Prime People Plc
Annual Report and Accounts
Annual report and financial statements
for the year ended 31 March 2010
2010
Contents
Chairman's statement
Financial review
Directors and advisers
Report of the directors
Corporate governance
Remuneration report
Report of the independent auditors
Consolidated income statement
Consolidated statement of changes in shareholders’ equity
Consolidated statement of financial position
Company statement of financial position
Company statement of changes in equity
Group and company cash flow statement
Notes to the financial statements
Notice of Annual General meeting
Form of Proxy
Page
1
4
5
6
14
17
19
21
22
23
25
26
27
28
52
54
Prime People Plc
Chairman's statement
_______________________________________________________________________________________
Introduction
I am pleased to report the results for Prime People Plc for the year ended 31 March 2010, which show profit
before tax of £0.46 m compared to £0.73m in 2009.
As was reported at the time of the publication of the Group’s Interim Results, we had taken action to
rationalise our management and organisation to reflect the level of business we expected to do in the
remainder of the financial year and in order to position the Group to be profitable in the second half of the
year. Shareholders will recall that the first half showed an operating loss of £46k before deduction of non-
recurring items of £116k and that this contrasted favourably with the immediately preceding half year when
the group recorded operating losses of £263k. As can be seen from these results, further positive progress has
been made in the second half where profit before tax of £624k was recorded, confirming our stated
expectation of a profitable second half.
Statutory Results
The Statutory results are set out in full in the financial statements and commented upon in the financial
review.
The table below provides the main elements of the Group’s performance for the year ended 31 March 2010.
Gross fee income
Direct Costs
Net fee income
Admin Expenses
Operating profit
Net interest
Profit before tax
Taxation at 28% (2009:28%)
Profit after tax
Fully diluted EPS
Basic EPS
Year ended
31 March 2010
£’000
Actual
14,180
(7,507)
6,673
(6,212)
461
1
462
(129)
333
2.71p
2.79p
Year ended
£’000
Actual
20,668
(10,255)
10,413
(9,663)
750
(23)
727
(190)
537
4.18p
4.47p
Prime People includes the trading businesses of Macdonald & Company, Prime Insight and Harper Craven
Associates
1
Prime People Plc
Chairman’s statement (continued)
_______________________________________________________________________________________
Macdonald & Company
Macdonald & Company remains our largest business providing executive and professional recruitment
services to the built environment sector in the UK and internationally. In line with others in our sector we
have seen a decrease in revenue and profit over the past year. Net fee income (“NFI”) decreased by 38 per
cent from £9.9m in 2009 to £6.1m in 2010. Details of the split between temporary and permanent net fee
income is shown below:
Net fee income – contract & temporary
1,467
2,570
Year ended
31 March 2010
£’000
Year ended
31 March 2009
£’000
Net fee income - permanent
- UK
- Other
Total net fee income
Prime Insight
2,606
2,017
6,090
4,138
3,192
9,900
Prime Insight which started trading in August 2008 provides recruitment consultancy that deals exclusively
with recruitment of Customer Insight, Market Research and Data Analysis professionals and in its first full
year of trading made a profit before tax of £48k.
Harper Craven
Harper Craven, which has been in the group for a number of years, provides bespoke sales, marketing and
management training and coaching programmes to a broad range of corporate clients. It has made a small loss
of £1k before tax compared to a profit of £53k in 2009.
Dividend
The Group’s focus on cash management resulted in a significant increase in the Group’s cash position in the
second half. As at 31 March 2010, the Group had net cash of £2.3 million compared to £1.79 million as at 31
March 2009 and the Board, having taken account of the prevailing economic conditions and the forecast need
for working capital, decided that it was appropriate to declare an interim dividend of 2 pence per ordinary
share. The working capital required to accomplish the planned future activity of the Group, as explained
below, is adequately provided for and this has allowed the Board to propose a final dividend of 1.5 pence per
ordinary share. This will be paid on 9 July 2010 to shareholders on the register on 25 June 2010 and brings
the total dividend paid to shareholders for this year to 3.5 pence per ordinary share.
2
Prime People Plc
Chairman’s statement (continued)
_______________________________________________________________________________________
Future Activity
In the immediate future the Group will continue to concentrate on managing its established businesses to be
profitable and ready to exploit cyclical opportunities that present themselves.
The success of the Prime Insight start-up and incubation provides a model for the use of the Group’s solid
platform from which to grow new recruitment businesses. Since the year-end, the Group has established a
new business in Sustainability Recruitment, serving professionals in the energy, environmental, and corporate
responsibility sectors. Recruitment consultants experienced in the sectors have been recruited to operate this
new business from our London and UAE offices from the beginning of Q2 and our Hong Kong office from
Q4 of our current financial year.
We continue actively to look for new opportunities, similar to Prime Insight and Sustainability Recruitment,
which are culturally aligned with group companies and where the Group’s core operational strength and office
network will provide rapid market penetration.
Outlook
As referred to above, at Future Activity, the Group has embarked on expansion into new revenue areas by
utilising its strong operational platform and overseas offices. Such activity is planned to be profit neutral as a
minimum in the year.
The level of visibility on the upside for the Group is still generally difficult to assess, although our Asia
operations are showing increasing promise and have performed well ahead of budget in the year to date. Since
the year-end the Group has continued to trade profitably and, subject to there being no further significant
economic shocks in the UK or the other regions in which the group operates, we expect to have a successful
full year.
Our people
Finally, I should once again like to thank our staff for their hard work and commitment over the last twelve
months and remind shareholders that these results are a testament to their efforts in testing times.
Robert Macdonald
Executive Chairman
3 June 2010
3
Prime People Plc
Financial Review
________________________________________________________________________________________
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union.
Trading Results
Gross fee income for the year from continuing operations decreased by 31.4 per cent to £14.18m (2009:
£20.67m).
Net fee income decreased by 35.9 per cent to £6.67 m (2009: £10.41m).
The group considers net fee income to be the key indicator of the performance of the business and is defined
as the income generated from permanent placements together with the contribution earned from contract and
temporary staff.
Administrative expenses including non recurring redundancy costs of £0.12m, totalled £6.21m which
represents 93.1 per cent of net fee income (2009: £9.66m: 92.8 per cent). Profit before tax decreased by 36.9
per cent to £0.46m (2009: £0.73m).
The taxation charge is £0.13m on a profit on ordinary activities before taxation of £0.46m which gives an
overall tax rate of 28 per cent (2009: 26 per cent). The reasons for the difference from the standard UK
corporation tax rate of 28 per cent are detailed in note 9 of the accounts.
Earnings Per Share
The continuing diluted earnings per share is 2.71p (2009: 4.18p)
Dividend
As outlined in the Chairman’s statement, the directors propose a final dividend of 1.5 pence which will be
paid on 9 July 2010 to shareholders who are on the register on 25 June 2010 making a total dividend paid to
shareholders for the year to 3.5 pence per ordinary share.
Treasury Management
Net cash inflow of £859k (2009: inflow of £3,187k) was generated from operating activities during the year
which after net taxation payments of £27k (2009: net taxation payment of £631k) resulted in a net cash inflow
from operating activities of £831k (2009: inflow of £2,556k).
The group operates a centralised treasury function with a net cash position at 31 March 2010 of £2.3m
compared to a net cash position of £1.79m at 31 March 2009.
Christopher Heayberd
Finance Director
3 June 2010
4
Prime People Plc
Directors and Advisers
________________________________________________________________________________________
Directors
R J G Macdonald (Executive Chairman)
P H Moore
C I Heayberd
J H J Lewis OBE (Non-Executive)
(Non-Executive)
S J Murphy
(Managing Director)
(Finance Director)
Secretary and registered office
C I Heayberd, 40a Dover Street, London, W1S 4NW.
Registered number
1729887
Stockbrokers & Nominated Advisers
Cenkos Securities Plc, 6.7.8 Tokenhouse Yard, London, EC2R 7AS
Howard Kennedy, 19 Cavendish Square, London, W1A 2AW.
Solicitors
Auditors
Horwath Clark Whitehill LLP, Aquis House, 49-51 Blagrave Street, Reading, Berkshire,
RG1 1PL
Principal bankers
Barclays Bank plc, Corporate Banking, 1 Churchill Place, London E14 5HP
Registrars
Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands, B63
3DA.
5
Prime People Plc
Report of the directors for the year ended 31 March 2010
________________________________________________________________________________________
The directors present their annual report together with the audited financial statements for the year ended
31 March 2010.
Principal activity, business review and future developments
The principal activity of the Group during the year was the provision of recruitment and training services.
The Company is required to present in this report a review of the development and performance of the group’s
business for the financial year and of its position at the year end, along with a description of the principal risks
and uncertainties facing the group. This information is contained within the Chairman’s statement on pages 1
to 3 and the Financial Review on page 4.
Results
The consolidated profit on ordinary activities after taxation amounted to £333k (2009: £537k).
Dividends
An interim dividend of 2.0 pence per ordinary share was paid on 31 March 2010 to those shareholders on the
register at 26 March 2010 (2009: Nil pence) and a final dividend of [1.5 pence] per ordinary share will be paid
on 9 July 2010 to those shareholders on the register on 25 June 2010 (2009: Nil pence).
Directors and directors' interests
The directors who held office during the year were as follows:
R J G Macdonald
P H Moore
C I Heayberd
J H J Lewis
S J Murphy
(Executive Chairman)
(Managing Director)
(Finance Director)
(Non-executive)
(Non-executive)
The directors who held office at the end of the financial period had the following interests, all of which are
beneficial, in the ordinary shares of Prime People Plc, as recorded in the register of directors' share interests:
R J G Macdonald
P H Moore
C I Heayberd
J H J Lewis
S J Murphy
Ordinary shares of
10p each
31 March 2010
Ordinary shares of
10p each
31 March 2009
2,480,000
2,897,500
199,000
1,180,500
230,000
2,480,127
2,897,906
199,238
1,180,849
230,000
Details of directors’ share options are given in the Remuneration Report on page 18.
