machinery and accessories, and other work
equipment either directly with clients or through insurance broker intermediaries.
During the year we put into effect our decision to close down ALS, which operated from premises in Essex and the
Midlands. The Essex office is in the process of being sold (subject to contract) and is expected to raise £300,000 of cash
after expenses.
An extremely positive performance has been achieved by our QCS International Limited (QCS) subsidiary which
specialises in consultancy support and training in quality systems management. QCS is looking to take on additional
premises alongside its existing Cumbernauld office, to help service the consistently high level of demand for public
training courses.
Our plans to form a safety division are progressing at a natural pace. The lease on The Old Police Station in Northleach,
occupied by Quality Leisure Management Limited (QLM), expires in 2018 and the subsidiary will be relocating to
Raunds (Northamptonshire) to take up residence in Blotts Barn. This is the Group-owned accommodation formerly
shared between RSA Environmental Health Limited (RSA) and ALS. Now that ALS has ceased operations, the space has
become available and this move will reduce QLM’s premises-related costs. This will mean that the Group will operate
from four locations including the Aylesford Head Office, with the security division based at Finchampstead (Berkshire),
the safety division at Aylesford and Raunds, and quality management systems delivered from Cumbernauld.
4
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
Acquisition payments
There are no outstanding liabilities in respect of former acquisitions and currently there are no planned new acquisitions.
Net asset value
As at 31 March 2018, the Group’s consolidated net assets stood at £5.29m. There were 14,677,257 ordinary shares in
issue at that date which equates to a net asset value per share of 36p.
The company’s ordinary shares continue to trade at a discount to the net asset value. Much of the asset value relates
to goodwill arising from previous acquisitions. We review the carrying value each year to ensure that the book value is
stated within a range commensurate with good accounting practice. As noted above, we are writing down the carrying
value of our retail-dependent security businesses by £200,000 and this represents a reduction of approximately 4% in the
consolidated net assets of the Group. The board is satisfied that all other goodwill valuations can presently be justified.
Outlook
It is necessary to reiterate the commentary made in last year’s report, wherein we stated that the Group is affected
by political uncertainty surrounding the timetable and implications of leaving the European Union. The weakness of
sterling, triggered by the outcome of the Brexit referendum two years ago, continues to impact on margins. This is
because we rely upon imported goods. In particular within our security business, goods are predominately purchased in
Euros or US Dollars, and it has not proved commercially feasible to pass the full cost of this on to our customers.
Losses associated with ALS are now a matter of history following its closure during the year. There are some ongoing
implications as outlined below but no material implications going forward. Prior to moving into security technology, ALS
was the largest part of the Group and the largest subsidiary and made the greatest contribution towards the Group’s
costs, approximately £200,000 per annum. Whilst we have now extricated ourselves from that business, management’s
task is to find ways to replace the lost contribution. The security division was intended to do this but, for reasons
explained, has encountered its own difficulties and will not make up the shortfall. However, the safety division remains
profitable and consolidation of sites will reduce costs. All other things being equal, the highly encouraging growth
in revenue and profit from QCS gives us an expectation that overall and on a consolidated basis, 2018/19 will see an
improvement on 2017/18.
Trading update
Unaudited management accounts for the first quarter of 2018/19, after adjusting for late invoice receipts from suppliers
and a settlement to compensate for unfinished asbestos work payable to a client of ALS show the following: Group
revenues were £1.56m and this generated EBITDA of £121,815. This compares with total revenues of £1.82m for the
first quarter of 2017/18 and EBITDA of £121,351, which included results for ALS which has now been discontinued.
PERFORMANCE BY TRADING SUBSIDIARY
The Group currently measures the following key performance indicators.
Total revenues
Total revenues are reviewed each month across the Group because this information gives a ready measure of how well
the Group and underlying businesses are performing relative to historical data. It enables any trend to be detected,
understood and acted upon as appropriate. Consolidated Group revenues for the year decreased by 2%;
Earnings before interest, taxation, depreciation, amortisation and non-recurring costs (underlying EBITDA)
After allowing for exceptional costs, the Group saw an increase in EBITDA from a loss of £100,000 to a profit of £139,500.
5
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
Staff turnover
Staff turnover is monitored because the key asset of each subsidiary is its workforce. Recruiting replacement staff
is an expensive task and it is not always possible to compensate for the specialised knowledge that may be lost
when an employee departs. Between the years ended 31 March 2017 and 2018 the average number of staff employed
across the Group fell from 88 to 72. The main reason for the decrease was the closure of ALS which resulted in all except
one employee leaving the business.
Pre-tax profit/(loss) per subsidiary before Group management charges
Profits before tax and management charges are reviewed by each subsidiary and the board every month to ensure
that each subsidiary trades profitably. Although the Group does not generally adopt a policy of cross-charging between
subsidiaries, informal account is taken of significant work done by one subsidiary on behalf of another.
A review of the activities of each trading subsidiary is provided below. The profit figures stated are before tax, central
management charges and impairment charges. The management charges are the individual subsidiary’s contribution to
Group overheads and are not directly attributable costs.
Adamson’s Laboratory Services Limited (ALS)
• 2018: revenues of £377,852 yielding a loss of £165,100
• 2017: revenues of £823,208 yielding a loss of £194,600
The adverse effects of competition within the sector resulted in the Group making the decision to discontinue operations
related to asbestos services on 31 December 2017. ALS continued to provide general health and safety services until
31 March 2018 at which point the remaining client contracts were satisfied by other Group companies.
The trading name, intellectual property, and the rights to offer asbestos management service to former clients were sold
to another asbestos consultancy for £25,000.
Accordingly, ALS became dormant with effect from 31 March 2018. There will however be certain ongoing costs in
respect of outstanding leases on some office machinery, where it has been determined that heavy penalties for early
settlement make it less expensive to continue with the leases. In addition, the Group is obliged to carry run-off insurance
in relation to previously completed work by ALS with some contracts requiring this for up to six years.
It is also expected that there could be some one-off costs (which are not expected to exceed £15,000) relating to
compensation to some ALS clients for their out-of-pocket costs where work was not completed by the time ALS
ceased operation.
B to B Links Limited (B to B)
• 2018: revenues of £2,777,300 yielding a profit of £78,300
• 2017: revenues of £2,594,900 yielding a profit of £52,500
During 2018 B to B generated revenues of £2,777,300, up 7% on the previous year. The majority of revenues in 2017/18
continued to come from national retail accounts, with revenues from the largest customer being £1.5m (2017: £1.5m),
and non-retail CCTV revenues grew by 25% compared with 2016/17.
After a very strong first half, profits for the year ended below forecast due to weaker sales during the second half of the
financial year. Nevertheless, the operating profit before management charge in 2017/18 was 49% higher than 2016/17,
despite the very challenging retail marketplace due to tight control of overheads.
The profit is shown after a non-cash provision has been made of £15,000 (2017 – £nil) for slow moving stock.
6
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
SG Systems (UK) Limited (SG)
• 2018: revenues of £1,449,000 yielding a loss of £96,200
• 2017: revenues of £1,414,500 yielding a loss of £113,500
Revenues for SG were £1,449,000, up 2% on the previous year, but significantly below forecast. The pressures facing the
wider retail sector have led to delays in capital expenditure decisions, thus impacting on SG’s revenues. Although the
company made an operating loss for the year, this was considerably less than the previous year due to an improvement
in gross margins, which was partly the result of the recovery of sterling’s value against the US dollar.
Over the last 18 months significant effort has been devoted to marketing SG’s wider retail technology offer, which includes
products that can support retailers in driving sales conversion rates as well as reducing shoplifting. This has resonated
strongly amongst key retail customers and prospects and a number of important in-store trials are now underway.
The profit is shown after a non cash provision has been made of £30,000 (2017 – £nil) for slow moving stock.
Inspection Services (UK) Limited (ISL)
• 2018: revenues of £215,500 yielding a profit of £46,300
• 2017: revenues of £227,600 yielding a profit of £44,200
The main business of ISL continues to be the statutory examination and inspection of lifting plant and equipment,
and of pressure systems, under contracts placed by insurance brokers on behalf of end users. In return for passing this
work to ISL, commissions are payable to brokers in line with agreed terms. In addition to examinations necessary to
meet specific obligations under health and safety legislation, ISL also assists employers by carrying out non-statutory
inspections of various other items of workplace equipment. It remains the case that a large majority of work derives
through insurance brokers, though ISL also engages directly with clients in a number of cases.
Year-on-year revenues reduced by a little over 5%, reflecting a number of contracts that were not renewed for various
reasons. These include situations where the equipment owner changes insurance broker and the new broker has
pre-existing arrangements with another provider of the services that ISL offers. Whilst new contracts were won, these
were outweighed by the value of those contracts that lapsed. To some extent this is cyclical, as in the previous year when
new contracts were worth more than those lost.
ISL delivered higher profits on lower revenues thanks to a number of reductions in costs. The main contributor was an
engineer surveyor electing to reduce his working week as a prelude to full retirement.
Personnel Health & Safety Consultants Limited (PHSCL)
• 2018: revenues of £615,700 yielding a profit of £240,000
• 2017: revenues of £666,900 yielding a profit of £218,900
Profit increased by 10% to £240,000 despite a £51,200 decrease in revenue. The improved profit was a result of
close control of expenditure, in particular staff costs. PHSCL continues to be a net provider of resources to other
members of the group, with policy dictating that cross-charges are not applied to reflect this contribution. Staff utilisation
by the other subsidiaries averaged 16% during the year so the improved profitability is particularly encouraging in the
current environment.
The reduction in revenue can partially be attributed to one of PHSCL’s largest clients taking some of their work in house.
It also reflects the continuing high levels of competition, mainly from sole traders or small partnerships that have lower
overheads and can thus price very competitively in what has become a mature and crowded market. The majority of
PHSCL’s revenue is obtained under a retainer service, with these clients often purchasing additional consultancy or
training days. Customer loyalty remains high (over 70% of clients have been with PHSCL for 10 years or more) with a
large proportion of work coming from existing or former customers.
7
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
PHSCL has been working on transitioning its ISO 9001 quality management processes into the new 2015 standard with
the British Standards Institute (BSI) and has recently been successful in attaining accreditation. Maintenance of this
standard with a reputable accreditation body helps to promote PHSCL’s attention to quality of service.
Revenues in the subsidiary’s key product, the Appointed Safety Advisor Service continue to be flat as customers either
recruit in-house or prefer to buy services on an ad-hoc basis and a key part of the business plan for the coming year
is to attract entirely new customers, whilst maintaining the high-quality levels of support to those who are already
established customers.
One area which has enjoyed significant growth has been the development of our expert witness service which is
growing from an ad-hoc service to one that has achieved over 300% increase in revenue as the subsidiary becomes
better known within the legal profession. This is often complex and high profile work which helps to promote the
company’s reputation as an expert in the field of occupational health and safety risk management.
QCS International Limited (QCS)
• 2018: revenues of £767,600 yielding a profit of £285,200
• 2017: revenues of £624,000 yielding a profit of £210,800
QCS continues to be a leader in the design, marketing and delivery of training courses and consultancy to the ISO
standards, which can be seen in the high number of public training courses, in house training courses and new
consultancies delivered. QCS is highly regarded within its locale and has a considerable share of the ISO training market
for southern and central Scotland. In 2017/18 QCS also benefitted from a small increase in work outside of its core
geographical area with clients being secured as far south as Kent.
Revenues were up £143,600 (23%) compared to 2016/17 and the corresponding profit before tax and central
management charges increased by £74,400 (35%).
Performance exceeded management forecasts for both revenue and operating profit. This was underpinned by high
levels of client retention along with the expansion of consultancy and training services. Additional services were
provided to longstanding customers and the company reaped the benefits of market demand relating to the new ISO
9001 and ISO 14001 standards. The update to standards continues to underpin a proportion of new sales although this
effect is slowly declining and will probably end during the next financial year. Some benefit from the new ISO 45001
standard for health and safety will be experienced, and evidence has already shown that sales of training in this area for
the year ahead will be good.
QCS retains approved training partner status with the International Register of Certified Auditors (IRCA). The costs and
benefits associated with maintaining this relationship are regularly reviewed but this status continues to differentiate
the company from competitors.
Medical device consultancy and training continues to be a successful area of the business. QCS is benefitting from
changes in the medical device regulatory structure that has increased enquiries and has also led to the introduction of
two new courses.
QCS launched a new website in May 2017. With carefully targeted advertising and search engine optimisation it has been
notable that there has been an increase in enquiries from around the UK, with several leads from previously unknown
clients leading to sales.
8
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
Quality Leisure Management Limited (QLM)
• 2018: revenues of £439,400 yielding a profit of £111,900
• 2017: revenues of £437,100 yielding a profit of £74,300
Revenue for 2017/18 of £439,400 was similar to the prior year though greater efficiency in delivery resulted in pre-tax
profit of £111,900 before central management charges compared to £74,300 in 2016/17. This was primarily the result
of a reduction in staff costs.
