Prime People Plc
Annual Report and Accounts
Annual report and financial statements
for the year ended 31 March 2011
2011
Contents
Chairman's statement
Operating review
Financial review
Board of Directors
Report of the Directors
Statement of Directors responsibilities
Corporate governance
Remuneration report
Independent Auditors’ report
Consolidated statement of comprehensive income
Consolidated statement of changes in 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
Directors and Advisers
Notice of Annual General Meeting
Form of Proxy
Page
1
2
3
4
5
11
12
15
18
20
21
22
24
25
26
27
55
56
58
through
Share Buy Back
During the year 55,000 shares at a cost of £30,375
(2010: 25,000 shares at a cost of £8,750) were
the Group‟s buy back
purchased
programme and
the Board will be seeking
shareholder approval for the renewal of the
authority to repurchase up to 10% of the Group‟s
issued share capital at the Annual General Meeting
on 28 June 2011.
Strategy
With recruitment being driven to a very large
extent by the economic cycle it is our strategy to
broaden, whether by organic growth or
acquisition, the recruitment service that the Group
the
time
provides when
opportunity arises, both by geography and sector.
We continue
in our established
invest
businesses and we are looking to extend our reach
in South East Asia. We expect to add to our
established presence in that region (Hong Kong
since 2006) by opening an office in China.
right and
the
to
is
there
continues
Outlook
Whilst
to be uncertainty
surrounding recovery in the UK, there is evidence
of confidence returning to our markets. Our
to our
revenues provide diversity
overseas
business and, subject to there being no systemic
shocks, we look forward with some confidence to
2012.
Our people
Finally, I should like to thank our staff for their
hard work and commitment over the last twelve
months. These results are a testament to their
efforts.
Robert Macdonald
Executive Chairman
2 June 2011
PRIME PEOPLE PLC
Chairman's Statement
Introduction
We saw a continuation of the improvement in
overall market conditions and both our net fee
income and profitability in the year to 31 March
2011.
The recovery has been in permanent placements,
where net fee income grew by 35% in the year.
Our temporary business suffered a decline in sales
and net fee income as a direct result of Public
Sector spending cuts. The ratio of net fee income
from permanent placements
temporary
placements has increased from 78:22 in 2010 to
88:12 in the year being reported.
to
We have increased our permanent consultant
headcount within our established areas of activity
and broadened our business into new end markets.
The Group generated 29% of its net fee income
outside the UK, which is broadly similar to the
30% achieved in 2010.
Results
Operating profit for the year was £1.01m (2010:
£0.46m), a significant improvement on the prior
year. Basic earnings per share increased to 5.86p
(2010: 2.79p).
The conversion rate of operating profit from net
fee income increased from 6.9% in 2010 to 12.5%
in 2011.
Gross revenue was marginally down at £13.95m
reflecting the lower level of temporary business
income
(2010: £14.18m). However, net fee
increased by 20.5% to £8.04m (2010: £6.67m).
The Group maintained a strong net cash position
with £3.03m as at 31 March 2011 (2010: £2.3m).
During the year the Group repaid the final tranche
of the bank loan entered into with Barclays Bank
Plc in January 2006 to part fund the acquisition of
Macdonald & Company Group Limited.
Dividends
The Board will be recommending an increase in
the final dividend to 2.25p (2010: 1.5p) per share
which combined with the interim dividend of
1.75p per share, will result in a total dividend of
4.00p (2010: 3.5p).
1
similar
to 2010, productivity per head has
increased by 16% and we are looking for this to
further improve in 2012.
A testament to the above approach is that our
largest brand, Macdonald & Company, was placed
in the top 100 companies to work for by the
Sunday Times and achieved 2 Star Status in “The
Sunday Times 100 Best Small Companies To
Work For 2011”.
Current Trading
The outlook for the year remains positive. We
believe that the strong market position of our UK
business combined with the continued investment
in new sectors and our overseas businesses will
enable us to further increase the net fee income
generated by the Group.
Peter Moore
Managing Director
2 June 2011
PRIME PEOPLE PLC
Operating Review
The Business
The Group‟s principal activity is the delivery of
permanent and temporary recruitment services.
Historically, the Group‟s focus has been to provide
these services into the built environment sector.
More
the Group has successfully
broadened its sector focus to include provision of
recruitment services for customer insight staff in
the market research and data analysis sectors.
recently
The Group has delivered strong net fee income
growth of 20.5% increasing net fee income from
£6.67m to £8.04m producing an operating profit of
£1.01m (2010: £0.46m).
the
Insight,
customer
In the UK business a number of our teams have
had a strong year. It is very encouraging to report
that Prime
insight
recruitment business closed with net fee income up
by 147%. Against this net fee income from our
temporary business reduced by 33% from £1.47m
to £0.98m, as referred to in the Chairman‟s
Statement this area has been affected by the
government spending cuts.
On the international front, net fee income grew by
15.8% from £2.02m to £2.34m, reflecting a partial
return of confidence to the Middle East market and
the strength of the South East Asia market. With
respect
the
consultant headcount in our Hong Kong office
during the course of the year, which we expect to
provide strong net fee income growth in 2012.
latter we have doubled
the
to
and
Internationally
During the year we continued to invest in new
market sectors. We have established teams in both
the UK
the
environment and energy sectors and, in the UK,
serving the pharmaceutical research sector. These
teams have now been in place since June 2010 and
we expect them to generate net fee income growth
in 2012.
serving
Our Staff
The success of our business is reliant on the
quality of our staff and we have adopted an
improved recruitment and training process during
the year. Whilst overall headcount has remained
2
PRIME PEOPLE PLC
Financial Review
Trading results
Gross fee income for the year from continuing
operations decreased by 1.6% to £13.95m (2010:
£14.18m).
Net fee income increased by 20.5% to £8.04m
(2010: £6.67m).
The group considers net fee income to be the key
indicator of the performance of the business. This
is defined as the income generated from permanent
placements together with the contribution earned
from contract and temporary staff.
Cash flow and cash position
Net cash inflow of £1.58m (2010: inflow of
£0.89m) was generated from operating activities
during the year, which after net taxation payments
taxation payment of
of £0.23m (2010: net
£0.03m), resulted in a net cash inflow from
operating activities of £1.35m (2010: inflow of
£0.86m).
The group operates a centralised treasury function
with a net cash position at 31 March 2011 of
£3.03m, compared to a net cash position of £2.3m
at 31 March 2010.
Chris Heayberd
Finance Director
2 June 2011
Administrative costs
totalled £7.03m which
represents 87% of net fee income (2010: £6.21m:
93%). A significant contributor to the reduction as
a percentage of net
the
improvement in fee productivity across the group.
Profit before tax increased by 121 per cent to
£1.01m (2010: £0.46m).
income was
fee
The taxation charge is £0.33m on a profit on
ordinary activities before taxation of £1.02m
which gives an overall tax rate of 31.8% (2010:
27.9 %). The reasons for the difference from the
standard UK corporation tax rate of 28% are
detailed in note 8 of the accounts.
Earnings per share
Basic earnings per share increased by 110% to
5.86pence (2010: 2.79 pence).The diluted earnings
per share increased by 108% to 5.65pence (2010:
2.71pence).
Dividend
As outlined in the Chairman‟s statement, the
Directors propose a final dividend of 2.25 pence
which will, subject to shareholder approval at the
Annual General Meeting, be paid on 1 July 2011
to shareholders who are on the register on 17 June
2011, making a total dividend paid to shareholders
for the year of 4.00 pence per ordinary share.
Balance sheet
The Group‟s net assets position at 31 March 2011
is similar to last year at £13.79m (2010:13.53m)
Trade receivables are slightly down on last year at
£1.72m (2010:£1.78m) as is the average credit
period taken by customers at 45 days (2010: 46
days).
3
PRIME PEOPLE PLC
Board of Directors
Directors' biographies
Robert Macdonald - 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 - 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.
Chris Heayberd BA ACA - Finance Director
Chris 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. Chris 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) - Non-executive Director
John is a solicitor (Non Practising) and a consultant to Eversheds LLP (solicitors). Previously he served as a
partner in Lewis Lewis & Co which became part of Eversheds after a series of mergers. John is currently
Chairman of Photo-Me International 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 - Non-executive Director
Simon qualified as a Chartered Accountant with Coopers & Lybrand. He is currently Director of corporate
finance for Treasury Holdings. He was previously 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. He is a Director of a number of private companies.
