Tanfield Group Plc
Annual Report 2015

Plain-text annual report

TANFIELD GROUP PLC REPORT AND FINANCIAL STATEMENTS 2015 Registered in England & Wales Company number 04061965 TANFIELD GROUP PLC FINANCIAL STATEMENTS REPORT AND FINANCIAL STATEMENTS 2015 SUMMARY OF CONTENTS Directors and Advisers Strategic Report Directors’ Report Corporate Governance Directors’ Remuneration Report Statement of Directors’ Responsibilities Report of the Independent Auditor Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Accounting Policies Notes to the Accounts 2 3 5 7 8 10 11 12 13 14 15 16 19 1 TANFIELD GROUP PLC FINANCIAL STATEMENTS DIRECTORS AND ADVISERS DIRECTORS NON-EXECUTIVE J Pither RRE Stanley M Groak D Robinson SECRETARY D Robinson Chairman Non executive Director (resigned 17 November 2015) Non executive Director Non executive Director (appointed 13 November 2015) REGISTERED OFFICE AND ADVISORS REGISTERED OFFICE Sandgate House 102 Quayside Newcastle upon Tyne NE1 3DX NOMINATED ADVISOR WH Ireland 24 Martin Lane Londno London EC4R 0DR AUDITOR RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) 1 St James’ Gate Newcastle upon Tyne NE1 4AD NOMINATED BROKER WH Ireland 24 Martin Lane Londno London EC4R 0DR NOMINATED BROKER Peterhouse Corporate Finance Plc 3rd Floor New Liverpool House 15 Eldon Street London EC2M 7LD SOLICITOR Ward Hadaway Sandgate House 102 Quayside Newcastle upon Tyne NE1 3DX REGISTRAR Capita IRG Plc Bourne House 34 Beckenham Beckenham Kent BR3 4TH 2 TANFIELD GROUP PLC FINANCIAL STATEMENTS STRATEGIC REPORT CHAIRMAN’S STATEMENT During the year we have continued to monitor the progress of both investments closely. The Board feels that some progress has been made towards a realisation in value of the investment in Snorkel following further growth in 2015. The Board do not feel that sufficient progress was made by Smith and, following a review of the investment in Smith, decided to impair the investment to a nil value. NON-EXECUTIVES' REVIEW Background The Company is defined as an investment company with two passive investments. This definition resulted from the disposal of Smith Electric Vehicles in 2009 and the disposal of Snorkel in October 2013. Tanfield Group Plc currently owns 5.76% of Smith Electric Vehicles Corp. ("Smith") and 49% of Snorkel International Holdings LLC ("Snorkel"). OVERVIEW Snorkel Tanfield continues to own 49% of Snorkel, which it has held since the disposal of the business in October 2013. Progress in production continued to be made during 2015 which resulted in sales increasing by approximately 30% compared with 2014. Investment in Snorkel by the current owner since the disposal stands at over $70m. This has allowed the business to make the progress to date and will assist in the continued progress that is targeted for the future. The Board understands that it is the intention of Snorkel to focus on improving profit margins of its products during 2016 through further procurement synergies and standardisation across the product range as well as efficiency improvements. In March 2016 Ahern Deutschland, the German distributor for Snorkel, opened a new €1.1 million headquarters along with new regional sales appointments in to the European markets which underpins the ambition and drive to increase European market penetration. Snorkel continues to operate in an aggressive market where competitors are also targeting increased market share but there is no reason why the progress made to date should not continue to be made in to the future. Mr Don Ahern, the owner of Extreme and Ahern Rentals, remains fully committed to Snorkel and has a strong desire to continue to grow and improve the business. Valuation of Snorkel holding The Board of Tanfield has taken a view of the carrying value of its 49% holding and its preferred interest holding (Loan note) that takes account of risks in the industrial global markets and the normal cycles that operate within these markets. The range of potential valuation can be broad. The valuation has, to an extent, a time driven element. The agreement for the valuation formula to be triggered is over a five year period. At the end of 2015 there were just under three years left to run on this aspect of the agreement. If the formula is not triggered within the 5 year time frame Tanfield will still retain 49% of the equity. The decision has been made to maintain its valuation of £36.3m ($60.1m, being $43.1m equity holding and $17.0m preferred interest holding). This valuation has been assessed against a number of criteria using discounted cash flow in relation to the sale and purchase agreement and its valuation formula: Level of investment in working capital. • • Capital investment. • Production capacity. • Order Book. • Market conditions. • Historical capability of the business to ramp up output. The valuation has not been adjusted for foreign currency fluctuations due to the uncertain nature of future foreign currency markets. Based on the exchange rate at 31 December 2015, the $60.1m valuation would convert to £40.7m and based on the exchange rate at 1 June 2016, it would convert to £41.6m. This represents approximately 27p per share. Smith In October 2013 Smith completed a restructuring exercise that saw it convert debt to equity. As a result of this, they informed the Company that the equity shareholding went from 24% to 5.76% (excluding warrants). In May 2015 it executed a conditional agreement to form an exclusive joint venture ("the JV") with strategic partner and investor FDG Electric Vehicles Limited ("FDG"). FDG is an international company listed on the Hong Kong Stock Exchange and is a vertically integrated electric vehicle manufacturer engaged in the R&D, production and distribution of all-electric vehicles. Under the terms of the JV, Smith were to invest the Smith brand, licence for Newton™ EV design and IP while FDG were to invest $15M in cash and $30m in assets, licence for commercial EV design and IP. The New Joint Venture entity was to be responsible for US product development, sales and marketing and Smith were to be responsible for manufacturing and maintain its right to territories outside of the USA. 3 TANFIELD GROUP PLC FINANCIAL STATEMENTS STRATEGIC REPORT (Continued) In May 2016, the Board of Tanfield was informed by the Board of Smith that it had filed a complaint against FDG and the New Joint Venture based on fraudulent misstatements that were given that induced Smith to enter into the joint venture. Smith have asked the court to declare the joint venture terminated or rescinded, thereby returning the right to sell its vehicles in the United States along with damages for the financial injury inflicted on Smith. Following the complaint against FDG, the