QLM continued to focus on core business objectives and key areas of income generation in 2017/18, namely audits,
training and accident investigation. The support service is also key to QLM’s success in being able to support the diverse
and changing needs of its client base. Over £100,000 of revenue was generated from auditing, representing an increase
of 21%, utilising QLM’s specialist skill sets. Accident investigation income remained relatively constant given the nature
of the work, but continues to be vital in setting QLM apart from its competitors. It demonstrates the competence within
the broader QLM team and is a pre-requisite for supporting the Chartered Institute of Environmental Health in delivery
of sections of its continuing professional development programme.
Other expenditure generally remained consistent with the previous year.
Technology and the associated infrastructure are vital to QLM and investment has and will continue to be made in
these areas. The server has been replaced by a cloud-based system which has led to greater efficiency in uploading and
accessing data from a number of different platforms. An audit specific cloud-based system is to be introduced during
2018/19 to accommodate QLM’s Leisuresafe™ audits and health and safety reviews.
RSA Environmental Health Limited (RSA)
• 2018: revenues of £370,400 yielding a profit of £75,400
• 2017: revenues of £374,100 yielding a profit of £65,100
The principal activities of the company in the year under review were the provision of health and safety consultancy
services and training, together with the sale of associated health and safety products. Revenue for the year was marginally
down on the previous year but despite this, there was an increase in profitability due to cost control measures.
The past year has seen organic growth in activities where the strengths of the company lie. New strategies are being
developed to ensure that the company’s offering is diversified and is relevant to the markets in which it operates.
The core offering of SafetyMARK to the education sector remains the focus of the company, with increased income
year-on-year. Revenues broke through the £100,000 barrier in this area despite cost pressures placed on schools and
the continued consolidation of schools into Multi Academy Trusts. The company has increased the number of schools to
which is provides services and this continues to be a focus in 2018/19
Despite the focus on SafetyMARK, the past year has also seen strong growth in other areas of the business. Training has
seen an increase in the number of courses being provided to clients and there continues to be demand for our IOSH
accredited school courses. Reducing the frequency of courses has increased the average attendance, which has, in turn,
resulted in an improvement in profitability.
Food safety consultancy has seen some strong demand in the past year with revenues being well above forecast.
However, there are some significant and increasing cost pressures within this market and clients see consultancy as
something of a luxury.
The continued success of SafetyMARK means that new enquiries from prospective clients are strong. New business has
been gained with a focussed marketing strategy. The key will now be to ensure that profitability is maximised by using
the economies of scale afforded by a larger client base, as well as ensuring that costs are well controlled and standard
fees are reviewed, where appropriate.
9
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
PHSC plc
• 2018: net loss of £521,700 before management charges, exceptional costs and dividends received
• 2017: net loss of £501,100 before management charges, exceptional costs and dividends received
The parent company incurs costs on behalf of the Group and does not generate any income. The costs incurred by PHSC
plc represent the costs of running an AIM quoted Group and are consistent with the previous year.
PRINCIPAL RISKS AND UNCERTAINITIES
Regulatory/Marketplace
Much of the Group’s work involves assisting organisations with the implementation of measures to meet regulatory
requirements relating to health and safety at work. If the regulatory burden was to be substantially lightened, for example
if the government embarked upon a programme of radical deregulation, there could be less demand for the Group’s
services. Changes to the operation of the employer’s liability insurance system, as proposed in some quarters, could
reduce the incentive for organisations to buy in claims-preventive services such as health and safety advice. In mitigation
of these risks, the board has diversified the Group’s range of offerings for example, by setting up a security division and
is exploring non-regulatory areas of environmental work to add to the current portfolio of services.
Technological
The Group’s website is a primary source of new business. If the website became inaccessible for protracted periods, or
was subject to “hacking”, this may prejudice the opportunity to obtain new business. Additionally, the increase in the
use of the internet for satisfying business requirements may lead to a reduction in demand for face-to-face consultancy
services and the number of training courses commissioned may be affected by moves towards screen-based interactive
learning. The subject of IT security is regularly reviewed by the board to ensure that appropriate strategies are in place.
Personnel
Generally, there is an excess of demand over supply for health and safety professionals. Those with sufficient qualifications
and experience to be suitable for consultancy roles are in the minority. This has the combined effect of making it difficult
for the Group to source suitable personnel and having to offer higher remuneration packages to attract them. The Group
is dependent upon its current executive management team. Whilst it has entered into contractual arrangements with the
aim of securing the services of these personnel, the retention of their services cannot be guaranteed. Accordingly, the
loss of any key member of management of the Group may have an adverse effect on the future of the Group’s business.
The Group and each subsidiary have contingency plans in place in the event of incapacity of key personnel.
Geographical
The Group offers a nationwide service but a number of organisations see benefit in using consultancies that are local
to them and internet search engines favour local providers. The acquisitions made, particularly QCS with an office in
Scotland, have increased the geographical spread of the Group and assist in mitigating this risk.
Licences
The Group is reliant on licences and accreditations in order to be able to carry on its business. The temporary loss of, or
failure to maintain, any single licence or accreditation would be unlikely to be materially detrimental to the Group, as the
directors believe that this could be remedied. However, if the Group fails to remedy any loss of, or does not maintain, any
licence or accreditation, this would have a material adverse effect on the business of the Group. The Group has internal
processes in place to ensure that the licences and accreditations are maintained.
10
PHSC plc STRATEGIC REPORT (continued)
for the year ended 31 March 2018
GOING CONCERN
Accounting standards require the directors to consider the appropriateness of the going concern basis when preparing
the financial statements. The directors confirm that they consider that the going concern basis remains appropriate
as the Group has adequate resources to continue in operational existence for the foreseeable future based upon the
Group’s forecasts and current banking facilities. The cashflow forecasts do not indicate that the facility will need to
be increased. Thus the directors continue to adopt the going concern basis of accounting in preparing the annual
financial statements.
In closing I would like to extend thanks to all our shareholders for their continued support, and to everyone employed
across the Group for their hard work and effort.
On behalf of the board
Stephen King
Group Chief Executive
13 August 2018
11
PHSC plc REPORT OF THE DIRECTORS
for the year ended 31 March 2018
The directors present their report with the audited financial statements of PHSC plc (Company and Group) for the year
ended 31 March 2018.
DIRECTORS
The directors who held office during the year under review were:
S A King
N C Coote
G N Webb MBE
L E Young
DIVIDENDS
The board did not declare a final dividend for the year ended 31 March 2017. An interim dividend of £73,386 (0.5p per
share) was paid in February 2018 in respect of the year ended 31 March 2018. The board is proposing a final dividend
of 0.5p per share payable on 12 October 2018 to shareholders on the register on 28 September 2018 making a total of
1.0p for the year.
FINANCIAL RISK MANAGEMENT
The Group’s operations expose it to a variety of financial risks which are outlined in note 1 to the financial statements
on page 30.
SHARE CAPITAL
The issued share capital of the Company throughout the financial year was 14,677,257 ordinary shares of £0.10 each.
ENVIRONMENTAL, SOCIAL AND COMMUNITY ISSUES
The directors are aware of the impact of the Group’s business on the environment but believe this to be minimal due
to the nature of its operations. Details of the Group’s involvement in the community can be found on the company’s
website (www.phsc.plc.uk).
EMPLOYEES
Each company within the Group has in place the necessary structures to ensure effective communication with its
employees. In addition, there are initiatives to ensure that staff are offered continuing professional development
opportunities appropriate to their roles. The Group aims to improve the performance of the organisation through the
development of its employees. Their involvement is encouraged by means of team meetings and briefings and bonuses
are paid on the basis of individual performance and results at subsidiary and Group level. The Group is committed to
equality of employment and its policies reflect a disregard of factors such as disability in the selection and development
of employees.
During the year, a review was conducted to identify any gender-related pay anomalies across the Group. As at the date of
this report, there are no known anomalies in any subsidiary that would fall into this category.
The board would like to formally acknowledge the valuable work carried out by every employee and recognises that it
is reliant upon each individual member of staff and management if it is to succeed and prosper.
DATA PROTECTION
The company has introduced a policy to meet the requirement of the General Data Protection Regulations (GDPR) and
this has been issued across the Group.
12
PHSC plc SUBSTANTIAL SHAREHOLDINGS
As at 3 August 2018, the following persons had notified the company of an interest of 3% or more of its issued
share capital.
Name
No. of ordinary shares
% of issued share capital
S A King
N C Coote
Unicorn Asset Management Limited and Unicorn AIM VCT II plc
Downing LLP held via Downing ONE VCT
James Faulkner
3,190,000
3,144,342
1,071,440
510,767
455,000
21.73
21.42
7.30
3.48
3.10
PROVISION OF INFORMATION TO AUDITOR
So far as each of the directors is aware at the time the report is approved:
•
•
there is no relevant audit information of which the Group’s auditor is unaware; and
the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
ANNUAL GENERAL MEETING
This year’s AGM will be held at 10.00am on Monday 24 September 2018 at The Old Church, 31 Rochester Road, Aylesford,
Kent ME20 7PR. The notice of meeting is set out on pages 61 to 63 of this document and a form of proxy is on page 65.
Details of the business to be considered at the meeting are given below.
Report and accounts (Resolution 1)
It is a requirement of company law that the annual report and accounts is laid before shareholders in general meeting.
Dividend (Resolutions 2)
As noted above, the directors recommend a final dividend of 0.5p per share.
Re-election of director (Resolutions 3)
Under the company’s articles of association, Stephen King retires by rotation and offers himself for re-election.
Appointment of auditor (Resolution 4)
A resolution for the reappointment of Crowe U.K. LLP as the company’s auditor will be put to the AGM together with
the usual practice of authorising the directors to determine the auditor’s fees.
Authority of directors to allot shares (Resolutions 5 and 6)
By law, directors are not permitted to allot new shares (or to grant rights over shares) unless they are authorised to do
so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (or
granting rights over shares) for cash without first offering them to existing shareholders in proportion to their holdings.
Resolution 5 gives the directors the necessary authority until the earlier of next year’s AGM or 30 September 2019 to
allot securities up to an aggregate nominal amount of £489,242.
Resolution 6 empowers the directors, until the earlier of next year’s AGM or 30 September 2019 to allot such securities
for cash otherwise than on a pro-rata basis to existing shareholders, up to a maximum of 2,935,451 ordinary shares of
10p each, equivalent to 20% of the issued share capital as at 10 August 2018. It is intended to renew this authority and
power at each annual general meeting.
13
PHSC plcREPORT OF THE DIRECTORS (continued)for the year ended 31 March 2018
Authority for the company to purchase its own shares (Resolution 7)
Resolution 7 authorises the company, until the earlier of next year’s AGM or 30 September 2019 to purchase in the
market up to a maximum of 2,201,589 ordinary shares (equivalent to approximately 15% of the issued share capital of
the company as at 10 August 2018) for cancellation at a minimum price of 10 pence per share and a maximum price per
share of an amount equal to 105 percent of the average of the middle market quotations for an ordinary share (as derived
from the Daily Official List) for the five business days immediately before the date of purchase.
The company may hold any repurchased shares in treasury, instead of cancelling them immediately. If the company buys
back its own shares and holds them in treasury it may then deal with some or all of them in several ways. It may sell
them for cash; transfer them under the provisions of an employee share scheme; cancel them; or continue to hold them
in treasury. Holding shares in treasury in this way would allow the company to reissue them quickly and cost effectively,
giving increased flexibility to the management of its capital base. Dividends are not paid on shares held in treasury, nor
do they carry voting rights while they remain there. The directors intend to decide at the time of any share buyback,
whether to cancel the shares immediately or to hold them in treasury, depending on what would best promote the
success of the company at the time. The company does not currently hold any shares in treasury.
The proposal should not be taken as an indication that the company will purchase shares at any particular price or
indeed at all, and the directors will only consider making purchases if they believe that such purchases would result in
an increase in earnings per share and are in the best interests of shareholders.
Voting
A form of proxy is included at the end of this document for use at the AGM. Please complete, sign and return it as soon
as possible in accordance with the instructions on it, whether or not you intend to come to the AGM. Returning a form
of proxy will not prevent you from attending the meeting and voting in person if you wish. A form of proxy should be
returned so that it is received not less than 48 hours (excluding non-working days) before the time of the AGM.
The directors consider that all the resolutions to be put to the meeting are in the best interests of the company and its
shareholders as a whole. The directors will be voting in favour of them and unanimously recommend that you do so
as well.
Subsequent events and future developments
There have been no significant events affecting the company since the year end.
Future developments have been discussed in the strategic report.
On behalf of the board
Lorraine Young Company Secretaries Limited
Secretary
13 August 2018
14
PHSC plcREPORT OF THE DIRECTORS (continued)for the year ended 31 March 2018 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
for the year ended 31 March 2018
The directors are responsible for preparing the strategic report, the directors’ report and the Group and parent company
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent company financial statements for each financial year.
Under that law the directors have elected to prepare the consolidated financial statements and company accounts
in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and
applicable law.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and parent company and of the profit or loss of the Group for that
period. In preparing these financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
• 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 and Group’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the strategic report, the report of the directors and other information
included in the annual report and financial statements is prepared in accordance with applicable law and regulations
in the UK.