4
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
The Directors present their annual report on the affairs of the Group, together with the audited financial
statements for the year ended 31 March 2011. Prime People is a public limited company, incorporated and
domiciled in England, and its shares are quoted on the AIM market.
Principal activity
The principal activity of the Group during the year was the provision of recruitment and training services.
Business Review
The Company is required by the Companies Act to include a business review in their report of the
development and performance of the Group‟s business for the financial year and of its position at the year end
as well as expected future developments. This information is contained within the Chairman‟s Statement on
pages 1 and 2 and the Financial Review on page 3.
Principal Risks and uncertainties
The Board reviews on a regular basis the principal risks and uncertainties facing the Group. The Board‟s
approach is to ascertain the key risks and develop plans to reduce the potential effects of these risks on the
business. The principal risks identified are as follows:
Dependence on Key People
The future success of the Group is dependant on the continued service of senior management and key people.
The loss of the services of the senior management and other key people could have a material effect on the
business. To address this, the Group has put in to place an internal recruitment function, a training and
development programme, competitive pay structures and long term remuneration plans, the aim of which is to
retain the key employees.
Competition
Whilst the Directors believe that the Group is well positioned in its chosen markets it continues to broaden its
strategy by expanding into new industry sectors to reduce reliance on any one recruitment market. This exposes
the Group to increased competition and whilst the Group seeks to continue to improve its competitive positions,
the actions of current or indeed potential competitors may adversely affect the Group‟s business.
Strength of Property Markets
The market for property recruitment services, from which the Group obtains the major part of its revenue,
remains uncertain and it is difficult to predict how this market will develop in the foreseeable future. Our
temporary business, which historically has been focused in the Public Sector has, following government funding
cut backs, been in decline and for the time being the signs of recovery for this line of business are limited. We
have taken defensive steps to ensure that this business will be in a position to exploit cyclical opportunities when
they present themselves and to be prepared for the upturn in its markets when they come. A decline from current
levels of activity in the property market generally could have a material adverse effect on profitability and cash
flows of the business.
Macro economic factors
Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board
looks to reduce the Group‟s cyclical risk by expanding geographically and increasing the number of sectors from
which it derives revenues. Future business expansion is planned for the United Kingdom and South East Asia
and therefore outcomes could be influenced by the GDP growth of these economies.
Regulatory position
The recruitment industry is subject to an increasing level of regulation and compliance which varies in its degree
of complexity from country to country. The Group takes its responsibilities seriously and remains committed to
being compliant in each of the regions in which it operates. In order to reduce the legal and compliance risks, fee
earners and support staff receive regular training and updates of changes in legal and compliance requirements.
5
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
Principal Risks and uncertainties (continued)
Information Technology
To provide services to clients and candidates the Group is highly dependent on certain technology systems
and the infrastructure on which they operate. These systems are dependent on specific suppliers who provide
the technology infrastructure and disaster recovery solutions. The performance of these suppliers is
continually monitored to ensure that the services are available and maintained. In addition the systems and
infrastructure are regularly reviewed and upgraded to ensure that they provide appropriate functionality and
resilience to support the business as it develops.
Foreign exchange risk
The Group‟s international operations account for approximately 29 per cent of net fee income and less than 10
per cent of the Group‟s assets. Consequently the Group has a degree of translation exposure in accounting for
overseas operations and expects this to increase in line with the growth of the Group‟s operations outside the
United Kingdom. Currently the Group‟s policy is not to hedge against this exposure. However, the Group
seeks to minimise this exposure by converting into sterling all cash balances received in foreign currency that
are not required for local short term working capital needs. The Group will continue to monitor its policies in
this area.
Treasury policies, liquidity and financial risk
Surplus funds are held 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 whilst providing
the flexibility required to fund on-going operations and to invest cash safely and profitably. It is not a Group
policy to invest in financial derivatives.
Although the financial risks to which the group is exposed are currently considered to be minimal, future
interest rate, liquidity and foreign currency risks could arise. The Board will continually review its existing
policies and make changes as required to limit the financial risks of the business.
Credit risk management
Credit risk refers to the 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 with appropriate provisions being made.
Corporate Governance
The Company and the Group are committed to high standards of corporate governance, details of which are
provided in the Corporate Governance Report on pages 12 to 14 and Remuneration Report on pages 15 to 17.
Results
The consolidated profit on ordinary activities after taxation amounted to £696k (2010: £333k).
Dividends
An interim dividend for 2011 of 1.75 pence per ordinary share was paid on 3 December 2010 to those
shareholders on the register at 26 November 2010 (2010: Nil pence). The Directors‟ recommend the payment
of a final dividend for 2011 of 2.25 pence per ordinary share which, if approved at the Annual General
Meeting, will be paid on 1 July 2011 to those shareholders on the register on 17 June 2011 (2010: 1.5 pence).
6
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
Directors and interests
The following were Directors during the year and held office throughout the year:
Robert Macdonald
Peter Moore
Chris Heayberd
John Lewis
Simon Murphy
(Executive Chairman)
(Managing Director)
(Finance Director)
(Non-executive Director)
(Non-executive Director)
Biographical details for all the current Directors are shown on page 4.
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:
Robert Macdonald
Peter Moore
Chris Heayberd
John Lewis
Simon Murphy
Ordinary shares of 10p each
31 March 2011
31 March 2010
2,480,000
2,897,500
199,000
1,180,500
230,000
2,480,000
2,897,500
199,000
1,180,500
230,000
Details of directors‟ share options are given in the Remuneration Report on pages 16 and 17.
There have been no changes to the directors' interests in the ordinary share capital of Prime People Plc
between 31 March 2011 and 1 June 2011.
Substantial shareholders
As at 16 May 2011, the Company had been notified in accordance with Chapter 5 of the Disclosure and
Transparency Rules of the following substantial shareholdings:
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
The mid market quotation of the Company‟s shares at close of business on 31 March 2011 was 65p. The
highest and lowest mid market quotations in the period from 1 April 2010 to 31 March 2011 were 77p and
38p.
7
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
Our employees
The involvement of our employees in the business is key to our success. We endeavour to source and retain
the highest calibre employees from a wide range of backgrounds. The business is organised into a number of
business teams based on sector with each team leader empowered to run their operations within the operating
framework of the Group. The policy of providing employees with information about the Group has been
continued and employees are always encouraged to present their own suggestions and views.
The Group is committed to the principles of hiring based purely on individual merit and is committed to equal
opportunities.
The Group gives full and fair consideration to applications for employment from disabled persons where the
requirements of the job may be adequately covered by a disabled person.
The Group has embraced the Government‟s policy on Stakeholder Pensions and made available schemes open
to all employees.
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 34 days
average purchases (2010: 30 days). The Company makes no trade purchases.
Environmental policy
The Group recognises its responsibilities for the environment and gives due consideration to the possible effects
of its activities on the environment. As such our main environmental impact comes from the running of our
businesses generating carbon emissions through the consumption of gas and electricity, transport activities and
commuting, as well as office based waste such as paper and toners. We do not consider that the Group‟s
activities have a major 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. We are, therefore, committed
to the following principles to ensure the business operates in an environmentally sensitive manner:
Encouraging the re-use and re-cycling of products and waste from our offices
Ensuring efficient use of materials and energy
Purchasing environmentally friendly materials where appropriate.
Charitable and Political Donations
During the year, the Group supported the charity ELIFAR with a number of employees donating their time to
support initiatives. This year we also allowed employees the opportunity to be involved in activities with a
charity, community or environmental cause and allowed them to take two working days out of the office in order
“to give something back”. In addition the Group made charitable donations of £7,099 (2010: £3,184).
The group made no political donations during the year (2010: £Nil).
Going concern
At 31 March 2011 the Group had a net cash position of £3.03m (2010: £2.3m). The Directors have prepared
cash flow forecasts for a period of at least 12 months from the date of approval of the financial statements.
After reviewing these forecasts and having made the appropriate enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue operating for the foreseeable future. The Group
continue to adopt the going concern basis in preparing the financial statements.
