Consolidated statement of cash flows for the year ended 31 December 2018

		Note		2018		2017
				£		£
Cash flow from all operating activities
Loss before taxation from continuing activities				(144,485)		(780,192)
Profit before taxation from discontinued activities		32c		-		53,567
				(144,485)		(726,625)
Adjustments for:
Finance income				(718)		-
Finance expense				628		3,714
Impairment and amortisation of intangible assets				100		520,792
Share based payments				10,800		-
Other gains and losses				-		(103,097)
Depreciation				7,507		26,145
Loss/ (profit) on disposed tangible assets				1		(30,865)
Operating cash flow before working capital movements				(126,167)		(309,936)
(Increase)/decrease in receivables				(20,779)		28,720
Increase/(decrease) in payables				66,250		(48,886)
Net cash absorbed by operations				(80,696)		(330,102)
Taxation				-		17,241
Cash flow from investing activities
Finance income				718		-
Property, plant and equipment acquired				(7,753)		(9,820)
Intangible asset development costs				-		(16,300)
Proceeds on sale of property, plant and equipment				-		33,187
Net proceeds on sale of business				-		82,600
Proceeds on disposal of available for sale investments				-		48,334
Net cash (absorbed)/from investing activities				(7,035)		138,001
Cash flow from financing activities
Finance expense				(628)		(3,714)
Funds from share issue				496,077		224,687
Repayment of borrowings				(2,000)		(45,939)
Net cash from financing activities				493,449		175,034
Net increase in cash and cash equivalents in the year		32b		405,718		174
Cash and cash equivalents at the beginning of the year				129,611		129,437
Cash and cash equivalents at the end of the year				535,329		129,611

 

 

Company statement of cash flows for the year ended 31 December 2018

		Notes		2018		2017
				£		£
Cash flow from operating activities
Loss before tax				(201,202)		(1,020,317)
Adjustments for:
Finance income				(17,218)		(16,500)
Finance expense				-		3,714
Share based payments				10,800		-
Other gains				-		(1,034)
Provision for impairment in value of investments in subsidiaries				10,713		90,103
Provision for intra group indebtedness				78,765		889,245
Depreciation and write offs				-		18,592
Loss/(profit) on disposed tangible assets				1		(30,865)
Operating cash flow before working capital movements				(118,141)		(67,062)
Increase in receivables				(81,855)		(242,954)
Increase in payables				35,398		1,244
Net cash absorbed by operations				(164,598)		(308,772)
Cash flow from investing activities
Finance income				718		-
Proceeds on sale of property, plant & equipment				-		33,187
Proceeds on sale of investments for resale				-		2,721
Net cash inflow from investing activities				718		35,908
Cash flow from financing activities
Funds from share issue				496,077		224,687
Finance expense				-		(3,714)
Hire purchase repayments				-		(42,439)
Net cash from financing activities				496,077		178,534
Net increase /(decrease) in cash and cash equivalents in the year		32b		332,197		(94,330)
Cash and cash equivalents at the beginning of the year				81,459		175,789
Cash and cash equivalents at the end of the year				413,656		81,459

 

 

Notes to the group and parent company financial statements

 

1.            General information

Ultimate Sports Group Plc is a public company limited by shares, domiciled and incorporated in England and Wales and its activities are as described in the strategic report on pages 5 to 7.

 

These financial statements are prepared in pounds sterling being the currency of the primary economic environment in which the group operates.

 

2.            Basis of Accounting

The consolidated financial statements of the group and the financial statements of the parent company for the year ended 31 December 2018 have been prepared under the historical cost convention and are in accordance with International Financial Reporting standards ("IFRS") as adopted by the EU. These policies have been applied consistently except where otherwise stated.

 

For the purpose of the preparation of these consolidated financial statements, the group has applied all standards and interpretations that are effective for accounting periods beginning on or after 1 January 2018.  The adoption of new standards and interpretations in the year has not had a material impact of the group's financial statements.