The maintenance and integrity of the PHSC plc website is the responsibility of the directors; the work carried out by the
auditors does not involve the consideration of these matters and, accordingly, the auditors accepts no responsibility for
any changes that may have occurred in the accounts since they were initially presented on the website.
Legislation in the UK governing the preparation and dissemination of the accounts and the other information included
in annual reports may differ from legislation in other jurisdictions.
15
PHSC plc CORPORATE GOVERNANCE STATEMENT
for the year ended 31 March 2018
The directors consider it important that appropriately high standards of corporate governance are maintained. They
have put in place governance structures and provide information which would be expected for companies quoted on
AIM of the London Stock Exchange. The company intends to follow the QCA Corporate Governance Code (2018) and
from 28 September 2018 details of compliance with this code will be available on the company’s website.
LEADERSHIP
The board is made up of four directors, two of whom are executive, Stephen King (group chief executive) and Nicola
Coote (deputy group chief executive) and two of whom are non-executive, Graham Webb MBE and Lorraine Young.
Stephen King acts as chairman and chief executive. Since the board is comprised of only four members, the directors
are of the view that there is no need to split these roles and for the same reason they have not appointed a senior
independent director. Graham Webb has served fifteen years. The board is of the view that Graham Webb retains his
independent judgement and continues to make a valuable contribution to the board. Lorraine Young was appointed on
1 April 2016. Biographical details of the directors can be found on the company’s website (www.phsc.plc.uk).
The directors have a duty to promote the success of the company and to this end the board has clearly defined
responsibilities set out in a formal schedule of matters reserved to it. This was reviewed during the year and includes
setting the company’s strategy; approving business plans; approving the annual report and accounts and shareholder
communications; ensuring a sound system of internal controls and risk management; approving major contracts;
determining the remuneration policy (on the recommendation of the remuneration committee); and making
appointments to the board and other offices. Health and safety within the Group is considered at every board meeting.
The board also considers the risks which face the Group which might impact on the achievement of its strategy and
determines which ones are acceptable. Mitigations are put in place where practicable. The directors have continued to
disclose their other interests and to date there have been no actual or potential conflicts of interest between these and
the interests of the company.
EFFECTIVENESS
The board meets at least five times each year and the committees meet twice each year (or more often if required).
During the year there was full attendance at all board and committee meetings with the exception of one instance
where a board member was absent. Monthly management accounts are circulated to all directors. All directors have
access to advice from the company secretary.
COMMITTEES
The board has delegated certain matters to committees. There is an audit committee and a remuneration committee.
The terms of reference of these committees were reviewed during the year and are available on request. There is no
separate nominations committee and the board as a whole deals with any matters that would normally be within the
remit of such a committee. For example, the board reviews succession planning at senior levels within the Group at
least annually.
The audit committee comprises Lorraine Young (chair) and Graham Webb. During the year it has considered internal
controls and risk management issues which are relevant to the Group. A risk register has been set up which will be
kept under review as the Group’s strategy evolves. Accepting that no systems of control can provide absolute assurance
against material misstatement or loss, the directors believe that the established systems for internal control within the
Group are appropriate to the business.
There is an annual audit planning meeting between the external auditor and the committee chair as well as a formal
meeting with the auditor and the committee at the time of the final results. The committee considers the continuing
independence of the external auditor and notes the level of non-audit fees to ensure they remain at an acceptable level.
Where relevant, developments in accounting standards and reporting have been discussed during the year. The audit
committee reviews annually whether the Group needs to have an internal audit function and does not consider this to
be necessary at present.
16
PHSC plc CORPORATE GOVERNANCE STATEMENT (continued)
for the year ended 31 March 2018
The remuneration committee comprises Graham Webb (chair) and Lorraine Young. The committee has written terms
of reference and considers all aspects of the remuneration of the executive directors and other senior executives. As in
prior years, any payments to senior executives under the Group bonus plan are approved by the committee. It also hears
representations on any proposed general pay increases across Group subsidiaries and is responsible for approving those.
DIRECTORS’ REMUNERATION
The remuneration of the executive directors was as follows:
Year ended 31.3.18
Short term employee benefits
S A King
N C Coote
Salary
£
90,000
70,000
Bonus
£
1,477
1,477
Pension
salary
sacrifice
£
Waiver
£
Post
employment
benefits
Pension
£
Benefits
£
Year
ended
31.3.17
Total
£
Total
£
(4,810)
–
(3,600)
(5,400)
1,976
7,804
7,680
8,630
92,723
82,511
95,251
82,535
Stephen King’s benefits relate to health insurance and Nicola Coote’s to a company car and health insurance. Both
directors opted to take their bonus as a pension contribution.
The fees of the non-executive directors were as follows:
G N Webb
L E Young
CORPORATE RESPONSIBILITY
Year ended
31.3.18
£
Year ended
31.3.17
£
14,000
14,000
14,000
14,000
Group companies are involved in the communities in which they operate and they also provide sponsorship and donations
to good causes. Details of these can be found on the corporate social responsibility section of the Group’s website.
RELATIONS WITH SHAREHOLDERS
The annual report is sent to all shareholders and, on request, to other parties who have an interest in the Group’s
performance. The company endeavours to send the notice of AGM and supporting papers to shareholders at least
20 working days before the meeting and responds promptly to any enquiries received from shareholders. The AGM
provides the board with the opportunity to meet and engage directly with shareholders and all shareholders have the
opportunity to put forward questions on performance and operations as well as other related topics at the AGM. Stephen
King is the principal contact between PHSC plc and its investors, with whom he maintains a regular dialogue. The views
of investors are communicated to the whole board.
17
PHSC plc
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC
for the year ended 31 March 2018
OPINION
We have audited the financial statements of PHSC plc (Parent Company) and its subsidiaries (Group) for the year ended
31 March 2018, which comprise:
•
•
•
•
•
the Group statement of comprehensive income for the year ended 31 March 2018;
the Group and parent company statements of financial position as at 31 March 2018;
the Group and parent company statements of cash flows for the year then ended;
the Group and parent company statements of changes in equity for the year then ended; and
the notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law
and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as
at 31 March 2018 and of the Group’s profit for the period then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union as applied in accordance with the provisions of the Companies Act 2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the Group in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to
you when:
• The directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
• The directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the Group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for
a period of at least twelve months from the date when the financial statements are authorised for issue.
OVERVIEW OF OUR AUDIT APPROACH
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of
materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole
to be £50,000 (FY17 £45,000), based on a percentage of Group revenue.
18
PHSC plc INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS
OF PHSC PLC (continued)
for the year ended 31 March 2018
We use a different level of materiality (performance materiality) to determine the extent of our testing for the audit of
the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements
made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal
control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the audit committee to report to it all identified errors in excess of £2,500 (2017: £2,500). Errors below
that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The audit scope was established during the planning stage and was based around the key matters set out below.
All subsidiaries were considered significant components and a full scope audit was undertaken on each of these. The
audit approach for each component was consistent with the overall scope of the audit.
The parent and subsidiaries were all audited by Crowe U.K. LLP and no component auditors were used.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Goodwill valuations and
impairment reviews
Revenue recognition
Inventory
Going concern
Impairment reviews were conducted by management based upon current
forecasts. We challenged management on assumptions used, conducted sensitivity
analysis on key criteria and checked the calculations.
We reviewed the policy used by each company in the Group for all material
income streams. We tested a sample of transactions and tested cut off along with
deferred and accrued income where relevant. We discussed and confirmed our
understanding of policies adopted.
We carried out substantive testing on a sample of stock items to check whether
stock was being recorded at the lower of cost and net realisable value. We
also reviewed the ageing of stock items and the provisions in place for slow
moving stock.
We reviewed forecasts prepared by management along with current financing
and post year end trading. We also reviewed historic forecasts to actual results
achieved to assess accuracy.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They
were not designed to enable us to express an opinion on these matters individually and we express no such opinion.
19
PHSC plc INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS
OF PHSC PLC (continued)
for the year ended 31 March 2018
OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion based on the work undertaken in the course of our audit
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
•
the directors’ report and strategic report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In light of the knowledge and understanding of the Group and the parent company and their environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters 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.
RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS
As explained more fully in the directors’ responsibilities statement set out on page 15, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
20
PHSC plc INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS
OF PHSC PLC (continued)
for the year ended 31 March 2018
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Darren Rigden (Senior Statutory Auditor)
for and on behalf of Crowe U.K. LLP
Statutory Auditor
Maidstone
13 August 2018
21
PHSC plc Registered number: 4121793
GROUP STATEMENT OF FINANCIAL POSITION
as at 31 March 2018
Non-Current Assets
Property, plant and equipment
Goodwill
Deferred tax asset
Current Assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total Assets
Current Liabilities
Trade and other payables
Current corporation tax payable
Contingent consideration
Non-Current Liabilities
Deferred tax liabilities
Total Liabilities
Net Assets
Capital and reserves attributable to equity holders of the Group
Called up share capital
Share premium account
Capital redemption reserve
Merger relief reserve
Retained earnings
Note
31.3.18
£
31.3.17
£
5
6
14
594,343
3,678,463
21,105
626,224
3,878,463
21,693
4,293,911
4,526,380
8
7
9
389,034
1,568,625
244,290
487,367
1,447,493
206,719
2,201,949
2,141,579
6,495,860
6,667,959
11
13
1,137,094
16,230
–
1,064,358
–
25,000
1,153,324
1,089,358
14
55,818
55,818
57,800
57,800
1,209,142
1,147,158
5,286,718
5,520,801
10
10
1,467,726
1,916,017
143,628
133,836
1,625,511
1,467,726
1,916,017
143,628
133,836
1,859,594
5,286,718
5,520,801
The financial statements were approved and authorised for issue by the board of directors on 13 August 2018, and were
signed on its behalf by:
S A King
Director
Accounting policies and notes on pages 26 to 46 form part of these financial statements.
22
PHSC plc
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2018
Revenue
Cost of sales
Gross profit
31.3.18
£
31.3.17
£
Continuing Discontinued
operations
operations
Note
Total
Continuing Discontinued
operations
operations
Total
6,635,012
(3,688,565)
7,012,864
377,852
(248,886) (3,937,451)
6,339,091
(3,475,427)
15
823,208
(513,196)
7,162,299
(3,988,623)
2,946,447
128,966
3,075,413
2,863,664
310,012
3,173,676
Administrative expenses
Goodwill impairment
Other income
15
25
(2,724,895)
(200,000)
–
(317,604) (3,042,499)
(200,000)
25,000
–
25,000
(2,814,360)
(625,191)
1,560
(504,732)
–
–
(3,319,092)
(625,191)
1,560
Profit/(loss) from operations
21,552
(163,638)
(142,086)
(574,327)
(194,720)
(769,047)
Fair value movement on
contingent consideration
Finance income
Finance costs
Profit/(loss) before taxation
Corporation tax (expense)/credit
Profit/(loss) for the year after
tax attributable to owners of
the parent
Other comprehensive income
Total comprehensive income
attributable to owners of
the parent
Basic and diluted Earnings per Share
from operations
25
18
18
19
–
3
(2,411)
–
–
(1,367)
–
3
(3,778)
50,000
471
(1,187)
–
–
(930)
50,000
471
(2,117)
19,144
(17,511)
(165,005)
2,675
(145,861)
(14,836)
(525,043)
28,467
(195,650)
1,028
(720,693)
29,495
1,633
–
(162,330)
–
(160,697)
–
(496,576)
–
(194,622)
–
(691,198)
–
1,633
(162,330)
(160,697)
(496,576)
(194,622)
(691,198)
20
0.01p
(1.11)p
(1.09)p
(3.53)p
(1.38)p
(4.92)p
Accounting policies and notes on pages 26 to 46 form part of these financial statements.
23
PHSC plc
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2018
Balance at 1 April 2016
Loss for year attributable to equity holders
Issue of shares
Dividends
Share
Capital
£
1,308,634
–
159,092
–
Share
Premium
£
1,751,358
–
164,659
–
Merger
Capital
relief Redemption
Reserve
£
reserve
£
Retained
Earnings
£
Total
£
133,836
–
–
–
143,628
–
–
–
2,747,087
(691,198)
–
(196,295)
6,084,543
(691,198)
323,751
(196,295)
Balance at 31 March 2017
1,467,726
1,916,017
133,836
143,628
1,859,594
5,520,801
Balance at 1 April 2017
Loss for year attributable to equity holders
Dividends
1,467,726
–
–
1,916,017
–
–
133,836
–
–
143,628
–
–
1,859,594
(160,697)
(73,386)
5,520,801
(160,697)
(73,386)
Balance at 31 March 2018
1,467,726
1,916,017
133,836
143,628
1,625,511
5,286,718
Accounting policies and notes on pages 26 to 46 form part of these financial statements
24
PHSC plc
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2018
Cash flows from operating activities:
Cash generated from operations
Interest paid
Tax paid
Net cash generated from operating activities
Cash flows used in investing activities
Purchase of property, plant and equipment
Disposal of fixed assets
Interest received
Net cash used in investing activities
Cash flows used in financing activities
Payment of contingent consideration
Proceeds from placement of shares
Dividends paid to Group shareholders
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
I
31.3.18
£
31.3.17
£
143,360
(3,778)
–
124,925
(2,117)
(100,061)
139,582
22,747
(19,358)
15,730
3
(2,087)
1,574
471
(3,625)
(42)
(25,000)
–
(73,386)
(200,000)
323,751
(196,295)
(98,386)
(72,544)
37,571
206,719
(49,839)
256,558
244,290
206,719
The above statement of cash flows relates to the Group. The statement of cashflows in relation to discontinued
operations is shown separately in note 28.