Smith Board are now focused on the sale and production of its existing vehicles and technology in to the United States and European markets. It will continue to pursue opportunities license/JV/partner opportunities throughout the Rest Of The World whilst continuing to invest in the development of the next generation vehicle. for In order to implement its plan, the Smith Board are seeking to raise $15m in new funding through a series 'F' financing round. It is unknown at this stage whether this financing will be successful or not. Valuation of Smith holding In 2014, the investment in Smith was valued at £4.8m ($7.4m). The Board of Directors have carried out a review of the investment in Smith resulting in a decision to impair the investment value to nil. The Board came to this decision due to the uncertainty around the level of funding required before Smith is able to achieve profitability and become self financing as well as the disruption, costs and delays as a result of the relationship with FDG which the Board acknowledge Smith are now trying to remedy via legal proceedings. The Board will continue to monitor any progress made by Smith in relation to the investment in Smith and will review the position should significant progress be made in achieving its plans. in Strategy of Tanfield Board of Directors relation to its Investments Although the Board cannot predict the timeframe for a return of value in its investment in Snorkel, the Directors believe that its investment will result in a return of value to shareholders over time. At this stage it is uncertain whether its investment in Smith will result in a return of value to shareholders but the Directors will continue to monitor the situation. The strategy of the Company in relation to these investments is to return as much as possible of any realised value to shareholders as the events occur and circumstances allow, subject to compliance with any legal requirements associated with such distributions. The Board takes the view that while there has been progress made by Snorkel, there is still a risk of failure. The Board will continue to fulfill its obligation to its shareholders in seeking to optimise the value on its investments. The Investments are defined as passive investments and in line with this definition Tanfield does not hold Board seats in either Snorkel or Smith. There is no limit on the amount of time the existing Investments may be held by the Company. Finance income The interest cost in the period of £54k (2014: £91k) was incurred from loan interest charged during the period and interest income of £1k (2014: £624k) received on deferred consideration and loans with Smith and bank balances. Taxation There is no tax charge for the period under review. There is no brought forward deferred tax asset recognised, and none was recognised in the period resulting in no adjustment to deferred tax, consistent with 2014. Loss from operations Loss from operations after impairment was £4.4m, (2014: £0.4m), the most significant difference being the £4.8m impairment of the investment in Smith. Loss per share Loss per share from continuing operations was 3.1 pence (2014: profit 0.1 pence). No dividend has been declared. (2014: nil) Cash At 31 December 2015, the Company had cash of £0.1m (2014: £0.4m). Approved by the Board of Directors and signed on behalf of the Board Daryn Robinson Non-Executive Director 24 June 2016 4 TANFIELD GROUP PLC FINANCIAL STATEMENTS DIRECTORS’ REPORT The directors submit their report and the financial statements of Tanfield Group PLC for the year ended 31 December 2015. Tanfield Group Plc is a public listed company incorporated and domiciled in England and quoted on AIM. PRINCIPAL ACTIVITIES The company’s principal activity is that of an investment company. RESULTS AND DIVIDENDS The financial result, for the year to 31 December 2015 reflects the changes to the principal activity of the company to that of an investment company. Turnover for the year was nil (2014: nil). The operating profit before impairments in the year of £0.4m (2014: £0.4m loss) arose from operating costs. The balance sheet has slightly reduced compared to the prior year with total assets at the end of the year of £36.5m (2014: £41.6m) caused largely by the write off of the Investment value in Smith Electric. Net Current Assets were £0.1m (2014: £0.4m) with cash balances of £0.1m (2014: £0.4m). Following the £0.4m fundraising completed in March 2016, the directors believe the Company has sufficient working capital to allow it to continue through to the Autumn of 2017 or beyond. No dividend has been paid or proposed for the year (2014: £nil). The loss of £4.4m (2014: £0.1m profit) has been transferred to reserves. FINANCIAL INSTRUMENTS The Company’s financial instruments comprise cash, current debtors and current and non current creditors arising from its operations. The principal financial instruments used by the Company are cash balances raised from share issues by the Company. The Company has not established a formal policy on the use of financial instruments but assesses the risks faced by the Company as economic conditions and the Company’s operations develop. RISKS AND UNCERTAINTIES The business believes it has sufficient cash funds to continue in business for the foreseeable future through to the realisation of value from one of its investments. It recognises that its investments have a level of risk associated with them and is reliant on the continued performance within their respective markets. DIRECTORS The present membership of the board is set out on page 2. All directors have the right to acquire shares in the company via the exercise of options granted under the terms of their service contracts, copies of which may be inspected by shareholders upon written application to the company secretary. Details of the directors’ options to acquire shares are set out in the Directors’ Remuneration Report on pages 8 to 9. POLICY ON PAYMENT OF CREDITORS It is Company policy to agree and clearly communicate the terms of payment as part of the commercial arrangements negotiated with suppliers and then to pay according to those terms based on the timely receipt of an accurate invoice. The company supports the CBI Prompt Payers Code. A copy of the code can be obtained from the CBI at Centre Point, 103 New Oxford Street, London WC1A 1DU. Trade creditor days based on creditors at 31 December 2015 were 58 days (2014: 67 days). SUBSTANTIAL SHAREHOLDINGS On 31 December 2015 the following held substantial shares in the company. No other person has reported an interest of more than 3% in the ordinary shares. No. % HSBC GLOBAL CUSTODY NOMINEE (UK) 50,575,085 33.51% CHASE NOMINEES LIMITED 