 

IFRS 15

The group has adopted IFRS 15 retrospectively in its consolidated financial statements for the year ended 31 December 2018.  IFRS 15 replaces all existing revenue requirements in IFRS and sets out principles for recognising revenue that must be applied using a 5-step model.  Revenue should only be recognised when (or as) control of goods or services is passed to the customer, when distinct 'performance obligations' are met, at the amount to which the entity expects to be entitled.  The group has completed its assessment of IFRS and has not identified any material differences between the group's current revenue recognition policy and the requirements of IFRS 15.

 

 

Future standards in place but not yet effective.

 

No new standards, amendments or interpretations to existing standards that have been published and that are mandatory for the Group's accounting periods beginning on or after 1 January 2019, or later periods, have been adopted early.  The following standards and amendments are not yet applied at the date of authorisation of these financial statements:

 

·      IFRS 16 - Leases (effective 1 January 2019)

·      Annual Improvements to IFRS Standards 2015 - 2017 Cycle (effective 1 January 2019)

·      IAS 12 - Income taxes (effective 1 January 2019)

·      Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020)

·      Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020)

 

Except for IFRS 16, see below, the group does not believe that there will be a material impact on the financial statements from the adoption of these standards / interpretations.

 

IFRS 16 requires the recognition of an asset and liability by introducing a lessee accounting model.  As at 31 December 2018, the group would recognise an asset and liability in respect of leases of approximately £79,000.

 

There were no material changes in the financial statements as a result of adopting new or revised accounting standards during the year.

 

 

 

3.            Significant accounting policies

 

(a)           Basis of consolidation

The financial statements of the group incorporate the financial statements of the company and entities controlled by the company, which are its subsidiary undertakings.  Control is achieved where the company has the power to govern the financial and operating policies of its subsidiary undertakings so as to benefit from their activities.

 

Details of subsidiary undertakings are set out in note 18.

 

All intra-group transactions and balances have been eliminated in preparing the consolidated financial statements.

 

(b)           Revenue

Revenue arises from the disposal of available-for-sale investments and income from sports and leisure activities undertaken by the company and its subsidiary undertakings. In the case of sports and leisure activities it represents invoiced and accrued amounts for services supplied in the year, exclusive of value added tax and trade discounts.

(c)           Intangible assets

Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of subsidiary entities at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed.

 

For the purpose of impairment testing, goodwill is allocated to each of the group's cash generating units expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

 

On disposal of a subsidiary, associate or jointly controlled entity, the amount of goodwill is included in the determination of the profit or loss on disposal.

 

Goodwill arising on acquisitions before the date of transition to IFRS's has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

 

                Development costs are expensed in arriving at the operating profit or loss for the year unless the directors are satisfied as to the technical, commercial and financial viability of individual project. In this situation, the expenditure is recognised as an asset and is reviewed for impairment on an annual basis.

Any impairment is recognised immediately in the income statement in administrative expenses and is not subsequently reversed.

 

 

 

3.            Significant accounting policies

 

(d)           Plant and equipment

                Plant and equipment is stated at cost less depreciation.  Depreciation is provided at rates calculated to write off the cost less their estimated residual value over their expected useful lives.

               The rates applied to these assets are as follows:

 

Plant & equipment	25% & 10% straight line
Motor vehicles	33.3% - straight line

 

(e)           Operating leases

                Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against revenue as and when incurred.

 

(f)            Deferred taxation

                Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes.  The deferred tax balance is not discounted.

               

The recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences.

 

 (g)          Trade receivables

                Trade receivables are recognised at fair value.  A provision for impairment of trade receivables is established where there is objective evidence that the company or group will not be able to collect all amounts due according to the original terms of the receivables.  Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or liquidation and default or delinquency of payments are considered indicators that the trade receivable is impaired.  The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within administrative expenses.  When a trade receivable is uncollectable it is written off against the allowance account for trade receivables.

 

(h)           Investments

                Investments are classified as available for sale, are measured at fair value. Gains or losses in changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.

               Fair value of quoted investments is based on current bid prices. If an investment is suspended from trading, fair value is based on quoted bid prices on the first day that trading recommences following suspension.

               Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company balance sheet.

 

(i)            Cash and cash equivalents

                Cash and cash equivalents include cash in hand and deposits held at call with banks.  Bank overdrafts are shown as borrowings within current liabilities.