NOTES TO THE GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2018
I. CASH GENERATED FROM OPERATIONS
Operating loss – continuing operations
Depreciation charge
Goodwill impairment
Fair value movement on contingent consideration
Loss on sale of fixed assets
Decrease/(increase) in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from operations
25
31.3.18
£
31.3.17
£
(142,086)
34,590
200,000
–
919
98,333
(121,132)
72,736
(719,047)
44,089
625,191
(50,000)
5,545
(70,996)
447,384
(157,241)
143,360
124,925
PHSC plc
ACCOUNTING POLICIES
for the year ended 31 March 2018
General information
PHSC plc is a company quoted on AIM and incorporated in England and Wales under the Companies Act 2006. The
address of the registered office is given at the front of this report. The nature of the Group’s operations and its principal
activities are set out in the strategic report on page 3. The financial statements are presented in pounds sterling which
is the Group’s functional and presentation currency. The figures shown in the financial statements are rounded to the
nearest pound.
Basis of preparation of financial statements
The Group’s financial statements have been prepared in accordance with IFRSs, as adopted by the European Union,
International Financial Reporting Intermediate Committee (IFRIC) interpretations and the Companies Act 2006
applicable to companies reporting under IFRSs. The financial statements have been prepared under the historical cost
convention except as noted below.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in note 2.
Accounting standards require the directors to consider the appropriateness of the going concern basis when preparing
the financial statements. The directors confirm that they consider that the going concern basis remains appropriate as
the Group has adequate resources to continue in operational existence for the foreseeable future based upon forecasts.
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective
and in some cases have not been adopted by the European Union. The directors have assessed the potential impact of
IFRS 15. If IFRS 15 had been in place for the current and the preceding financial year then the impact on total revenues
of the Group would be negligible. However, a one-off increase in reserves of approximately £90,000 would be made
on transition to IFRS 15 due to revenue in one of the trading subsidiaries being recognised earlier in the course of a
contract. IFRS 16 may have an impact on the measurement and treatment of operating leases and the related disclosures.
As at 31 March 2018 the estimated impact of the transition to IFRS 16 would be to increase tangible fixed assets and
liabilities by approximately £52,000. The impact on the statement of comprehensive income is not expected to be
material to the financial statements. IFRS 9 is not expected to have a material impact on the financial statements of the
Group entities.
Basis of consolidation
The Group financial statements consolidate the financial statements of PHSC plc and all its subsidiary undertakings
made up to 31 March 2018.
Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating
policies of the entity so as to obtain benefits from its activities. The Group obtains and exercises control through
voting rights.
The acquisition of subsidiaries has been accounted for using the acquisition method of accounting. The cost of an
acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed
at the date of exchange. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed are measured initially at their fair values at the acquisition date. The excess of the
cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.
Goodwill arising on purchases prior to 1 April 2006 was capitalised and amortised over its useful economic life.
Inter-company transactions (including unrealised gains/losses) and balances are eliminated. Unrealised losses are also
eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in
the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting
policies adopted by the Group.
26
PHSC plc ACCOUNTING POLICIES (continued)
for the year ended 31 March 2018
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s
carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit and loss in the
period in which they are incurred.
At the date of transition to IFRS, the carrying value of land and freehold buildings that had previously been revalued is
shown as deemed cost, and not subsequently revalued.
Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated to write off
the cost, less estimated residual value, of each asset over the shorter of the expected useful life or lease term, as follows:
Freehold buildings
Improvements to property
Fixtures and equipment
Motor vehicles
–
–
–
–
2% on a straight line basis
on a straight line basis (10% of cost if expected useful life is shorter than the
lease term)
25% on reducing balance
25% on reducing balance
Material residual value estimates are updated as required. An asset is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are
determined by comparing the proceeds with the carrying amount, and are recognised in profit and loss.
Operating lease commitments
An operating lease is one in which a significant portion of the risks and rewards of ownership are retained by the lessor.
Rentals payable under operating leases are charged to the statement of comprehensive income on a straight-line basis
over the term of the lease.
Intangible assets
Goodwill arises on the acquisition of subsidiary undertakings and interests and represents the excess of the cost of
acquisition over the net asset values of the subsidiaries or interests acquired. Such goodwill is capitalised as an intangible
asset and is stated at cost impairment losses.
Impairment of intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit
from the business combination on which the goodwill arose, and represent the lowest level within the Group at which
management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include goodwill are tested for impairment at least
annually. All property, plant and equipment with a finite life are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less
costs to sell, and value in use, based on an internal discounted cash flow evaluation. With the exception of goodwill, all
assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
Impairment losses are charged to administrative expenses.
27
PHSC plc ACCOUNTING POLICIES (continued)
for the year ended 31 March 2018
Inventories
Inventories are stated at the lower of cost and net realisable value after making due allowance for obsolete and
slow-moving inventory. The value of inventory is calculated on purchase cost on a first-in, first-out basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits, bank overdrafts, and short-term, highly liquid
investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes
in value.
Financial instruments
Provision is made for diminution in value where appropriate.
Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and
the interest rates applicable.
Trade payables are recognised at initially fair value and subsequently measured at amortised cost.
Taxation
Current tax is the tax currently payable based on the taxable profit for the year.
Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities and
their tax bases, except when, at the initial recognition of the asset or liability, there is no effect on accounting or
taxable profit or loss under a business combination. Deferred tax is determined using tax rates and laws that have been
substantially enacted by the statement of financial position date, and that are expected to apply when the temporary
difference reverses.
Tax losses available to be carried forward, and other tax credits to the Group, are recognised as deferred tax assets, to the
extent that it is probable that there will be future taxable profits against which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the statement of
comprehensive income, except where they relate to items that are charged or credited directly to equity, in which case
the related deferred tax is also charged or credited directly to equity.
Provisions
These are recognised when the Group has a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation, using a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to the passage of time is recognised as a finance cost.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds. The proceeds of share issues, received net of any
directly attributable transactions costs, are credited to share capital at nominal value and the excess credited to the share
premium account.
The capital redemption reserve arose when the company repurchased some of its own shares. At that point the nominal
value of those shares was transferred to the capital redemption reserve.
The merger relief reserve represents the premium of any shares issued in part consideration on acquisitions in accordance
with section 612 of The Companies Act 2006.
28
PHSC plc ACCOUNTING POLICIES (continued)
for the year ended 31 March 2018
Retained earnings represent the accumulated profits and losses, less dividends since the Group was formed.
Employee benefits
The Group supports various personal pension arrangements and is auto-enrolment compliant. Payments are made to
individual defined contribution pension schemes. Agreed contributions are charged to the statement of comprehensive
income as they become payable.
Revenue recognition
Revenue consists of the fair value of the consideration received or receivable by the Group for services provided in the
ordinary course of the Group’s activities, excluding VAT and trade discounts.
Historically the majority of the Group’s revenue has arisen from the core health and safety businesses with the
major income streams being derived from activities such as asbestos management, training, consultancy, supporting
the education sector, serving the leisure industry and carrying out statutory examinations of plant and machinery. In
2016/17 more revenue arose from security-related sales in the form of installations and consumables than from health
and safety services and this trend has continued.
Consultancy and inspection revenue is recognised in the accounting period in which the services are rendered, by
reference to the stage of completion of the specific transaction assessed on the basis of the actual service provided as a
proportion of the total services to be provided.
Training revenue is recognised on the date the training is carried out.
The sale of products such as security tagging, labelling and CCTV through B to B and SG are recognised when the
products are transferred to the customer.
Revenue relating to installations of security equipment such as CCTV is recognised at the point it is installed.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the date of the Group statement of financial position are reported
at the rates of exchange prevailing at that date. All foreign exchange gains and losses are presented in the statement of
comprehensive income within the administrative expense heading.
29
PHSC plc NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2018
1.
FINANCIAL RISK MANAGEMENT
Financial risk
The Group’s activities expose it to a variety of financial risks. The Group’s overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s
financial performance.
Risk management is carried out by the board which evaluate and manage financial risks in close co-operation with
the managing directors of the subsidiary companies. The Group:
•
•
•
regularly reviews credit extended to customers with appropriate action being taken to minimise the cost
of bad debts;
balances risk and return when assessing where to place cash surplus to the Group’s immediate
requirements; and
keeps open options to employ debt finance to ensure that the Group has sufficient funds for continuing
operations and planned expansions.
Market risk
The Group has interest-bearing assets which are subject to a variable rate of interest. Thus the Group is only
exposed to interest rate risk, which is not expected to have a significant impact on profit or loss or equity.
Credit risk
The Group has implemented policies that require appropriate credit checks on potential customers before sales
are made. No credit limits were exceeded during the year, and management does not expect any losses from
non-performance by these counterparties.
Liquidity risk
The Group keeps open avenues for securing debt finance to ensure that funds may be called upon if and when
needed for operations and payments due in respect of acquisitions. The board monitors the Group’s liquidity
position on the basis of expected cash flow on a regular basis.
The following table analyses the Group’s financial liabilities, which will be settled on a net basis, into relevant
maturity groupings, based on the remaining period to maturity at 31 March. The amounts disclosed are the
contractual undiscounted cash flows:
At 31 March 2018
Trade and other payables
At 31 March 2017
Trade and other payables
Contingent consideration
Capital risk
Less than
1 year
£
Between
1 & 2 yrs
£
Between
2 & 5 yrs
£
Over
5 yrs
£
1,137,094
1,064,358
25,000
–
–
–
–
–
–
–
–
–
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns to shareholders. The Group defines capital as share capital plus reserves. The Group
is not subject to any externally imposed capital requirements. The board monitors levels of cash and any excess
levels have historically been used for acquisitions.
30
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
1.
FINANCIAL RISK MANAGEMENT – continued
Foreign exchange risk
The Group purchases security-related products in foreign currencies. The Group has a number of methods to in
protecting against foreign risk and do not enter into long term contracts that would increase currency exposure.
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The directors are required to make estimates and judgements concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The areas involving a higher degree of
judgement or complexity and areas where assumptions are significant to the production of these financial
statements are disclosed below.
Impairment of goodwill
An impairment of goodwill has the potential to significantly impact upon the Group’s statement of comprehensive
income for the year. In order to determine whether impairments are required the directors estimate the recoverable
amount of the goodwill. This calculation is based on the directors’ expectations of future volumes and margins
based on the forecast results to 31 March 2019 in perpetuity assuming a zero growth rate. Full details are disclosed
in note 6.
Provision for obsolete and slow moving stock
Stock of approximately £67,000 has been identified as slow moving within the SG business. A £30,000 non cash
provision has been made against stock to cover potential obsolescence. Within the B to B business stock of
£56,000 has been identified as slow moving and a £15,000 non cash provision has been made against this for
potential obsolescence. The directors believe that the unprovided stock will be either sold or used for spares and
maintenance. The stock provision will be monitored and updated regularly.
31
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
3.
SEGMENTAL REPORTING
IFRS 8 requires that operating segments be identified on the basis of internal reporting and decision-making. PHSC
plc’s operating segments are by subsidiary company as the directors and management team receive and make
decisions based on monthly management accounts by subsidiary. A description of each subsidiary’s activities is
included in the strategic report on pages 3 to 11.
The following table shows the Group’s revenue and results for the year under review analysed by operating
segment. Segment operating profit represents the trading profit after depreciation, but before tax and management
charges. The management charges represent Group overheads and are reflected in the operating loss of the parent
company. All revenue arose in the UK and all assets are located in the UK. There is an element of liabilities that
derive from foreign currency due to some of the subsidiaries sourcing goods overseas.