8
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
Directors’ and officers’ liability insurance
The Company maintains liability insurance for the Directors and officers of the Company and its subsidiaries.
Capital Structure
Details of the authorised and issued share capital are shown in note 18. The Company has one class of ordinary
shares which carry no right to fixed income and which represents 100% of the total issued nominal value of all
share capital. Each share carries the right to one vote at general meetings of the Company.
Details of employee share schemes are set out in note 18.
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 Tuesday 28 June 2011. The Special Business is detailed on pages 9 and 10.
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 7 to grant authority to allot shares up to a maximum aggregate nominal amount
of £398,050. This amounts to 3,980,500 shares or approximately 33.33 per cent of the total share capital in issue
as at 1 June 2011.
Except for the issue of shares held under an existing Enterprise Management Incentive Scheme, details of which
are set out in note 18 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 the
board is granted the authority to issue new shares by shareholders, authority will be sought in resolution 8 to
allot shares for cash up to a maximum aggregate nominal amount of £59,700 representing 597,000 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 27 September 2012 and the conclusion of the next Annual General
Meeting of the Company.
Market purchases of own shares
Resolution 9 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
1,194,150 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 £250,000 the Company plans,
from time to time, to purchase its shares in the market and to cancel them.
9
PRIME PEOPLE PLC
Report of the Directors for the year ended 31 March 2011
Market purchases of own shares (continued)
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
908,468 ordinary shares. This represents 8.45 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).
Statement as to disclosure of information to auditors
Each of the persons who are Directors at the time when this report is approved has confirmed that:
(a) so far as each Director is aware, there is no relevant audit information of which the company‟s auditors
are unaware; and
(b) each Director has taken all steps that ought to have been taken as a Director in order to be aware of any
information needed by the company‟s auditors in connection with preparing their report and to establish that
the company‟s auditors are aware of that information.
Auditor
Crowe Clark Whitehill LLP have expressed their willingness to continue in office and a resolution to
re-appoint them as auditor and authorising the Directors to set their remuneration will be proposed at the
forthcoming Annual General Meeting.
By order of the Board
Chris Heayberd
Finance Director
2 June 2011
10
PRIME PEOPLE PLC
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.
11
PRIME PEOPLE PLC
Corporate Governance
Statement by the Directors on compliance with the Combined Code
The Board of Directors has a strong commitment to high standards of corporate governance integrity and
ethics. The Financial Reporting Council (FRC) published the new „UK Corporate Governance Code‟ in June
2010, replacing the „Combined Code on Corporate Governance‟, and in September 2010 the Quoted
Company Alliance (QCA) published „Corporate Governance Guidelines for Smaller Quoted Companies‟
replacing previous guidelines issued in 2004 and 2005. Although as an AIM listed company it is not formally
required to do so, the Group and has followed the principles of the „UK Corporate governance Code‟ so far as
is practicable and appropriate for the nature and size of the Group. The Group supports the recommendations
on corporate governance of the QCA and has implemented steps to reach compliance.
A statement of the Directors‟ responsibilities in respect of the financial statements is set out on page 11.
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 and its operation
The Board of Prime People Plc is the body responsible for corporate governance, establishing policies and
objectives, and reviewing the management of the Group‟s resources
The Board consists of an executive chairman, Robert Macdonald, two other executive Directors and two non-
executive Directors.
The non-executive Directors are John Lewis and Simon Murphy. Both receive a fixed fee for their services
and their interests in the shares of the company are as described on pages 7 and 16.
Biographies of the board members appear on page 4.
The Board meets up to 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 monthly 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.
12
PRIME PEOPLE PLC
Corporate governance
The Board and its operation (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 on the Prime People
website, 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 Simon
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‟s principal tasks are to ensure the integrity of the Company‟s Financial Reporting
process, review the effectiveness of the Group‟s internal controls including risk management, review the
scope of the work of the external auditors and their independence, consider issues raised by the external
auditor, review audit effectiveness and review the half-yearly and annual accounts focusing in particular on
accounting policies and compliance and on areas of management judgement and estimates.
Whistleblowing policy
The Company is committed to maintaining the highest ethical standards and the personal and professional
integrity of its employees, suppliers, contractors and consultants. It encourages all individuals to raise any
concerns that they may have about the conduct of others in the business or the way in which the business is
run. The aim of the policy is to ensure that as afar as is possible, our employees are able to tell us about any
wrong doing at work which they believe has occurred or is likely to occur.
Remuneration Committee
The members of the Remuneration Committee comprises the two non executive Directors of the Company
and is chaired by John Lewis.
The committee reviews the Group policy on the Executive Directors‟ remuneration and terms of
employment, makes recommendations on this and also approves the provision of policies for the
incentivisation of senior employees, including share schemes.
The principal terms of reference of the committee are set out in the Remuneration Report on pages 15 to 17.
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.
13
PRIME PEOPLE PLC
Corporate governance
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.
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.
When undertaking their review the Directors have considered all material controls including operational,
compliance and risk management, as well as financial.
The Board has assessed the effectiveness of the Group‟s internal control systems for the period 1 April 2010
to the date of approval of the financial statements and believes it has the procedures in place to safeguard the
Group‟s assets and to ensure the reliability of information used within the business and for publication.
Key elements of the system of internal control are as follows:
Group organisation
The Board of Directors meets at least six times a year focusing mainly on strategic issues, operational and
financial performance. The Directors have in place an organisational structure with clearly defined levels of
responsibility and delegation of authority.
Annual Business Plan
The Group has a comprehensive budgeting system with an annual budget approved by the Board.
Monthly forecasting
The Group prepares monthly fee income forecasts by individual businesses which are compared to budget.
Financial Reporting
Detailed monthly reports are produced showing comparison of results against budget, forecast and the prior
year with performance monitoring and explanations provided for significant variances. Any significant
adverse variances are examined and remedial action taken where necessary.
Capital Expenditure
Capital expenditure requests are reviewed by the Board. Appropriate due diligence work will be carried out if
a business is to be acquired.
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.
14
PRIME PEOPLE PLC
Remuneration report
The Remuneration Committee meets not less than twice a year and comprises John Lewis and Simon Murphy.
The Committee is chaired by John Lewis.
The purpose of the Remuneration Committee is to review, on behalf of the Board, the remuneration policy
for the Chairman, Executive Directors and other Senior Executives and to determine the level of
remuneration, incentives and other benefits, compensation payments and terms of employment of the
Executive Directors and other Senior Executives. It seeks to provide a remuneration package that strongly
aligns the interests of Executive Directors with those of shareholders.
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.
All Executive Directors have service contracts which contain a notice period of one year which are terminable
by either party giving one years notice. The service contracts also contain restrictive covenants preventing the
Executive Directors from competing with the Group for one year following the termination of employment
and preventing Executive Directors from soliciting key employees, clients and candidates of the employing
Group and Group companies for 12 months following termination of employment. There are no provisions for
liquidated damages on the early termination of any of the Directors‟ service contracts nor provisions for
mitigating damages.
Both Non-Executive Directors have letters of appointment which entitle either party to give three months
notice. The remuneration of the Non-Executive Directors is determined by the Board. The Non-Executive
Directors do not receive any pension or other benefits, other than out of pocket expenses, from the Group, nor
do they participate in any bonus schemes.
The remuneration agreed by the Committee for the Executive Directors contains some or all of the following
elements: a base salary and benefits, an annual bonus reflecting Group and individual performance and share
options.
Base Salary and benefits
The Committee establishes salaries and benefits by reference to those prevailing in the employment market
generally for Executive Directors of companies of comparable status and market value. Reviews of such base
salary and benefits are conducted annually by the committee.
Annual bonus plan
Annual bonuses for the Executive Directors are based on the division of a pool of profits earned during the
financial year. In 2011 the bonus pool for Executive Directors was equal to 15% of Operating Profit earned
above a threshold equal to two thirds of targeted Operating Profit for the year. If profits exceed 85% of the
targeted level then an additional 2.5% of Operating Profit earned above the target level is added to the bonus
pool. In 2011 the maximum annual bonus entitlement for Executive Directors was equal to 50% of their base
salary. No annual bonus was payable under the bonus arrangement for 2011 although the Committee agreed
that a discretionary award of £15,500 was to be made to Chris Heayberd which he took as a contribution into
his personal pension plan.