 

 

 

3.            Significant accounting policies (continued)

 

(j)            Financial liabilities and equity

Financial liabilities and equity instruments are classified 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 group after deducting all of its liabilities.

                Ordinary shares are classified as equity. Incremental costs directly attributable to new shares are shown in equity as a deduction from the proceeds.

                Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 

                Borrowings are recognised initially at fair value, net of transaction costs incurred.  Borrowings are subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest method.

 

                Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position.

 

 

4.            Critical accounting judgements and key sources of estimation uncertainty

                  The preparation of the group's financial statements requires the directors to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on the director's best knowledge of the relevant facts and circumstances. Information about such judgements and estimation is contained in the accounting policies and/or notes to the financial statements.

 

               Deferred tax asset

At the present time the directors' do not consider that there is sufficient certainty regarding the utilisation of tax losses available in the group. As a result, no deferred tax asset has been recognised.

 

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill is the deemed cost on first time application of IFRS.

 

Details of the impairment review calculation are given in note 17.

 

Impairment of intangible assets

The carrying value of intangible assets comprising unamortised website costs are determined by reference to an assessment of future income generated by the UltimatePlayer.me platform. Having regard to the Board's decision to delay future plans for further website development, all unamortised costs have been fully impaired  as an exceptional item in 2017 (note 8).

 

5.            Going concern      

The directors have prepared financial forecasts covering the 12 months following approval of these financial statements, which show the Group can continue to carry on trading within its existing finance facilities over that period. 

 

In view of the above, the directors consider it appropriate to prepare the financial statements on a going concern basis.

6.            Business segment analysis

Segmental information with regard to continuing and non- continuing activities is disclosed below and is based on the different business activities in the group.

All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.

Year ended 31 December 2018		Sports and leisure		Social media website		Consolidated
		£		£		£
Revenue		1,546,733		273		1,547,006
Segment operating profit/(loss)*		100,754		(32,399)		68,355
Group operating expenses**						(212,930)
Operating loss						(144,575)
Finance revenues less finance costs						90
Loss before taxation						(144,485)
Taxation						-
Loss after taxation from continuing activities						(144,485)
Year ended 31 December 2017		Sports and leisure		Social media website		Consolidated
		£		£		£
Revenue		1,368,710		483		1,369,193
Segment operating profit/(loss)*		28,255		(587,536)		(559,281)
Group operating expenses**						(237,694)
Operating loss						(796,975)
Other gains and losses						20,497
Finance revenues less finance costs						(3,714)
Loss before taxation						(780,192)
Taxation relating to the social media website						17,572
Loss after taxation from continuing activities						(762,620)
Discontinued activities		53,567				53,567
		(53,567)				(709,053)

 

*Segment operating profit in relation to Sports and Leisure is after charges for depreciation of £7,507 (2017: £7,553).  Segment operating losses in relation to the social media website is after charges for amortisation and impairment of £Nil (2017: £520,792). 

** 'Group operating expenses' represent the costs of running the group as a whole. The directors consider that the costs of running Pantheon Leisure Plc of £68,824 (2017: £53,370) form part of these costs as opposed to forming part of the segmental costs of the sports and leisure division.

Financial position at 31 December 2018			Sports and leisure		Social media website		Consolidated
			£		£		£
Segment assets			86,555		1,388		87,943
Non segmental assets							610,268
Consolidated total assets							698,211
Segmental liabilities			203,071		-		203,071
Non segmental corporate liabilities							36,840
							239,911
Capital additions			7,753		-
Depreciation/amortisation and impairment			7,507		-
Financial position at 31 December 2017
			Sports and leisure		Social media website		Consolidated
			£		£		£
Segment assets			55,714		1,846		57,560
Non segmental assets							214,009
Consolidated total assets							271,569
Segment liabilities			158,457		4,162		162,619
Non segmental corporate liabilities							13,042
							175,661
Capital additions			9,820		16,300
Depreciation/amortisation and impairment			7,553		520,792

 

Non segmental assets include group cash balances of £535,329 (2017: £129,611), goodwill of £59,954 (2017: £59,954), other assets and receivables of £14,985 (2017: £24,444). Non segmental liabilities include trade and other payables of £36,840 (2017: £13,042).