Operating
Revenue Depreciation profit/(loss)
£’000
£’000
£’000
Net Profit/(loss)
Loss
before tax Taxation taxation consideration impairment after tax
£’000
Deferred
Goodwill
£’000
£’000
£’000
£’000
£’000
interest
£’000
Release
contingent
As at 31 March 2018
Security division
B to B
SG
Health and safety division
ISL
PHSCL
QLM
RSA
Quality systems division – QCS
Discontinued operations – ALS
Holding company – PHSC plc
Total
2,777
1,449
4,226
216
616
439
370
1,641
768
378
–
7,013
7
2
9
1
2
2
1
6
2
5
13
35
78
(96)
(18)
46
240
112
75
473
285
(163)
(519)
58
–
–
–
–
–
–
–
–
–
(2)
(2)
(4)
78
(96)
(96)
46
240
112
75
473
285
(165)
(521)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(16)
(1)
–
–
2
–
1
54
(16)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(200)
(161)
Operating
Revenue Depreciation profit/(loss)
£’000
£’000
£’000
Net Profit/(loss)
Loss
before tax Taxation taxation consideration impairment after tax
£’000
Deferred
Goodwill
£’000
£’000
£’000
£’000
£’000
interest
£’000
Release
contingent
As at 31 March 2017
Security division
B to B
SG
Health and safety division
ISL
PHSCL
QLM
RSA
Quality systems division – QCS
Discontinued operations – ALS
Holding company – PHSC plc
Total
2,595
1,414
4,009
228
667
437
374
1,706
624
823
–
7,162
52
(113)
(61)
44
219
74
65
402
211
(195)
(502)
(145)
–
3
3
–
–
–
–
–
–
–
–
3
22
1
23
–
36
–
–
36
–
1
–
–
–
–
–
–
–
–
–
–
(34)
26
50
50
–
–
–
–
–
–
–
–
–
–
(625)
–
–
–
–
–
–
–
–
–
–
–
(625)
(691)
9
2
11
–
7
2
1
10
1
7
15
44
–
–
–
–
–
–
–
–
–
(1)
(1)
(2)
52
(113)
(61)
44
219
74
65
402
211
(194)
(501)
(143)
32
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
3.
SEGMENTAL REPORTING – continued
The table below shows assets and liabilities by subsidiary, exclusive of inter-company balances.
Non-current
asset Non current
assets
additions
£’000
£’000
Current
assets
£’000
Total
assets
£’000
Current Non-current
liabilities
liabilities
Total
liabilities
Net
operating
assets
£’000
£’000
£’000
£’000
As at 31 March 2018
Security division
B to B
SG
Health and safety division
ISL
PHSCL
QLM
RSA
Quality systems division – QCS
Discontinued operations – ALS
Holding company – PHSC plc
4
1
5
2
4
1
1
8
7
–
–
268
7
275
1
7
6
461
475
965
148
1,233
155
1,113
1,388
176
773
303
202
177
780
309
663
462
188
650
97
45
90
49
1,454
1,929
281
8
–
4,660
669
85
(1,074)
677
85
3,586
129
8
85
Total
20
5,418
2,247
7,665
1,153
–
–
–
–
1
1
–
2
1
–
44
47
Adjustment of goodwill on consolidation including goodwill amortisation write back under IFRS and goodwill impairment
Deferred tax adjustment to property revaluation
Net assets
462
188
650
97
46
91
49
771
(33)
738
80
734
218
614
283
1,646
130
8
129
1,200
547
77
3,457
6,465
(1,170)
(8)
5,287
33
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
3.
SEGMENTAL REPORTING – continued
Non-current
asset Non-current
assets
additions
£’000
£’000
Current
assets
£’000
Total
assets
£’000
Current Non-current
liabilities
liabilities
Total
liabilities
Net
operating
assets
£’000
£’000
£’000
£’000
As at 31 March 2017
Security division
B to B
SG
Health and safety division
ISL
PHSCL
QLM
RSA
Quality systems division – QCS
Discontinued operation – ALS
Holding company – PHSC plc
Total
1
–
1
–
–
–
1
1
–
–
–
2
273
8
281
1
6
7
419
433
902
199
1,175
207
1,101
1,382
163
857
256
174
164
863
263
593
1,450
1,883
3
20
5,125
417
344
(1,170)
420
364
3,955
343
130
473
109
40
120
49
318
88
82
128
5,862
2,142
8,004
1,089
–
–
–
–
1
1
–
2
–
3
44
49
343
130
473
109
41
121
49
320
88
85
172
1,138
Adjustment of goodwill on consolidation including goodwill amortisation write back under IFRS and goodwill impairment
Deferred tax adjustment to property revaluation
Net assets
832
77
909
55
822
142
544
1,563
332
279
3,783
6,866
(1,336)
(9)
5,521
PHSC plc company accounts reflects the overdraft in current liabilities. In the Group’s consolidated accounts and
segmental analysis, the overdraft is reflected as part of Group facility shown under current assets.
Revenues from one customer within the B to B business segment totalled £1,518,490 (2017 – £1,491,685) as this
represented more than 10% of its total revenue.
4.
AUDITOR REMUNERATION
Audit
Fees payable to the company’s auditor for the audit of the annual parent company
and consolidated accounts
Fees payable to the company’s auditor for other services provided to the company
and its subsidiaries:
The audit of the company’s subsidiaries under legislative requirements
Total audit
Tax
Tax compliance services
Tax advisory services
Total tax
Total
31.3.18
£
31.3.17
£
6,910
7,195
25,500
32,410
10,560
2,700
13,260
45,670
28,865
36,060
10,255
2,700
12,955
49,015
34
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
5.
PROPERTY, PLANT AND EQUIPMENT
COST
At 1 April 2016
Additions
Disposals
At 31 March 2017
Additions
Disposals
At 31 March 2018
DEPRECIATION
At 1 April 2016
Charge for year
Disposals
At 31 March 2017
Charge for year
Disposals
At 31 March 2018
NET BOOK VALUE
At 31 March 2018
At 31 March 2017
At 31 March 2016
Freehold
property
£
Improvements
to property
£
Fixtures and
equipment
£
Motor
vehicles
£
Totals
£
712,000
–
–
712,000
–
–
32,299
–
–
32,299
2,010
–
270,666
11,095
–
290,348
17,348
(145,944)
39,643
15,125
(7,363)
30,910
–
(4,665)
1,054,608
26,220
(7,363)
1,065,557
19,358
(150,609)
712,000
34,309
161,752
26,245
934,306
148,191
16,483
–
164,674
11,653
–
26,380
2,399
–
28,779
285
–
212,050
19,517
(453)
231,114
18,750
(130,398)
20,933
5,690
(11,857)
14,766
3,902
(3,562)
407,554
44,089
(12,310)
439,333
34,590
(133,960)
176,327
29,064
119,466
15,106
339,963
535,673
547,326
563,809
5,245
3,520
5,919
42,286
59,234
79,145
11,139
594,343
16,144
626,224
26,472
675,345
Depreciation expenses of £34,590 (2017: £44,089) are included in administrative expenses in the statement of
comprehensive income.
Lease rentals amounting to £106,168 (2017: £132,369), relating to the lease of buildings and motor vehicles are
included in the statement of comprehensive income.
35
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
6. GOODWILL
COST
At 1 April 2016 and 2017
Additions
At 31 March 2018
IMPAIRMENT
At 1 April 2016
Impairment
At 31 March 2017
Impairment
At 31 March 2018
NET BOOK VALUE
At 31 March 2018
At 31 March 2017
At 31 March 2016
Goodwill
£
5,514,547
–
5,514,547
1,010,893
625,191
1,636,084
200,000
1,436,084
3,678,463
3,878,463
4,503,654
Impairment Tests for Goodwill
Goodwill is allocated to the Group’s cash-generating units, identified according to subsidiary.
The following table shows a summary of the goodwill allocation by subsidiary:
Personnel Health & Safety Consultants Limited and dormant subsidiaries
RSA Environmental Health Limited
Adamson’s Laboratory Services Limited
Inspection Services (UK) Limited
Quality Leisure Management Limited
QCS International Limited
B to B Links Limited
SG Systems (UK) Limited
Total goodwill for Group
31.3.18
£
594,952
601,644
–
205,207
582,844
417,638
939,066
337,112
31.3.17
£
594,952
601,644
–
205,207
582,844
417,638
1,139,066
337,112
3,678,463
3,878,463
When considering impairment, the directors have taken the cash flow forecast prepared to 31 March 2019 and
used the expected cash flows for that year in perpetuity as the cash flows generated are expected to continue for
the foreseeable future. The 2019 forecasts have been prepared using a range of growth assumptions compared to
the results for 2018. Revenue growth ranges from 0%-8% and gross margin growth of between 0 to 7 percentage
points for the cash generating units.
Zero growth rates, and zero margin improvement have been adopted in the perpetuity calculations for all cash
generating units.
36
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
6. GOODWILL – continued
The cash flow projections:
•
•
are based on profits before tax and inter group management charges; and
have been discounted using a discount rate of 11%. The rate has been determined by calculating the
Group’s weighted average cost of capital (WACC) of 4% using the capital asset pricing model with a 7% risk
factor added.
The table below shows the amount by which each subsidiary’s recoverable amount exceeds its carrying value. An
illustration is also provided to show at what point the key assumptions regarding cash flow and WACC need to
change to before impairment would be necessary.
Personnel Health & Safety Consultants Limited and
dormant subsidiaries
RSA Environmental Health Limited
Inspection Services (UK) Limited
Quality Leisure Management Limited
QCS International Limited
B to B Links Limited
SG Systems (UK) Limited
Margin in
carrying
value
£
1,925,775
103,427
205,611
283,792
1,553,226
(194,243)
154,392
Annual
cash flow at
which
impairment
required
£
Discount at
which
impairment
required
%
65,445
63,963
22,573
64,113
45,954
125,297
37,082
47
13
22
16
52
9
16
The impairment review undertaken by the directors identified that the value-in-use of the B to B cash generating
unit was less than its carrying value and thus impairment was required. An impairment charge of £200,000 has
been provided on the basis that the remaining goodwill could be supported by the value-in-use calculation. If
forecast revenues in B to B were to fall by 1%, then a further impairment of £90,000 would be required.
37
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
7.
TRADE AND OTHER RECEIVABLES
Trade receivables
Less provision for impairment of trade receivables
Trade receivables – net
Other debtors, prepayments and accrued income
Total
At 31 March 2018 there were £1,000 impaired trade receivables (2017: £21,892).
The ageing of receivables over the Group’s normal credit terms is:
Up to 3 months
3 – 6 months
Over 6 months
Movements on the Group provision for impairment of trade receivables are as follows:
At 1 April
Provision for receivables impairment
Release of provision
At 31 March
31.3.18
£
31.3.17
£
1,456,141
(1,000)
1,298,804
(21,982)
1,455,141
113,484
1,276,822
170,671
1,568,625
1,447,493
31.3.18
£
558,290
84,496
58,855
31.3.17
£
519,939
74,231
49,690
701,641
643,860
31.3.18
£
21,982
–
(20,982)
31.3.17
£
15,322
57,856
(51,196)
1,000
21,982
The creation and release of the provision for impaired receivables is included in administrative expenses in the
statement of comprehensive income. Amounts charged to the provision account are generally written off when
there is no expectation of recovering additional cash. The provision and subsequent write off of debts for the year
ended 31 March 2017, was unusually high due to B to B incurring a bad debt of around £40,000 after a client went
into administration.
The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to
credit risk at the year-end is the fair value of each class of receivable mentioned above. The Group does not hold
any collateral as security.
38
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
8.
INVENTORIES
Stocks
31.3.18
£
31.3.17
£
389,034
487,367
£45,000 of inventory was written down in the current year (2017 – £nil). The value of inventory consumed and
recognised as an expense was £1,973,806 (2017 – £1,837,192).
9.
CASH AND CASH EQUIVALENTS
The cash balances for the purposes of the cash flow statement were as follows:
Cash at bank and in hand
31.3.18
£
31.3.17
£
244,290
206,719
On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC plc (see note 12).
10. CALLED UP SHARE CAPITAL
Called up, allotted and fully paid
At 1 April 2016
Shares issued
Number of
shares (Nominal
value of 10p)
Ordinary
shares
£
Share
premium
£
Total
£
13,086,348
1,590,909
1,308,634
159,092
1,751,358
164,659
3,059,992
323,751
At 31 March 2017 and 2018
14,677,257
1,467,726
1,916,017
3,383,743
11. TRADE AND OTHER PAYABLES
Trade payables
Social security and other taxes
Other payables
Accruals
Deferred income
Total
31.3.18
£
515,004
270,197
11,655
99,178
241,060
31.3.17
£
415,321
267,100
58,615
97,815
225,507
1,137,094
1,064,358
39
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
12. FINANCIAL LIABILITIES
On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC plc. Each company
within the Group operates its own current account, the balance on which is allowed to fluctuate according
to trading conditions. Interest is only charged on a net overdrawn balance as the Group has the right to offset
overdrawn accounts with accounts in credit across the Group. During the year HSBC plc renewed the Group’s
£300,000 overdraft facility which is secured by a debenture including a fixed charge over certain present freehold
and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both
present and future; and first floating charge over all assets and undertakings both present and future. The overdraft
is next reviewed in October 2018.
13. CONTINGENT CONSIDERATION
At 1 April 2016
Transfer from non–current to current
Fair value movement on contingent consideration
At 31 March 2017
Paid during year
At 31 March 2018
Current
£
Non-current
£
–
75,000
(50,000)
25,000
(25,000)
–
75,000
(75,000)
–
–
–
–
Total
£
75,000
–
(50,000)
25,000
(25,000)
–
Under the SG sale and purchase agreement, a final payment became due on 11 December 2017, the second
anniversary of the acquisition date, determined by a formula that relates to performance over the two years post
acquisition. A payment of £25,000 was made in accordance with the provision.