Other than to reflect the changes arising from the share capital reorganisation completed on 8 July 2009 there
have been no changes to the directors' interests in the ordinary share capital of Prime People Plc between 31
March 2010 and 16 May 2010.
6
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Directors' biographies
Robert Macdonald 62 - Executive Chairman
Robert has held senior positions within the recruitment industry since 1973 when he founded Reuter Simkin
Ltd, a recruitment business in both the legal and property sectors. After the sale of Reuter Simkin in 1989, he
acquired shares in and was chairman of, two other recruitment companies including Straker Simkin which
acquired the legal business of Reuter Simkin in the West of England from PSD in 1992 and traded as
Macdonald & Company. In 1994, he established Macdonald & Company as a specialist property recruitment
agency in London. Macdonald & Company was incorporated separately in 1996 when certain key members of
staff, including Peter Moore, acquired equity stakes.
Peter Moore MRICS 40 - Managing Director
Peter worked with Strutt & Parker from 1992 to 1995, qualifying as a Chartered Surveyor in 1994. He joined
Macdonald & Company in November 1995 and was appointed Managing Director in 1996. As MD of
Macdonald & Company, Peter has responsibility for its day-to-day operations. He has introduced operational
tools such as customer relationship management, anonymous staff surveys, staff working groups, objective
grading systems for staff and highly incentivising remuneration schemes. He specialises in advising on topics
such as staff retention, mergers and acquisitions, human resource policy and remuneration benchmarking. He
is also responsible for the industry's benchmark salary and benefits survey undertaken annually in conjunction
with RICS.
Christopher Heayberd BA ACA 57 - Finance Director
Christopher qualified as a Chartered Accountant in 1980 and since that date has held a number of financial
positions in a broad range of industries. Since 1989 his main focus has been the business services sector. This
included 4 years as Finance Director of PSD Group plc, during which time the company was admitted to
trading on the London Stock Exchange. Christopher rejoined the Board of Prime People in June 2000 and for
a period of five years combined the role of Finance Director with other business interests. In May 2005 he
returned full time to the Board.
John Lewis OBE LLB (Hons) 69 - Non-executive director
John is a consultant to Eversheds LLP (solicitors). Previously he served as a partner in Lewis Lewis and Co
which became part of Eversheds after a series of mergers. John is currently a director of Photo-Me
International Plc, AIM listed G R (Holdings) Plc and several private companies. He has served as chairman of
Cliveden Plc and Principal Hotels Plc and as deputy chairman of John D Wood & Co Plc, retiring in each case
when the company was sold.
Simon Murphy BSc ACA 45 - Non-executive director
Simon qualified as a Chartered Accountant with Coopers & Lybrand. Until April 2005 he was a Managing
Director in the global investment banking division of HSBC. He was Chief Executive of Prime People from
May 2005 until the acquisition of Macdonald & Company Group Ltd.
7
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Substantial shareholders
The following shareholders held interests of 3 per cent or more of the nominal value of the issued ordinary
share capital of the Company, as recorded in the register of substantial share interests at 16 May 2010.
Peter Moore
Robert Macdonald
John Lewis
Peter Hearn
The Cayzer Trust Company Limited
City of London PR Group
Number of 10p
ordinary shares
Percent of issued
share capital
%
2,897,500
2,480,000
1,180,550
719,500
439,500
429,000
24.26
20.77
9.89
6.02
3.68
3.59
Except for the interests disclosed above, the directors are not aware of any other interests (direct or indirect)
of 3 per cent or more of the issued ordinary share capital of the Company.
The mid market quotation of the Company’s shares at close of business on 31 March 2010 was 43p. The
highest and lowest mid market quotations in the period from 1 April 2009 to 31 March 2010 were 47p and
15p.
Share Capital Reorganisation
At an Extraordinary General Meeting held on 7 July 2009 shareholders gave their approval for the Company
to consolidate every 500 Ordinary Shares into one consolidated ordinary share. Following the Consolidation,
resulting fractions of the Consolidated Ordinary Shares were aggregated and sold by the Board of Directors of
the Company with the proceeds being remitted to the relevant shareholders. Cash payments of less than
GBP3.00 were not distributed to holders of Ordinary Shares but were instead aggregated and held for the
benefit of the Company. Following the consolidation and the sale of the fractional entitlements, it was further
approved by shareholders that every Consolidated Ordinary Share be subdivided into 500 new ordinary shares
of 10p par value. The subdivision took effect on 8 July 2009
The effect of the proposed capital reorganisation was that shareholders holding fewer than 500 Ordinary
Shares on 7 July 2009 (the "Record Date") received a cash payment equivalent to the market value of their
shares, as represented by the closing middle market price (derived from the Official List of the UK Listing
Authority) on AIM on 8 June 2009 of 21 pence for each Ordinary Share which they held.
Holders of 500 or more Ordinary Shares on the Record Date likewise received a cash payment equivalent to
the closing middle market price on AIM on 8 June 2009 for the number of their Ordinary Shares as became a
fraction of a Consolidated Ordinary Share when their holding was divided by 500. These shareholders
retained the balance of their shareholding.
Immediately following the Capital Reoganisation the new Ordinary Shares were admitted to trading on Aim at
8.00am on 8 July 2009
8
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Policy and practice on payment of creditors
The Group agrees payment terms with each of its major suppliers and seeks to abide by these terms, subject to
satisfactory performance by the supplier. Trade creditors for the Group at the year end represent 30 days
average purchases (2009: 30 days). The Company makes no trade purchases.
Personnel policies
The Group gives consideration to applications for employment from disabled persons where the requirements
of the job may be adequately covered by a handicapped or disabled person.
The Group has embraced the Government’s policy on Stakeholder Pensions and made available schemes open
to all employees.
During the year, the policy of providing employees with information about the Group has been continued and
employees have been encouraged to present their own suggestions and views.
Environmental policy
The Group recognises its responsibilities for the environment and gives due consideration to the possible effects
of its activities on the environment. The Group’s activities have a minor effect on the environment. However it
is the Group’s aim to reduce the environmental impact of its activities and to operate in an environmentally
responsible manner. The Group is committed to the following principles to ensure the business operates in an
environmentally sensitive manner:
• Encouraging the re-use and re-cycling of products
• Ensuring efficient use of materials and energy
• Purchasing environmentally friendly materials where appropriate.
Political and Charitable Donations
The group made charitable donations of £3,184 (2009: £7,202). The group made no political donations during
the year (2009: £Nil).
Risk Factors
i) Dependence on Key Personnel
The future success of the Group is dependant on the continued service of senior management and key
personnel. The loss of the services of the executive officers of the Group and other key personnel could
have a material effect on the business.
ii) Competition
The Directors believe that the Group is well positioned in its chosen markets. Whilst the Group will seek to
continue to improve its competitive positions, the actions of current or indeed potential competitors may
adversely affect the Group’s business.
iii) Strength of Key Markets
The market for recruitment services is currently weak and it is difficult to predict how the market will
develop over the foreseeable future. A further decline in the recruitment market could have a material
adverse effect on profitability and cash flows of the business.
9
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
iv) Foreign currency risk management
The Group’s international operations account for approximately 15 per cent of gross fee income and less
than 10 per cent of the Group’s assets and consequently the Group has a degree of translation exposure in
accounting for overseas operations and its policy is not to hedge against this exposure. The group seeks
to minimise this exposure by converting into sterling all cash balances in foreign currency that are not
required for short term working capital monetary needs.
v) Treasury policies and financial risk
Surplus funds are intended to support short term working capital requirements. These funds are invested
through the use of short term and period deposits, with a policy of maximising fixed interest returns as
well as providing the flexibility required to fund on-going operations. It is not a Group policy to invest in
financial derivatives.
Although the financial risks to which the group is exposed are considered to be minimal at present, future
interest rate, liquidity and foreign currency risks could arise and the Board will review its existing
policies in the coming period.
vi) Credit risk management
Credit risk refers to the credit risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Group. The principal credit risk arises from the Group’s trade receivables.
Ongoing credit evaluation is performed on the financial condition of accounts receivable based on
payment history and third party credit references.
vii) Liquidity risk management
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable
needs and to invest cash assets safely and profitably.
Surplus funds are invested on a short term basis at money market rates and therefore such funds are
available at short notice.
viii) Capital risk management
The Group manages capital to ensure that entities in the Group will be able to continue as a going
concern whilst maximising the return to stakeholders through optimisation of the debt and equity
balance.
Going concern
At 31 March 2010, the Group's statement of financial position showed net shareholders’ funds of £13.5m
(2009: £13.5m). In forming their views, the Directors have prepared cash flow forecasts for a 1 year period
following the balance sheet date. Based on these forecasts, the Directors have confirmed that there are
sufficient cash reserves to allow the business to continue to operate. After reviewing these forecasts,
consideration of the Group’s cash resources and other appropriate enquiries, the Directors have a reasonable
expectation that the Company and Group have adequate resources to continue in operational existence for the
foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial
statements.
10
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Directors’ and officers’ liability insurance
The Company maintains liability insurance for the directors and officers of the Company and its subsidiaries.
Ordinary and Special business for the annual general meeting
The notice of the meeting contains Ordinary and Special Resolutions to be proposed at the forthcoming Annual
General Meeting to be held on 6 July 2010. The Special Business is detailed on page 11.
Allotment of shares
The Companies Act 2006 provides that the directors of the Company may only allot unissued shares if they have
the authority of shareholders or the Articles of Association to do so. Approval of shareholders will therefore be
sought in resolution 6 to grant authority to allot shares up to a maximum aggregate nominal amount of
£398,050. This amounts to 3,913,833 shares or approximately 33.33 per cent of the total share capital in issue as
at 1 June 2010.
Except for the issue of shares held under an existing Enterprise Management Incentive Scheme, details of which
are set out in note 20 of these accounts the directors have no intention, at present, of issuing any part of that
capital and no issue will be made which will effectively alter control of the company without the prior approval
of shareholders in general meeting.