 

Sports and leisure segment assets include £nil (2017: £2,727) from discontinued activities. Segment liabilities include £nil (2017: £8,638) from discontinued activities.

 

 

7.             Discontinued activities

				2018		2017
				£		£
Revenue				-		11,015
Cost of sales and expenses				-		(40,048)
Operating loss				-		(29,033)
Net proceeds on disposal				-		82,600
				-		53,567
Football Partners Limited ceased small-sided football league activities in December 2016 and disposed of its trade for £100,000 in 2017.

8.    Exceptional item and non- recurring costs

				2018		2017
				£		£
Exceptional item: Development cost - full impairment				-		462,073
Non- recurring costs: Website expenditure and amortisation				-		101,252
				-		563,325

 

9.       Operating loss

				2018		2017
The operating loss is stated after charging /(crediting):				£		£
Auditors' remuneration - audit services				18,900		20,875
Operating lease rentals - land and buildings				17,635		13,507
Depreciation of property, plant and equipment				7,753		26,145
Amortisation - Website development				-		58,719
Impairment    - Website development				-		462,073

 

Included in the audit fee for the group is an amount of £7,000 (2017: £6,700) in respect of the Company.

The auditors received fees of £1,630 (2017: £1,250) in respect of the provision of services in connection with advice relating to the group's interim results, and general advice.

 

10.          (a) Staff Costs

Employee benefit costs were as follows:					Group
					2018		2017
					£		£
Wages and salaries					1,152,825		1,128,737
Social security costs					58,061		67,549
Pension contributions					12,634		7,019
Share based payment					10,800		-
					1,234,320		1,203,305

 

The average numbers of employees, including directors during the year, were as follows:-

 

					No.		No.
Administration, sales and coaching staff					94		115

 

 (b) Directors' remuneration

		2018		2017
An analysis of directors' remuneration (who are the key management personnel) is set out below:		£		£
Salary and consultancy fees		21,250		32,859
Executive directors		16,250		32,859
Non-executive directors		5,000		-
		21,250		32,859

 

 

The total cost of key management personnel being the executive directors and including employers' national insurance was £21,250 (2017: £32,859).

 

The following amounts were paid for the services of the directors in the year:

 

			2018 £		2017 £
			Salaries and benefits		Salaries and benefits
R L Owen			13,750		15,996
G Simmonds			-		16,863
D Hillel			2,500		-
J Zucker			2,500		-
D J Coldbeck			2,500		-
			21,250		32,859

 

There were no directors' benefits (2017- £17,859).

 

11.          Finance income

					2018		2017
					£		£
Interest revenue - bank deposits					718		-

 

12.          Finance costs

					2018		2017
					£		£
Bank overdraft interest					628		-
Interest on obligations under hire purchase agreements					-		3,714
					628		3,714

 

 

 

 

13.          Other gains and losses

					2018		2017
					£		£
Profit on disposal of available for sale investments					-		20,497

 

Investments in AIM listed companies were disposed of in 2017 giving rise to gains of £20,497 before fair value adjustments of £1,838 recognised in the Statement of Other Comprehensive Income in that year.

 

14.          Taxation

					2018		2017
					£		£
Deferred tax (credit)/charge
Origination and reversal of temporary differences					-		(331)
Total deferred tax (credit)/(charge					-		(331)
Research and development tax credits					-		(17,241)
Tax credit in income statement					-		(17,572)

No income tax charge arises based on the loss for the year (2017: nil).

 

The group has unutilised tax losses of £6,443,000 (2017: £6,311,000) which includes £2,380,000 (2017: £2,364,000) in relation to the company's subsidiary undertakings. Where it is anticipated that future taxable profits will be available to utilise these losses a deferred tax asset or a reduction in deferred tax liability is recognised as appropriate.