14. DEFERRED TAX
Deferred tax asset
At 1 April 2016
Credited to income statement
At 31 March 2017
Credited/(debited) to income statement
At 31 March 2018
Deferred tax liabilities
At 1 April 2016
Credited to income statement
At 31 March 2017
Credited to income statement
At 31 March 2018
Tax losses
carried forward
£
Accelerated
capital
allowances
£
Other short
term timing
differences
£
–
21,617
21,617
(613)
21,004
–
–
–
–
–
497
(421)
76
25
101
Provision
revalued
properties
£
Accelerated
capital
allowances
£
Intangible
assets
£
43,436
(248)
43,188
–
43,188
14,162
(4,707)
9,455
(1,982)
7,473
5,157
–
5,157
–
5,157
Total
£
497
21,196
21,693
(588)
21,105
Total
£
62,755
(4,955)
57,800
(1,982)
55,818
Deferred tax has been provided on the revalued fixed assets at 19% (2017: 19%). At present it is not envisaged that
any tax will become payable in the foreseeable future.
40
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
15. EXPENSES BY NATURE
Cost of sales
Staff related costs
Premises costs
Professional fees
Operating lease expenses
Other expenses
Goodwill impairment
Total cost of sales and administrative expenses
16. EMPLOYEES
Staff costs (including executive directors)
Wages and salaries
Social security costs
Other pension costs
The average monthly number of employees during the year was as follows:
Directors
Consultants
Administrative
Total
31.3.18
£
31.3.17
£
3,034,011
2,533,300
125,181
375,697
106,168
760,593
200,000
2,793,955
2,900,612
162,671
452,182
132,369
865,926
625,191
7,134,950
7,932,906
31.3.18
£
31.3.17
£
2,214,768
218,135
62,266
2,557,308
247,605
59,208
2,495,169
2,864,121
31.3.18
31.3.17
9
27
36
72
9
38
41
88
The aggregate compensation for key management, being the members of the board of PHSC plc and the directors
of the subsidiary companies (including de facto directors), was as follows:
Short-term employee benefits
Post-employment benefits
Total
31.3.18
£
507,069
47,046
31.3.17
£
544,655
57,539
554,115
602,194
41
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
17. DIRECTORS’ REMUNERATION
Directors of PHSC plc only
Emoluments
Pension contributions to money purchase schemes
31.3.18
£
183,970
16,310
31.3.17
£
190,148
15,638
200,280
205,786
The remuneration of the executive directors of PHSC plc, from all Group companies was as follows:
S A King
N C Coote
Salary
£
90,000
70,000
Bonus
£
1,477
1,477
Year ended 31.3.18
Short term employee benefits
Pension
salary
Sacrifice
£
Waiver
£
Benefits
£
Post
employment
benefits
Pension
£
Year
ended
31.3.17
Total
£
Total
£
(4,810)
–
(3,600)
(5,400)
1,976
7,804
7,680
8,630
92,723
82,511
95,251
82,535
Stephen King’s benefits pertain to health insurance and Nicola Coote’s to a company car and health insurance.
Both directors opted to take their bonus as a pension contribution.
The fees of the non-executive directors were as follows:
Year ended
31.3.18
£
Year ended
31.3.17
£
14,000
14,000
14,000
14,000
31.3.18
£
31.3.17
£
3
471
66
608
3,104
3,778
3,775
–
–
2,117
2,117
1,646
G N Webb
L C Young
18. FINANCE INCOME AND COSTS
Finance income
Interest received
Interest expense
Bank interest
Loan interest
Other interest
Net finance charge
42
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
19. TAXATION
Analysis of tax charge in year
Current tax:
UK corporation tax on profits in the year
Adjustments in respect of previous year
Total current tax charge/(credit)
Deferred tax on origination and reversal of timing differences (provided at 19%)
Adjustment in respect of previous years
Taxation charge/(credit)
Factors affecting tax charge for year
31.3.18
£
31.3.17
£
24,230
–
24,230
(2,189)
795
–
(3,344)
(3,344)
(24,171)
(1,980)
22,836
(29,495)
The relationship between expected tax expense based on the effective tax rate of PHSC plc at 19% (2017: 20%)
and the tax expense actually recognised in the income statement can be reconciled as follows:
Loss on ordinary activities before tax
Loss on ordinary activities multiplied by standard rate of corporation tax in the
UK of 19% (2017: 20%)
Effects of:
Expenses not deductible for tax purposes
Depreciation on ineligible assets
Adjustment of deferred tax to standard rate of 20%
Adjustments in respect of prior periods
Total tax charge/(credit)
31.3.18
£
31.3.17
£
(145,861)
(720,693)
(27,714)
(144,138)
39,487
2,268
795
–
115,398
3,297
1,272
(5,324)
14,836
(29,495)
The UK government has legislated to maintain the main rate of corporation tax at 19% for the years commencing
1 April 2018 and 2019 and then to reduce it to 18% from 1 April 2020. This will affect future tax charges.
20. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the
weighted average number of ordinary shares in issue during the year.
Loss attributable to equity holders of the Group (£)
Weighted average number of ordinary shares in issue
Basic earnings per share (pence per share)
There are no dilutive shares, options or warrants in issue.
31.3.18
31.3.17
(160,697)
14,677,257
(1.09p)
(691,198)
14,062,687
(4.92p)
43
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
21. DIVIDENDS
An interim dividend of £73,386 representing 0.5p per ordinary share was paid in February 2018 in respect of the
year ended 31 March 2018. The board is proposing a final dividend of 0.5p per share payable on 12 October 2018
to shareholders on the register on 28 September 2018, making a total dividend for the year of 1.0p. No dividend
was paid in respect of the year ended 31 March 2017.
22. COMMITMENTS
Operating lease commitments
The Group leases various offices under non-cancellable operating lease agreements. The leases have varying terms
and renewal rights. The Group also leases various motor vehicles under cancellable operating lease agreements.
The lease expenditure is charged the statement of comprehensive income during the year.
The minimum lease payments to which the Group is committed under operating leases are:
Within one year
Between two and five years
Total
The Group had no capital commitments at the year end.
23. RELATED PARTY DISCLOSURES
PHSC plc dividends were paid to directors as follows:
S A King
N C Coote
G N Webb MBE
31.03.18
31.03.17
Land and
building
£
27,267
–
27,267
Motor
vehicles
£
17,231
8,171
25,402
Land and
buildings
£
30,167
38,000
68,167
Motor
vehicles
£
43,579
20,021
63,600
31.3.18
£
31.3.17
£
15,950
15,722
97
31,769
38,584
43,453
293
82,330
24. ULTIMATE CONTROLLING PARTY
PHSC plc, incorporated in the England and Wales, is the ultimate parent company of the Group. There is no
ultimate controlling party, but the largest shareholder, Mr S A King, holds 21.73% (2017: Ms N C Coote 21.42%) of
the issued share capital of PHSC plc.
44
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
25. GOODWILL IMPAIRMENT AND CONTINGENT CONSIDERATION
The exceptional cost of £200,000 relates to the impairment of PHSC plc’s investment in B to B. As stated in the
strategic report, the continued decline of the high street and the general uncertainty over Brexit has led to reduced
opportunities and general pressure on gross margins in the security sector. The impairment review undertaken by
the directors identified that the value-in-use of the B to B cash generating unit was less than its carrying value and
thus impairment was required. The remaining goodwill of £939,066 remains on the basis that it can be supported
by the value-in-use calculations.
Under the SG sale and purchase agreement, a final payment became due on 11 December 2017, the second
anniversary of the acquisition date, determined by a formula that related to performance over the two years post
acquisition. A payment of £25,000 was made in accordance with the provision.
26. FINANCIAL INSTRUMENTS
Set out below are the Group’s financial instruments:
Financial assets at amortised cost
Trade and other receivables
Cash and cash equivalents
Financial liabilities at amortised cost
Trade and other payables
Due within 1 year
Due in over 1 year
Full details of the overdraft facility can be found in note 12.
Financial liabilities at fair value through profit and loss
Contingent consideration
31.3.18
£
31.3.17
£
1,491,433
244,290
1,286,854
206,719
1,735,723
1,493,573
625,837
571,751
625,837
571,751
625,837
571,751
–
625,837
571,751
–
–
25,000
25,000
The fair values of the Group’s financial instruments are considered not to be materially different to their book value.
45
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
27. REVENUE
Set out below is a breakdown of revenue:
Revenue from services provided
Revenue from sale of products
Revenue from the sale of products relates to the revenue of B to B and SG.
28. STATEMENT OF CASHFLOWS FROM DISCONTINUED OPERATIONS
Cash flows (used by)/from operating activities:
Cash (used by)/generated from operations
Tax paid
Net cash (used by)/generated from operating activities
Cash flows from investing activities
Disposal of goodwill
Disposal of plant and equipment
Net cash from investing activities
Cash flows used in financing activities
Interest paid
Dividends paid to Group shareholders
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
31.3.18
£
31.3.17
£
2,786,523
4,226,341
3,152,927
4,009,372
7,012,864
7,162,299
31.3.18
£
31.3.17
£
(169,894)
–
(169,894)
45,853
–
45,853
41,081
14,899
55,980
–
–
(1,367)
–
(930)
(350,000)
(1,367)
(350,930)
(115,281)
161,944
(305,077)
467,021
46,663
161,944
46
PHSC plc
Company number: 4121793
P H S C p l c
COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
47
Registered number: 4121793
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March 2018
Non-Current Assets
Property, plant and equipment
Investments
Current Assets
Trade and other receivables
Total Assets
Current Liabilities
Trade and other payables
Overdraft
Current corporation tax
Contingent consideration
Non-Current Liabilities
Deferred taxation
Total Liabilities
Net Assets
Capital and reserves attributable to equity holders of the Group
Called up share capital
Share premium account
Capital redemption reserve
Merger relief reserve
Revaluation reserve
Retained earnings
Note
31.3.18
£
31.3.17
£
9
10
542,008
4,118,206
554,712
4,569,931
4,660,214
5,124,643
11
808,356
1,014,582
808,356
1,014,582
5,468,570
6,139,225
12
13
14
273,918
1,105,005
–
–
290,010
1,197,758
–
25,000
1,378,923
1,512,768
15
44,286
44,286
44,453
44,453
1,423,209
1,557,221
4,045,361
4,582,004
16
16
1,467,726
1,916,017
143,628
133,836
43,373
340,781
1,467,726
1,916,017
143,628
133,836
43,373
877,424
4,045,361
4,582,004
The company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the parent
company profit and loss account. The loss for the year was £463,244 (2017: profit £137,483).
Approved and authorised for issue by the board on 13 August 2018 and signed on its behalf by;
S A King
Director
48
PHSC plc
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2018
Share
Capital
£
Share
Premium
£
Merger
Capital
relief Redemption
Reserve
£
reserve
£
Revaluation
reserve
£
Retained
Earnings
£
Total
£
Balance at 1 April 2016
Profit for year attributable
to equity holders
Issue of shares
Dividends paid
1,308,634
1,751,358
133,836
143,628
43,373
936,236
4,317,065
–
159,092
–
–
164,659
–
–
–
–
–
–
–
–
–
–
137,483
(196,295)
137,483
323,751
(196,295)
Balance at 31 March 2017
1,467,726
1,916,017
133,836
143,628
43,373
877,424
4,582,004
Balance at 1 April 2017
Loss for year attributable
to equity holders
Dividends paid
1,467,726
1,916,017
133,836
143,628
43,373
877,424
4,582,004
–
–
–
–
–
–
–
–
–
–
(463,257)
(73,386)
(463,257)
(73,386)
Balance at 31 March 2018
1,467,726
1,916,017
133,836
143,628
43,373
340,781
4,045,361
49
PHSC plc
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March 2018
Cash flows generated from/(used by) operating activities:
Cash generated from/(used by) operations
Tax paid
Interest paid
Net cash generated from/(used by) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Dividends from subsidiary companies
Interest received
Net cash from/(used by) investing activities
Cash flows used by financing activities
Payment of contingent consideration
Proceeds from placement of shares
Dividends paid to Group shareholders
Net cash used by financing activities
Net decrease in overdraft
Cash and cash equivalents at beginning of year
Overdraft at end of year
Note
I
31.3.18
£
31.3.17
£
193,550
–
(2,411)
(232,630)
(9,115)
(1,187)
191,139
(242,932)
–
–
–
–
(132,003)
605,000
141
473,138
(25,000)
–
(73,386)
(200,000)
323,751
(196,295)
(98,386)
(72,544)
92,753
(1,197,758)
157,662
(1,355,420)
(1,105,005)
(1,197,758)
NOTES TO THE COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March 2018
I. CASH USED BY OPERATIONS
Loss before taxation and interest
Depreciation charge
Impairment of investment
Fair value movement in contingent consideration
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Cash generated from/(used by) operations
31.3.18
£
31.3.17
£
(461,013)
12,704
451,725
–
206,226
(16,092)
(432,260)
15,342
508,466
(50,000)
(216,068)
(58,110)
193,550
(232,630)
50
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2018
1.