14,772,506 9.79% RATHBONE NOMINEES LIMITED 12,235,452 8.11% THE BANK OF NEW YORK (NOMINEES) 12,011,045 7.96% VIDACOS NOMINEES LIMITED 10,214,172 6.77% FOREST NOMINEES LIMITED 7,233,086 4.79% HARGREAVES LANSDOWN (NOMINEES) 6,263,757 4.15% DIRECTORS’ INTEREST IN CONTRACTS No director had a material interest at any time during the year in any contract of significance, other than a service contract, with the company or any of its subsidiary undertakings. AUDITOR A resolution to reappoint RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) as auditor will be put to the members at the annual general meeting. RSM UK Audit LLP has indicated its willingness to continue in office. INFORMATION TO STATEMENT AS TO DISCLOSURE OF AUDITORS The directors in office on the date of approval of the financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the directors have confirmed that they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor. 5 TANFIELD GROUP PLC FINANCIAL STATEMENTS DIRECTORS’ REPORT (Continued) DIRECTORS INDEMNITY Every Director shall be indemnified by the company out of its own funds. Approved by the Board of Directors and signed on behalf of the Board Daryn Robinson Non-Executive Director 24 June 2016 6 TANFIELD GROUP PLC FINANCIAL STATEMENTS CORPORATE GOVERNANCE Principles of Corporate Governance The Company is committed to high standards of corporate is accountable to the Company’s governance. The board shareholders for good corporate governance. The Company has complied substantially throughout the period with the corporate governance guidelines for smaller quoted companies issued by the Quoted Company Alliance and details are provided below. The role of the Board is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls, which enables risk to be assessed and managed. The Board sets the company’s strategic aims, ensures that the necessary financial and human resources are in place for the company to meet its objectives and reviews management performance. The Board sets the company’s values and standards and ensures that its obligations to its shareholders and others are understood and met. Board Structure During the year the Board comprised of the Non-Executive Chairman and two independent Non-Executive Directors. D Robinson was appointed to the Board on 13 November 2015 and RRE Stanley resigned from the board on 17 November 2015. Board Role The Board is responsible to shareholders for the proper management of the Company. The Non-Executive Directors have a particular responsibility to ensure that the strategy is fully considered. To enable the Board to discharge its duties, all Directors have full and timely access to all relevant information and there is a procedure for all Directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the Company. The Board has a formal schedule of matters reserved to it. The Board met on six separate occasions in the year. Appointment and Induction of Directors The composition of the Board is kept under review with the aim of ensuring that the directors collectively possess the necessary skills and experience to direct the Company’s business activities. Board Committees The Board delegates certain matters to its two principal committees, which deal with remuneration and audit. Remuneration Committee During the year the Remuneration Committee comprised Jon Pither and Daryn Robinson who took over from Roy Stanley following his resignation. The Remuneration Committee determined and agreed with the Board the framework of remuneration for the Non-Executive Directors. There was one remuneration committee meeting in the period which was fully attended. The report on Directors’ remuneration is set out on pages 8 to 9. Audit Committee During the year the Audit Committee comprised of Martin Groak and Jon Pither. The Audit Committee is responsible for:    Reviewing the scope of external audit, to receive regular reports from RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP). Reviewing the half-yearly and annual accounts prior to their recommendation to the Board. Reviewing the Company’s internal financial controls and risk management systems and processes.  Making recommendations on the appointment, re- appointment and removal of external auditors and approving the terms of engagement. Reviewing the nature of the work and level of fees for non-audit services provided by the external auditors. Assessing effectiveness of the external auditor. independence, objectivity and the   The committee met on two occasions during the year and they were fully attended. Internal Control The Board has overall responsibility for the Company’s system of internal control and risk management and for reviewing the effectiveness of this system. Such a system can only be designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can therefore only provide reasonable, and not absolute assurance against material misstatement or loss. The Board are of the view that due to the current size and composition of the Company, that it is not necessary to establish an internal audit function. Relations with Shareholders The Company values its dialogue with both institutional and private investors. Effective two-way communication with fund managers, institutional investors and analysts is actively pursued and this encompasses issues such as performance, policy and strategy. Private investors are encouraged to participate in the Annual General Meeting at which the Chairman presents a review of the results and comments on current business activity. The Chairmen of the Audit and Remuneration Committees will be available at the Annual General Meeting to answer any shareholder questions. Notice of Annual General Meeting will be issued in due course. Going Concern The directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Daryn Robinson Non-Executive Director 24 June 2016 7 TANFIELD GROUP PLC FINANCIAL STATEMENTS DIRECTORS’ REMUNERATION REPORT Remuneration committee The company has established a Remuneration Committee which is constituted in accordance with the recommendations of the Combined Code. The members of the committee during the year were J Pither and D Robinson who took over from R Stanley following his resignation and the committee was chaired by J Pither. Remuneration policy There were four main elements of the remuneration packages for directors:  Basic annual salary (including directors’ fees) and benefits; Annual bonus payments; Share option incentives; and Pension arrangements.    