 

Factors affecting the tax charge in the year

					2018		2017
					£		£
Loss on ordinary activities before taxation					(144,485)		(724,787)
Loss on ordinary activities before taxation at the standard rate of UK corporation tax of 19% (2017: 19.25%)					(27,452)		(139,521)
Effects of:
Expenses not deductible for tax purposes					5,370		-
Share based payments					2,052		-
Dividend income					3,943		-
Temporary differences in respect of depreciation and capital allowances not reflected in deferred tax					(79)		97,121
Unutilised tax losses not recognised as a deferred tax asset					16,166		42,400
Adjustment on available-for-sale investments					-		(331)
Research and development tax credits					-		(17,241)
Tax credit					-		(17,572)

 

In 2017 claims for tax credits in relation to research and development costs were made giving rise to cash credits of £17,241.

 

15.          Loss per share

 

Basic loss per share has been calculated on the group's loss attributable to equity holders of the parent company of £149,121 (2017: £709,470) and on the weighted average number of shares in issue during the year, which was 29,174,996 (2017: 22,211,434).

 

Comprehensive loss per share is based on the same number of shares and on the comprehensive loss for the year attributable to the equity holders in the parent company of £149,121 (2017: £710,977).

 

In view of the group loss for the year, share warrants and options to subscribe for ordinary shares in the company are anti-dilutive and therefore diluted earnings per share information is not presented. There are options outstanding at 31 December 2018 on 307,500 ordinary shares and on 1,500,000 share warrants.

 

16.          Loss for the financial year

 

As permitted by Section 400 of the Companies Act 2006, the profit and loss account for the company is not presented as part of these financial statements.

 

The consolidated loss for the year of £144,485 (2017-loss: £709,053) includes a loss of £201,202 (2017-loss: £1,020,317) dealt with in the accounts of the company.

17.          Goodwill, intangibles and development costs

	2018		2018		2018		2017
	£		£		£		£
	Website development		Goodwill and other intangibles		Total		Total
Cost at 1 January	587,187		60,054		647,241		630,941
Additions in the year	-		-		-		16,300
Cost at 31 December	587,187		60,054		647,241		647,241
Amortisation at 1 January	587,187		-		587,187		66,395
Charged in the year	-		-		-		58,719
Impairment write off	-		100		100		462,073
Amortisation at 31 December	587,187		100		587,287		587,187
Carrying value at 31 December	-		59,954		59,954		60,054

         

                Goodwill of £59,954 included above relates to the acquisition of Pantheon Leisure Plc which is included at its deemed cost on first time application of IFRS.

 

                The Group acquired intangible assets costing £100 in 2013 following the acquisition of a subsidiary. The asset has been fully impaired and written off in 2018.

 

Goodwill acquired in a business combination is allocated, at acquisition, to cash generating units ("CGUs") that are expected to benefit from that business combination. The carrying amount of goodwill relates wholly to the leisure activities business segment.

 

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding forecast revenues and operating costs. Management have taken into account the following two elements:

 

(i)   Based on current assessments of the Sport in Schools activities made by the directors, they consider that revenues will continue to grow in 2019 and 2020; and

 

(ii)  Operational costs are monitored and controlled

 

Development costs

 

Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. As a result of the decision taken by the Board in 2017, to delay future plans for further website development, unamortised development costs were fully impaired and written off as an exceptional item in the prior year (see note 8).

18.          Investments in Subsidiaries

 

Company				2018		2017
Cost				£		£
Shares				1,947,932		1,947,932
Loan notes				220,000		220,000
Total cost at beginning and end of year				2,167,932		2,167,932
Provision for impairment
At 1 January				1,651,464		1,561,361
Increase of provision in year				10,713		90,103
At 31 December				1,662,177		1,651,464
Carrying value at 31 December				505,755		516,468

Included in investments is £220,000 of loan notes which carry an interest coupon of 7.5% and are repayable on demand at par. 

 

The following companies were subsidiaries at the balance sheet date and the results and year end position of these companies has been included in these consolidated financial statements. The registered office for all the companies listed below is at 30 City Road, London EC1Y 2AB.