In addition, the Companies Act 2006 gives shareholders statutory rights of pre-emption, whereby any shares
issued for cash must be offered to existing shareholders pro-rata to their respective holdings. Assuming your
board is granted the authority to issue new shares by shareholders, authority will be sought in resolution 7 to
allot shares for cash up to a maximum aggregate nominal amount of £59,708 representing 587,075 shares, being
approximately 5 per cent of the issued ordinary share capital of the Company, to persons other than existing
shareholders as if the statutory pre-emption rights did not apply. The authorities granted by the relevant
resolutions will expire on the earlier of 7 October 2010 and the conclusion of the next Annual General Meeting
of the Company.
Market purchases of own shares
Resolution 8 will be proposed as a special resolution at the Annual General Meeting and, if approved, will
give the Company authority to make market purchases of its own shares out of the distributable profits of the
Company. The Directors propose that the Company should be authorised to purchase a maximum of
1,174,150 ordinary shares of 10p each, equivalent to approximately 10 per cent of the current ordinary shares
in issue. On such purchase, such ordinary shares will be cancelled.
The effect of any purchases will be to reduce the number of shares in issue. In recognition that current market
conditions are challenging and that liquidity for dealing in the Company’s shares is constrained, within the
limits of the resolution dealing with the purchase of its own shares at the forthcoming resolution (if duly
passed by shareholders) and with an aggregate consideration not exceeding £100,000 the Company plans,
from time to time, to purchase its shares in the market and to cancel them.
If the Board exercises the authority conferred by Resolution 8 the Company will have the option of holding
repurchased shares in treasury.
The full exercise of all options outstanding at the date of the notice of meeting may require the issue of up to
952,021 Ordinary shares. This represents 7.97 per cent of the Company’s issued share capital if the proposed
authority to purchase the Company’s own shares has been obtained and exercised in full (in each case at the
date of notice of the Annual General Meeting).
11
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Directors' Report, Directors’ Remuneration Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (IFRSs’) as adopted by the EU 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 company and the group and of the profit or loss of the
group for that period. In preparing these financial statements, the directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgments and 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;
• 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 Report of the Directors and other information included in
the Annual Report and Financial Statements is prepared in accordance with applicable law in the United
Kingdom.
The maintenance and integrity of the Prime People plc web site 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
accept no responsibility for any changes that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
12
Prime People Plc
Report of the directors for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of
any information needed by the company’s auditors for the purpose of their audit and to establish that the
auditors are ware of that information. The Directors are not aware of any relevant audit information of which
the auditors are unaware.
Horwath Clark Whitehill LLP are appointed as auditors and have expressed their willingness to continue in
office and a resolution to re-appoint them will be proposed at the Annual General Meeting.
On behalf of the Board
C I Heayberd
Director
3 June 2010
13
Prime People Plc
Corporate governance
________________________________________________________________________________________
Statement by the Directors on compliance with the Combined Code
The Company is listed on the Alternative Investment Market (AIM) and is therefore not required to comply
with section 1 of the 2006 Combined Code. Nevertheless, the Board is committed to ensuring that proper
standards of corporate governance operate throughout the Group and has followed the principles of the Code
so far as is practicable and appropriate for the nature and size of the Group.
This is not a statement of compliance as required by the Combined Code and should therefore not be relied
upon to give the disclosure which would normally be made.
A statement of the directors’ responsibilities in respect of the financial statements is set out on page 12. Below
is a brief description of the role of the Board and its Committees, followed by a statement regarding the
Group’s system of internal controls.
The Board
The Board currently consists of an executive chairman, R J G Macdonald, two other executive directors and
two non-executive directors.
The non-executive directors are J H J Lewis and S J Murphy. Both receive a fixed fee for their services and
their interests in the shares of the company are as described on pages 6 and 18.
Biographies of the board members appear on page 7.
The Board meets at least 6 times each year and more frequently where business needs require and the
directors receive monthly management accounts detailing the performance of the Group. The Board has a
general responsibility for overseeing all day to day matters of the Company with specific responsibility for
reviewing trading performance, resources (including key appointments), finding, setting and monitoring
strategy, examining acquisition opportunities and reporting to shareholders. The non-executive directors have
a responsibility to ensure the strategies proposed by the executive directors are fully considered and to bring
their judgment to bear in this role.
To enable the Board to function effectively and directors to discharge their responsibilities, full and timely
access is given to all relevant information. In the case of Board meetings, this consists of a comprehensive set
of papers, including regular business progress reports and discussion documents regarding specific matters.
Directors are free to and regularly make further enquiries where they feel it is necessary and they are able to
take independent professional advice as required at the Company's expense. This is in addition to the access
which every director has to the company secretary.
The Board considers itself to be a "small board", and therefore has not set up a separate Nomination
Committee. Appointments to the Board of both executive and non-executive directors are based on approval
by the full Board.
Any director appointed during the year is required, under the provisions of the company's Articles of
Association, to retire and seek reappointment by shareholders at the next Annual General Meeting. The
Articles also require that one-third of the directors retire by rotation each year and seek reappointment at the
Annual General Meeting.
14
Prime People Plc
Corporate governance (Continued)
________________________________________________________________________________________
The Board (Continued)
The directors have resolved that they will retire at least once every three years even though not required by the
Company's Articles.
The executive directors abstain from any discussion or voting at full board meetings on Remuneration
Committee recommendations where the recommendations have a direct bearing on their own remuneration
package.
Remuneration of non-executive directors is determined by the Board. Non-executive directors abstain from
discussions concerning their own remuneration.
The Company publishes a full annual report and financial statements which are available to shareholders on
request and to other parties who have an interest in the Group's performance.
All shareholders have the opportunity to put questions at the Company's Annual General Meeting.
Audit Committee
The Audit Committee comprises the two non executive directors of the Company and is chaired by S J
Murphy. Its terms of reference require it to meet not less than twice each year and it provides a forum for
reporting by the Group’s auditors. By invitation, the meetings are also attended by the Finance Director.
The Audit Committee is responsible for reviewing a wide range of financial matters including ensuring that
the financial performance of the Group is adequately measured and controlled, correctly represented, reported
to and understood by the Board. The Audit Committee advises the Board on the appointment of external
auditors and on their remuneration, both for audit and non-audit work, and discusses the nature and scope of
their audit. The Committee has unlimited access to the Company’s auditors.
Remuneration Committee
The members of the Remuneration Committee comprises the two non executive directors of the Company and
is chaired by J H J Lewis. The principal terms of reference of the committee are set out in the Remuneration
Report on pages 17 to 18. The report also contains full details of directors' remuneration and a statement of
the Company's remuneration policy. The committee meets when required to consider all aspects of the
executive directors' remuneration, drawing on outside advice as necessary.
Going concern
The directors believe the Group has adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
15
Prime People Plc
Corporate governance (Continued)
________________________________________________________________________________________
Internal controls
The directors are responsible for the Group’s system of internal control and for reviewing its effectiveness
which, by its nature, can only provide reasonable and not absolute assurance against material misstatement or
loss.
The Board has reviewed the effectiveness of the Group’s internal control systems for the period 1 April 2009*
to the date of approval of the financial statements. The Board will continue to review the effectiveness of its
control assessment system on a regular basis.
The Board has established procedures, which are designed to provide effective internal control for the Group
and these include:
Control Procedures
The directors have in place an organisational structure with clearly defined levels of responsibility and
delegation of authority.
Control procedures include annual budget approval and monitoring of actual performance. Formal staff
appraisal procedures and training programmes are in place. Capital expenditure requests are reviewed by the
Board and appropriate due diligence work will be carried out when a business is to be acquired.
It is Board policy that executive directors receive suitable training for their position, which is considered as
part of the appraisal process.
Risk Management
The directors and operating company management have a clear responsibility for identifying risks facing each
of the businesses and for putting in place procedures to mitigate and monitor risks. Risks are assessed during
the annual budget process, which is monitored by the Board, and the ongoing Group strategy process.
Financial Reporting
The Group has a comprehensive system of financial reporting. There is a detailed budgeting system in place
which includes the plan of each operating Company being approved by the executive directors and the Board
approves the overall Group budget. On a monthly basis, actual results are reported against budget and any
significant adverse variances examined and remedial action taken where necessary.
16
Prime People Plc
Remuneration Report
________________________________________________________________________________________
The Remuneration Committee comprises J H J Lewis and S J Murphy. The Committee makes
recommendations to the Board on the total reward package for the Company's Executive Directors.
Remuneration policy
The main aim of the committee is to attract, retain and motivate high calibre individuals with a remuneration
package comprising of basic salary, incentives and rewards which are linked to the overall performance of the
Group and which are comparable to pay levels in companies of similar size and in similar business sectors.
Service contracts
Executive Directors
All Executive Directors hold a contract for service which includes a notice period of one year. The Executive
Directors have service agreements with the Company which are terminable by either party giving one years
notice. There are no provisions for liquidated damages on the early termination of any of the Directors’
service contracts nor provisions for mitigating damages.
Non-executive directors
Both non-executive directors have letters of appointment which entitle either party to give three months
notice.
Remuneration of Directors
The remuneration of directors who served during the period is shown in the table below. Remuneration
includes management salaries, fees as directors, performance related bonuses and taxable benefits.
Remuneration shown is in respect of each director's period in office during the year as a board member of
Prime People Plc and includes remuneration from the Company and its subsidiary undertakings.
ExecutiveChairman
R J G Macdonald
Executive Directors
P H Moore
C I Heayberd
Non-Executive Directors
J H J Lewis
S J Murphy
Salaries and
fees
Benefits
Year ended
31 March
2010
Total
Year ended
31 March
2009
Total
£
£
£
£
96,232
3,828
100,060
99,777
154,289
124,861
16,286
16,286
9,080
4,196
-
-
163,369
129,057
16,286
16,286
164,198
143,909
16,286
16,286
407,954
17,104
425,058
440,456
17
Prime People Plc
Remuneration Report (Continued)
Directors’ Options
At 31 March 2010 directors’ options on ordinary shares of 10p each granted under the Prime People
Enterprise Management Incentive Scheme, were as follows:
Director
Date Granted Granted Exercise Price
Exercise Period
S J Murphy
16 May 2005
184,234
57.5p
16 May 2007 - 15 May 2015
C I Heayberd
25 September 2009
184,234
20.5p
25 September 2009 - 2 July 2011
Director’s options granted under the company’s Enterprise Management Incentive Scheme to C.I.Heayberd
totalling 184,234 were surrendered on 24 September 2009.
