Final Results

Ross Group plc is pleased to file final audited accounts for the year ended 31^st December 2016. A full review for the year is included within the accounts.

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2016

FOR

ROSS GROUP PLC & SUBSIDIARIES

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

Page

COMPANY INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2016

DIRECTORS: B Pettitt

M Simon

W Hopkins

S Mehta

K Fusa

SECRETARY:

M Simon

REGISTERED OFFICE: 71-75 Shelton Street

Covent Garden

London

WC2H 9JQ

REGISTERED NUMBER: 00131902

(England and Wales)

AUDITORS: Carter Backer Winter LLP

Chartered Accountants

& Statutory Auditors

66 Prescot Street

London

E1 8NN

ROSS GROUP PLC & SUBSIDIARIES

SUMMARY AND HIGHLIGHTS

FOR THE YEAR ENDED 31 DECEMBER 2016

Revenues in 2016 were somewhat reduced when compared with prior years, which arose from a lower level of professional-fee earning activity on the part of the Chairman. Costs returned to their usual long-term run-rates after two years where (1) the Group had made a large cost-provision in 2014 and (2) were able to reverse that provision in 2015.

Overall, despite recording a loss in 2016, the directors are satisfied with the result, and continue with the task of researching and developing strategic trading opportunities for the business.

The Board takes satisfaction in its rigorous control of overheads and preservation of the Group's Main Board Premium Listed status:

	2016	2015	2014
	£ 000's	£ 000's	£ 000's

Revenues	59	157	154
Total Costs	121	46	152
	_____	______	_____
(Loss)/Profit for the Year	(62)	111	2

The Chairman and the Board continue to research opportunities that they believe will lead towards an acquisition, merger, or strategic alliance which would leverage the Group's strengths as a premium listed company on the London Stock Exchange and thereby create a stable and prosperous business for its shareholders.

ROSS GROUP PLC & SUBSIDIARIES

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2016

It is my responsibility to report to you on both the business activities and the financial results of the Ross Group Plc for the financial year ended 31st December 2016.

We have continued to diligently research and explore strategic opportunities for the Group, primarily involving potential mergers, acquisitions and/or business alliances.

Over the last several years, we have considered many proposals from within various industries; consumer electronics, mining, mineral resources, green energy, internet service providers to specialist supply chain management services. Whilst I reflect on the fact that yet another year has gone by without being able to present to our shareholders a really compelling opportunity, I equally remain both enthusiastic and confident that such a deal should prove possible and in due course we will hopefully have a well-developed proposal that shall reward our shareholders' patience and provide them with significant value.

As I have also said in previous years, we have to bear in mind that while we are busy with such exploratory and research work, the operating business should always be able to focus on generating sufficient cash and/or profit from its traditional activities, primarily specialist supply chain management services, in order to make a meaningful contribution towards the running costs of the business.

The reduction in revenues this year was as a direct result of my devoting a greater proportion of my time in trying to develop new leads and macro opportunities for the Group, which resulted in less time being available to fulfil lesser micro revenue-generating professional specialist services and assignments. Nonetheless, both I and the Board are very satisfied with the progress that we have made in 2016, in preparation for 2017, and in this respect we feel that we have taken significant steps to get closer to our long-term macro goal.

The costs in 2016 reverted in a large part back to our long-term run rate, following a couple of years of ups and downs. We continue to be prudent and focused in our cost management, and although we recorded a loss for a the year, we are still reasonably satisfied with the overall performance of the Group, and are not overly concerned that this year's loss has impacted shareholder value significantly.

Our Board remains conservatively confident that it is progressively focusing in on identifying and being able to put forward an appropriate deal for the Board to consider and hopefully be able to recommend to our Shareholders at some stage in the future.

In the meantime, I would like to very much personally thank our Board of Directors, our specialist contractors and consultants for all their excellent support, commitment and hard work in helping the Group towards achieving its aims.

Also, as always, I would also like to personally thank our extraordinary loyal shareholders for their continued patience and understanding.

Barry Richard Pettitt

Chairman and Chief Executive

25 April 2017

ROSS GROUP PLC & SUBSIDIARIES

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2016

The directors present their strategic report of the company and the group for the year ended 31 December 2016.

Background and History

The current management team took control of the Ross Group seven years ago. Since then the objectives we have pursued have been consistent:

· to clean up the Group's inherited, unresolved issues and historical potential liabilities;

· to make the Group as deal-ready as possible; and

· to research suitable business opportunities in order to find a candidate business that would value the

Group's premium listed status and would enter into a merger/acquisition/alliance that would create a

stable and prosperous business.

Business Strategy: Model and Principal Activity

The Group funds its business research activities by means of commissions and fees earned on reverse supply-chain logistics consulting and advice. Typically, over the last five years, this source of funds has not always been sufficient to cover the costs of (1) the fee-generating activity itself and (2) the mandatory listed-company compliance costs. As a result the working capital of the Group has, from time to time, been topped up by occasional placing of shares with investors.

Business Review 2016

The Group at 31 December 2016 consisted of Ross Group plc, and two wholly owned subsidiaries; Ross Diversified Trading Limited and San Gain Industrial Company Limited, a corporation registered in Hong Kong.

The main focus of the Board during 2016 continued to be the safe custodianship of the Group whilst continuing to explore various promising business opportunities around the world. As in previous years, we delivered a number of electronics supply-chain consultancy assignments in the Far East.

As for our trading performance in 2016, revenues were somewhat lower than last year (see Chairman's comments) which resulted in a trading loss this year. Not a result to celebrate, but neither is the Board discouraged. The Directors are confident that the underlying value of the Group remains strong and that the Group will be successful in securing the strategic deal it seeks.