Basic salary The basic salary of the directors is reviewed annually having regard to the commitment of time required and the level of fees in similar companies. Non-executive directors are employed on renewable fixed term contracts not exceeding three years. Following a review in December 2015 it was felt that a reduction in the overall remuneration levels was appropriate and with immediate effect terms were amended reducing the overall remuneration costs. Annual bonus The committee established the objectives which must be met for each financial year if a cash bonus was to be paid. The purpose of the bonus was to reward directors for achieving above average performance which also benefits shareholders. Share options The directors have options granted to them under the terms of the Share Option Scheme. There are no performance conditions attached to the share options. Share options were awarded as set out in the table on page 9. Pension arrangements Some directors were members of a money purchase pension scheme to which the company contributed. No other payments to directors were pensionable. Directors interests The interests of directors holding office at the year end in the company’s ordinary 5p shares at 31 December 2015 and 1 January 2015 are shown below: M Groak J Pither D Robinson Total Number of shares 2015 - 1,403,248 546,740 1,949,998 2014 - 1,015,084 - 1,015,084 The directors, as a group, beneficially own 1.29% of the company’s shares. All directors have the right to acquire shares in the company via the exercise of options granted under the terms of their service contracts, copies of which may be inspected by shareholders upon written application to the company secretary. 8 TANFIELD GROUP PLC FINANCIAL STATEMENTS DIRECTORS’ REMUNERATION REPORT (continued) Remuneration review Directors emoluments for the financial year were as follows: RRE Stanleya M Groak J Pither D Robinsonb Total Salary 43 35 39 4 121 Benefits in kind - - - - - Total 2015 43 35 39 4 121 a b RRE Stanley resigned on 17 November 2015 D Robinson was appointed on 13 November 2015 Pension Total Total 2014 30 25 38 - 93 2015 16 - - - 16 Pension Total 2014 16 - - - 16 Directors share options held at 31 December 2015 were as follows: 31 December 2014 Granted/ (Lapsed) Transferred Exercised 31 December 2015 Option price per sharea Date from which normally exercisable RRE Stanley M Groak J Pither D Robinson M Groak M Groak J Pither D Robinson Total 800,000 - - - 30,000 - - - 830,000 - - - - 100,000 100,000 100,000 300,000 (800,000) 200,000 200,000 400,000 - - - - - - - (200,000) (400,000) - - - - (600,000) - 200,000 - - 30,000 100,000 100,000 100,000 530,000 5p 5p 5p 5p 5p 27p 27p 27p 02/01/2010 02/01/2010 02/01/2010 02/01/2010 01/03/2009 02/02/2015 02/02/2015 02/02/2015 a On 31 December 2015 the market price of the ordinary shares was 14.25p. The range during 2015 was 14.25p to 25.00p Expiry Date 02/01/2017 02/01/2017 02/01/2017 02/01/2017 01/03/2016 02/02/2020 02/02/2020 02/02/2020 Approval This report was approved by the board of directors and authorised for issue on 24 June 2015 and signed on its behalf by: Daryn Robinson Non-Executive Director 9 TANFIELD GROUP PLC FINANCIAL STATEMENTS STATEMENT OF DIRECTORS’ RESPONSIBILITIES The directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements of the company in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (“EU”). The financial statements are required by law and IFRS as adopted by the EU to present fairly the financial position and performance of the company. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. 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 of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to: a. b. c. d. select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether they have been prepared in accordance with IFRS as adopted by the EU; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure the statements that Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. comply with financial the The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Tanfield Group Plc website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 10 TANFIELD GROUP PLC FINANCIAL STATEMENTS REPORT OF THE INDEPENDENT AUDITOR Independent auditor’s report to the members of Tanfield Group PLC We have audited the financial statements on pages 12 to 26. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditor As more fully explained in the Directors’ Responsibilities Statement set out on page 10, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditscopeukprivate Opinion on financial statements In our opinion the financial statements:    give a true and fair view of the state of the company’s affairs as at 31 December 2015 and of its loss for the year then ended; have been properly prepared in accordance with IFRSs as adopted by the European Union; and have been prepared in accordance with the provisions of the Companies Act 2006. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements. 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. ALAN AITCHISON (Senior Statutory Auditor) For and on behalf of RSM UK AUDIT LLP (formerly Baker Tilly UK Audit LLP), Statutory Auditor Chartered Accountants 1 St James’ Gate Newcastle upon Tyne NE1 4AD 24 June 2015 11 TANFIELD GROUP PLC FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015 Revenue Staff costs Other operating income Other operating expenses Profit/(Loss) from operations before impairments Impairment of Investments Loss from operations after impairments Finance expense Finance income Net finance (expense)/ income (Loss)/Profit from operations before tax Taxation (Loss)/Profit & total comprehensive income for the year attributable to equity shareholders Earnings per share (Loss)/earnings per share from operations Basic (p) Diluted (p) Notes 1 2 4 3 3 5 6 6 2015 £000's - 618 27 (268) 377 (4,770) (4,393) (54) 1 (53) (4,446) - (4,446) 2014 £000's - (111) 18 (296) (389) - (389) (91) 624 533 144 - 144 (3.1) (3.1) 0.1 0.1 12 TANFIELD GROUP PLC FINANCIAL STATEMENTS BALANCE SHEET (Company registration number 04061965) AS AT 31 DECEMBER 2015 Non current assets Non current Investments Current assets Trade and other receivables Cash and cash equivalents Total assets Current liabilities Trade and other payables Non-current liabilities Other payables Deferred tax liabilities Total liabilities Equity Share capital Share premium Share option reserve Special reserve Merger reserve Retained earnings Total equity attributable to equity shareholders Notes 7 9 8 10 10 11 12 12 2015 £000's 36,283 36,283 98 94 192 2014 £000's 41,053 41,053 131 369 500 36,475 41,553 110 110 254 - 254 364 7,546 16,800 461 66,837 1,534 (57,067) 36,111 135 135 1,565 - 1,565 1,700 7,187 16,455 845 66,837 1,534 (53,005) 39,853 Total equity and total liabilities 36,475 41,553 The financial statements on pages 12 to 26 were approved by the board of directors and authorised for issue on 24 June 2016 