On behalf of the Board
J H J Lewis
Chairman of the Remuneration Committee
3 June 2010
18
Prime People Plc
Independent auditors' report
________________________________________________________________________________________
Independent Auditor’s Report to the Members of Prime People plc
We have audited the financial statements of Prime People plc for the year ended 31 March 2010 which
comprise the Consolidated Statement of Income, the Consolidated and Company Statement of Financial
Position, the Consolidated and Company Cash Flow Statement, the Consolidated and Company Statement of
Changes in Shareholders Equity, and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the
company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the directors; and the overall presentation of the financial
statements.
Opinion on financial statements
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and company's affairs as at 31 March 2010 and of the
group’s profit for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
19
Prime People Plc
Independent auditors' report
________________________________________________________________________________________
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• Adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
• The 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.
Ian Dale
Senior Statutory Auditor
For and on behalf of
Horwath Clark Whitehill LLP
Statutory Auditor
Aquis House
49-51 Blagrave Street
Reading
Berkshire
RG1 1PL
3 June 2010
20
Prime People Plc
Consolidated income statement for the year ended 31 March 2010
________________________________________________________________________________________
Note
Year ended
31 March 2010
£’000
Year ended
31 March 2009
£’000
Gross fee income
Direct costs
Net fee income
Administrative expenses
Operating profit
Finance income
Finance expense
Profit before taxation
Tax expense
Other comprehensive income
Total comprehensive income for the
year
Attributable to:
Equity holders of the parent
Retained profit
Earnings per share
-Basic
-Diluted
-Continuing basic
-Continuing diluted
4
5
8
9
11
14,180
(7,507)
6,673
(6,212)
461
12
(11)
462
(129)
333
-
333
333
333
2.79p
2.71p
2.79p
2.71p
20,668
(10,255)
10,413
(9,663)
750
14
(37)
727
(190)
537
-
537
537
537
4.47p
4.18p
4.47p
4.18p
The notes on pages 28 to 52 form part of these financial statements
21
Prime People Plc
Consolidated statement of changes in shareholders’ equity at 31 March 2010
Capital
redemption
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Foreign
currency
translation
Retained
earnings
£’000
£’000
£’000
7,095
£’000
£’000
173
136
£’000
(15)
£’000
4,087
Called
up
share
capital
£’000
At 1 April 2008
1,203
Equity
dividends
Adjustment in
respect of share
schemes
Currency
translation
differences
Profit for the
year
At 31 March
2009
Equity
dividends
Shares
purchased for
Treasury
Adjustment in
respect of share
schemes
Shares
purchased for
cancellation
Currency
translation
differences
Profit for the
year
At 31 March
2010
-
-
-
-
1,203
-
-
-
(9)
-
-
1,194
Total
£’000
12,679
40
501
537
(289)
(289)
-
-
-
-
-
-
-
-
-
40
-
-
-
-
501
-
-
-
537
7,095
173
176
486
4,335
13,468
-
-
-
(18)
-
-
-
-
-
-
-
-
-
-
(99)
-
-
-
-
-
-
-
(18)
(238)
(238)
-
(9)
113
14
-
-
(18)
(18)
-
333
333
(9)
7,077
173
77
468
4,543
13,532
-
-
-
-
-
-
-
(9)
-
-
-
-
-
-
-
-
-
-
-
-
-
9
-
-
9
The notes on pages 28 to 52 form part of these financial statements
22
Prime People Plc
Consolidated statement of financial position at 31 March 2010
Registered No: 1729887
________________________________________________________________________________________
2010
£’000
9,769
251
54
2009
£’000
9,769
379
49
10,074
10,197
2,795
2,783
5,578
3,351
2,499
5,850
15,652
16,047
476
1,514
130
2,120
-
2,120
13,532
429
1,848
22
2,299
280
2,579
13,468
Assets
Non – current assets
Goodwill
Property, plant and equipment
Deferred tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Financial liabilities
Trade and other payables
Current tax liabilities
Non-current liabilities
Financial liabilities – borrowings
Total liabilities
Net assets
Note
14
12
16
17
18
18
19
18
23
Prime People Plc
Consolidated statement of financial position at 31 March 2010 (continued)
________________________________________________________________________________________
Capital and reserves
Called up share capital
Capital redemption reserve fund
Treasury shares
Share premium account
Merger reserve
Share option reserve
Currency translation differences
Retained earnings
Note
20
2010
£’000
1,194
9
(9)
7,077
173
77
468
4,543
2009
£’000
1,203
-
-
7,095
173
176
486
4,335
Equity shareholders' funds
13,532
13,468
The financial statements were approved and authorised for issue by the Board on 3 June 2010.
R J G Macdonald
C I Heayberd
The notes on pages 28 to 52 form part of these financial statements
24
Prime People Plc
Company statement of financial position at 31 March 2010
Registered No: 1729887
________________________________________________________________________________________
Note
2010
£’000
Assets
Non-current assets
Investment in subsidiaries
Property, plant and equipment
Deferred tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Financial liabilities – borrowings
Other payables
Non-current liabilities
Financial liabilities – borrowings
Total liabilities
Net assets
Capital and reserves
Called up share capital
Capital redemption reserve fund
Treasury shares
Share premium account
Merger reserve
Share option reserve
Retained earnings
15
13
16
17
19
18
20
2009
£’000
10,926
6
37
10,969
766
1,526
2,292
10,876
3
1
10,880
200
2,211
2,411
13,291
13,261
296
33
329
-
329
288
51
339
280
619
12,962
12,642
1,194
9
(9)
7,077
173
37
4,481
1,203
-
-
7,095
173
65
4,106
Equity shareholders' funds
12,962
12,642
The financial statements were approved and authorised for issue by the Board on 3 June 2010
C I Heayberd
R J G Macdonald
The notes on pages 28 to 52 form part of these financial statements
25
Prime People Plc
Company Statement of changes in shareholders’ equity at 31 March 2010
________________________________________________________________________________________
Company
Called
up
share
capital
£’000
Capital
redemption
reserve
Treasury
shares
£’000
£’000
At 1 April 2008
1,203
Equity dividends
Adjustments in
respect of share
schemes
Profit for the
year
-
-
-
At 31 March
2009
1,203
Equity dividends
Shares purchased
for treasury
Adjustments in
respect of share
schemes
Shares purchased
for cancellation
Profit for the
year
-
-
-
(9)
-
At 31 March
2010
1,194
-
-
-
-
-
-
-
-
9
-
9
Share
premium
account
£’000
7,095
-
-
-
Share
option
reserve
Other
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
61
173
2,321
10,853
-
4
-
-
-
-
(289)
(289)
-
4
1,315
1,191
7,095
65
173
4,106
12,642
-
-
-
(18)
-
-
-
(28)
-
-
-
-
-
-
-
(238)
(238)
-
32
-
581
(9)
4
(18)
581
-
-
-
-
-
-
(9)
-
-
-
(9)
7,077
37
173
4,481
12,962
The Company has taken advantage of the exemption conferred by the Companies Act 2006 to not present its own profit and loss
account. The amount of consolidated profit after tax and before dividends dealt with in the financial statements of the parent is
£581,712 (2009: profit £1,315,040).
The notes on pages 28 to 52 form part of these financial statements.
26
Prime People Plc
Group and company cash flow statement for the year ended 31 March 2010
Group
Company
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
Note
22
Cash inflow / (outflow) from operating
activities
Cash generated by operations
Corporation tax paid
Corporation tax received
Net cash from operating activities
Cash inflow/(outflow) from investing
activities
Interest received
Interest paid
Net purchase of property, plant and
equipment
Dividend received
859
(78)
51
832
12
(11)
(51)
3,187
(631)
-
2,556
14
(37)
(290)
-
Net cash (used in)/from investing activities
(50)
(313)
Cash flows from financing activities
Repayment of borrowings
Purchase of own shares
Treasury shares
Dividend paid to shareholders
(280)
(18)
(9)
(238)
(280)
-
-
(289)
691
-
-
691
9
(9)
-
531
531
(280)
(18)
(9)
(238)
743
-
-
743
8
(37)
-
1,250
1,221
(280)
-
-
(289)
Net cash used in financing activities
(545)
(569)
(545)
(569)
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 April 2009
237
2,350
1,674
676
677
1,518
1,395
123
Cash and cash equivalents at 31 March
2010
23
2,587
2,350
2,195
1,518
The notes on pages 28 to 52 form part of these financial statements
27
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010
________________________________________________________________________________________
1 General information
Prime People Plc (‘the Company’) and its subsidiaries (together ‘the Group’) is an international
recruitment services organisation with offices in the United Kingdom, the Middle East, South Africa and
the Asia Pacific region from which it serves an international client base.
The company is a public limited company which is quoted as an AIM company and is incorporated and
domiciled in the UK. The address of the registered office is 40a Dover Street, London W1S 4NW. The
registered number of the Company is 1729887.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
2.1 Basis of preparation
The consolidated financial statements of Prime People Plc have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the
EU), IFRIC interpretations and the Companies Act 2006 applicable to Companies reporting under IFRS.
The consolidated financial statements have been prepared under the historical cost convention modified
as necessary so as to include any items at fair value, as required by accounting standards.
The accounting polices applied by the Group in these consolidated financial statements are the same as
those applied by the Group in it consolidated financial statements as at and for the year ended 31 March
2009 except as described below.
In the current financial year the Group has adopted International Accounting Standard 1 Presentation of
Financial Statements” (revised 2007) (IAS 1) and International Financial Reporting Standard 8
“Operating Segments” (IFRS 8).
The implementation of IAS 1 (revised 2007) resulted in changes to disclosure with the inclusion of a
Consolidated Statement of Comprehensive Income.
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of
the Group that are regularly reviewed by the Board to allocate resources to the segments and to assess
their performance.
The amendments to IFRS7 expand disclosures required in respect of fair value measurements and
liquidity risk. The Group has elected not to provide comparative information in the current in accordance
with the transitional reliefs offered in these amendments.