Given the level of activity within the Group, the Board does not feel that it is appropriate to use key performance indicators to analyse their success.

Business Outlook

The Board remains confident that the outlook for the Group will be enhanced by opportunities that are currently being developed and negotiated, which we believe will result in significant improvements to the overall structure and operation of the business.

Principal Risks and Uncertainties

The main risk to the operations of the company is that the working capital runs out and there is insufficient funding to keep the company operating and compliant with listing regulations.

The Board is fully aware of this risk and manages its cash closely. In order that all the funds available to the company are used exclusively for essential expenses, i.e. mandatory compliance costs, professional fees etc., the Directors work for a notional £1 p.a. salary. The company has no other paid employees.

It is also the case that the Chairman has, as occasion has required, supported the operations of the business with personal funds.

Breakdown by Sex of Directors

All five directors of the Group are men. There are no other employees.

ROSS GROUP PLC & SUBSIDIARIES

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2016

Environmental matters

The Group's activities currently involve no manufacturing, mining or materials processing. There are only five directors, who mostly work from home and occasionally meet at hired premises. The Board considers that in such circumstances, the carbon emissions arising from its activities are minimal.

However, the Chairman does travel extensively around the world. The total number of business miles he travelled in 2016 is calculated at 27,000, which, using the conversion factor taken from the Carbonify.com, website amounts to 13,095 kg CO2.

ON BEHALF OF THE BOARD:

Barry Richard Pettitt - Chairman

25 April 2017

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2016

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2016.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2016.

DIRECTORS

B R Pettitt (Chief Executive Officer)

Barry Richard Pettitt, aged 59, was appointed to the board on 22 December 2008 as the CEO of the Group and elected as its Chairman and CEO on 28 April 2009. He has more than 30 years' experience within the consumer electronics industry, during which time he successfully started a specialist supply chain management services company, ISO International (Holdings) Ltd., which was subsequently purchased by a Hong Kong Public Company for HK$ 155,000,000 in 2003. In addition, he has managed a number of Public Company divisions (in the capacities of President and Managing Director) and recently successfully relisted a Hong Kong Public Company, Vision Tech Ltd., as its CEO in 2007. Through Premier Consultants Ltd., a specialist consulting company, of which he was a founding member and has specialised primarily in working with major consumer electronics and electrical Public Companies, usually all being based in Hong Kong; where he has resided since 1990. Prior to that, he was the joint Managing Director of Ross Consumer International Ltd. and a main board director of the Ross Group (formerly Ross Consumer Electronic plc) in 1988/89 after which he has continued to be a shareholder in Ross Group for the last 20 years.

M J Simon (Non-Executive Director)

Michael Jonathan Simon, aged 58, was reappointed to the board on 29 April 2009. He is an economics graduate from the University of Cambridge and a fellow of the Institute of Chartered Accountants in England and Wales and also of the Association of Chartered Certified Accountants. Mr Simon is in a partnership in public practice and a non-executive director of several other companies.

W L Hopkins (Executive Director)

Wade Lionel Hopkins, aged 68, was appointed to the board on 22 December 2009. He has over 35 years of experience in both Consumer Electronics and the Electronic Components Industry. He has previously worked for the Ross Group as Managing Director of a subsidiary, Britimpex, in 1988/90.

S C Mehta (Executive Director)

Shashi Mehta, aged 60, was appointed to the Board on 22 December 2009. He holds a BSc (Hons) in Manufacturing and has had a distinguished career in a variety of industrial and manufacturing trouble-shooting roles. He brings a wealth of experience and expertise to the Group. He spent many years working for the Ford Motor Company, and was Operations Manager in Ross Consumer Electronics during the 1980's.

K Fusa (Executive Director)

Koji Fusa, aged 57, was appointed to the Board on 29 December 2016. A graduate of Waseda University of Science and Engineering, he has enjoyed a successful career advising on M&A for businesses in the UK, Europe, Japan, and Myanmar. He has written several business books, and speaks at Universities and corporate events around the world. He is currently a contributing writer for Nikkei Asia. He was presented with the Blue Ribbon Medal from the Prime Minister of Japan in 2001.

FINANCIAL INSTRUMENTS

Details of the financial instruments used by the Group can be found in note 16 of the accounts.

EMPLOYEE INVOLVEMENT

Currently the directors are the only employees.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2016

DIRECTORS INTERESTS

Directors

Mr Barry Pettitt entered into a contract with Ross Group concerning the provision of professional services to a third party. Apart from this, no director had any interests in contracts of significance with the company.

In accordance with the Articles of Association members will be asked to confirm the appointment of all directors.

The total number of shares controlled by Barry Pettitt, directly and indirectly through Prime Growth Enterprises Limited at the date of this report was 30,794,795 (17.16%).

The following directors also owned shares in Ross Group plc at the date of this report:

	No. of Ordinary Shares	% of Issued Share Capital
Michael Simon	1,258,320	0.70%
Wade Hopkins	92,962	0.05%

Substantial shareholdings

As at 31 December 2016 the following were registered as being materially interested in 4% or more of the company's issued share capital, or being a related shareholder:

	No. of Ordinary Shares		% of Issued Share Capital
Keniworth Capital Limited	40,000,000	22.29%
Prime Growth Enterprises Limited	30,567,555	17.03%
Escalating Investments Limited	22,200,720	12.37%
Euroclear Nominees Limited	14,000,000	7.80%
Mr Nitin Mehta	7,340,156	4.09%
Morgan Stanley Client Securities Nominees	7,340,156	4.09%
Limited

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual 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 as adopted by the European Union. 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 judgements and accounting estimates that are reasonable and prudent;

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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2016

STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued

DIRECTORS' RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

1. the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

2. the management report, which is incorporated into the Directors' Report together with the information provided in the Chairman's Statement, the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation as a whole, together with a description of the principal risks and uncertainties that they face.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Carter Backer Winter LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

........................................................................