and are signed on its behalf by: Daryn Robinson Non-Executive Director 13 TANFIELD GROUP PLC FINANCIAL STATEMENTS STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY SHAREHOLDERS FOR THE YEAR ENDED 31 DECEMBER 2015 At 1 January 2014 Comprehensive income Profit for the year Total comprehensive income for the year Transactions with owners in their capacity as owners:- Issuance of new shares (note 12) Share based payments (note 13) At 31 December 2014 Comprehensive income Loss for the year Total comprehensive income for the year Transactions with owners in their capacity as owners:- Issuance of new shares (note 12) Share based payments (note 13) At 31 December 2015 Share capital Share premium £000's 6,975 £000's 16,262 Share option reserve £000's 1,904 Merger reserve Special reservea Retained earnings Total £000's 1,534 £000's 66,837 £000's (54,208) £000's 39,304 - - - - - - - - - - 144 144 144 144 212 - 7,187 193 - 16,455 - (1,059) 845 - - 1,534 - - 66,837 - 1,059 (53,005) 405 - 39,853 - - - - - - - - - - (4,446) (4,446) (4,446) (4,446) 359 - 7,546 345 - 16,800 - (384) 461 - - 1,534 - - 66,837 - 384 (57,067) 704 - 36,111 a The company’s special reserve relates to the reclassification of the share premium account. 14 TANFIELD GROUP PLC FINANCIAL STATEMENTS CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015 Loss before interest and taxation Loss on deferred consideration currency fluctuations Loss on impairment of investments Operating cash flows before movements in working capital (Increase)/decrease in receivables (Decrease)/increase in payables Net cash from/(used in) operations Interest paid Net cash from/(used in) operating activities Cash flow from Investing Activities Interest received Net cash (used in)/from investing activities Cash flow from financing activities Proceeds from issuance of ordinary shares net of costs Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the start of year Cash and cash equivalents at the end of the year 2015 £000's (4,393) - 4,770 377 (25) (1,331) (979) - (979) - - 704 704 (275) 369 94 2014 £000's (389) 55 - (334) 109 (186) (411) - (411) - - 405 405 (6) 375 369 15 TANFIELD GROUP PLC FINANCIAL STATEMENTS ACCOUNTING POLICIES (i) Basis of preparation of statements the financial These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (“IFRS”), IFRIC interpretations and the requirements of the Companies Act applicable to Companies reporting under IFRS. The financial statements have been prepared under the historical cost convention, modified for the revaluation of certain financial assets and liabilities at fair value. The preparation of financial statements in conformity with IFRS requires the use of accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below in “Critical accounting estimates and key judgements”. (ii) Going Concern The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to be able to meet its liabilities as they fall due for the foreseeable future. At 31 December 2015 the Company had cash balances of £0.1m and, apart from director loans, is debt free. The Directors are confident that the cash balances will be sufficient to see the Company continue for the foreseeable future, well beyond 12 months, or until it realises the value of one of its investments and that the assumptions underlying their opinion are reasonable and that the Company will be able its cash balances. Having taken the to operate within uncertainties is appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustment to the value of the balance sheet assets or provisions for further liabilities, which would result should the going concern assumption not be valid. into account the Board believes that it (iii) Revenue All revenue relates to management recharges and is recognised when the recharges are made. in than sterling, currencies other (iv) Foreign currencies Transactions the presentational currency of the company, are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in the income statement for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in equity. (v) Share based payments The Company issues equity-settled share based payments to certain employees and has applied the requirements of IFRS2 “Share-based payments”. Equity settled share-based payments are measured at fair value at the date of the grant. Fair value is measured using a Black-Scholes model. The fair value is expensed on a straight line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest. (vi) Borrowing costs All borrowing costs are expensed in the income statement in the period in which they are incurred. (vii) Financial instruments Recognition of financial assets and financial liabilities Financial assets and financial liabilities are recognised on the Company’s balance sheet when the Company has become a party to the contractual provisions of the instrument. Financial assets Investments Investments are included at either cost less amounts written off or fair value where applicable. Trade and other receivables Financial assets within trade and other receivables are initially recognised at fair value, which is usually the original invoiced amount and are subsequently carried at fair value less provisions made for doubtful receivables. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Provisions are made specifically where there is evidence of a risk of non-payment, taking into account ageing, previous losses experienced and general economic conditions. Cash and cash equivalents Cash and cash equivalents comprise cash on hand less short term bank overdrafts. liabilities and equity Financial liabilities Financial liabilities and equity instruments are classified Financial according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds received. Trade and other payables Financial liabilities within trade and other payables are initially recorded at fair value, which is usually the original invoiced amount, and subsequently carried at historical cost. 16 (xi) Termination benefits Termination benefits (leaver costs) are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits when it is demonstrably committed to the affected employees leaving the Company. (x) Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. (xi) Functional and presentational currencies The consolidated financial statements are presented in sterling which is also the functional currency of the company. TANFIELD GROUP PLC FINANCIAL STATEMENTS ACCOUNTING POLICIES (continued) (viii) Segmental reporting IFRS 8 provides segmental information for the Company on the basis of information reported to the chief operating decision- maker for decision-making purposes. The Company considers that the role of chief operating decision-maker is performed by the