 

Subsidiary undertakings	Description and proportion of share capital owned	Country of incorporation or registration	Nature of business
Westside Acquisitions Limited	Ordinary 100%	England & Wales	Holding company
Reverse Take-Over Investments Limited *	Ordinary 100%	England & Wales	Acquisition and development of shell companies
Westsidetech Limited	Ordinary 100%	England & Wales	Dormant
Westside Mining Plc	Ordinary 100%	England & Wales	Investment - inactive
Westside Sports Limited	Ordinary 100%	England & Wales	Holding company
Ultimate Player Limited	Ordinary 100%	England & Wales	Social media website
Football Data Services Limited	Ordinary 100%	England & Wales	Website data services - inactive
FootballFanatix Limited	Ordinary 100%	England & Wales	Social media website - inactive
Pantheon Leisure Plc **	Ordinary 85.87%	England & Wales	Holding company
Sport in Schools Limited ***	Ordinary 85.87%	England & Wales	Sports coaching in schools
Football Partners Limited ***	Ordinary 85.87%	England & Wales	Dormant
The Elms Group Limited  ***	Ordinary 85.87%	England & Wales	Inactive
Footballdirectory.co.uk Limited ****	Ordinary 85.87%	England & Wales	Dormant

*              33¹/₃% held indirectly through Westside Acquisitions Limited

**           held indirectly through Westside Sports Limited

***         held indirectly through Pantheon Leisure Plc

****       held indirectly through The Elms Group Limited

 

 

 

 

 

19.          Property, plant and equipment

Group		Plant and equipment		Motor Vehicles		Total
		£		£		£
Cost
At 1 January 2017		148,443		83,662		232,105
Additions		9,820		-		9,820
Disposals		(63,691)		(83,662)		(147,353)
Cost at 31 December 2017		94,572		-		94,572
Additions		7,753		-		7,753
Disposals		(1,848)		-		(1,848)
At 31 December 2018		100,477		-		100,477
Depreciation
At 1 January 2017		137,787		62,748		200,535
Charge for the year		7,553		18,592		26,145
Disposals		(63,691)		(81,340)		(145,031)
At 31 December 2017		81,649		-		81,649
Charge for the year		7,507		-		7,507
Disposals		(1,847)				(1,847)
At 31 December 2018		87,309		-		87,309
Carrying value
At 31 December 2018		13,168		-		13,168
At 31 December 2017		12,923		-		12,923

 

Company		Plant and equipment		Motor Vehicles		Total
		£		£		£
Cost
At 1 January 2017		1,848		83,662		85,510
Disposals		-		(83,662)		(83,662)
Cost at 31 December 2017		1,848		-		1,848
Disposals		(1,848)		-		(1,848)
At 31 December 2018		-		-		-
Depreciation
At 1 January 2017		1,847		62,748		64,595
Disposals		-		(81,340)		(81,340)
Charge for year		-		18,592		18,592
At 31 December 2016		1,847		-		1,847
Disposals		(1,847)		-		(1,847)
At 31 December 2017		-		-		-
Carrying value
At 31 December 2018		-		-		-
At 31 December 2017		1		-		1

 

The company was party to hire purchase agreements in respect of its motor vehicles during the prior year.

Depreciation charged on assets subject to hire purchase agreements in the year was £Nil. (2017: £18,592).  The net book value of these assets at the end of the year and at the end of last year was £Nil.

 

20.     Receivables and loan notes

 

Non-current assets

Company

In 2018, amounts due within one year included £220,000 of loan notes (2017 - £220,000). The loan notes are convertible into 50 million new shares in Pantheon Leisure Plc (the borrower) at any time before redemption. The loan notes carry an interest coupon of 7.5% and are repayable on demand at par.

 

Pantheon Leisure Plc is a subsidiary undertaking of Ultimate Sports Group Plc.

 

The loan notes are included in investments.

Group

The group has no receivables and loan notes classified as non-current assets.

 

Current assets

	Group				Company
	2018		2017		2018		2017
	£		£		£		£
Trade receivables	62,768		24,371		-		-
Other receivables	18,681		17,375		10,166
Amounts due from subsidiary undertakings	-		-		347,102		318,053
Prepayments and deferred expenditure	8,311		27,235		4,525		24,150
	89,760		68,981		361,793		342,203

 

The average credit period given for trade receivables at the end of the year is 15 days (2017:6 days). Trade receivables are stated net of a provision for irrecoverable amounts of £Nil (2017: £Nil).