M Simon - Secretary

Date: 25 April 2017

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2016

The company is pleased to present its report on Corporate Governance and the UK Corporate Governance Code. The Board strives to comply with the high standards set by the UK Corporate Governance Code as incorporated in the UK Listing Rules of the Financial Conduct Authority. The Code requires the company to make a two part disclosure statement, firstly on how the principles of the code are applied and secondly confirmation of compliance or explanation of any reason for deviation from the Code. Throughout the year the Company has complied with the main principles of the Code.

Application Of The Principles Of The UK Corporate Governance Code

The Board

There is an effective and appropriately constituted board which in the year under review consisted of four directors. The Chief Executive, Mr Pettitt who is normally based overseas, also serves as Chairman. The Board is fully aware that this is contrary to Code provision A.2.1, which states that the roles of chairman and chief executive should not be exercised by one individual. The Board is of the opinion that, given the current size of the business, and also Mr Pettitt's undoubted and considerable knowledge, experience and contacts in the Group's field of operations that the shareholders' interests are best served by this arrangement. The Board is active in its management of the Company and meets and confers regularly on business matters arising. These frequent and robust discussions serve to ensure that no one individual has unfettered powers of decision.

During 2016 Mr Pettitt was supported by three (from 29/12/2016, four) other directors: W L Wade and M J Simon, both appointed in April 2009, and S C Mehta appointed in December 2009. Mr Koji Fusa was appointed on 29^th December 2016. Mr Simon has acted as Company Secretary since April 2009.

The non-executive director Mr Simon is considered to be independent as there are no circumstances or relationships as described by Code provision B.1.1 which apply to his appointment. The Group's definition of a non-executive director is one who considers the interest of all the shareholders and this is demonstrated during the board meetings. As part of his role, the non-executive director constructively challenges decisions and helps develop strategies and plans for the benefit of the Board. As of 29^th December 2016 a second Non-executive director joined the Board - Mr Koji Fusa.

Board Procedure

The Board is responsible for decisions concerning strategic and financial planning and matters involving the overall direction of the company. Management will seek Board approval of the annual budget and rolling business plan. Reforecasts are presented as updates to the budget throughout the year to account for variances and provide forward vision. The operational business decisions are taken by local management with reference to the Board where necessary.

The Board has established separate committees for: Appointments (Chaired by Mr Pettitt); Audit (Chaired by Mr Simon) and Remuneration (Chaired by Mr Simon).

All of the directors are subject to periodic re-election and the full board considers all appointments. A director will require re-election within a maximum period of three years.

Biographies of the Board are included in the Financial Statements. These indicate a wealth of experience, which is essential in effectively managing the activities of the Group. In addition to this the board members, where appropriate, attend seminars and courses of their respective professional organisations.

Attendance

Board meetings are held regularly throughout the year. Due to the location of the directors, the meetings are often held electronically. The Board is supplied with all the information relevant to the meeting in a timely manner and in a form and quantity appropriate to enable it to discharge its duties during the meetings.

The Board has now established procedures in respect of access to the Company Secretary and the Directors have access to consult the Company Secretary when required.

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2016

All Shareholders have the opportunity to put forward questions to the Board during the Company's Annual General Meeting and the Board communicates with the Shareholders via the notices and other papers relating to the Annual General Meeting. The Company also welcomes and responds to written communication from its shareholders. The Company website allows shareholders to contact the directors by email.

The Board has carried out a formal and rigorous annual evaluation of its performance and of its committees and individual directors. This evaluation covers contribution, commitment and the manner in which board related duties have been completed. The chairman has discussed the review with individual directors where necessary to ensure the Board operates as an effective unit. The performance review was conducted using recognised evaluation processes. The independent non-executive director has conducted a performance review on the chairman which included the consideration of the views expressed by the executive directors.

Internal audit and control

The respective responsibilities of the directors and the auditors in connection with the Financial Statements are set out in the audit report. The directors have overall responsibility of the effectiveness of the Group's whole system of internal control, including financial and other controls, which are designed to provide reasonable but not absolute assurance against material misstatement or loss. The key procedures that the directors have established to provide effective internal financial control are as follows:

Financial Reporting

There is a comprehensive system for reporting performance. During the course of the year, a one year rolling budget is prepared for each company within the Group and a consolidated budget is prepared for the whole Group. The Board then formally approves the budgets. The results are then reported regularly to the Board for their consideration and forecasts are revised accordingly.

Quality and Integrity of Personnel

The integrity of the Group is maintained through the appointment of experienced and professional staff and the application of appropriate policies and procedures.

Capital Investment

The Group has set procedures for capital expenditure. These include annual budgets, appraisals and review of the required expenditure, approvals at the right levels of authority and the commissioning of independent professional advice where appropriate.

Professional Advice

Professional advice is usually sought on contentious and disclosure issues, this being as a result of discussions during the Board Meetings. During the year the Chairman can seek independent professional advice in relation to matters affecting the Group.