BASIS OF PREPARATION
The company’s financial statements have been prepared in accordance with IFRSs, as adopted by the European
Union, International Financial Reporting Intermediate Committee (IFRIC) interpretations and the Companies Act
2006 applicable to companies reporting under IFRSs. The financial statements have been prepared under the
historical cost convention except as noted below.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in note 19.
The company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the
parent company profit and loss account. The loss for the year before dividends received from subsidiaries (2018
– nil; 2017 – £605,000) was £463,244 (2017 – £467,517). There were no recognised gains and losses for 2018 or
2017 other than those included in the company statement of comprehensive income. As at 31 March 2018 the
company had net assets of £4,045,361 (2017: £4,582,004).
The financial statements have been prepared on a going concern basis. Accounting standards require the directors
to consider the appropriateness of the going concern basis when preparing the financial statements. The directors
confirm that they consider that the going concern basis remains appropriate as the company has adequate
resources to continue in operational existence for the foreseeable future based upon forecasts.
A number of new standards and amendments to standards and interpretations have been issued but are not
yet effective and in some cases have not been adopted by the European Union. The directors have assessed
the potential impact of IFRS 15 (revenue recognition) and IFRS 16 (measurement and treatment of operating
leases) but consider that the impact will not be material on the company’s financial statements in future
periods. The company does not have any operating leases and income only relates to management charges and
dividends received.
2.
ACCOUNTING POLICIES
Revenue
Management charge income is recognised when the service the company has provided is fulfilled.
Deferred income tax
Deferred income tax is provided in full on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. The deferred income tax is not accounted for if
it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at
the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred
income tax assets are recognised to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Segmental reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject
to risks and returns that are different from those of other business segments. The directors regard the operations
of the company as being one business segment. Further analysis of revenue is disclosed in note 3.
51
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
2.
ACCOUNTING POLICIES – continued
Pensions
The company operates a defined contribution pension scheme. Contributions payable for the year are charged to
the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to
write off the cost of non-current assets, less their estimated residual value, over the shorter of the expected useful
life or lease term, on the following bases:
Freehold buildings
Improvements to property
Fixtures and equipment
–
–
–
2% of cost on a straight line basis
on a straight line basis (10% of cost if expected useful life is shorter than
the lease term)
25% reducing balance
Investments
Investments in subsidiary undertakings are stated at cost less amounts provided for any impairment in value. An
impairment review is carried out each year.
Impairment of tangible and intangible assets
An impairment loss is recognised for the amount by which the investments carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs
to sell, and value in use, based on an internal discounted cash flow evaluation. Impairment losses are charged to
administrative expenses.
Taxation
Current income tax assets/liabilities comprise those claims from or obligations to, or claims from, fiscal authorities
relating to the current or prior reporting periods, that are unpaid at the balance sheet date. They are calculated
according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable
profit for the year.
Provisions
These are recognised when the company has a present legal or constructive obligation as a result of past events,
when it is probable that an outflow of resources will be required to settle the obligation, and the amount can be
reliably estimated.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation,
using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the obligation. The increase in the provision due to the passage of time is recognised as a finance cost.
52
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
2.
ACCOUNTING POLICIES – continued
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds. The proceeds of share issues, received net of any directly attributable transactions costs
are credited to share capital at nominal value and the excess credited to the share premium account. The capital
redemption reserve arose when the company repurchased some of its own shares. At that point the nominal value
of those shares was transferred to the capital redemption reserve.
The merger relief reserve represents the premium of any shares issued in part consideration on acquisitions in
accordance with section 612 of The Companies Act 2006.
Dividends
Dividends received from subsidiary companies are recognised at the point that the right to receive the dividend
has been established.
3.
REVENUE
The revenue of the company during the year was generated in the United Kingdom and derives from the
management charge levied to the subsidiary companies.
4.
LOSS BEFORE TAXATION
The profit before taxation is stated after charging:
Depreciation – owned assets
5. DIRECTORS’ REMUNERATION
Full details are given on page 17 of the Group accounts.
6.
STAFF COSTS
The average number of employees during the year was as follows:
Directors
Consultants
Administration
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
The directors are considered to be key management personnel of the company
53
31.3.18
£
31.3.17
£
12,704
15,342
31.3.18
31.3.17
4
2
3
9
£
4
2
3
9
£
278,888
25,082
19,104
268,725
23,740
17,726
323,074
310,191
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
7.
AUDITOR’S REMUNERATION
Full details are given on page 34 of the Group accounts.
8.
FINANCE INCOME AND COSTS
Finance income
Interest received
Interest expense
Bank interest
Other interest
Net finance cost
9.
TANGIBLE FIXED ASSETS
COST OR VALUATION
At 1 April 2016
Transfer from subsidiary
At 31 March 2017
Transfer from subsidiary
At 31 March 2018
DEPRECIATION
At 1 April 2016
Charge for the year
At 31 March 2017
Charge for year
At 31 March 2018
NET BOOK VALUE
At 31 March 2018
At 31 March 2017
At 31 March 2016
31.3.18
£
31.3.17
£
–
141
(66)
(2,345)
–
(1,187)
(2,411)
(1,046)
Freehold
land and
buildings
£
262,730
319,908
582,638
–
Freehold
improvements
£
Plant and
equipment
£
23,978
–
23,978
–
13,103
–
13,103
–
Totals
£
299,911
319,908
619,719
–
582,638
23,978
13,103
619,719
23,659
11,653
35,312
11,653
18,062
2,399
20,461
84
7,944
1,290
9,234
967
46,965
20,545
10,201
49,665
15,342
65,007
12,704
77,711
535,673
547,326
239,071
3,433
3,517
5,916
2,902
542,008
3,869
554,712
5,159
250,146
54
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
10.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Investment in shares of subsidiary undertakings
At 1 April 2017
Impairment of investment in B to B
Impairment of investment in SG
Impairment of investment in ALS.
At 31 March 2018
31.3.18
£
31.3.17
£
4,569,931
(220,000)
(120,000)
(111,725)
5,078,397
–
–
(508,466)
4,118,206
4,569,931
The decision was taken during the year to discontinue the trading operations of ALS. The remaining investment
value of £111,725 pertaining to this subsidiary was written off at the year end.
As stated in the strategic report, the continued decline of the high street and the general uncertainty over Brexit
has led to reduced opportunities and general pressure on gross margins in the security sector. The impairment
review undertaken by the directors identified that the value-in-use of both the B to B and SG investments were
compromised and thus impairment of the respective investments were required. The investment values have been
reduced by £220,000 and £120,000 to new carrying values of £1,150,724 and £482,964 respectively.
Investments in subsidiary undertakings are stated at cost and include the following:
Name of Company
Proportion
of voting
Class of
shares held rights held Registered office
Adamson’s Laboratory Services Limited
Ordinary 100%
B to B Links Limited
Ordinary 100%
Camerascan CCTV Limited
Ordinary 100%
Envex Company Limited
Ordinary 100%
In House The Hygiene Management Company Limited Ordinary 100%
Inspection Services (UK) Limited
Ordinary 100%
Personnel Health & Safety Consultants Limited
Ordinary 100%
Quality Leisure Management Limited
Ordinary 100%
QCS International Limited
Ordinary 100%
RSA Environmental Health Limited
Ordinary 100%
Safetymark Certification Services Limited
Ordinary 100%
SG Systems (UK) Limited
Ordinary 100%
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
9 Cumbernauld Business Park,
Cumbernauld, North Lanarkshire,
Scotland G6 3JZ
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
The Old Church, 31 Rochester
Road, Aylesford, Kent, ME20 7PR
55
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
11. TRADE AND OTHER RECEIVABLES
Amount owed by subsidiary undertakings
Prepayments
12. TRADE AND OTHER PAYABLES
Trade payables
Amount owed to subsidiary undertakings
Social security and other taxes
Other payables
Accruals
13. OVERDRAFT
Bank overdraft
31.3.18
£
778,373
29,983
31.3.17
£
987,148
27,434
808,356
1,014,582
31.3.18
£
27,340
189,050
36,036
1,098
20,394
31.3.17
£
24,712
187,905
31,172
31,144
15,077
273,918
290,010
31.3.18
£
31.3.17
£
1,105,005
1,197,758
On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC plc. Each company
within the Group operates its own current account, the balance on which is allowed to fluctuate according
to trading conditions. Interest is only charged on a net overdrawn balance as the Group has the right to offset
overdrawn accounts with accounts in credit across the Group. During the year HSBC plc renewed the Group’s
£300,000 overdraft facility which is secured by a debenture including a fixed charge over certain present freehold
and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital,
both present and future; and first floating charge over all assets and undertakings both present and future. On
31 March 2018, PHSC plc’s company balance was £1,105,005 overdrawn (2017: £1,197,758 overdrawn) within the
Group’s cash at bank and in hand figure of £244,280 (2017: £206,719). The overdraft facility is reviewed subject
to requirement.
56
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
14. DEFERRED AND CONTINGENT CONSIDERATION
Deferred consideration
At 1 April 2016
Paid during year
At 31 March 2017
Contingent consideration
At 1 April 2016
Transfer from non-current to current
Fair value movement on contingent consideration
At 31 March 2017
Paid during year
At 31 March 2018
Current
£
Non-current
£
Total
£
200,000
(200,000)
–
–
–
–
Current
£
Non-current
£
–
75,000
(50,000)
25,000
(25,000)
–
75,000
(75,000)
–
–
–
–
200,000
(200,000)
–
Total
£
75,000
–
(50,000)
25,000
(25,000)
–
Under the SG sale and purchase agreement, a final payment became due on 11 December 2017, the second
anniversary of the acquisition date, determined by a formula that related to performance over the two years
post acquisition.
15. DEFERRED TAXATION
Deferred taxation – accelerated capital allowances
At 1 April 2017
Deferred tax (debit)/credit in year
At 31 March 2018
16. SHARE CAPITAL
Called up, allotted and fully paid
At 1 April 2016
Shares issued
31.3.18
£
31.3.17
£
44,286
44,453
Deferred tax
£
Deferred tax
£
44,453
(167)
44,286
10,018
34,435
44,453
Number of
shares
(Nominal value
10p per share)
Ordinary
shares
£
Share
premium
£
Total
£
13,086,348
1,590,909
1,308,634
159,092
1,751,358
164,659
3,059,992
323,751
At 31 March 2017 and 2018
14,677,257
1,467,726
1,916,017
3,383,743
57
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
17. RELATED PARTY DISCLOSURES
A management charge is levied by PHSC plc to its subsidiary companies to reflect the central services it provides.
Management charge from PHSC plc to subsidiary companies
31.3.18
£
31.3.17
£
510,000
527,300
The inter-company balances between PHSC plc and the other companies within the PHSC plc group are
summarised below.
31.3.18
£
31.3.17
£
–
54,492
469,304
435
–
2,649
6,712
410
14,670
229,701
31,104
54,937
469,304
1,070
188,713
5,759
1,737
819
4,004
229,701
778,373
987,148
454
188,596
189,050
–
–
–
–
–
–
–
15,950
15,722
97
31,769
–
–
–
350,000
15,000
100,000
100,000
20,000
20,000
605,000
38,584
43,453
293
82,330
Amounts owed by group undertakings
Adamson’s Laboratory Services Limited
B to B Links Limited
In House the Hygiene Company Limited
Inspection Services (UK) Limited
Personnel Health & Safety Consultants Limited
QCS International Limited
Quality Leisure Management Limited
RSA Environmental Health Limited
SG Systems (UK) Limited
Camerascan CCTV Limited
Amounts owed to group undertakings
Adamson’s Laboratory Services Limited
Personnel Health & Safety Consultants Limited
PHSC plc received dividends from subsidiaries as follows:
Adamson’s Laboratory Services Limited
Inspection Services (UK) Limited
Personnel Health & Safety Consultants Limited
QCS International Limited
Quality Leisure Management Limited
RSA Environmental Health Limited
PHSC plc dividends were paid to directors as follows:
S A King
N C Coote
G N Webb MBE
58
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
18. FINANCIAL INSTRUMENTS
Set out below are the company’s financial instruments:
Financial assets at amortised cost
Trade and other receivables
Financial liabilities at amortised cost
Overdraft
Trade and other payables
Due within 1 year
Due in over 1 year
Full details of the overdraft facility can be found in note 13.
Financial liabilities at fair value through profit and loss
Contingent consideration
31.3.18
£
31.3.17
£
778,373
987,148
778,373
987,148
1,105,005
237,882
1,197,758
243,761
1,342,887
1,441,519
1,342,887
–
1,441,519
–
1,342,887
1,441,519
–
–
25,000
25,000
The contingent consideration held at fair value through profit and loss is the final payment due on the acquisition
of SG.