15
PRIME PEOPLE PLC
Remuneration report
Emoluments of Directors
The aggregate emoluments of Directors who served during the period is shown in the table below.
Emoluments include management salaries, fees as Directors, pension payments and taxable benefits.
Emoluments shown are in respect of each Director's period in office during the year as a Board member of
Prime People Plc and includes emoluments from the Company and its subsidiary undertakings.
Salaries and
fees
Pensions
(Note1)
Benefits
Year ended
31 March
2011
Total
31 March
2010
Total
Executive Chairman
R J G Macdonald
99,066
Executive Directors
P H Moore (Note 2)
159,066
£
-
-
£
£
£
4,431
103,497
100,060
9,406
168,472
163,369
C I Heayberd
109,041
40,044
4,697
153,782
129,057
Non-Executive Directors
J H J Lewis
S J Murphy
16,831
16,831
-
-
-
-
16,831
16,286
16,831
16,286
400,835
40,044
18,534
459,413
425,058
Notes to the emoluments:
1 - Pension payments made to Chris Heayberd represent salary payments sacrificed in to his personal pension plan.
2 – Peter Moore is the highest paid Director
3 – Benefits include items such as medical and travel allowance,
4 - The Group does not operate a defined benefit pension scheme.
Share option schemes
During 2011 no share options were granted to Executive Directors. As at 31 March 2011 Directors‟ options
on ordinary shares of 10p each granted under the Prime People Enterprise Management Incentive Scheme,
were as follows:
Director
Year of issue Granted Exercise Price
Earliest exercise date
Simon Murphy
Chris Heayberd
2005/6
184,234
2009/10
184,234
57.5p
20.5p
15 May 2007
2 July 2011
16
PRIME PEOPLE PLC
Remuneration report
Performance criteria
The performance criteria on Directors share options are as follows:
Options issued in 2005/6:
Options vested in full on the acquisition of Macdonald & Company Group Limited
Options issued in 2009/10:
Options vest in 2011/12 conditional upon Chris Heayberd‟s continued employment with the company on the
exercise date.
Annual resolution
Shareholders will be given the opportunity to approve the Remuneration report at the Annual General
Meeting.
John Lewis
Chairman of the Remuneration Committee
2 June 2011
17
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 2011 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.
We read all the financial and non financial information in the Directors‟ Report and any other surround
information to identify material inconsistencies with the audited financial statements. If we become aware of
any apparent material misstatements or inconsistencies we consider the implications to our report.
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 2011 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.
18
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.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
St Brides House
10 Salisbury Square
London
EC4Y 8EH
3 June 2011
19
PRIME PEOPLE PLC
Consolidated statement of comprehensive income
for the year ended 31 March 2011
Note
2
2
4
7
8
Revenue
Cost of sales
Net fee income
Administrative expenses
Operating profit
Finance income
Finance expense
Profit before taxation
Income tax expense
Profit for the year
Other comprehensive loss
Year ended
31 March
2011
£’000
31 March
2010
£’000
13,953
(5,913)
14,180
(7,507)
8,040
(7,031)
6,673
(6,212)
1,009
461
19
(7)
1,021
(325)
12
(11)
462
(129)
696
333
Foreign currency exchange differences
(55)
(18)
Total comprehensive income for the
year
Attributable to:
641
315
Equity shareholders of the parent
641
315
Earnings per share
Basic earnings per share
Diluted
10
5.86p
5.65p
2.79p
2.71p
The above results relate to continuing operations
20
PRIME PEOPLE PLC
Consolidated statement of changes in equity
For the year ended 31 March 2011
Called
up
share
capital
£’000
Capital
Redemp
tion
reserve
£’000
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
£’000
£’000
£’000
£’000
Foreign
currency
trans-
lation
£’000
Retained
earnings
Total
£’000
£’000
At 1 April 2009
1,203
Total
comprehensive
income for the
year
Adjustment in
respect of share
schemes
Shares
purchased for
cancellation
Shares
purchased for
treasury
Dividend
-
-
(9)
-
-
At 31 March
2010
1,194
Total
comprehensive
income for the
year
Adjustment in
respect of share
schemes
Shares
purchased for
treasury
Dividend
At 31 March
2011
-
-
-
-
-
-
-
9
-
-
9
-
-
-
-
-
7,095
173
176
486
4,335
13,468
-
-
-
(9)
-
-
-
-
-
-
-
-
-
-
-
-
(18)
333
315
(99)
-
-
-
-
-
-
-
113
14
(18)
(18)
-
(9)
(238)
(238)
(9)
7,095
173
77
468
4,525
13,532
-
-
(30)
-
-
-
-
-
-
-
-
-
-
(55)
696
641
31
-
-
-
-
-
6
37
-
(30)
(387)
(387)
1,194
9
(39)
7,095
173
108
413
4,840
13,793
21
PRIME PEOPLE PLC
Consolidated statement of financial position
As at 31 March 2011
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
2011
£’000
9,769
258
26
2010
£’000
9,769
251
54
10,053
10,074
2,956
3,104
6,060
2,795
2,783
5,578
16,113
15,652
56
2,045
198
2,299
21
2,320
476
1,514
130
2,120
-
2,120
13,793
13,532
Note
12
11
14
15
22
16
17
17
22
PRIME PEOPLE PLC
Consolidated statement of financial position
As at 31 March 2011
Note
2011
£’000
Capital and reserves attributable to the
company’s equity holders
Called up share capital
Capital redemption reserve fund
Treasury shares
Share premium account
Merger reserve
Share option reserve
Currency translation reserve
Retained earnings
18
19
19
19
19
19
19
19
1,194
9
(39)
7,095
173
108
413
4,840
2010
£’000
1,194
9
(9)
7,095
173
77
468
4,525
Total equity
13,793
13,532
The financial statements on pages 27 to 54 were approved by the Board of Directors and authorised for issue
on 2 June 2011 and are signed on its behalf by:
R J G Macdonald
C I Heayberd
23
PRIME PEOPLE PLC
Company statement of financial position
As at 31 March 2011
____________________________________________________________________
2011
£’000
Note
13
11
14
15
22
17
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
Total liabilities
Net assets
2010
£’000
10,876
3
1
10,880
200
2,211
2,411
10,876
1
1
10,878
119
2,420
2,539
13,417
13,291
29
97
126
296
33
329
329
13,291
12,962
Capital and reserves attributable to the company’s equity holders
Called up share capital
Capital redemption reserve fund
Treasury shares
Share premium account
Merger reserve
Share option reserve
Retained earnings
18
19
19
19
19
19
19
1,194
9
(39)
7,095
173
47
4,812
1,194
9
(9)
7,095
173
37
4,463
Total equity
13,291
12,962
The financial statements of Prime People Plc, company Number 1729887 were approved by the Board and authorised for
issue on 2 June 2011 and are signed on its behalf by:
R J G Macdonald
C I Heayberd
24
PRIME PEOPLE PLC
Company statement of changes in equity
For the year ended 31 March 2011
Company
Called
up
share
capital
£’000
Capital
Redemp
tion
reserve
£’000
Treasury
shares
Share
premium
account
Share
option
reserve
Other
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
£’000
£’000
At 1 April 2009
1,203
Total
comprehensive
income for the
year
Shares
purchased for
cancellation
Shares
purchased for
treasury
Adjustment in
respect of share
scheme
Dividend
-
(9)
-
-
-
At 31 March
2010
1,194
Total
comprehensive
income for the
year
Shares
purchased for
treasury
Adjustments in
respect of share
schemes
Dividend
At 31 March
2011
-
-
-
-
-
-
9
-
-
-
9
-
-
-
-
-
-
-
(9)
-
-
7,095
65
173
4,106 12,642
-
-
-
-
-
(28)
-
-
-
-
-
-
-
-
-
581
553
(18)
(18)
-
(9)
32
32
(238)
(238)
(9)
7,095
37
173
4,463
12,962
-
(30)
-
-
-
-
-
-
-
-
10
-
-
-
-
-
736
736
-
-
(30)
10
(387)
(387)
1,194
9
(39)
7,095
47
173
4,812
13,291
25
PRIME PEOPLE PLC
Group and company cash flow statement
For the year ended 31 March 2011
Group
Year ended
Company
Year ended
31 March
2011
£’000
31 March
2010
£’000
31 March
2011
£’000
31 March
2010
£’000
Note
Cash generated from
underlying operations
Income tax paid
Income tax received
Net cash from operating
activities
Cash flows from investing
activities
Interest received
Net purchase of property,
plant and equipment
Dividend received
Net cash (used in)/from
investing activities
Cash flows from financing
activities
Repayment of borrowings
Capital element of hire
purchase obligations
Purchase of own shares
Treasury shares
Dividend paid to shareholders
Interest paid
Net cash used in financing
activities
Net increase in cash and
cash equivalents
Cash and cash equivalents at
beginning of the year
Exchange loss on cash and
cash equivalents
Cash and cash equivalents at
the end of the year
21
1,577
887
236
(229)
1
(78)
51
691
-
-
(3)
-
1,349
860
233
691
19
(169)
-
12
(51)
-
18
-
645
9
-
531
(150)
(39)
663
540
(280)
(280)
(280)
25
-
(30)
(387)
(7)
-
(18)
(9)
(238)
(11)
-
-
(30)
(387)
(2)
(280)
-
(18)
(9)
(238)
(9)
(679)
(556)
(697)
(545)
520
265
197
677
2,587
2,350
2,195
1,518
(55)
(28)
-
-
3,052
2,587
2,392
2,195
26
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
1 Nature of operations
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 Group offers both permanent and contract
specialist recruitment consultancy for large and medium sized organisations.