The Group has an ongoing system for identifying, evaluating and managing the significant risks faced by the Group which has been in place for the whole of the year under review up to the date of approval of the annual report and accounts and which is regularly reviewed by the Board to ensure it continues to accord with the UK Corporate Governance Code. The directors have reviewed the effectiveness of the system of internal financial control during the year from information provided by the management and the Group's external auditors. It must be recognised that such a system can only provide reasonable and not absolute assurance, and in that context, the review revealed nothing which, in the opinion of the directors, indicates that the system was inappropriate or unsatisfactory.

The Group has no formal internal audit function and the Board has determined that there is no need for one. The Board considers that internal audit is dealt with in other ways and the situation is regularly reviewed.

Going Concern

The directors confirm that after making the appropriate enquires, they are of the opinion that the Group as a whole has adequate resources to continue in operational existence for the foreseeable future and therefore have prepared the Financial Statements on a going concern basis.

External Audit and Audit Committee

The Audit Committee during 2016 comprised of the non-executive director, Mr Simon, as well as Executive Directors Mr Mehta and Mr Hopkins. It met periodically to review the adequacy of the Group's internal control systems, accounting policies, corporate governance policies and compliance with applicable accounting standards and to consider the appointment of the external auditors and to review their fees. Carter Backer Winter LLP is invited to attend these meetings. The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and obtain external professional advice as is necessary.

By order of the Board

Barry Richard Pettitt
Chairman & Chief Executive Officer

25 April 2017

ROSS GROUP PLC & SUBSIDIARIES

DIRECTORS' REMUNERATION REPORT

FOR THE YEAR ENDED 31 DECEMBER 2016

The Board is pleased to present its Remuneration Report in accordance with section 12.43A(c) of The Listing Rules.

The Board has in place a Remuneration Committee, comprising Mr Michael Simon, non-executive director, and Mr B Pettitt, Chief Executive and Mr W L Hopkins, to determine the remuneration of the Board.

The Company policy during the restructuring period throughout 2016 was to pay directors only a nominal £1 salary. This policy will be reconsidered as occasion arises and as the new business opportunities open to the Group are realised. The directors feel it would be inappropriate to take any reward until then.

Name	Position	Gross Salary	Benefits	Notice Pay	Total Remuneration 2016	Total Remuneration 2015
B R Pettitt	Chairman/ Chief Executive	£1	Nil	Nil	£1	£1
M J Simon	Non-executive director	£1	Nil	Nil	£1	£1
W L Hopkins	Executive Director	£1	Nil	Nil	£1	£1
S C Mehta	Executive Director	£1	Nil	Nil	£1	£1
K Fusa	Non -executive Director (appointed 29/12/16)	Nil	Nil	Nil	Nil	Nil
Total		£4	Nil	Nil	£4	£4

No director currently has a service contract with a notice period in excess of 12 months. All executive directors have contracts that require a notice period of one month. The contracts of the non-executive directors would normally be renewed for a period of one year. All directors are presented for re-election by the members at the Annual General Meeting on a maximum cycle of three years.

The Group does not currently operate a director's share option scheme or a long-term incentive scheme. The Group also does not currently have an employees' share scheme or other long-term incentive.

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE SOCIAL RESPONSIBILITY (CSR)

FOR THE YEAR ENDED 31 DECEMBER 2016

The Board is fully aware of its responsibilities and fully supports the drive for ongoing improvement in this area. The impact the group's activities on the environment are regularly assessed to enable action to be directed at areas where any harmful impact could be reduced.

The Board has instructed local management to ensure the companies address those corporate social responsibilities which are recognised as being of prime importance. The responsibility for CSR rests with the Chief Executive Officer, Barry Pettitt, who will bring to the Board's attention any major issues which require their approval and regularly updates the Board on CSR matters. The views of shareholders and interested external parties are considered when developing the ongoing policy to CSR.

Figures are available for the board to review to enable them to assess the trend towards improvement in CSR matters and to direct the policy towards those areas that require further attention.

Employees

During 2016 the only employees of the company were its directors. However, as the new business opportunities planned in 2016 begin to be realised in 2017 and beyond, we are confident that this will not remain the case.

As a statement of principle, then, the company considers that employees constitute a company's most valuable asset and therefore it is committed to ensuring they will be rewarded with the best environment in which to perform their duties. This environment will be one of equal opportunity and free from discrimination and harassment. The company is keen to develop a culture which suits the recruitment and retention of the highest calibre of staff and to ensure that all staff will be trained to the appropriate standard required to fully meet their job specifications.

The health and safety of the employees is paramount to the company. Staff will be issued with data sheets on the handling of any substances which might be toxic and will be trained in the correct procedures to follow. Any potential issues can be raised with Barry Pettitt.

Environment

The Company has worked with its suppliers during the year to ensure the products used in manufacturing and any waste arising from the use of those products have a minimal impact on the environment. The use of energy is closely monitored and the available controls are used to good effect to reduce consumption where possible.

Customers

Customer satisfaction is one of the main targets for the company and this is aided by a rigorous quality policy. The Quality procedures adopted by the company require the recording of customer feedback and measures our performance against customer expectation. The company strives to meet the demands of its customers, but also ensures that solutions to their requirements are designed with efficiency.

Local Community

The company seeks to inter act with the local community and develop close relationships within its area of operation. It has established links with the local schools and colleges.