IFRS2 Share-based payment – Vesting Conditions and Cancellations has been amended to clarify the
definition of vesting conditions. These amendments have not resulted in significant changes.
The implementation of IAS 23 Borrowing costs (revised) resulted in clarification of the accounting
treatment of borrowing costs. These amendments have not resulted in significant changes.
IFRS 2008 Improvements (except IFRS 5) have been implemented. These amendments have not resulted
in significant changes.
28
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
At the date of authorisation of these financial statements, the following Standards and Interpretations
impacting the Group which have not been applied in these financials statements were in issue but not yet
effective
Amendments to IAS 20
IAS 23 (revised 2007)
IAS 27
IFRS 3
IFRS 2
Improvements to IFRS (IFRS 5) Non-current assets held for sale and discontinued operations
Amendments to IAS 32
Accounting for Government Grants and Disclosure of
Government Assistance
Borrowing Costs
Consolidated and Separate Financial Statements
Business Combinations
Amendments to group settled share based payment transaction
Amendments to IAS 39
Amendments to IFRIC 9
Amendments to IAS 39
IFRIC 16 -
IFRIC 17
IFRIC 18 -
Amendments to IFRS 2
Improvements to IFRS (April 2009)
Financial Instruments: Presentation and IAS 1 Presentation of
Financial Statements - Puttable Financial Instruments and
Obligations Arising on Liquidation
Financial Instruments: Recognition and Measurement Eligible
Hedged Items
Reassessment of embedded derivatives
Financial Instruments: Recognition and Measurement
Hedges of a net investment in a foreign operation
Distributions of Non-cash assets to owners
Transfers of Assets from Customers (adopted for transfers of
assets from customers received on or after 1 July 2009)
Group cash-settled share based payment transactions
The Directors anticipate that the adoption of the above Standards and interpretations in future periods
will have little of no impact on the financial statements of the Group when the relevant Standards come
into effect for periods commencing in or after 31 March 2010.
2.2 Consolidation
Subsidiaries are all entities over which the Group has the power to govern the financial and operating
policies, generally accompanying a shareholding of more than one half of the voting rights. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-consolidated from the date that control ceases. The
purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. 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, plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority
interest. 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. Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised losses are also eliminated but
considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
2.3 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. A geographical
segment is engaged in providing products or services within a particular economic environment that are
subject to risks and returns that are different from those of segments operating in other economic
environments.
29
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional
currency’). The consolidated financial statements are presented in pounds sterling (£), which is the
Company’s functional and presentation currency and rounded to the nearest thousand pound.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a
hyper-inflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
– assets and liabilities for each balance sheet presented are translated at the closing rate at the date of
that balance sheet;
– income and expenses for each income statement are translated at average exchange rates; and
–all resulting exchange differences are recognised as a separate component of equity. On
consolidation, exchange differences arising from the translation of the net investment in foreign
operations, are taken to shareholders’ equity.
2.5 Property, plant and equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, 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. The carrying amount of the replaced part is derecognised. All other
repairs and maintenance are charged to the income statement during the financial period in which they
are incurred.
Depreciation on assets is calculated using the straight-line method to allocate their cost to their residual
values over their estimated useful lives, as follows:
– Motor vehicles 20% – 33%
– Furniture, fittings and equipment 20% – 33%
– Leasehold improvements over the period of the lease.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount (note 2.7). Gains and losses on
disposals are determined by comparing the proceeds with the carrying amount.
30
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
2.6 Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the
net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on
acquisitions of subsidiaries is included in ‘intangible assets’. As permitted by the exception in IFRS1
‘First time adoption of International Reporting Standards’, the Group has elected not to apply IFRS3
‘Business combinations’ to goodwill arising on acquisition that occurred before the date of transition to
IFRS. Separately recognised goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses. Impairment losses on goodwill are not reversed. Goodwill is allocated to
cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose.
(b) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
bring to use the specific software. These costs are amortised over their estimated useful economic lives
(15% – 33% per annum).
Computer software development costs recognised as assets are amortised over their estimated useful lives
(15% – 33% per annum).
2.7 Impairment of non-financial assets
Assets that have an indefinite useful economic life, for example goodwill, are not subject to amortisation
and are tested annually for impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each
reporting date.
2.8
Financial assets and liabilities
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a
party to the contractual provision of the instrument. Non derivative financial instruments comprise trade
and other receivables, cash and cash equivalents, loans and borrowing and trade and other payables.
2.9
Trade receivables
Trade receivables are recognised initially at fair value. A provision for impairment of trade receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in
payments are considered indicators that the trade receivable is impaired. The amount of the provision is
the difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate. The carrying amount of the asset is reduced through the
use of an allowance account, and the amount of the loss is recognised in the income statement within
‘direct costs’. When a trade receivable is uncollectible, it is written off against the allowance account for
trade receivables. Subsequent recoveries of amounts previously written off are credited against ‘direct
costs’ in the income statement.
31
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
2.10 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities on the balance sheet.
2.11 Trade payables
Trade payables are recognised initially at fair value.
2.12 Borrowings
Borrowing are recognised at fair value net of transaction costs incurred.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
2.13 Current and deferred income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the Company’s subsidiaries operate and generate taxable
income. Deferred income tax is provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. Deferred income tax is determined using tax rates (and laws) 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.
2.14 Employee benefits
Share-based compensation
The Group operates equity-settled share-based compensation plans. The fair value of the employee
services received in exchange for the grant of the options is recognised as an expense. The total amount
to be expensed over the vesting period is determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions (for example, profitability and sales growth
targets). Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. At each balance sheet date, the entity revises its estimates of the number of options that
are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
32
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
2.15 Revenue recognition
Revenue comprises the fair value of the sale of services net of value-added tax, rebates and discounts and
after eliminating sales within the Group. Revenue is recognised as follows:
(a) Gross fee income
Revenue, which excludes value added tax (“VAT”), constitutes the value of services undertaken by
the Group as its principal activities, which are recruitment consultancy and other ancillary services.
These consist of:
– Revenue from temporary placements, which represents amounts billed for the services of temporary
staff, including the salary of these staff. This is recognised when the service has been provided;
– Revenue from permanent placements, which is based on a percentage of the candidate’s
remuneration package and is derived from both retained assignments (income recognised on
completion of defined stages of work) and non-retained assignments (income recognised at the date
an offer is accepted by a candidate, a start date has been agreed but employment has not yet
commenced). The latter includes revenue anticipated but not invoiced at the balance sheet date,
which is correspondingly accrued on the balance sheet within prepayments and accrued income. A
provision is made against accrued income based on past historical experience for possible
cancellations of placements prior to, or shortly after, the commencement of employment based on
past historical experience; and
– Revenue from amounts billed to clients for expenses incurred on their behalf (principally
advertisements) is recognised when the expense is incurred.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable.
(b) Direct costs
Direct costs consist of the salary cost of temporary staff and costs incurred on behalf of clients,
principally advertising costs.
(c) Net fee income
Net fee income represents revenue less cost of sales and consists of the total placement fees of
permanent candidates, the margin earned on the placement of temporary candidates and the margin
on advertising income.
2.16 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the income statement on a straightline basis over the period of the lease.
2.17 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
33
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
2.18 Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates and judgements. It also requires management to exercise judgement in the process
of applying the Company’s accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances. Management anticipate that any estimates and judgements made do not have a material
effect on the results.
In particular, information about significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the
financial statements are described in 2.15.
3
Financial risk
The Group’s activities expose it to a variety of financial risks; market risk, credit risk and liquidity risk.
The Group does not use derivative financial instruments to hedge risk exposures.
(a) Market risk
Market risk arises from the group’s exposure to foreign exchange risk arising from future commercial
transactions and recognised assets and liabilities in foreign operations. The principal foreign exchange
risk is to the UAE Dirham, Hong Kong Dollar and South African Rand.
The Group’s international operations account for approximately 15 per cent of gross fee income and
less than 10 per cent of the Group’s assets and consequently the Group has a degree of translation
exposure in accounting for overseas operations and its policy is not to hedge against this exposure. The
group seeks to minimise this exposure by converting into sterling all cash balances in foreign currency
that are not required for short term working capital monetary needs.
(b) Credit risk
The Group’s principal financial assets are bank balances and trade receivables. The Group’s credit risk
is primarily in respect of trade receivables. Credit risk refers to the risk that a client will default on its
contractual obligations resulting in financial loss to the Group. The Group does not have any significant
credit risk exposure to any individual client. However, in the current economic climate, there is
increased uncertainty regarding customers who may not be able to pay as their invoices fall due. In
reviewing the appropriateness of the provisions in respect of recoverability of trade receivables,
consideration has been given to the ageing of the debt and the potential likelihood of default, taking into
account current economic conditions.
(c) Liquidity risk
Effective liquidity risk management requires maintaining sufficient cash and credit facilities to meet
forecast cash requirements of the Group. Management monitors its forecasted cash flow requirements at
a Group level based on monthly returns made by the Group’s operating units.