Tanfield Group PLC’S board of directors. (ix) Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net 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 Company’s liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 17 and amended New and interpretations effective from 1 January 2016 not yet adopted by the Company standards The Company currently adopts all relevant accounting standards that have been endorsed by the EU. There are various standards that are expected to be endorsed in 2016 which the Company believes will have no significant impact on the Company’s financial position or results for the current or prior years but may impact the accounting for future transactions or arrangements. TANFIELD GROUP PLC FINANCIAL STATEMENTS Critical accounting estimates and key judgements The preparation of financial statements in conformity with IFRS requires the use of accounting estimates and assumptions. It also requires management to exercise judgement in the process of applying the Company’s accounting policies. We continually evaluate our estimates, assumptions and judgements based on the most up to date information available. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Investments The status of the Company’s holding in Smith Electric Corp was reviewed. The Board do not feel that Smith have made sufficient progress towards achieving its plan of obtaining a public listing to maintain the previous valuation and have therefore decided to impair the investment in Smith to nil. However, the board acknowledge that there is a chance the investment will result in a return to Shareholders and will continue to monitor the investment. Should progress be made in the future the valuation of the investment will be revisited. The status of the Company’s holding in Snorkel International Holdings was reviewed. Since the injection of working capital Snorkel International Holdings continues to progress well with production increasing. The company has reviewed the financial projections prepared by Snorkel and taking in to account improving global market conditions, the injection of working capital and applying its own sensitivity to the time taken to achieve EBITDA growth to $25m, considers its investment in Snorkel International Holdings to be at fair market value. The Board takes the view that while there has been progress made by Snorkel, there is still a risk of failure. The valuation has not been adjusted for foreign currency fluctuations due to the uncertain nature of foreign currency markets. Accounting standards, amendments to published accounts interpretations and The Company considered the implications, if any, of the following amendments to IFRSs during the year ended 31 December 2015. and amended and New interpretations effective from 1 January 2015 adopted by the Company standards During the year ended 31 December 2015, the Company has not adopted any new IFRS, IAS or amendments issued by the IASB, and interpretations by the IFRS Interpretations Committee, which have had a material impact on the Company’s financial statements. 18 TANFIELD GROUP PLC FINANCIAL STATEMENTS NOTES TO THE ACCOUNTS 1. Revenue An analysis of the Company's revenue is as follows: Management recharges Total 2. Staff costs Aggregate remuneration comprised Wages and Salaries Social Security Costs Other Pension Costs Total staff costs Average monthly number of employees Head Office and Administration Total 2015 £000’s - - 2014 £000’s - - 2015 £000's (638) 4 16 (618) 2015 No. 3 3 2014 £000's 90 5 16 111 2014 No. 3 3 Details of Directors’ fees and salaries, bonuses, pensions, benefits in kind and other benefit schemes together with details in respect of Directors’ share option plans are given in the Directors’ Remuneration Report on pages 8 to 9. During the year a provision for £760k of remuneration costs was reversed. 2015 £000's 54 54 2015 £000's 1 - 1 2014 £000's 91 91 2014 £000's 604 20 624 2015 £000's 2014 £000's 39 - 22 207 268 1 - 22 273 296 3. Finance expense and finance income Finance expense Interest on director loans Total finance expense Finance income Interest on cash, cash equivalents & financial instruments Interest on deferred consideration Total finance income 4. Other operating expenses Other operating expenses Property related expenses Net loss on foreign exchange Auditor's remuneration (see below) Other operating expenses Total operating expenses 19 TANFIELD GROUP PLC FINANCIAL STATEMENTS 4. Other operating expenses (continued) Auditor's remuneration Amounts payable to RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) and their associates in respect of both audit and non audit services are as follows: Audit Services  statutory audit of accounts Other services relating to taxation  compliance services Comprising  Audit services  Non audit services 5. Taxation Analysis of taxation charge for the year United Kingdom Corporation tax at 20.25% (2014: 21.5%) Total current taxation charge Deferred tax Origination and reversal of temporary differences Total deferred tax charge Total taxation charge in the income statement 2015 £000's 2014 £000's 22 2 24 22 2 22 2 24 22 2 2015 £000's 2014 £000's - - - - - - - - - - Factors affecting taxation charge The taxation charge on the loss for the year differs from the amount computed by applying the corporation tax rate to the loss before taxation as a result of the following factors: (Loss)/Profit before taxation Notional taxation charge at UK rate of 20.25% (2014: 21.5%) Effects of: Non (taxable) income/deductable expenses Utilisation of tax losses brought forward Total taxation charge 2015 £000's (4,446) (900) 966 (66) - 2014 £000's 144 31 - (31) - The Company has tax losses of approximately £2,307k (2014: £2,373k) available to carry forward against future profits of the same trade. No deferred tax asset has been recognised due to the uncertainty of future profitability of the Company. 20 TANFIELD GROUP PLC FINANCIAL STATEMENTS 6. (Loss)/earnings per share Basic (loss)/earnings per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue during the period. In calculating the dilution per share, share options outstanding and other potential ordinary shares have been taken into account where the impact of these is dilutive. The average share price during the year was 19.58p (2014: 16.90p). Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share Effect of dilutive potential ordinary shares from share options Weighted average number of ordinary shares for the purposes of diluted earnings per share (Loss)/earnings From operations (Loss)/earnings for the purposes of basic earnings per share being net profit attributable to owners of the parent Potential dilutive ordinary shares from share options (Loss)/earnings for the purposes of diluted earnings per share (Loss)/earnings per share from operations Basic (p) Diluted (p) 7. Non current investments A summary of the Non current investments is shown below: Investment in Smith Electric Vehicles US Corp Investment in Snorkel International Holdings LLC Total Non Current Investments 2015 No. 000’s 144,823 171 144,994 2015 £000's (4,446) - (4,446) 2014 No. 000’s 141,755 584 142,339 2014 £000's 144 - 144 (3.1) (3.1) 0.1 0.1 2015 £000’s - 36,283 36,283 2014 £000’s 4,770 36,283 41,053 Smith Electric Vehicles US Corp At 31 December 2015, the Company held a 5.76% (2014: 5.76%) share of the issued share capital of Smith Electric Vehicles US Corp, a company registered in the US. The Board do not feel that Smith have made sufficient progress towards achieving its plan of obtaining a public listing to maintain the previous valuation and have therefore decided to impair the investment in Smith to nil. However, the board acknowledge that there is a chance the investment will result in a return to Shareholders and will continue to monitor the investment. Should progress be made in the future the valuation of the investment will be revisited. In 2014 the Shareholding was held as a non current investment at the lower of cost and realisable value of £4,770k. Snorkel International Holdings LLC At 31 December 2015, the Company held a 49% (2014: 49%) share of the issued share capital of Snorkel International Holdings LLC, a company registered in the US. This shareholding is being held as a non current investment at fair value (2015: £36,283k, 2014: £36,283k). 8. Cash and cash equivalents Cash and cash equivalents comprise cash and short-term deposits held by the Company treasury function. The carrying amount of these assets approximates their fair value. The Company primarily holds Sterling. Currency denominated balances are translated to sterling at the balance sheet date. Cash and cash equivalents 2015 £000's 94 2014 £000's 369 21 TANFIELD GROUP PLC FINANCIAL STATEMENTS 9. Trade and other receivables Payable within one year Amounts due from Snorkel International Holdings LLC Other debtors and prepayments 2015 £000's 15 83 98 The directors consider that the carrying amounts of trade and other receivables approximates to their fair value. 10. Trade and other payables The directors consider that the carrying amounts of trade and other payables approximates to their fair value. 2015 £000's Payable within one year Trade payables Social security and other taxes Accrued expenses Loans Average credit period taken on trade purchases (days)a a Creditor days have been calculated as trade payables over other operating expenses multiplied by 365 days. Payable after one year Loans Other creditors 43 37 30 - 110 58 2015 £000's 254 - 254 11. Deferred taxation Company There is no movement in deferred taxation recognised in the current or proceeding years. 12. Share capital and share premium The Company has one class of ordinary shares which carry no right to fixed income. All shares are fully paid up. Nominal share value 5p 5p 5p 5p 5p 5p 5p 5p At 31 December 2013 Share options exercised New share issue 28 November 2014a Share options exercised At 31 December 2014 Share options exercised New share issue 6 November 2015b At 31 December 2015 a Number of shares 139,491,225 2,231,334 1,818,180 200,000 143,740,739 600,000 6,583,334 150,924,073 Share capital £000’s 6,975 111 91 10 7,187 30 329 7,546 2014 £000's 15 116 131 2014 £000's 56 38 41 - 135 67 2014 £000's 805 760 1,565 Share premium £000’s 16,262 - 193 - 16,455 - 345 16,800 On 25 November 2014 the Company announced that it had conditionally raised gross proceeds of £300k. These funds were raised by way of a placing of 1,818,180 new Ordinary Shares of 5 pence ("Shares") with institutional investors at a price of 16.5 pence per Share which were issued onto the AIM market on 28 November 2014. Costs of £15k attributable to the share issue have been charged against the Share Premium account. b On 3 November 2015 the Company announced that Directors and the Company Secretary were converting £675k of convertible loan in to equity which resulted in 6,583,334 new Ordinary Shares of 5 pence ("Shares") being issued. Under the terms of the convertible loan agreements, the shares were issued at a price of 10.25 pence per Share and were admitted onto the AIM market on 6 November 2015. 22 TANFIELD GROUP PLC FINANCIAL STATEMENTS 13. Share based payments IFRS2 requires share based payments to be recognised at fair value. The group measures the fair value of its share based payments to employees, “share options”, using the Black-Scholes valuation method. All share based payments are equity settled and details of the share option activity during 2015 and 2014 are shown below. Number of share options 2015 Weighted average exercise price (pence) Outstanding at the beginning of the year Granted Forfeited Exercised Expired Outstanding at the end of the year Exercisable 4,630,000 300,000 - (600,000) - 4,330,000 4,330,000 23 27 - (5) - 24 24 2014 Number of share options 7,061,334 - - (2,431,334) - 4,630,000 4,630,000 Weighted average exercise price (pence) 16 - - (5) - 23 23 The outstanding options at 31 December 2015 had a weighted average remaining contractual life of 4.47 years (2014: 5.33 years) The following table relates to share options outstanding and exercisable at 31 December 2015 Exercise price (pence) No of share options No of exercisable options Option exercise prices 5p 230,000 230,000 27p 4,100,000 4,100,000 Total 4,330,000 4,330,000 Income statement charge In accordance with IFRS2 the group determined the fair value of its options at ‘grant date’. The group accrues this fair value charge over the share option vesting period. Share options that are forfeited during the year are credited directly to the share option reserve account. A charge to the income statement of nil (2014: nil) and a credit directly to equity of £384k (2014: £1,059k) have been made during the year in accordance with IFRS2 ‘Share-based payments’. The group uses the Black-Scholes model to value its share options. 