Commitment

The Group will continue to enhance its approach to CSR to ensure that it supports the principles as it expands its range of activities and welcomes any suggestions on how it can improve in this area.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

ROSS GROUP PLC & SUBSIDIARIES

We have audited the financial statements of Ross Group Plc & Subsidiaries for the year ended 31 December 2016 on pages sixteen to thirty five. 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, and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

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 a Report of the Auditors 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 set out on pages seven and eight, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

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 group's and the parent 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. In addition, we read all the financial and non-financial information in the Chairman's statement the Group Strategic Report and the Report of the Directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for 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 the parent company's affairs as at 31 December 2016 and of the group's loss for the year then ended;
-	have been properly prepared in accordance with IFRSs as adopted by the European Union;
-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
-	the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Our assessment of risk of material misstatement

The most significant risk we identified for the Group was that of going concern. This had an effect on the overall audit strategy; the allocation of audit resource; and in directing the efforts of the audit engagement team.

Our application of materiality

We set certain thresholds for materiality. These helped us to determine the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the Group financial statements as a whole to be £1,100, which represents approximately 2% of turnover for the year.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £55 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

ROSS GROUP PLC & SUBSIDIARIES

An overview of the scope of our audit

We adopted a risk-based approach in determining our audit strategy. This approach focuses audit effort towards higher risk areas, such as management judgements, particularly with regards to going concern. The work of the audit engagement team was tailored to fit the size, complexity and risk of the Group.

In preparing the financial statements, the directors made a number of subjective judgements, for example in respect of significant accounting estimates that involved them making assumptions and considering future events that are inherently uncertain. We primarily focused our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

In our audit, we tested and examined information, using sampling and other auditing techniques, to the extent we considered necessary to provide a reasonable basis for us to draw conclusions. We also obtained audit evidence through substantive procedures.

Emphasis of matter - going concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2 to the financial statements concerning the Group's ability to continue as a going concern. The Group's total liabilities exceeded its total assets by £6.33 million. This condition, along with the other matters explained in note 2 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern. However, the Chairman has pledged his personal support to cover the overheads of the Group up to 19 October 2018. As a result, the financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Group Strategic Report and the Report of the Directors 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-	the parent company financial statements are not in agreement with the accounting records and returns; or
-	certain disclosures of directors' remuneration specified by law are not made; or
-	we have not received all the information and explanations we require for our audit.

Paul Woosey ACA FCCA (Senior Statutory Auditor)

for and on behalf of Carter Backer Winter LLP

Chartered Accountants

& Statutory Auditors

66 Prescot Street

London

E1 8NN

Date: 26 Aprl 2017

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2016


		31.12.16	31.12.15
	Notes	£'000	£'000

CONTINUING OPERATIONS
Revenue	3	59	157

Administrative expenses		(121)	(46)

OPERATING (LOSS)/PROFIT		(62)	111


(LOSS)/PROFIT BEFORE INCOME TAX	5	(62)	111

Income tax	6	-	-

PROFIT/(LOSS) FOR THE YEAR		(62)	111

(Loss)/profit attributable to:
Owners of the parent		(62)	111


Earnings per share expressed in pence per share:	8
Basic		-0.03	0.06
Diluted		-0.03	0.06

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2016


	31.12.16	31.12.15
	£'000	£'000

(LOSS)/PROFIT FOR THE YEAR	(62)	111

OTHER COMPREHENSIVE INCOME	-	-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR	(62)	111

Total comprehensive income attributable to:
Owners of the parent	(62)	111

ROSS GROUP PLC & SUBSIDIARIES (REGISTERED NUMBER: 00131902)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2016


		31.12.16	31.12.15
	Notes	£'000	£'000
ASSETS
CURRENT ASSETS
Trade and other receivables	11	13	21
Cash and cash equivalents	12	1	4

		14	25

TOTAL ASSETS		14	25

EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	13	11,179	11,179
Share premium	14	2,803	2,803
Other reserves	14	15,384	15,384
Retained earnings	14	(35,691)	(35,629)

TOTAL EQUITY		(6,325)	(6,263)

LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings Interest bearing loans and borrowings	16	6,072	6,072

CURRENT LIABILITIES
Trade and other payables	15	257	206
Financial liabilities - borrowings
Interest bearing loans and borrowings	16	10	10

		267	216

TOTAL LIABILITIES		6,339	6,288

TOTAL EQUITY AND LIABILITIES		14	25

The financial statements were approved by the Board of Directors on 25 April 2017 and were signed on its behalf by:

........................................................................

B Pettitt - Director

........................................................................

M Simon - Director

ROSS GROUP PLC & SUBSIDIARIES (REGISTERED NUMBER: 00131902)

COMPANY STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2016


		31.12.16	31.12.15
	Notes	£'000	£'000
ASSETS
CURRENT ASSETS
Trade and other receivables	11	17	25
Cash and cash equivalents	12	1	4

		18	29

TOTAL ASSETS		18	29

EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	13	11,179	11,179
Share premium	14	2,803	2,803
Other reserves	14	30,938	30,938
Retained earnings	14	(50,711)	(50,675)

TOTAL EQUITY		(5,791)	(5,755)

LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings Interest bearing loans and borrowings	16	2,062	2,062

CURRENT LIABILITIES
Trade and other payables	15	3,747	3,722

TOTAL LIABILITIES		5,809	5,784

TOTAL EQUITY AND LIABILITIES		18	29

The financial statements were approved by the Board of Directors on 25 April 2017. and were signed on its behalf by:

........................................................................