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 and the principal place of business is 40a Dover
Street, London W1S 4NW. The registered number of the Company is 1729887.
2 Summary of significant accounting policies
Basis of preparation
The financial statements of Prime People plc consolidate the results of the Company and all its subsidiary
undertakings. As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the
Company has not been included as part of these financial statements. The amount of profit after tax and before
dividends dealt with in the financial statements of the parent is £735,794 (2010: profit £581,712). The financial
statements have been prepared on a going concern basis.
The consolidated financial statements of Prime People Plc have been prepared in accordance with
International Financial Reporting Standards as endorsed by the European Union and also comply with 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 2010
except as described below.
To ensure consistency of treatment with the current year a number of comparatives have been adjusted from
those disclosed in the prior years financial statements. In the opinion of the Directors none of the amendments
are material and none represent a change in accounting policy. There has been no change to the reported result
or net assets from the prior year.
Adoption of new and revised International Accounting Standards (IAS/IFRS) and the interpretations
affecting current or prior periods
IFRS 3 Business Combinations - Revised 2008 (effective 1 July 2009) The revised standard introduces some
changes to the existing accounting treatment of business combinations. For example, all transaction costs will
be expensed. The standard is applicable to business combinations occurring in accounting periods beginning
on or after 1 July 2009. Assets and liabilities arising from business combinations occurring before the date of
adoption by the Group will not be restated and thus there was no effect on the Group‟s reported income or net
assets on adoption.
International Accounting Standards (IAS/IFRS) and Interpretations not adopted
At the date of authorisation of these financial statements the following Standards and Interpretations, that
have not been applied in these financial statements, were in issue but not yet effective:
IFRS 9 Financial Instruments (Effective 1 January 2013)*
27
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
International Accounting Standards (IAS/IFRS) and interpretations not adopted (continued)
IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)
IFRS1 Amendments Severe Hyperinflation and Removal of Fixed Dates for First Time Adopters (effective 1
July 2011)
Prepayments of Minimum Funding Requirement – Amendments to IFRIC 14 (effective 1 January 2011)
Amendment to IAS 32 Classification of Rights Issues (effective 1 February 2011)
Improvements to IFRS issued May 2010 (some changes effective 1 July 2010, others effective 1 January
2011)
Disclosures – Transfers of Financial Assets – Amendments to IFRS 7 (effective 1 July 2011)*
Deferred Tax: Recovery of Underlying Assets – Amendments to IAS 12 Income Taxes (effective 1 January
2012)*
*To be approved by the European Union
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 2011.
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. 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.
Business combinations are accounted for using the acquisition method of accounting. The cost of an
acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the acquisition. 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 in preparing the consolidated financial statements. Unrealised losses are also eliminated in the
same way as unrealised gains but only to the extent that there is no evidence of impairment.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Going concern
The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval
of the financial statements and have a reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the
going concern basis of accounting in preparing the financial statements.
28
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
Revenue recognition
(a) Gross fee income
Revenue, which excludes value added tax (“VAT”), constitutes the value of services undertaken by the Group
from 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) Cost of sales
Cost of sales 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.
(d) Foreign currency translation
(i) 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 pounds.
(ii)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.
29
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
(d) Foreign currency translation (continued)
(iii) 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.
(e) Property, plant and equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation less provisions
for impairment. Depreciation is provided on all property, plant and equipment using the straight-line method
at rates calculated to write off the cost less estimated residual values over their estimated useful lives, as
follows:
Leasehold improvements over the period of the lease.
Furniture, fittings and computer equipment 20% – 33%
Motor vehicles 20% – 33%
The gain or loss arising on disposal or retirement of an asset is determined by comparing the sales proceeds
with the carrying amount of the asset and is recognised as income.
(f) Intangible assets
(i) 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. Determining whether goodwill is
impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been
allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise
from the cash generating unit and a suitable discount rate in order to calculate present value.
(ii) Computer software
Computer software acquired by the Group is stated at cost. These costs are amortised using the straight-line
method over their estimated useful economic lives (33% per annum).
30
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
(g) Impairment of assets
Assets that have an indefinite useful economic life 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).
(h) Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported
in the income statement because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Group‟s liability for current tax is
calculated using tax rates that have been enacted or substantially enacted by the balance sheet date.
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.
(i) Leased assets and obligations
Where assets are financed by leasing arrangements that give rights approximating to ownership (finance
leases), the assets are treated as if they had been purchased outright. The amount capitalised is the lower of
fair value or the present value of the minimum lease payments payable during the lease term, The
corresponding lease commitments are shown as obligations to the lessor. The property, plant or equipment
acquired under finance leases is depreciated over the shorter of the asset‟s useful life and the lease term.
Lease payments are apportioned between finance charges and reduction in lease obligations so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to
income.
All other leases are operating leases and the annual rentals are charged to profit and loss on a straight line
basis over the lease term.
The benefit of rent free periods received for entering into a lease is spread evenly over the lease term.
(j) Pension costs
The Group does not operate a pension scheme for employees but makes contributions to the personal defined
contribution pension plan of one Director. The pension costs charged to profit represent the contributions
payable by the Group during the year.
31
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
(k) Segmental reporting
IFRS8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed
by the Managing Director to allocate resources to the segment and to assess their performance.
(l) 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.
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in
an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost
using the effective interest method, less any impairment. Interest income is recognised by applying the
effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
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.
Trade payables are recognised initially at fair value. Other financial liabilities including borrowings are
recognised at fair value net of transaction costs incurred.
(m) 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). At the balance sheet date the number of outstanding options is adjusted to reflect
those options that have been granted during the year or have lapsed in the year.
(n) Dividend distribution
A final 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.
Interim dividend distributions are recognised in the period in which they are approved and paid.
(o) 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.
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 below:
32
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
(o) Critical accounting estimates and judgements (continued)
Revenue recognition
Revenue from permanent placements is recognised when a candidate formally accepts an offer of
employment, a start date has been agreed, but employment has not commenced. A „fall-through‟ provision is
made by management, based on historical experience, for the proportion of those placements where the offer
of employment is not taken up. Management have reviewed the past assumptions made with respect to the
„fall-through‟ provisions and consider that they remain reasonable. The fall through provision is estimated at
23.8% of those offers where employment has yet to commence (2010: 24.8%). The Directors consider that a
change in the range of possible outcomes, or sensitivity, would not have a material impact on the business.
Goodwill impairment
The Group‟s determination of whether goodwill is impaired requires an estimation of the value in use of the
cash generating units to which goodwill is allocated. This requires estimation of future cash flows and the
selection of a suitable discount rate details of which are disclosed in note 12.
Trade receivables
There is uncertainty regarding customers who may not be able to pay as their debts 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. Details of the total amount of receivables past due and the movement in allowance for doubtful
debts are disclosed in note 15.