34
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
4
Segmental analysis
a) Gross fee income, net fee income and operating profit by geographic region
Gross fee income
Net fee income
31 March
2010
£’000
31 March
2009
£’000
31 March
2010
£’000
31March
2009
£’000
Operating profit
31 March
2010
£’000
31 March
2009
£’000
UK
Other
12,163
17,476
4,656
7,221
628
1,022
2,017
3,192
2,017
3,192
(167)
(272)
Total
14,180
20,668
6,673
10,413
461
750
b) Segment assets, liabilities and capital expenditure by geographical region
Total assets
Total liabilities
31 March
2010
£’000
31 March
2009
£’000
31 March
2010
£’000
31March
2009
£’000
Capital expenditure
31 March
2010
£’000
31 March
2009
£’000
UK
Other
14,120
14,285
1,605
2,083
1,532
1,762
515
496
Total
15,652
16,047
2,120
2,579
49
2
51
136
155
291
c) Gross fee income and net fee income generated from permanent and temporary placements
Permanent
Temporary
Total
Gross fee income
Net fee income
31 March
2010
£’000
31March
2009
£’000
31 March
2010
£’000
31 March
2009
£’000
5,392
9,082
8,788
11,586
5,206
1,467
7,843
2,570
14,180
20,668
6,673
10,413
35
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
5 Operating profit
Year ended 31
March 2010
Year ended 31
March 2009
£’000
£’000
This is arrived at after charging
Fees payable to the company’s auditor for the audit of the
company’s annual accounts
Fees payable to the company’s auditor and its associates for other services
- the audit of the company’s subsidiaries pursuant to legislation
- tax services
Depreciation
- owned assets
Operating lease rentals
- land and buildings
- other operating leases
12
40
1
189
354
13
(1)
17
23
3
224
584
11
(24)
Exchange rate gain
6 Directors remuneration
Directors' remuneration consists of:
Fees and emoluments for management services
Highest paid director:
Emoluments
Year ended 31
March 2010
£’000
Year ended 31
March 2009
£’000
425
425
163
163
440
440
164
164
The directors are the key management personnel of the group.
Directors’ Options
At 31 March 2010 directors’ options on ordinary shares of 10p each granted under the Prime
People Enterprise Management Incentive Scheme, were as follows:
Director
Date Granted Granted
Exercise Price
Exercise Period
S J Murphy
16 May 2005
184,234
57.5p
16 May 2007 - 15 May 2015
C I Heayberd
25 September 2009
184,234
20.5p 25 September 2009 – 2 July 2011
36
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
7
Staff costs including (directors)
Group
The average monthly number of employees of the Group during
the year, including directors, was as follows:
Consultants
Management and administration
Year ended
31 March
2010
Number
Year ended 31
March 2009
Number
59
27
86
94
32
126
Company
Year ended
31 March
2010
Number
Year ended 31
March 2009
Number
The average monthly number of employees of the Company
during the year, including directors, was as follows:
Management
5
5
Staff costs for all employees, including directors, but excluding temporary staff placed with clients
consists of:
Group
Wages and salaries
Social security costs
8
Finance expense
Bank interest
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
3,717
334
6,115
515
4,051
6,630
Year ended
31 March
2010
£’000
11
11
Year ended 31
March 2009
£’000
37
37
37
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
9 Taxation
Current tax
UK Corporation tax
UK tax over provided in previous years
Total current tax
Deferred tax
Origination and reversal of temporary differences
Total income tax expense in the income statement
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
135
(1)
134
(5)
129
190
(17)
173
17
190
The tax assessed for the year is equal to that obtained by applying the standard rate of corporation tax in
the UK. The differences for the prior year are explained below:
Profit before taxation
Year ended
31 March
2010
Year ended
31 March
2009
462
727
UK corporation tax at the standard rate of 28% (2009: 28%) on
profit on ordinary activities
129
204
Effects:
Expenses not deductible for tax purposes
Capital allowances for the period less than depreciation
Tax losses utilised
Tax rate differences
Marginal relief
Overprovision provision in prior years
24
4
(13)
(12)
(2)
(1)
24
10
-
(31)
-
(17)
129
190
38
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
10 Dividends
Final dividend for 2009: Nil p per share (2008: 2.40p per
share)
Interim dividend for 2010: 2p per share (2009: Nil p per
share)
Year ended
31 March
2010
£’000
Year ended 31
March 2009
£’000
-
238
238
288
-
288
The directors propose to pay a final dividend in respect of the year ended 31 March 2010 of 1.5 pence per
share which will be paid on 9 July 2010 to shareholders who are on the register on 25 June 2010.
11 Earnings per share
Earnings per share (EPS) has been calculated in accordance with IAS 33 “Earnings per share” and is
calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the year.
Earnings and weighted average number of shares used in the calculations are shown below.
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
Retained profit for basic earnings per share
333
537
Weighted average number of shares used for basic and
continuing earnings per share
Dilutive effect of share options and shares to be issued
11,956,824
314,761
12,028,900
835,155
Number
Number
Diluted weighted average number of shares used for diluted
earnings per share
12,271,585
12,864,055
Basic earnings per share
Diluted earnings per share
Continuing basic earnings per share
Continuing diluted earnings per share
39
Pence
Pence
2.79p
2.71p
2.79p
2.71p
4.47p
4.18p
4.47p
4.18p
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
12 Property, plant and equipment
Group
Cost
At 1 April 2008
Additions
Disposals
Exchange rate gain
At 1 April 2009
Additions
Disposals
Exchange rate gain/(loss)
At 31 March 2010
Depreciation
At 1 April 2008
Provision for the year
Disposals
Exchange rate gain
At 1 April 2009
Provision for the year
Disposals
Exchange rate gain/(loss)
At 31 March 2010
Net book value
At 31 March 2010
At 31 March 2009
At 31 March 2008
Total
£’000
792
291
(9)
16
1,090
51
(6)
(7)
1,128
478
224
(7)
16
711
189
(6)
(17)
877
251
379
314
Fixtures,
fittings and
equipment
£’000
Motor
vehicles
£’000
39
-
-
6
45
-
-
(23)
22
17
14
-
6
37
7
-
(28)
16
6
8
22
753
291
(9)
10
1,045
51
(6)
16
1,106
461
210
(7)
10
674
182
(6)
11
861
245
371
292
40
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
Fixtures, fittings and
equipment
£’000
24
(5)
19
16
2
(5)
13
3
16
3
6
8
13 Property, plant and equipment
Company
Cost
At 1 April 2008
Disposals
At 1 April 2009 and 31 March 2010
Depreciation
At 1 April 2008
Provision for the year
Disposals
At 1 April 2009
Provision for the year
At 31 March 2010
Net book value
At 31 March 2010
At 31 March 2009
At 31 March 2008
41
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
14
Goodwill
At 1 April 2008, 1 April 2009 and 31 March 2010
Goodwill
£’000
9,769
Goodwill is not amortised but the Group tests it annually for impairment with the recoverable amount
being determined from value in use calculations. Value in use is determined through the analysis of
discounted cash flow forecasts based on financial forecasts approved by the management which takes
account of both past performance and expected future market developments. Management have used a
post tax discount rate of 9 per cent, equivalent to its weighted average cost of capital. This has been
determined as reflecting current market assessments of the time value of money and risks specific to the
industry and Company.
15 Non current asset investments
Company
Cost
At 1 April 2008, 1 April 2009 and 31 March 2010
Amounts provided
At 1 April 2008 and 1 April 2009
Provided in year
At 31 March 2010
At 31 March 2010
At 1 April 2008 and 1 April 2009
42
Shares in
subsidiary
undertakings
£’000
11,139
213
50
263
10,876
10,926
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
15 Non current asset investments (Continued)
The following are subsidiary undertakings at the end of the year and have all been included in the
consolidated financial statements:
Macdonald & Company
Group Limited
Macdonald & Company
Property Limited
Macdonald and Company
Freelance Limited
Macdonald & Company
(Overseas) Limited
Propertejobs.com
Limited
Country of
incorporation
business
Proportion of
Nature of
voting rights and subsidiary
ordinary share
capital held
undertakings
England and Wales
100%
Holding Company
England and Wales
100%
Recruitment
England and Wales
100%
Recruitment
England and Wales
100%
Dormant
England and Wales
100%
Dormant
Macdonald & Company Pty Ltd Australia
Macdonald & Company Ltd
Hong Kong
Macdonald & Company
Recruitment Limited
Hong Kong
100%
100%
100%
Recruitment
Recruitment
Dormant
Macdonald & Company
Recruitment Proprietary Ltd
Harper Craven Associates
Limited
South Africa
100%
Recruitment
England and Wales
100%
Management training
For all undertakings listed above, the country of operation is the same as its country of incorporation.
43
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
16 Deferred tax asset
Group
Depreciation in excess
of capital allowances
£’000
Balance at 1 April 2008
Charge / (Credit)
Balance at 31 March 2009
Charge / (Credit)
Balance at 31 March 2010
Company
Balance at 1 April 2008
Credit to income
Balance at 31 March 2009
Charge to income
Balance at 31 March 2010
(2)
15
13
41
54
Capital allowances
more than
depreciation
£’000
1
-
1
-
1
Losses
£’000
68
(32)
36
(36)
-
Losses
£’000
68
(32)
36
(36)
-
Total
£’000
66
(17)
49
5
54
Total
£’000
69
(32)
37
(36)
1
17 Trade and other receivables
Amounts receivable within one year
Trade receivables
Amounts owed by subsidiary undertakings
Other receivables
Prepayments and accrued income
Group
2010
£’000
1,529
-
293
973
2009
£’000
1,619
-
378
1,354
2,795
3,351
Company
2010
£’000
2009
£’000
-
-
188
12
200
-
573
185
8
766
44
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
18 Financial Instruments
Financial assets
Trade and other receivables
Cash and cash equivalents
Note
17
2010
£’000
2,795
2,783
2009
£’000
3,351
2,499
5,578
5,850
Sterling
Cash is held either on current account or on short term deposits at floating rates of interest determined by
the relevant bank's prevailing base rate.
To date, the Group’s currency exposure is limited and it has not been necessary to use any derivative
financial instruments to manage this exposure. Any resulting gains or losses are recognised in the profit
and loss account.
2010
£’000
2009
£’000
280
196
476
280
149
429
2010
£’000
2009
£’000
-
-
280
280
Financial liabilities
Current
Bank loan (Secured)
Bank overdraft
Non-current
Bank loan (Secured)
45
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
18 Financial Instruments (continued)
The maturity of these obligations is as follows:
In one year or less
In more than one year but less than two years
2010
£’000
476
-
476
2009
£’000
429
280
709
The Group's financial liabilities consist of a bank overdraft and a bank loan both denominated in sterling.
Bank overdraft
The Group has not renewed its borrowing facilities with Barclays Bank Plc as the Board consider that
the net cash within the group is sufficient to meet existing and foreseeable liabilities as they fall due.