B Pettitt - Director

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2016


	Called up
	share	Retained	Share	Other	Total
	capital	earnings	premium	reserves	equity
	£'000	£'000	£'000	£'000	£'000

Balance at 1st January 2015	11,179	(35,740)	2,803	15,384	(6,374)

Changes in equity
Total comprehensive income	-	111	-	-	111

Balance at 31st December 2015	11,179	(35,629)	2,803	15,384	(6,263)


Changes in equity
Total comprehensive income	-	(62)	-	-	(62)

Balance at 31st December 2016	11,179	(35,691)	2,803	15,384	(6,325)

ROSS GROUP PLC & SUBSIDIARIES

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2016


	Called up
	share	Retained	Share	Other	Total
	capital	earnings	premium	reserves	equity
	£'000	£'000	£'000	£'000	£'000

Balance at 1st January 2015	11,179	(50,789)	2,803	30,938	(5,869)

Changes in equity
Total comprehensive income	-	114	-	-	114

Balance at 31st December 2015	11,179	(50,675)	2,803	30,938	(5,755)


Changes in equity
Total comprehensive income	-	(36)	-	-	(36)

Balance at 31st December 2016	11,179	(50,711)	2,803	30,938	(5,791)

OSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2016


		31.12.16	31.12.15
	Notes	£'000	£'000
Cash flows from operating activities
Cash generated from operations	1	(41)	64

Net cash from operating activities		(41)	64


Cash flows from financing activities
Loan Repayment		-	(67)
Amount introduced by directors		38
Amount withdrawn by directors		-	(8)

Net cash from financing activities		38	(75)


Decrease in cash and cash equivalents		(3)	(11)
Cash and cash equivalents at beginning of year	2	4	15

Cash and cash equivalents at end of year	2	1	4

ROSS GROUP PLC & SUBSIDIARIES

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2016


		31.12.16	31.12.15
	Notes	£'000	£'000
Cash flows from operating activities
Cash generated from operations	1	(41)	67

Net cash from operating activities		(41)	67


Cash flows from financing activities
Loan repayment		-	(70)
Amount introduced by directors		38
Amount withdrawn by directors		-	(8)

Net cash from financing activities		38	(78)



Decrease in cash and cash equivalents		(3)	(11)
Cash and cash equivalents at beginning of year	2	4	15

Cash and cash equivalents at end of year	2	1	4

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2016

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

Group
	31.12.16	31.12.15
	£'000	£'000
(Loss)/profit before income tax	(62)	111
Increase in trade and other receivables	-	(11)
Increase/(decrease) in trade and other payables	21	(36)

Cash generated from operations	(41)	64


Company
	31.12.16	31.12.15
	£'000	£'000
(Loss)/profit before income tax	(36)	114
Increase in trade and other receivables	-	(11)
Decrease in trade and other payables	(5)	(36)

Cash generated from operations	(41)	67

2. CASH AND CASH EQUIVALENTS

	Group		Company
Year ended 31st December 2016
	31.12.16	1.1.16	31.12.16	1.1.16
	£'000	£'000	£'000	£'000
Cash and cash equivalents	1	4	1	4

Year ended 31st December 2015
	31.12.15	1.1.15	31.12.15	1.1.15
	£'000	£'000	£'000	£'000
Cash and cash equivalents	4	15	4	15

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

1. STATUTORY INFORMATION

Ross Group Plc & Subsidiaries is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standard on a going concern basis.

The adoption of all relevant new Standards issued by the International Accounting Standards Board in the current period has not led to any changes in the Group's accounting policies or financial statements. The directors have adopted these policies to the extent they feel is appropriate.

At the date of authorisation of these financial statements a number of Standards, amendments and Interpretations, issued by the IASB and not applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU) none of which will have a significant impact on the financial statements.

Going concern

Although the Group has incurred significant losses, which result in negative retained earnings and the position that total liabilities exceed total assets the Directors feel the going concern basis is appropriate. The change in management structure that took place in 2009 has led to a new strategy being adopted by the Group and will allow them to take advantage of new, profitable business opportunities. The Chairman has also pledged his personal support to cover the overheads of the Group up to 19 October 2018, which gives further assurance that the Group is a going concern.

Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2016. Profits or losses on intra-group transactions and intra-group balances are eliminated in full. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities which exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.

Revenue recognition

Revenue is the total amount receivable by the group for goods supplied and services provided to third parties, excluding VAT.

Financial instruments

Financial assets and liabilities are recognised on the statement of financial position when the entity becomes party to the contractual provisions of the instrument.

The Group's financial instruments consist primarily of cash and cash equivalents, accounts receivable and accounts payable.

Cash and cash equivalents

Cash and cash equivalents comprise cash and short term deposits held with banks, bank overdrafts are recorded under current liabilities on the statement of financial position.

Trade and other receivables

Trade and other receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts and included in current assets or non-current assets as appropriate.

Trade and other payables

Trade and other payables are stated at their nominal value and included in current liabilities or non-current assets as appropriate.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

2. ACCOUNTING POLICIES - continued

Deferred taxation

A deferred tax asset is provided for if material, using the tax rates estimated to arise when the timing differences reverse and is accounted for to the extent that it is probable that an asset will crystallise.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Foreign currencies

Transactions denominated in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the year-end date. These transaction differences are dealt with in the income statement. The financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the year-end date. The exchange differences arising from the retranslation of the opening net investment in subsidiaries are taken directly to reserves.

3. SEGMENTAL REPORTING

The directors feel that due to the small amount of trading that has taken place during the year it is not possible to identify any segments and as a result cannot follow IFRS 8. The entire turnover was generated overseas and relates to the principal activity of the Group. The directors will review this assessment next year.

4. EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 December 2016 or for the year ended 31 December 2015.

The average monthly number of employees during the year was as follows:

	31.12.16	31.12.15
Management	4	4

	31.12.16	31.12.15
	£	£
Directors' remuneration	4	4

5. (LOSS)/PROFIT BEFORE INCOME TAX

The loss before income tax (2015 - profit before income tax) is stated after charging:

	31.12.16	31.12.15
	£	£
Auditors remuneration	42	42

6. INCOME TAX

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2016 or for the year ended 31 December 2015. The Group made a loss during the year.