33
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
3 Segmental analysis
a) Gross fee revenue, net fee income and operating profit by geographic region
Gross fee income
Net fee income
31 March
2011
£’000
31 March
2010
£’000
31 March
2011
£’000
31March
2010
£’000
Operating profit
31 March
2011
£’000
31 March
2010
£’000
11,617
12,163
5,704
4,656
1,120
628
2,336
2,017
2,336
2,017
(111)
(167)
13,953
14,180
8,040
6,673
1,009
461
UK
Other
Total
All revenues disclosed are derived from external customers.
The accounting policies of the reportable segments are the same as the Group‟s accounting policies described
in note 2. Segment operating profit represents the profit earned by each segment after allocation of central
administration costs.
b) Segment assets, liabilities and capital expenditure by geographical region
Total assets
Total liabilities
31 March
2011
£’000
31 March
2010
£’000
31 March
2011
£’000
31March
2010
£’000
Capital expenditure
31 March
2011
£’000
31 March
2010
£’000
UK
Other
Total
14,963
14,120
1,934
1,605
1,150
1,532
365
515
16,113
15,652
2,299
2,120
153
19
172
49
2
51
The analysis above is of the carrying amount of reportable segment assets, liabilities and non-current assets.
Segment assets and liabilities include items directly attributable to a segment and include income tax assets
and liabilities. Non-current assets include property, plant and equipment and computer software.
34
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
3 Segmental analysis (continued)
c) Gross fee income and net fee income generated from permanent and temporary placements
Gross fee income
Net fee income
31 March
2011
£’000
31March
2010
£’000
31 March
2011
£’000
31 March
2010
£’000
7,261
5,392
7,060
6,692
8,788
980
5,206
1,467
13,953
14,180
8,040
6,673
Permanent
Temporary
Total
4 Profit for the year
Profit for the year 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
- leased assets
Operating lease rentals
- land and buildings
- other operating leases
Profit on disposal of fixed assets
Exchange rate gain
Year ended
31 March
2011
£’000
31 March
2010
£’000
12
30
4
160
3
429
14
3
(1)
12
28
1
189
-
354
13
-
(1)
35
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
5 Directors’ emoluments
Short term employee benefits
Share based payment charge
Social security contributions
Highest paid Director:
Emoluments
Year ended
31 March
2011
£’000
31 March
2010
£’000
459
10
50
519
425
4
52
481
168
164
168
164
The Directors are the key management personnel of the group. There were no post-employment benefits
provided to key management during the year and no key management exercised any share based payments.
Details of Directors‟ emoluments and interests, which form part of these financial statements, are provided in
the Director‟s Remuneration report on pages 15 to 17.
6 Employee information
Group
The average monthly number of employees of the Group during the year,
including Directors, was as follows:
Consultants
Management and administration
Temporary staff
Year ended
31 March
2011
Number
31 March
2010
Number
64
25
11
59
27
17
100
103
36
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
6 Employee information (continued)
Company
Year ended
31 March
2011
Number
31 March
2010
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
Pension contributions
Share option charge
7
Finance expense
Bank interest
Year ended
31 March
2011
£’000
31 March
2010
£’000
4,542
387
40
37
3,717
334
-
174
5,006
4,225
Year ended
31 March
2011
£’000
31 March
2010
£’000
7 11
7
11
11
37
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
8 Taxation on profits on ordinary activities
Analysis of charge in the year
Current tax
UK Corporation tax
UK tax over provided in previous years
Total current tax
Deferred tax
Origination and reversal of temporary differences
Year Ended
31 March
2011
£’000
31 March
2010
£’000
297
-
135
(1)
297
134
28
(5)
Total income tax expense in the income statement
325
129
The tax assessed for the year is equal to that obtained by applying the standard rate of corporation tax in
the UK. Taxation for other jurisdictions is calculated at the rates prevailing in the respective
jurisdictions.
Reconciliation of the effective tax rate
Profit before taxation
UK corporation tax at the standard rate of 28% (2010: 28%) on profit on
ordinary activities
Effects of:
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
Tax charge for the year
Year Ended
31 March
2011
31 March
2010
1,021
462
286
129
22
22
(5)
2
(2)
-
24
4
(13)
(12)
(2)
(1)
325
129
38
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
9 Dividends
Final dividend for 2010: 1.5 pence per share (2009: NIL pence per share)
Interim dividend for 2011: 1.75pence per share (2010: 2.0 pence per share)
Year ended
31 March
2011
£’000
31 March
2010
£’000
178
209
-
238
387
238
The Directors propose to pay a final dividend in respect of the year ended 31 March 2011 of 2.25 pence per
share (2010: 1.5 pence per share) which, subject to shareholder approval, will be paid on 1 July 2011 to
shareholders who are on the register on 17 June 2011.
10 Earnings per share
Earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year.
Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by
existing share options assuming dilution through conversion of all existing options.
Earnings and weighted average number of shares from continuing operations used in the calculations are
shown below.
Year ended
31 March
2011
£’000
31 March
2010
£’000
Retained profit for basic and diluted earnings per share
696
333
Weighted average number of shares used for basic earnings per share
Dilutive effect of share options
11,883,121
440,537
11,956,824
314,761
Number
Number
Diluted weighted average number of shares used for diluted earnings per
share
12,323,657
12,271,585
Basic earnings per share
Diluted earnings per share
Pence
Pence
5.86p
5.65p
2.79p
2.71p
39
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
11 Property, plant and equipment
Group
Cost
At 1 April 2009
Additions
Disposals
Exchange difference
At 1 April 2010
Additions
Disposals
Exchange difference
At 31 March 2011
Depreciation
At 1 April 2009
Provision for the year
Disposals
Exchange rate loss
At 1 April 2010
Provision for the year
Disposals
Exchange rate gain
At 31 March 2011
Net book value
At 31 March 2011
At 31 March 2010
At 31 March 2009
Total
£’000
1,066
51
(6)
12
1,123
172
(23)
(8)
1,264
687
189
(6)
2
872
163
(22)
(7)
1,006
258
251
379
Fixtures,
fittings and
equipment
£’000
Motor
vehicles
£’000
39
-
-
5
44
30
(22)
(1)
51
31
7
-
-
38
8
(22)
(1)
23
28
6
8
1,027
51
(6)
7
1,079
142
(1)
(7)
1,213
656
182
(6)
2
834
155
-
(6)
983
230
245
371
40
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
11 Property, plant and equipment (continued)
Company
Cost
At 1 April 2009, 1 April 2010 and 31 March 2011
Depreciation
At 1 April 2009
Provision for the year
At 1 April 2010
Provision for the year
At 31 March 2011
Net book value
At 31 March 2011
At 31 March 2010
At 31 March 2009
12 Goodwill
Cost
At 1 April 2009, 1 April 2010 and 31 March 2011
Fixtures, fittings and equipment
£’000
19
13
3
16
2
18
1
3
6
Goodwill
£’000
9,769
The total carrying value of goodwill relates to the acquisition of the Macdonald & Company group of
companies in January 2006 and is tested annually for impairment with the recoverable amount being
determined from value in use calculations.
The value in use is determined through the analysis of the discounted cash flow forecasts based on financial
forecasts approved by management which takes account of both past performance and expected future market
developments. The key assumptions on which the current financial forecasts are based are:
25% growth in net fee income
The change in net fee income split between permanent and temporary placements disclosed in note 3
(c) is expected to be indicative of the future split of placements
41
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
12 Goodwill (continued)
Projected cash flows are initially based upon budgets and forecasts approved by Management and are then
projected using a constant rate of growth of 5%. The rate of growth is based upon the long term average rate
of growth adjusted downwards for risk. The cash flows are then discounted at a rate of 9% which is
determined after an analysis of the group‟s weighted average cost of capital.
In undertaking the impairment review Management have considered the sensitivity of the calculation to
reasonably possible movements in key assumptions for both the current financial forecasts and the projected
cash flows. Three scenarios have been modelled using a growth rate of 0% for years following the current
financial forecasts, a discount rate of 12% and the net fee income in the current financial forecast, and
subsequent operating profit and cash flow, being restricted to the prior years level; in each case the carrying
value did not exceed the recoverable amount. Based upon this analysis Management does not consider it
reasonably possible that there will be a material change to a key assumption which would result in the
carrying value exceeding the recoverable amount.