Bank loan
On 3 January 2006 the company entered into a loan agreement with Barclays Bank Plc to part fund the
acquisition of Macdonald & Company Group Limited. Loan repayments commenced in April 2006 in 20
equal quarterly instalments with the final repayment due in January 2011. Interest on the loan is payable
at 1.75 per cent over bank base rate. The loan is secured by a fixed and floating charge over all the assets
of Prime People Plc and its subsidiary companies. The balance outstanding at the year end is £280k
(2009: £560k).
There is no material difference between the book values of the group's financial assets and liabilities and
their fair values.
The Group does not hold any derivative financial instruments.
46
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
19 Trade and other payables – current
Trade payables
Amounts owed to subsidiary undertakings
Other payables
Taxation and social security
Accruals and deferred income
Group
Company
2010
£’000
75
-
227
477
735
2009
£’000
168
-
227
507
946
1,514
1,848
2010
£’000
2009
£’000
-
11
-
9
13
33
13
-
-
4
34
51
20 Share capital
31 March 2010
31 March 2009
Number
£’000
Number
£’000
AUTHORISED
New ordinary shares of 10p each
Ordinary shares of 10p each
16,000,000
-
1,600
-
-
16,000,000
-
1,600
16,000,000
1,600
16,000,000
1,600
ALLOTTED, CALLED UP AND FULLY PAID
New ordinary shares of 10p each
At beginning of period
Share consolidation
Share subdivision
-
23,883
11,917,617
11,941,500
-
1,194
-
1,194
-
-
-
-
Ordinary shares of 10p each
At beginning of period
Shares issued
Shares cancelled
Share consolidation
12,028,900
100
(87,500)
(11,941,500)
1,203
-
(9)
(1,194)
12,028,900
-
-
-
-
-
-
1,203
-
-
-
-
12,028,900
1,203
47
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
20 Share capital (continued)
On 7 July 2009 the shareholders of the company approved the reorganisation of the share capital of the
company by the consolidation of every 500 issued ordinary shares of 10p each into one New Ordinary
share of 10p each. As part of this restructure 100 shares were issued and 8,750 cancelled. Further
approval was given by shareholders that every Consolidated Ordinary share be subdivided into 500 New
ordinary shares of 10p value. The subdivision took effect on 8 July 2009.
At 31 March 2010, 25,000 shares were held in treasury (2009: Nil shares of nominal value £Nil). The
maximum number of shares held in treasury during the year was 25,000 shares (2009: Nil shares of
nominal value £Nil), representing 0.002% (2009: Nil %) of the called up ordinary share capital of the
company.
Merger reserve
The merger reserve arose on the issue of shares less shares issued to acquire subsidiaries.
48
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
20 Share capital (continued)
Employee share schemes
The Company operates two share options schemes, an Employee Management Incentive Scheme and a
HM Revenue & Customs SAYE approved scheme.
Enterprise Management Incentive Scheme (EMI)
The Company established an Enterprise Management Incentive Scheme on 16 May 2005.
Details are as follows:-
Year
of
grant
Exercise
Price
Pence
Exercise
Period
Number of
options
31 March 2009
Granted
Cancelled
Number of
Options
31 March
2010
2006
57.5
2007-2015
368,467
2007
90.5
2008-2013
2008
122.00 2009-2014
2010-2015
113.50
2009
20.50 2011-2016
20.77 2011-2016
31.50 2012-2017
31.50 2014-2019
99,000
40,000
192,000
-
-
-
-
-
-
-
184,234
312,000
40,000
200,000
(184,234)
184,233
(94,000)
5,000
(40,000)
(178,000)
-
14,000
-
(60,000)
-
-
184,234
252,000
40,000
200,000
Total 2010
699,467
736,234
(556,234)
879,467
Weighted average exercise price
2010 (pence)
Total 2009
Weighted average exercise price
2009 (pence)
95.88
8.08
56.59
51.98
699,467
87.41p
-
-
-
-
699,467
95.88p
49
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
20 Share capital (continued)
There were 879,467 options outstanding at 31 March 2010 which had a weighted average price per share
of 51.98p (£2009: 95.88p). The performance conditions which gives the option holders the right to
exercise their options under the EMI have been achieved. All the options granted during the year have
been valued on a weighted average basis using the Black-Scholes option pricing model with the
following assumptions:
Share price (pence)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
2010
52.25
60.71
4.2
2
2009
95.88
40.25
4.45
2
Expected volatility was determined by reference to historical volatility of the company’s share price.
2001 Employee Share Option Scheme
There are no share options held under the HM Revenue & Customs approved scheme.
SAYE Share Scheme
The company operates a three year save as you earn (SAYE) scheme for the benefit of the employees
within the company which is administered by Barclays Bank Trust Company Limited.
On 3 September 2007 all eligible employees within the group were invited to buy shares in Prime People
Plc.
Details are as follows:
Year of
grant
Exercise
price
Pence
Exercise
period
Number of
options
31 March
2009
2008
86.00
2011
135,689
Total 2010
135,689
Weighted average exercise price
2010 (pence)
Total 2009
Weighted average exercise price
2009 (pence)
86.0p
222,800
49.24p
50
Granted
Leavers
Number of
Options
31 March
2010
-
-
-
-
-
(63,135)
72,554
(63,135)
72,554
86.0p
86.0p
(87,111)
135,689
86.0p
86.0p
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
20 Share capital (continued)
There were 72,554 SAYE options outstanding at 31 March 2010 which had a weighted average price per
share of 86.0p (2009: 86.0p). All the SAYE options have been valued using the Black-Scholes option
pricing model with the following assumptions:
Share price (pence)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
21 Commitments
2010
107.0
37.0
4.0
3
2009
107.0
37.0
4.0
3
As at 31 March 2010 the group was committed to making the following total payments in respect of
operating leases:
Group
Land and
buildings
2010
£’000
Other
2010
£’000
Land and
buildings
2009
£’000
Other
2009
£’000
leases which
Non-cancellable operating
expire:
Within one year
Within one to two years
Within two to five years
After five years
18
-
1,163
269
1
6
24
-
132
-
913
404
1,450
31
1,449
-
-
43
-
43
The Company does not hold non-cancellable operating lease agreements.
22 Reconciliation of operating profit to net cash inflow from operating activities
Group operating profit
Depreciation
Share option reserve movement
Effect of exchange rate changes
Decrease in debtors
Decrease in creditors
Group
Company
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
Year ended
31 March
2010
£’000
Year ended
31 March
2009
£’000
461
189
14
(28)
555
(332)
750
224
40
501
2,400
(728)
859
3,187
51
137
2
4
-
566
(18)
691
127
2
-
-
633
(19)
743
Prime People Plc
Notes forming part of the financial statements for the year ended 31 March 2010 (Continued)
________________________________________________________________________________________
23 Analysis of net cash
Group
At 1 April
Cash flow
At 31 March
Cash at bank and in hand
Bank overdraft
Bank loans due within one year
Bank loans due after one year
Total cash/(debt)
Company
Cash at bank and in hand
Bank overdraft
Bank loans due within one year
Bank loans due after one year
Total (debt)/cash
2009
£’000
2,499
(149)
2,350
(280)
(280)
1,790
£’000
284
(47)
237
-
280
517
2010
£’000
2,783
(196)
2,587
(280)
-
2,307
At 1 April
200
£’000
1,526
(8)
1,518
(280)
(280)
958
Cash flow
£’000
685
(8)
677
280
957
At 31 March
2010
£’000
2,211
(16)
2,195
(280)
-
1,915
24 Related party transactions
Prime People Plc provides various management services to its subsidiary undertakings. These services
take the form of centralised Finance and Operations support. The Company also provides corporate
guarantees on the subsidiary bank accounts. The total amount charged by the Company to its subsidiaries
during the year is £403k (2009: £414k). The balance owed by the subsidiary undertakings at the year end
is £Nil (2009: £573k).
52
Prime People Plc
Notice of Annual General Meeting
Notice is hereby given that the twenty-sixth Annual General Meeting of Prime People Plc (the “Company”) will be held
at 40a Dover Street, Mayfair, London, W1S 4NW on Tuesday 6 July 2010 at 11.00am for the following purposes:
Ordinary Business:
1. To receive the Company's financial statements for the year ended 31 March 2010 together with the reports of the
directors and auditors thereon.
2. To approve the Remuneration Report.
3. To reappoint Mr C I Heayberd as a director, who retires by rotation pursuant to the articles of association, and being
eligible, offers himself up for reappointment.
4. To reappoint Horwath Clark Whitehill LLP as auditors for the ensuing year.
5. To authorise the Directors to determine the remuneration of the auditors.
Special Business:
6. To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That, in substitution for any existing powers, the Directors be and are hereby generally and unconditionally authorised in
accordance with Section 551 of the Companies Act 2006 ('the Act') to exercise all powers of the Company to allot
ordinary shares up to an aggregate nominal amount of £398,050 provided that this authority shall expire at the conclusion
of the Annual General Meeting to be held in 2011 or 15 months after the passing of this resolution (whichever is the
earlier) save that the Company may before such expiry make an offer or agreement which would or might require
ordinary shares to be allotted after such expiry and the Directors may allot ordinary shares in pursuance of such an offer
or agreement as if the authority conferred hereby had not expired.
7. To consider, and, if thought fit, to pass the following resolution as a special resolution:
That, in substitution for all existing powers, under Section 570 of the Act, but without prejudice to the exercise of such
power prior to the date hereof, the Directors be and are hereby empowered to allot equity securities (as defined in Section
560(1) and 560(2) of the Act) for cash pursuant to the authority conferred in accordance with Section 551 of the Act
pursuant to Resolution 6 above as if Section 561of the Act did not apply to such allotment provided that this power shall
be limited:
a)
b)
to the allotment of equity securities in connection with a rights issue, open offer or otherwise in favour of the
holders of equity securities in proportion to their respective holdings of such securities but subject to such
exclusions or other arrangements as the Directors may deem necessary or expedient to deal with legal or practical
problems in respect of overseas holders, fractional entitlements or otherwise; or
to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate
nominal amount of £59,708.