Subject to the agreement with HM Revenue and Customs, the Group has allowable trading losses at 31 December 2016 for set-off against future trading profits of £11.88m (2015: £11.85m).

A deferred tax asset of £2.38m (2015: £2.37m) arises due to the large trading losses described above. As it is not known when the Group will be able to make use of these losses the asset has not been recognised in the financial statements.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

7. LOSS OF PARENT COMPANY

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was £(36,147) (2015 - £113,699 profit).

8. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Reconciliations are set out below.

		31.12.16
		Weighted
		average
		number	Per-share
	Earnings	of	amount
	£'000	shares	pence
Basic EPS
Earnings attributable to ordinary shareholders	(62)	179,479,428	-0.03
Effect of dilutive securities	-	-	-

Diluted EPS
Adjusted earnings	(62)	179,479,428	-0.03

		31.12.15
		Weighted
		average
		number	Per-share
	Earnings	of	amount
	£'000	shares	pence
Basic EPS
Earnings attributable to ordinary shareholders	111	179,479,428	0.06
Effect of dilutive securities	-	-	-

Diluted EPS
Adjusted earnings	111	179,479,428	0.06

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

9. SUBSIDIARIES

At 31 December 2016 the company held 100% of the allotted equity share capital of the following:-

Name of subsidiary undertaking

Country of registration and incorporation

Class of share capital held

Nature of business

Ross Diversified Trading Limited (formerly Sansui Electronics (UK) Limited)		England and Wales		Ordinary		Distribution of consumer electronic branded products. It is currently dormant.
San Gain Industrial Company Limited		Hong Kong		Ordinary		Distribution of consumer electronic branded products and complementary supply chain management services. It is currently not trading.

The costs of these fixed asset investments have been written off over the previous periods.

10. INVESTMENTS

Group

	Unlisted
	investments
	£'000
COST
At 1st January 2016
and 31st December 2016	344

PROVISIONS
At 1st January 2016
and 31st December 2016	344

NET BOOK VALUE
At 31st December 2016	-

At 31st December 2015	-

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

10. INVESTMENTS - continued

Company

	Unlisted
	investments
	£'000
COST
At 1st January 2016
and 31st December 2016	344

PROVISIONS
At 1st January 2016
and 31st December 2016	344

NET BOOK VALUE
At 31st December 2016	-

At 31st December 2015	-

11. TRADE AND OTHER RECEIVABLES

	Group		Company
	31.12.16	31.12.15	31.12.16	31.12.15
	£'000	£'000	£'000	£'000
Current:
Amounts owed by group undertakings	-	-	4	4
Directors' current accounts	-	8	-	8
VAT	11	10	11	10
Prepayments and accrued Income	2	3	2	3

	13	21	17	25

12. CASH AND CASH EQUIVALENTS

	Group		Company
	31.12.16	31.12.15	31.12.16	31.12.15
	£'000	£'000	£'000	£'000
Bank current account	1	4	1	4

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

13. CALLED UP SHARE CAPITAL

Group and Company

	31.12.16	31.12.15
Authorised share capital:	£000	£000

195,000,000 Deferred shares of 4.8p each	9,360	9,360
67,052,306 Deferred shares of 4p each	2,682	2,682
300,000,000 Ordinary shares of 0.1p each	300	300
2,700,000,000 Deferred shares of 0.1p each	2,700	2,700

	15,042	15,042

Alloted, called up and fully paid:

147,745,300 Deferred shares of 4.8p each	7,092	7,092
67,052,306 Deferred shares of 4p each	2,682	2,682
179,479,428 Ordinary shares of 0.1p each	179	179
1,225,628,316 Deferred shares of 0.1p each	1,226	1,226

	11,179	11,179

The ordinary shares have both voting rights and the right to dividends. The deferred shares have no rights to dividends and no voting rights.

On a winding up the holders of the deferred shares of 4.8p each shall be entitled to receive 1p per share after the repayment of all amounts payable to the holders of any other class of share and the payment of £5,000 on each ordinary share for the time being in issue. On a winding up the holders of deferred shares of 0.1p each shall be entitled to receive 0.1p per share after the payment of £5,000 on each ordinary share for the time being in issue but shall not confer the right to participate in any surplus.

The deferred shares of 4.8p each are redeemable at the company's option any time at a price of 1p for each of the deferred shares held by any member. The deferred shares of 0.1p each are transferable at the company's option at any time to any person at a total price of 1p for all of the shares held by a shareholder. The deferred shares of 0.1p each are redeemable or cancellable at the company's option at any time at a total price of 1p for all of the shares held by a shareholder.

As the deferred shares rank behind the ordinary shares, they are recognised as equity.

Managing Capital

The Group considers only the allotted share capital set out above to be the capital of the group. There are no financial liabilities considered to be part of the capital, and no components of equity excluded from it.

The Group's objectives when managing capital are:

- To safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

- To provide an adequate return to shareholders by pricing products and services at an appropriate level taking into account the level of risk.

The Group sets an amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and risk characteristics of the underlying assets.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

13. CALLED UP SHARE CAPITAL - continued

The entity is not subject to any externally imposed capital requirements.