Shares in
subsidiary
undertakings
£’000
11,139
213
50
263
10,876
10,926
13
Investments
Company
Cost
At 1 April 2009,1 April 2010 and 31 March 2011
Amounts provided
At 1 April 2009
Provided in year
At 31 March 2010 and 31 March 2011
At 1 April 2010 and 31 March 2011
At 1 April 2009
42
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
13
Investments (Continued)
The following are subsidiary undertakings at the end of the year and have all been included in the
consolidated financial statements:
Country of
incorporation
Principal
activity
England and Wales
Holding Company
England and Wales
Recruitment
England and Wales
Recruitment
England and Wales
Dormant
Macdonald & Company
Group Limited
Macdonald & Company
Property Limited
Macdonald and Company
Freelance Limited
Macdonald & Company
(Overseas) Limited
Propertejobs.com
Limited
England and Wales
Macdonald & Company Pty Ltd
Australia
Macdonald & Company Ltd
Hong Kong
Macdonald & Company
Recruitment Limited
Hong Kong
Dormant
Recruitment
Recruitment
Dormant
Ru Yi Consulting Limited
Hong Kong
Dormant
Macdonald & Company
Recruitment Proprietary Ltd
Harper Craven Associates
Limited
South Africa
Recruitment
England and Wales
Management training
For all undertakings listed above, the country of operation is the same as its country of incorporation.
The Group holds 100% of all classes of issued share capital. The percentage of the issued share capital held is
equivalent to the percentage of voting rights for all companies.
43
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
14 Deferred tax asset
Group
At 1 April 2009
Credit/(charge) in profit or loss for
year
At 31 March 2010
(Charge)/credit in profit or loss for
year
At 31 March 2011
Company
At 1 April 2009
Charge to income
At 31 March 2010 and 31 March 2011
15 Trade and other receivables
Current
Trade receivables
Allowance for doubtful debts
Amounts owed by subsidiary undertakings
Other receivables
Prepayments and accrued income
Accelerated
depreciation
£’000
13
41
54
(28)
26
Accelerated
depreciation
£’000
1
-
1
Tax
losses
£’000
36
(36)
-
-
-
Tax
losses
£’000
36
(36)
-
Group
2011
£’000
1,715
(196)
-
187
1,250
2010
£’000
1,779
(250)
-
293
973
Total
£’000
49
5
54
(28)
26
Total
£’000
37
(36)
1
Company
2011
£’000
2010
£’000
-
-
91
4
24
-
-
-
188
12
200
2,956
2,795
119
Trade receivables are recognised initially at fair value. A provision for impairment of trade receivables is
established when there is evidence that the Group will not be able to collect all amounts due according to the
original terms of the receivables. An allowance of £196k (2010:£250k) has been made for estimated
irrecoverable amounts.
44
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
15 Trade and other receivables (continued)
The ageing of trade receivables at the reporting date was:
Gross trade
receivables
2011
£’000
Provisions
2011
£’000
Gross trade
receivables
2010
£’000
Not past due
Past due 0-30 days
Past due 30-90 days
Past due More than 90 days
673
794
124
124
1,715
-
70
7
119
196
Movement in allowance for doubtful debts:
1 April 2010
Impairment losses recognised
Amounts written off as uncollectable
Impairment losses reversed
792
612
233
142
1,779
2011
£’000
250
111
(156)
(9)
Provisions
2010
£’000
19
73
18
140
250
2010
£’000
474
127
(121)
(230)
31 March 2011
196
250
16 Financial Instruments
Financial assets
Trade and other receivables
Cash and cash equivalents
Note
15
2011
£’000
2,956
3,104
2010
£’000
2,795
2,783
6,060
5,578
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.
45
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
16 Financial Instruments (continued)
Financial liabilities
Current
Bank loan (Secured)
Bank overdraft
Hire purchase liabilities
Non-current
Hire Purchase liabilities
The maturity of these obligations is as follows:
Within one year
Within two to five years
Obligations under finance leases and hire purchase
Contracts due within five years
Less: future finance charges
2011
£’000
2010
£’000
-
52
4
56
280
196
-
476
2011
£’000
2010
£’000
21
21
2011
£’000
56
21
77
31
(6)
25
-
-
2010
£’000
476
-
476
-
-
-
The Group's financial liabilities consist of a bank overdraft and hire purchase obligations, both denominated
in sterling.
Amounts due for obligations under finance leases and hire purchase contracts are secured on the assets to
which they relate.
46
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
16 Financial Instruments (continued)
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.
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 with the
final repayment in January 2011. Interest on the loan was payable at 1.75 per cent over bank base rate. The
balance outstanding at the year end is £Nil (2010: £280k).
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.
17 Trade and other payables
Current
Trade payables
Amounts owed to subsidiary undertakings
Other payables
Taxation and social security
Accruals and deferred income
Group
Company
2011
£’000
250
-
243
512
1,040
2010
£’000
75
-
227
477
735
2,045
1,514
2011
£’000
2010
£’000
2
-
-
42
53
97
-
11
-
9
13
33
Due to the short-term nature of the trade and other payables, the Directors consider that the carrying value
approximates to their fair value.
47
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
18 Share capital
31 March 2011
31 March 2010
Number
£’000
Number
£’000
AUTHORISED
Ordinary shares of 10p each
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
11,941,500
-
-
1,194
-
-
-
23,883
11,917,617
11,941,500
1,194
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)
-
-
The Company has one class of ordinary shares which carries no right to fixed income.
Capital management disclosure
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising
returns to shareholders through the optimisation of debt and equity balances. The Group considers capital to
be comprised of all the components of equity. There are no externally imposed capital requirements on the
Group.
The Group manages the capital structure and makes adjustments to it in the light of changes to economic
conditions and risks. In order to manage capital the Group has continued to consider and adjust the level of
dividends paid to shareholders and also made purchases of its own shares which are held as Treasury Shares.
As part of its strategy of seeking to optimise the Group‟s debt and equity balance the Group also considers the
appropriate level of external borrowing and, as disclosed in Note 16, has taken the decision not to renew its
borrowing facilities with Barclays Bank.
48
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
18 Share capital (continued)
Employee share schemes
The Company operates two share options schemes and a HM Revenue & Customs SAYE approved scheme.
Enterprise Management Incentive Share Option Scheme
At 31 March 2011 the following options had been granted and remained outstanding in respect of the
Company‟s ordinary shares:
Year of
grant
Exercise
Price
Pence
Exercise
Period
Number of
options
31 March
2010
2005/6
57.50 2007-2015 *
184,234
2006/7
90.50 2008-2013
2007/8
113.50
2010-2015
20.50 2011-2016
20.77 2011-2016
31.50 2012-2017
31.50 2014-2019
42.00 2013-2018
2008/9
2009/10
Total 2011
5,000
14,000
184,234
252,000
40,000
200,000
-
Granted
Cancelled
Number of
Options
31 March 2011
-
-
-
-
-
-
-
117,000
-
-
184,234
(5,000)
(14,000)
-
(58,000)
-
(11,000)
-
-
184,234
194,000
40,000
200,000
106,000
879,468
117,000
(88,000)
908,468
Weighted average exercise price
2011 (pence)
33.21p
42.00p
28.45p
33.48p
Total 2010
699,467
736,234
(556,234)
879,467
Weighted average exercise price 2010
(pence)
95.88p
24.20p
81.67p
33.21p
*These options have fully vested
There were 908,468 options outstanding at 31 March 2011 (2010:879,468) which had a weighted average
price per share of 33.48p (2010: 33.21p). The options vest over a period of two to four years conditional upon
the option holders continued employment with the company.
49
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
18 Share capital (continued)
The conditions which give 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)
2011
42.00
65.00
4.0
2
2010
52.25
60.71
4.2
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 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.
On 1st November 2010 the options granted on 3 September 2007 matured. All amounts saved under the
scheme together with tax free bonuses were repaid to the option holders on 8 November 2010. All option
holders were given six months from the maturity date to 30 April 2011 to exercise their options. At 30 April
2011 no options had been exercised and therefore the options lapsed.