14. Financial risk management The Company’s operations are exposed to various financial risks which are managed by various policies and procedures. The main risk and their related management are discussed below: Credit risk management The Company’s exposure to credit risk arises from its trade and other receivables and cash deposits with financial institutions. The Company’s maximum exposure to credit risk is summarised below: Trade and other receivables Cash and cash equivalents 2015 £’000 98 94 192 2014 £’000 131 369 500 The Company did not have any financial instruments that would mitigate the credit exposure arising from the financial assets designated at fair value through profit and loss in either the current or proceeding year. 23 TANFIELD GROUP PLC FINANCIAL STATEMENTS 14. Financial risk management (continued) Liquidity risk management The Company is exposed to liquidity risk arising from having insufficient funds to meet the Company’s future financing needs. The Company’s liquidity management process includes projecting cash flows and considering the level of liquid assets available to meet future cash requirements along with monitoring balance sheet liquidity. The Board reviews forecasts, including cash flow forecasts on a quarterly basis. Maturity analysis The table below analyses the Company’s financial liabilities on a contractual gross undiscounted cash flow basis into maturity groupings based on amounts outstanding at the balance sheet date up to the contractual maturity date. 2015 Trade and other payables 2014 Trade and other payables Within 1 year £’000 1 to 5 years £’000 Over 5 years £’000 110 110 135 135 254 254 1,565 1,565 - - - - Total £’000 364 364 1,700 1,700 Foreign exchange risk management The Company is exposed to movements in foreign exchange rates due to the net assets of its foreign investments being denominated in foreign currencies. If appropriate the Company can use currency derivative financial instruments such as foreign exchange contracts to reduce exposure. These were not used in the period. Capital management The Company’s main objective when managing capital is to protect returns to shareholders. The Company also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital. The Company manages its capital with regard to risks inherent in the business and the sector in which it operates by monitoring its gearing ratio on a regular basis. The Company considers its capital to include share capital, share premium, special reserve, share option reserve and retained earnings. No gearing is currently calculated as the Company currently has no borrowings. 15. Related party transactions Remuneration of key personnel The remuneration of the key management personnel, which includes Directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual directors is provided in the Directors’ Remuneration Report on pages 8 to 9. Directors emoluments are shown in the table below: Salaries and short term benefits including NI Post employment benefits 2015 £000’s 125 16 141 114 2014 £000’s 98 16 24 TANFIELD GROUP PLC FINANCIAL STATEMENTS 15. Related party transactions (continued) Transactions with directors Loans During the year the convertible loans provided to the Company by some of the Directors were amended. The terms of the previous convertible loan agreements were due to expire in June 2016 with interest of 6% and an average conversion price of 6p. It was felt by the Board that whilst the average conversion price was proportionate to the risk at the time the loans were taken out in 2013, as there was no certainty of the Snorkel division being sold, a higher conversion price would now be more appropriate. In return for a combined fee of £68k being accrued, it was agreed that the loans were extended through to June 2017, with interest of 6% and an increase in the conversion price to 10.25p. Until the loans are either fully repaid or fully converted, the loan agreements are secured by a Debenture. The Debenture is in a form which is relatively standard and constitutes fixed and floating charges over the Company's assets. On 3 November 2015, it was announced that the Directors were converting £675k of their loans at 10.25p resulting in 6,583,334 new ordinary shares of 5p each being issued. As of 31 December 2015 the outstanding loan balances due were £254k (2014: £805k) which has been classified under trade and other payables within the balance sheet. 16. Retirement benefits The Company operates defined contribution retirement benefit plans for all qualifying employees. The assets of the schemes are held separately from those of the Company in funds under the control of trustees. Where there are employees who leave the scheme prior to vesting fully in the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions. The total cost charged to income of £16k (2014:£ 16k) represents contributions payable to these schemes by the Company at rates specified in the rules of the schemes. As at 31 December 2015, contributions of nil (2014: nil) due in respect of the current reporting period had not been paid over to the schemes. 17. Financial instruments recognised in the balance sheet Assets Current financial assets Trade and other receivables Investments Cash and cash equivalents Total Liabilities Current liabilities Trade and other payables Total a Assets and liabilities at fair value through profit and loss. 2015 Assets Available for Salea £000’s Loans and receivables £000’s - 36,283 - 36,283 Held for tradinga 98 - 94 192 Other financial liabilities £000’s 73 73 Total £000’s 98 36,283 94 36,475 Total 2014 Assets Available for Salea £000’s Loans and receivables £000’s 131 - 369 500 - 41,053 - 41,053 Total £000’s 131 41,053 369 41,553 Other financial liabilities £000’s 97 97 Held for tradinga Total £000’s £000’s - - 97 97 £000’s £000’s - - 73 73 25 TANFIELD GROUP PLC FINANCIAL STATEMENTS 18. Investments The tables below give brief details of the Company’s investments at 31 December 2015. The Company had no operating subsidiaries as of 31 December 2015. Investments Smith Electric Vehicles US Corp Smith Electric Vehicles Europe Ltda Snorkel International Holdings LLC Tanfield Engineering Systems US (Inc)b Snorkel Europe Ltd b Snorkel International Inc b Snorkel Australia Limited b Snorkel New Zealand Limited b a Principal activity Electric vehicle manufacture Electric vehicle manufacture Holding Company Powered Access Powered Access Powered Access Powered Access Powered Access Group Interest in allotted capital & voting rights 5.76% 5.76% 49.00% 49.00% 49.00% 49.00% 49.00% 49.00% Country of incorporation US UK US US UK US AUS NZ Smith Electric Vehicle Europe Ltd is a 100% owned subsidiary of Smith Electric Vehicles US Corp . The Company’s interest in Smith Electric Vehicles Europe Ltd is held indirectly through its investment in Smith Electric Vehicles US Corp. b The Company’s interest is held indirectly through its investment in Snorkel International Holdings LLC. 19. Post balance sheet events The Company raised a total of £400,000 through the placing of 2,758,620 ordinary shares at a price of 14.5 pence per share. The shares were admitted to trading on AIM, a market operated by the London Stock Exchange plc, on 22 March 2016. 26 

Continue reading text version or see original annual report in PDF format above