8. To consider, and, if thought fit, to pass the following resolution as a special resolution:
That the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Act
to make one or more market purchases (as defined in section 693 of the Act)) on the AIM Market of the London Stock
Exchange plc of ordinary shares of 10p each in the capital of the Company provided that:
a) The maximum aggregate number of new ordinary shares authorised to be purchased is 1,174,150 (representing
approximately 10 per cent of the Company’s current issued ordinary share capital).
b) The minimum price which may be paid for such shares is £0.10 per share.
c) The maximum price which may be paid for an ordinary share shall not be more than 5 per cent above the average
of the middle market quotations for a new ordinary share as derived from the London Stock Exchange plc for the
five business days immediately preceding the date on which the new ordinary share is purchased.
d) Unless previously renewed, varied or revoked, the authority hereby conferred shall expire at the earlier of the
Company’s next Annual General Meeting or 18 months from the date of passing this resolution.
e) The Company may make a contract or contracts to purchase new ordinary shares under the authority conferred
prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such
authority and may make a purchase of new ordinary shares in pursuance of any such contract or contracts.
Registered Office By order of the Board
40a Dover Street
London W1S 4NW
C I Heayberd
Secretary
3rd June 2010
53
Prime People Plc
Notice of Annual General Meeting (continued)
Notes:
.
.
.
1. A member entitled to speak, attend and vote at the above meeting convened by the above notice is entitled to appoint a
proxy to attend, speak and vote in his place. Such proxy need not be a member of the Company. 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.
2. A member may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by the member. A member wishing to appoint more than
one proxy should photocopy the proxy card and indicate on each copy the name of the proxy he appoints and the number
of shares in respect of which that proxy is appointed.
3. A form of proxy is enclosed. The appointment of a proxy will not prevent a Shareholder from subsequently attending
and voting at the meeting in person, in which case any votes cast by the proxy will be excluded and the proxy
appointment will automatically be terminated. In order to revoke a proxy appointment Shareholders will need to inform
the Company by sending a signed hard copy notice clearly stating the intention to revoke the proxy appointment to the
Company's registrars, Neville Registrars Limited, Neville House 18 Laurel Lane Halesowen West Midlands B63 3DA by
the time appointed for holding the meeting or adjourned meeting, or in the case of a poll taken subsequently to the
meeting or adjourned meeting, by the time appointed for taking the poll.
4. To be effective the instrument of proxy and the power of attorney or other written authority (if any) under which it is
signed, or an office or notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 or
the Enduring Powers of Attorney Act 1986 (or any statutory modification or re-enactment thereof for the time being in
force) of any such power or written authority must be deposited at the Company's registrars, Neville Registrars Limited,
Neville House 18 Laurel Lane Halesowen West Midlands B63 3DA, not less than 48 hours before the time appointed for
holding the meeting or adjourned meeting, or in the case of a poll taken subsequently to the meeting or adjourned
meeting, not less than 24 hours before the time appointed for taking the poll. Where a poll is not taken forthwith but is
taken less than 48 hours after it was demanded, the instrument of proxy together with any other documents required to be
deposited shall be deemed to have been deposited if handed to the chairman of the meeting at which the poll is validly
demanded at any time prior to the commencement of such meeting and if so delivered the instrument of proxy shall be
treated as valid.
5. Directors' service contracts together with a copy of the Rules to the company's Inland Revenue Approved Employee
Enterprise Management Incentive Scheme and the minutes of the previous Annual General Meeting will be available for
inspection during the Annual General Meeting and for at least 15 minutes before it begins.
6. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those Shareholders entered
on the Company’s register of members not later than 48 hours before the time of the meeting or, if the meeting is
adjourned, Shareholders entered on the Company’s register of members not later than 48 hours before the time fixed for
the adjourned meeting, will be entitled to attend and vote at the meeting. Changes to entries on the register of members
after such time on such date will be disregarded in determining the rights of any person to attend and vote at the meeting.
54
Prime People Plc
Form of Proxy
For use at the Annual General Meeting convened for Tuesday 6 July 2010 at 11.00am.
I/We
Of
being (a) member(s) of the above-named Company, hereby appoint the Chairman for the time being of the meeting or*
as my/our proxy to attend, speak and vote for me/us on my/our behalf at the Annual General Meeting of the Company to
be held at 40a Dover Street, London, W1S 4NW on Tuesday 6 July 2010 at 11.00am and at any adjournment thereof.
I/We direct my/our proxy to vote with an X in the spaces below on the resolutions set out in the notice convening the
Annual General Meeting as follows, (if no indication is given, your proxy will vote for or against the resolution or
abstain from voting as he thinks fit):
ORDINARY BUSINESS
FOR
AGAINST
ABSTAIN
1. To approve
the Company's financial
statements for the year ended 31 March
2010 together with the reports of the
directors and auditors thereon.
2. To approve the Remuneration Report.
3. To reappoint Mr C I Heayberd as a
director
4. To re-appoint Horwath Clark Whitehill
LLP as auditors for the ensuing year
5. To authorise the directors to determine
the remuneration of the auditors.
SPECIAL BUSINESS
6. To authorise the directors to issue new
shares
7. To empower the directors to allot shares
for cash.
8. To authorise the directors to make market
purchases of its own shares.
If no indication is given, my/our proxy will vote or abstain from voting at his or her discretion and I/we authorise my/our
proxy to vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the
meeting.
Signed this
__________________________________________________________________________
day of
2010
Signature
___________________________________________________________________________
55
SECOND FOLD
BUSINESS REPLY SERVICE
Licence No BM3865
NEVILLE REGISTRARS LIMITED
NEVILLE HOUSE
18 LAUREL LANE
HALESOWEN
WEST MIDLANDS
B63 3BR
F
I
R
S
T
F
O
L
D
THIRD FOLD AND TUCK IN
56
Prime People Plc
Form of Proxy (continued)
Notes:
1. If any other proxy is preferred, strike out the words "Chairman of the Meeting" and add the NAME and ADDRESS of
the proxy you wish to appoint and initial the alteration. The proxy need not be a member.
2. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder's name and the
number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the
number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given.
All forms must be signed and should be returned together in the same envelope.
3. If the appointer is a corporation, this form must be completed under its common seal or under the hand of some officer
or attorney duly authorised in writing.
4. The signature of any one of the joint holders will be sufficient, but the names of all the joint holders should be stated.
In the case of joint holders of a share, the vote of the senior who tenders a vote whether in person or by proxy shall be
accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the
order in which the names stand in the register of members in respect of the share.
5. To be effective this form and the power of attorney or other written authority (if any) under which it is signed, or an
office or notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 or the Enduring
Powers of Attorney Act 1986 (or any statutory modification or re-enactment thereof for the time being in force) of any
such power or written authority must be deposited at the Company's registrars, Neville Registrars Limited, Neville House
18 Laurel Lane Halesowen West Midlands B63 3DA not less than 48 hours before the time appointed for holding the
meeting or adjourned meeting, or in the case of a poll taken subsequently to the meeting or adjourned meeting, not less
than 24 hours before the time appointed for taking the poll. Where a poll is not taken forthwith but is taken less than 48
hours after it was demanded, this form together with any other documents required to be deposited shall be deemed to
have been deposited if handed to the Chairman of the Meeting at which the poll is validly demanded at any time prior to
the commencement of such meeting and if so delivered the instrument of proxy shall be treated as valid.
6. The completion of this form will not preclude a member from attending the meeting and voting in person in which
case any votes cast by the proxy will be excluded and your proxy appointment will automatically be terminated. In order
to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating
the intention to invoke the proxy appointment to the Company's registrars, Neville Registrars Limited, Neville House 18
Laurel Lane Halesowen West Midlands B63 3DA by the time appointed for holding the meeting or adjourned meeting,
or in the case of a poll taken subsequently to the meeting or adjourned meeting, by the time appointed for taking the poll.
7. Any alteration of this form must be initialled.
8. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members entered on
the Company’s register of members not later than 48 hours before the time of the meeting or, if the meeting is adjourned,
Shareholders entered on the Company’s register of members not later than 48 hours before the adjourned meeting, will
be entitled to attend and vote at the meeting. Changes to entries on the register of members after such time will be
disregarded in determining the rights of any person to attend and vote at the meeting.
57
Financial Calendar
Half year results
Full year results
Report and accounts
-
-
-
Announcement November 2010
Announcement June 2011
Posted to shareholders June 2011
Harper Craven Associates Limited
Rocklands Place
Boreham Lane
Watling
Nr Herstmonceux
East Sussex
T: + (0) 8707 503 630
F: + (0) 1323 834 929
www.harpercraven.co.uk
E: infocentre@harpercraven.co.uk
Macdonald & Company
York House
20 York Street
Manchester
M2 3BB
T: + (0) 161 605 0500
F: + (0) 161 605 0505
www.macdonaldandcompany.co.uk
E: manchester@macdonaldandcompany.com
Macdonald & Company
Gleneagles House
Fairway Office Park
52 Grosvenor Road
Beyanston
South Africa
T: + 27 11 361 5900
www.macdonaldandcompany.co.za
E: southafrica@macdonaldandcompany.com
Principal Addresses
Prime People Plc
40a Dover Street
Mayfair
London
W1S 4NW
T: + (0) 20 7318 1785
F: + (0) 870 442 1737
www.prime-people.co.uk
E: co.sec@prime-people.co.uk
Macdonald & Company
40a Dover Street
Mayfair
London
W1S 4NW
T: + (0) 20 7629 7220
F: + (0) 20 7629 3990
www.macdonaldandcompany.co.uk
E: london@macdonaldandcompany.com
Macdonald & Company
Office 206 - 207
Barsha Valley Building
Al Barsha 2
PO BOX 282196
Dubai
United Arab Emirates
T: + 971 4 430 9233
www.macdonaldandcompany.ae
E: dubai@macdonaldandcompany.com
Macdonald & Company
16th Floor
1 Duddell Street
Central
Hong Kong
T: + 852 2248 3000
F: + 852 2526 9150
www.macdonaldandcompany.hk
E: hongkong@macdonaldandcompany.com
Prime People Plc
40a Dover Street
Mayfair
London W1S 4NW
Tel: 0207 318 1785
Fax: 0870 442 1737