Details are as follows:
Year of grant
Exercise
price
Pence
Exercise
period
Number of
options
31 March
2010
Leavers
Number of
Options
31 March
2011
2008
86.00
2011
72,554
(14,020)
58,534
Total 2011
72,554
(14,020)
58,534
Weighted average exercise price 2011 (pence)
86.0p
86.0p
86.0p
Total 2010
135,689
(63,135)
72,554
Weighted average exercise price
2010 (pence)
86.0p
86.0p
86.0p
50
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
19 Reserves
Capital redemption reserve fund
The capital redemption reserve relates to the cancellation of the Company‟s own shares.
Treasury Shares
At 31 March 2011, 80,000 shares were held in treasury with a nominal value of £8,000 (2010: 25,000 shares
with a nominal value £2,500).
The maximum number of shares held in treasury during the year was 80,000 shares representing 0.007% of
the called-up ordinary share capital of the company (2010: 25,000 representing 0.002% of the called-up
ordinary share capital of the Company).
Share Premium account
The balance on the share premium account represents the amounts received in excess of the nominal value of
the ordinary shares.
Merger reserve
The merger reserve represents the fair value of the consideration given in excess of the nominal value of the
ordinary shares issued to acquire subsidiaries.
Share option reserve
The reserve represents the cumulative amounts charged to profit in respect of employee share option
arrangements where the scheme has not yet been settled by means of an award of shares to an individual.
Currency translation reserve
The translation reserve comprises all foreign exchange differences arising from translation of the financial
statements of foreign operations.
Retained earnings
The balance held on this reserve is the accumulated retained profits of the Group
51
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
20 Operating lease commitments
As at 31 March 2011 the group was committed to making the following total payments in respect of non-
cancellable operating leases:
Group
Non-cancellable operating leases which expire:
Within one year
Within one to two years
Within two to five years
After five years
Land and
buildings
2011
£’000
Other
2011
£’000
Land and
buildings
2010
£’000
Other
2010
£’000
40
-
921
241
1,202
1
-
17
-
18
18
-
1,163
269
1,450
1
6
24
-
31
The Group leases various offices under non-cancellable operating lease agreements. The leases have varying
terms as disclosed above. The Group also leases various plant and equipment under operating lease
agreements with varying terms.
21 Reconciliation of profit before tax to net cash inflow from operating activities
Group
Year ended
Company
Year ended
31 March
2010
£’000
31 March
2011
£’000
31 March
2010
£’000
Profit before taxation
Adjust for:
Depreciation
Share option reserve movement
Profit on sale of plant & equipment
Net finance income
31 March
2011
£’000
1,021
163
37
(3)
(12)
462
189
14
-
(1)
Operating cash flow before changes in working
capital
(Increase)/decrease in receivables
Increase/(decrease) payables
1,206
664
(160)
531
555
(332)
Cash generated from underlying operations
1,577
887
52
119
146
2
10
-
(2)
129
81
26
236
2
4
-
(9)
143
566
(18)
691
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
22 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
Obligations under finance lease
< 1 year
> 1 year
Total cash
Company
Cash at bank and in hand
Bank overdraft
Bank loans due within one year
Total (debt)/cash
23 Financial risk management
2010
£’000
2,783
(196)
2,587
(280)
-
-
2,307
£’000
321
144
465
280
(2)
(23)
720
2011
£’000
3,104
(52)
3,052
-
(2)
(23)
3,027
At 1 April
2010
£’000
2,211
(16)
2,195
(280)
1,915
Cash flow
£’000
210
(13)
197
280
477
At 31 March
2011
£’000
2,421
(29)
2,392
-
2,392
The Board of Directors has overall responsibility for the risk management policies that are applied by the
business to identify and control the risks faced by the Group.
The Group has exposure from its use of financial instruments to foreign currency risk, credit risk and liquidity
risk.
Foreign currency
The Group‟s activities expose it primarily to the financial risks of changes in foreign currency exchange rates
which will impact on 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.
53
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2011
23 Financial risk management (continued)
Foreign currency (continued)
The Group‟s international operations account for approximately 17 per cent of gross fee income and slightly
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.
Currently the Group‟s policy is not to hedge against this exposure but it does seek 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.
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. At the year end no customer represented more than 5% of the total
balance of trade receivables.
However, in the current economic climate, there is increased uncertainty regarding customers who may not be
able to pay as their debts 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.
It is the Directors‟ opinion that no further provision for doubtful debts is required.
Liquidity risk
Effective liquidity risk management requires maintaining sufficient cash and or 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.
Apart from one HP commitment the Group has no financial liabilities other than short term trade payables and
accruals as disclosed in note 17, all due within one year of the year end.
The Group has net funds of £3m which the Board consider are more than adequate to meet future working
capital requirements and to take advantage of business opportunities.
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 total amount charged by the Company to its
subsidiaries during the year is £388k (2010: £403k). The balance owed by the subsidiary undertakings at the
year end is £91k (2010: £Nil).
The Company also provides corporate guarantees on the subsidiary bank accounts. At 31 March 2011
amounts overdrawn by subsidiary bank accounts totalled £23k (2010: £180k).
The Directors receive remuneration from the Group, which is disclosed in the Directors‟ Remuneration
Report. As shareholders, the Directors also received dividends in the year from the Company amounting to
£227,027 (2010: £139,740).
54
PRIME PEOPLE PLC
Directors and Advisers
Directors
(Managing Director)
Robert Macdonald (Executive Chairman)
Peter Moore
Chris Heayberd (Finance Director)
John Lewis OBE (Non-Executive)
Simon Murphy (Non-Executive)
Secretary and registered office
Chris Heayberd, 40a Dover Street, London, W1S 4NW.
Registered number
1729887
Stockbrokers & Nominated Advisers
Cenkos Securities Plc, 6.7.8 Tokenhouse Yard, London, EC2R 7AS
Solicitors
Howard Kennedy, 19 Cavendish Square, London, W1A 2AW.
Auditors
Crowe Clark Whitehill LLP, St Brides House, 10 Salisbury Square, London, EC4Y 8EH
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.
55
PRIME PEOPLE PLC
Notice of Annual General Meeting
Notice is hereby given that the twenty-seventh Annual General Meeting of Prime People Plc (the “Company”) will be
held at 40a Dover Street, Mayfair, London, W1S 4NW on Tuesday 28 June 2011 at 11.00am for the following purposes:
Ordinary Business:
1. To receive the Company's financial statements for the year ended 31 March 2011 together with the reports of the
directors and auditors thereon.
2. To approve the Remuneration Report.
3. To reappoint Mr R J G Macdonald as a Director, who retires by rotation pursuant to the articles of association, and being
eligible, offers himself up for reappointment.
4. To reappoint Mr S J Murphy as a Director, who retires by rotation pursuant to the articles of association, and being
eligible, offers himself up for reappointment.
5. To reappoint Crowe Clark Whitehill LLP as auditors for the ensuing year.
6. To authorise the Directors to determine the remuneration of the auditors.
Special Business:
7. 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 2012 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.
8. 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 7 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 £59,700.
9. 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 1,194,150 (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
3 June 2011
56
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.
57
PRIME PEOPLE PLC
Form of Proxy
For use at the Annual General Meeting convened for Tuesday 28 June 2011 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 28 June 2011 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
2011 together with the reports of the
directors and auditors thereon.
2. To approve the Remuneration Report.
3. To reappoint Mr R J G Macdonald as a
Director
4. To reappoint Mr S J Murphy as a
Director
5. To re-appoint Crowe Clark Whitehill
LLP as auditors for the ensuing year
6. To authorise the directors to determine
the remuneration of the auditors.
SPECIAL BUSINESS
7. To authorise the Directors to issue new
shares
8. To empower the Directors to allot shares
for cash.
9. 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
2011
Signature
___________________________________________________________________________
58
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
59
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.
60
Financial Calendar
Half year results
Full year results
Report and accounts
-
-
-
Announcement November 2011
Announcement June 2012
Posted to shareholders June 2012
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) 20 7629 3990
www.macdonaldandcompany.co.uk
E: manchester@macdonaldandcompany.com
Macdonald & Company
Gleneagles House
Fairway Office Park
52 Grosvenor Road
Bryanston
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
Beach Park Plaza Centre
Al Barsha 1
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