14. RESERVES

	Retained	Share	Other
	earnings	premium	reserves	Totals
	£'000	£'000	£'000	£'000

At 1st January 2016	(35,629)	2,803	15,384	(17,442)
Deficit for the year	(62)	-	-	(62)

At 31st December 2016	(35,691)	2,803	15,384	(17,504)


Company
	Retained	Share	Other
	earnings	premium	reserves	Totals
	£'000	£'000	£'000	£'000

At 1st January 2016	(50,675)	2,803	30,938	(16,934)
Deficit for the year	(36)	-	-	(36)

At 31st December 2016	(50,711)	2,803	30,938	(16,970)

Other reserves of the Group consist of a capital redemption reserve of £1.92m (2015: £1.92m), a non-distributable capital reserve of £3.33m (2015: £3.33m), and a special reserve of £10.13m (2015: £10.13m).

Other reserves of the company consist of a capital redemption reserve of £1.92m (2015: £1.92m) and a special reserve of £29.02m (2015: £29.02m).

15. TRADE AND OTHER PAYABLES

	Group		Company
	31.12.16	31.12.15	31.12..16	31.12.15
	£ 000	£ 000	£ 000	£ 000
Current:
Trade Creditors	121	132	121	132
Amounts owed to group undertakings	-	-	3,522	3,519
Other Creditors	23	23	23	23
Accruals and deferred income	83	51	51	48
Directors current accounts	30	-	30	-
	257	206	3,747	3,722

16.	FINANCIAL LIABILITIES - BORROWINGS

	Group		Company
	31/12/16	31/12/15	31/12/16	31/12/15
	£ 000	£ 000	£ 000	£ 000
Current:
Other loans - less than 1 year	10	10	-	-


Non Current:
Other loans 1 - 2 years	6,072	6,072	2,062	2,062

Terms and debt repayment schedule

Group

	1 year or less	1 - 2 years	Totals
	£ 000	£ 000	£ 000

Other loans	10	6,072	6,082

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

The Current Financial Liabilities - Borrowings figure is due to Mr Firdaus Ruttonshaw, who is not a related party. The loan agreement says this is due for repayment in less than 12 months.

The Non-Current Financial Liabilities - Borrowings figure comprises the following loans:

£4,010,000 due to One World Limited, which is not a related party. The loan agreement for this states that the lender will not seek repayment of this loan other than by means of conversion to equity and and there is no agreed time frame for that at the moment.

£2,062,172 due to Excite Enterprises Limited, which is not a related party. The loan agreement for this states that the lender must give at least 12 months' notice if they want repayment of all or part of the balance.

17. FINANCIAL INSTRUMENTS

The Group uses financial instruments, comprising borrowings, cash, liquid resources and various items, such as trade debtors, trade creditors etc., that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations.

The Group did not enter into derivatives transactions such as interest rate swaps, forward rate agreements and forward foreign currency contracts.

The Board of the Group considers that the interest rate risk, liquidity risk and foreign currency risks arising from the Group financial instruments are low. However it reviews policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.

It is and has been throughout the year under review, the group policy that no trading in financial instruments shall be undertaken.

Short-term debtors and creditors

Short-term debtors and creditors have been excluded from all the following disclosures, other than the currency risk disclosures.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

Interest rate risk

The Group finances its operations through a mixture of borrowings. It relies on loans from its shareholders to ensure sufficient liquidity is available to meet foreseeable needs.

Maturity of financial liabilities

For the Group financial liabilities analysis at 31 December 2016 see note 15 and 16.

Currency risk

The Group does not have foreign investments held in foreign currencies.

The Group's exposure to translation and transaction foreign exchange risk is considered to be low by the board.

100% of the Group's worldwide income in the year was invoiced in Sterling. As a result the board does not consider there is a need for Group policy to manage the currency risk as it considers the risk to be low.

Fair values

The Board considers that the fair values of the Group's borrowings are equal to their book values.

18. RELATED PARTY DISCLOSURES

	31.12.16	31.12.15
	£000	£000
Receivables

Barry Pettitt	-	8

	-	8

Payables

Barry Pettitt	30	-

	30	-

Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc, owns Prime Growth Enterprises Limited. Prime Growth Enterprises Limited owns 17% of the ordinary share capital in Ross Group Plc.

Barry Pettitt has pledged to cover the overheads of the Group until 19 October 2018.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 DECEMBER 2016

Company

At the year end Ross Group plc had the following outstanding balances with its related parties:

	31.12.16	31.12.15
	£000	£000
Receivables
Barry Pettitt	-	8
Ross Diversified Trading Limited (formerly Sansui Electronics (UK) Limited)	4	4

	4	12
Payables
San Gain Industrial Company Limited	3,522	3,519
Barry Pettitt	30	-

	3,552	3,519

Ross Group Plc owns 100% of the ordinary share capital of Ross Diversified Trading Limited and San Gain Industrial Company Limited.

19. ULTIMATE CONTROLLING PARTY

The directors consider that there is no ultimate controlling party of Ross Group Plc and subsidiaries for 2016; however Barry Pettitt, by virtue of his position as CEO within the Group and his 17% shareholding, exerts a significant influence.

20. RECONCILIATION OF MOVEMENTS IN RESERVES

Group
	31.12.16	31.12.15
	£'000	£'000
Profit for the financial year	(62)	111
Shares issued in the year	-	-

Net addition to reserves	(62)	111
Opening reserves	(6,263)	(6,374)

Closing reserves	(6,325)	(6,263)



Company
	31.12.16	31.12.15
	£'000	£'000
Profit for the financial year	(36)	114
Shares issued during the year	-	-

Net addition/(reduction)to reserves	(36)	114
Opening reserves	(5,755)	(5,869)

Closing reserves	(5,791)	(5,755)

	Report of the Directors	6

	Corporate Governance Report	9

	Director's Remuneration Report	12

	Corporate Social Responsibility	13