The main risk arising from the company’s financial instruments is liquidity risk. The company seeks to manage this
risk by ensuring sufficient liquidity is available from current banking facilities to meet foreseeable needs and to
invest cash assets safely and profitably. This policy has remained unchanged from previous periods.
The fair values of the company’s financial instruments are considered not to be materially different to their
book value.
59
PHSC plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2018
19. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The company may be required to make estimates and assumptions concerning the future. These estimates and
judgements are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The principal areas where judgement was exercised are as follows:
Property, plant and equipment
The directors annually assess both the residual value of these assets and the expected useful life of such assets
which is currently judged to be up to 4 years, based on experience.
Impairment of investments
An impairment of investments has the potential to significantly impact upon the company’s statement of
comprehensive income for the year. In order to determine whether impairments are required the directors
estimate the recoverable amount of the investment. This calculation is based on the director’s expectations of
future volumes and margins based on forecast results to 31 March 2019 in perpetuity assuming a zero growth rate.
The cash flow projections:
•
•
are based on profits before tax and inter group management charges; and
have been discounted using a discount rate of 11%. The rate has been determined by calculating the Group’s
weighted average cost of capital (WACC) of 4% using the capital asset pricing model model with a 7% risk
factor added.
20. PARENT UNDERTAKING
PHSC plc, incorporated in the UK, is the ultimate parent company of the Group. There is no ultimate controlling
party but the largest shareholder, Mr S A King owns 21.73% (2017 – Ms N C Coote 21.42%) of the issued share
capital of PHSC plc.
The parent company operates within the UK and its accounts may be obtained from the same registered office
address as noted on page 2 of the Group accounts.
60
PHSC plc
NOTICE OF ANNUAL GENERAL MEETING
Notice is given that the annual general meeting of PHSC plc (“PHSC” or “the Company”) will be held at 10am on
Monday 24 September 2018 at The Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR to consider the following
resolutions of which resolutions 1 to 5 will be proposed as ordinary resolutions and resolutions 6 and 7 will be proposed
as special resolutions.
1
2.
3.
4.
5
To receive the annual report and audited accounts for the year ended 31 March 2018.
To declare a final dividend of 0.5p per ordinary share.
To re-elect Stephen King as a director.
To reappoint Crowe UK LLP as auditor to the company to hold office until the conclusion of the next general
meeting at which accounts are laid before the members and to authorise the directors to determine their
remuneration.
THAT, in substitution for any existing such authority, the directors be generally and unconditionally authorised in
accordance with section 551 of the Companies Act 2006 to exercise all the powers of the company to allot shares
in the company or to grant rights to subscribe for, or to convert any security into, shares in the company up to a
total nominal amount of £489,242 during the period commencing on the date of the passing of this resolution and
expiring at the conclusion of the annual general meeting in 2019 or on 30 September 2019, whichever is earlier,
but so that the authority shall allow the company to make before the expiry of this authority offers or agreements
which would or might require shares to be allotted, rights to be granted or securities to be converted after such
expiry and notwithstanding such expiry the directors may allot shares, grant rights or convert securities under
such offers or agreements.
Special resolution
6.
THAT, subject to and conditional upon the passing as an ordinary resolution of resolution number 5 set out in the
notice of this meeting the directors be empowered under section 570 of the Companies Act 2006 (the “Act”) to allot
equity securities (as defined in section 560 of the Act) for cash; under the authority conferred by resolution 5 above
as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to:
(a)
the allotment of equity securities in connection with a rights issue, open offer or other offer of securities in
favour of the holders of ordinary shares on the register of members at such record date(s) as the directors may
determine where the equity securities respectively attributable to the interests of the ordinary shareholders
are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them on any
such record date(s), subject to such exclusions or other arrangements as the directors may deem necessary
or expedient to deal with fractional entitlements or legal or practical problems arising under the laws of any
overseas territory or the requirements of any regulatory body or stock exchange or by virtue of shares being
represented by depositary receipts or any other matter whatever; and
(b)
the allotment (otherwise than under sub-paragraph (a) above) of equity securities and/or the sale and
transfer of shares held by the company in treasury (as the directors shall deem appropriate) to any person
or persons up to an aggregate nominal amount of £293,545
such power to expire at the conclusion of the annual general meeting of the company in 2019 or, if earlier, on 30
September 2019, unless such power is varied, revoked or renewed prior to such time by the company in general
meeting by special resolution; except that the company may before such expiry make offers or agreements which
would or might require equity securities to be allotted after such expiry and notwithstanding such expiry the
directors may allot equity securities under such offers or agreements.
61
PHSC plc
NOTICE OF ANNUAL GENERAL MEETING (continued)
7.
THAT, the company be generally and unconditionally authorised to make market purchases (as defined in the
Companies Act 2006) of ordinary shares of 10 pence each in the capital of the company (“ordinary shares”) on
such terms and in such manner as the directors may from time to time determine, provided that:
(a)
the maximum number of ordinary shares authorised to be purchased shall be 2,201,589;
(b)
the minimum price which may be paid for an ordinary share is 10 pence;
(c)
(d)
(e)
(f)
the maximum price which may be paid for an ordinary share is an amount equal to 105 per cent of the
average of the middle market quotations for an ordinary share (as derived from the Daily Official List)
for the five business days immediately preceding the date on which the ordinary share is contracted to
be purchased;
the minimum and maximum prices per ordinary share referred to in sub-paragraphs (b) and (c) of this
resolution are in each case exclusive of any expenses payable by the company;
the authority conferred by this resolution shall expire at the conclusion of the annual general meeting of the
company in 2019 or, if earlier, at the close of business on 30 September 2019, unless such authority is varied,
revoked or renewed prior to such time by the company in general meeting by special resolution; and
the company may make a contract to purchase ordinary shares under the authority hereby conferred prior
to the expiry of such authority which will or may be completed wholly or partly after the expiration of such
authority.
By order of the board
Lorraine Young Company Secretaries Limited
Secretary
23 August 2018
Registered Office:
The Old Church
31 Rochester Road
Aylesford
Kent ME20 7PR
62
PHSC plc
NOTICE OF ANNUAL GENERAL MEETING (continued)
Notes
Right to attend, speak and vote
1.
If you want to attend, speak and vote at the AGM you must be on the Company’s register of members at 6.00pm on 20 September 2018. This will allow
us to confirm how many votes you have on a poll. Changes to the entries in the register of members after that time, or, if the AGM is adjourned, 48 hours
before the time of any adjourned meeting, shall be disregarded in determining the rights of any person to attend, speak or vote at the AGM.
Appointment of proxies
2.
If you are a member of the Company you may appoint one or more proxies to exercise all or any of your rights to attend, speak and vote at the meeting.
You may only appoint a proxy using the procedures set out in these notes and in the notes on the proxy form, which you should have received with this
notice of meeting.
A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of how to appoint the Chairman of the
meeting or another person as your proxy using the proxy form are set out in the notes on the form. If you wish your proxy to speak on your behalf at the
meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
You may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or
shares which you hold. If you wish to appoint more than one proxy you may photocopy the proxy form or alternatively you may contact the Company
Secretary.
Appointment of proxy using hard copy proxy form
3.
The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. A vote withheld is not a vote in law,
which means that the vote will not be counted in the calculation of votes for or against the resolution. If you do not indicate on the proxy form how your
proxy should vote, they will vote or abstain from voting at their discretion. They will also vote (or abstain from voting) at they think fit in relation to any
other matter which is put before the meeting.
To appoint a proxy using the proxy form, the form must be completed and signed and received by the Company Secretary, PHSC plc, 6th Floor, 60
Gracechurch Street, London EC3V 0HR no later than 48 hours (excluding non-working days) before the meeting. Any proxy forms (including any amended
proxy appointments) received after the deadline will be disregarded.
The completed form may be returned by any of the following methods:
•
•
Sending or delivering it to the Company Secretary, PHSC plc 6th Floor, 60 Gracechurch Street, London EC3V 0HR
Scanning it and sending it by email to shaun.zulafqar@shma.co.uk
If the shareholder is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer or attorney. Any power of
attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the
proxy form.
Appointment of proxy by joint members
4.
In the case of joint holders, where more than one joint holder purports to appoint a proxy, only the appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the
joint holding (the first-named being the most senior).
Changing your instructions
5.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above. The amended instructions must be received
by the company secretary by the same cut-off time noted above. Where you have appointed a proxy using a hard copy proxy form and would like to
change the instructions using another hard copy proxy form, please contact the Company Secretary on 020 7264 4546. If you submit more than one valid
proxy form, the one received last before the latest time for the receipt of proxies will take precedence.
Termination of proxy appointments
6.
In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke
your proxy appointment to the Company Secretary, PHSC plc, 6th Floor, 60 Gracechurch Street, London EC3V 0HR. Alternatively you may send the notice
by email to shaun.zulafqar@shma.co.uk. In the case of a member which is a company, the revocation notice must be executed under its common seal or
signed on its behalf by an officer or attorney. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified
copy of such power or authority) must be included with the revocation notice.
In either case, your revocation notice must be received by the Company no later than 48 hours (excluding non-working days) before the meeting. If your
revocation is received after the deadline, your proxy appointment will remain valid. However, the appointment of a proxy does not prevent you from
attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically
be terminated.
Communications with the Company
7.
Except as provided above, members who have general queries about the meeting should telephone the Company Secretary on 020 7264 4546 (no other
methods of communication will be accepted). You may not use any electronic address provided either in this notice of general meeting; or any related
documents, to communicate with the Company for any purposes other than those expressly stated.
Issued shares and total voting rights
8.
As at 5.00 pm on 10 August 2018, being the latest practicable date prior to the date of this notice, the Company’s issued share capital comprised 14,677,257
ordinary shares of 10p each. Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of
voting rights in the Company at that time was 14,677,257.
63
PHSC plc 64
Proxy form for use by holders of ordinary shares in PHSC plc
at the Annual General Meeting (AGM)
to be held on Monday 24 September 2018
Please read carefully the notice of meeting, the accompanying notes and the explanation of the business to
be transacted at the AGM (contained in the directors’ report) before completing this form.
As a member of PHSC plc you have the right to attend, speak at and vote at the AGM. If you cannot or do
not wish to attend the AGM but still want to vote you can appoint someone to attend the AGM and vote on
your behalf. That person is known as a “proxy”. You can use the proxy form to appoint the Chairman of the
meeting or someone else, as your proxy. Your proxy does not have to be a member of the Company.
I/We …………………………………………………………………………. (FULL NAME IN BLOCK CAPITALS)
being a member(s) of PHSC plc, appoint the Chairman of the meeting or …....………………………………
…………………..................................….. (see note 1) as my/our proxy to attend and, on a poll, to vote for
me/us and on my/our behalf as indicated below at the AGM and at any adjournment (see notes 2, 3 and 4).
Please clearly mark the boxes below to instruct your proxy how to vote.
FOR
AT
AGAINST WITHHELD DISCRETION
VOTE
RESOLUTIONS
1. To receive the report and accounts
2. To declare a final dividend
3. To re-elect Stephen King as a director
4.
To reappoint the auditors and authorise
the directors to set their fees
5. To authorise the directors to allot shares
6. To disapply pre-emption rights
7. To authorise share buybacks
Signature(s) ………………………………......…..….....................….. (see note 5) Date …………………..……………
Notes:
1)
2)
3)
4)
5)
6)
If you wish to appoint as a proxy someone other than the Chairman of the meeting, please delete the words “The Chairman of the
meeting” and insert the name of the other person (who need not be a member of the Company). All alterations made to the proxy
form must be initialled by the signatory.
The completion and return of the proxy form will not prevent you from attending the AGM and voting in person should you
subsequently decide to do so.
If you wish your proxy to cast all of your votes for or against a resolution you should insert an “X” in the appropriate box. If you
wish your proxy to cast only some votes for and some against insert the relevant number of shares in the appropriate box. In
the absence of instructions your proxy may vote or abstain from voting as they think fit on the specified resolutions, and, unless
instructed otherwise, may also vote or abstain from voting as they think fit on any other business (including on a resolution to
amend a resolution, to propose a new resolution or to adjourn the meeting) which may properly come before the meeting.
The “Vote Withheld” option is provided so that you can instruct your proxy to abstain from voting on a particular resolution. A “Vote
Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “for” or “against” a resolution.
The “At Discretion” option is provided so that you can give discretion to your proxy to vote or abstain from voting on a particular
resolution as they think fit.
The proxy form must be signed by the shareholder or their attorney. Where the shareholder is a corporation the signature must be
under seal or that of a duly authorised representative. In the case of joint holders, any one may sign the form. The vote of the senior
joint holder (whether in person or by proxy) will be taken to the exclusion of all others, seniority being determined by the order
in which the names appear in the register of members for the joint shareholding.
To be valid, this proxy form and any power of attorney or other authority under which it is signed or a certified copy of such
authority, must be deposited with the Company Secretary, PHSC plc, 6th Floor, 60 Gracechurch Street, London EC3V 0HR no later
than 48 hours (excluding non-working days) before the time of the AGM or any adjournment.
65
PHSC plc
66
Annual Report
2018
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