 

Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total £1,454,629 (2017: £1,375,864).

 

The total charge in the year in respect of irrecoverable receivables in the group accounts was £Nil (2017: £Nil).

As at 31 December, the ageing analysis of trade receivables, all of which are due and not impaired is as follows:

 

					£
					<3 months
2018					62,768
2017					24,371

 

21.          Trade and other payables

 

	Group				Company
	2018		2017		2018		2017
	£		£		£		£
Trade payables	9,760		982		-		-
Other payables	24,672		1,216		-		-
Taxes and social security	99,459		74,981		-		-
Amounts due to subsidiary undertakings	-		-		287,793		273,573
Accruals and deferred income	106,020		96,482		31,922		10,744
	239,911		173,661		319,715		284,317

 

 

The average credit period taken for trade payables at the end of the year is 8 days (2017: 1 day).

 

22.          Bank overdraft

 

                Sport in Schools Limited has a bank overdraft facility secured by a guarantee of up to £50,000 by Ultimate Sports Group Plc. The overdraft is repayable on demand.

 

23.          Deferred tax

 

The following are the deferred tax liabilities and assets recognised by the group and movements during the current and previous year:

 

Deferred tax liabilities		Fair value gains	Tax losses offset	Total
		£	£	£
At 1 January 2017		(331)	331	-
Credited in the income statement		331	-	331
Charged directly to equity		-	(331)	(331)
At 31 December  2018 and  31 December 2017		-	-	-

 

24.          Borrowings

 

There were no borrowings outstanding at 31 December 2018 (2017- £2,000)

 

25.     Issued and fully paid share capital

 

Ordinary shares	Number of ordinary 10p shares	Number of ordinary 1p shares	Number of deferred 9p shares		£
At 1 January 2017	20,486,638	-	-		2,048,664
Shares issued in the year	2,325,000	-	-		232,500
At 1 January 2018	22,811,638	-	-		2,281,164
Subdivision of ordinary shares	(22,811,638)	22,811,638	22,811,638		-
New shares issued in the year	-	10,750,000	-		107,500
At 31 December 2018	-	33,561,638	22,811,638		2,388,664

 

Following a capital reorganisation in March 2018 in which each existing share of 10p each was subdivided into one new ordinary share of 1p each and 1 deferred share of 9p each, the company raised £537,500 before costs from a placing at a price of 5p per share resulting in the issue of a further 10,750,000 ordinary shares of 1p each.

 

Ordinary shares of 1p each:

Shareholders are entitled to receive dividends or distributions in the event of a winding up with rights to attend and vote at general meetings. 

 

Deferred shares of 9p each:

Shareholders are entitled to receive 0.1p for each £999,999 of dividends or other distributions in the event of a winding up with no rights to attend and vote at general meetings. 

 

At 31 December 2018 the company's issued shares carry no rights to fixed income.

 

The market price of the company's shares at 31 December 2018 was 20.00p and the price range during the financial year was 8.50p and 20.88p.

 

 

26. Share warrants and options

 

Warrants

In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants were issued exercisable at a price of 10p and 25p respectively per new ordinary share.

Further details are given in note 30.

 

Options

In January 2011 the company adopted an unapproved share option scheme details of which are given in note 30

 

To date the company has granted options to acquire 577,500 ordinary shares to key executives and employees engaged in the development of the social network. At the year end and at the date of this report there are options to acquire 307,500 ordinary shares in issue.

 

27.  Financial commitments

 

The group is committed to making the following future minimum lease payments under non-cancellable operating leases which fall due as follows:

	2018	2017
	£	£
Within one year
Land and buildings	10,868	16,358
Other	5,636	-
Between two and five years
Land and buildings	43,472	47,193
Other	6,417	-
After five years
Land and buildings	24,453	35,321
	90,846	98,872

 

28.         Reserves

 

Retained earnings represent the cumulative retained profit or loss of the group.

Share premium is the amount subscribed for share capital in excess of nominal value and is a capital reserve required by UK company law.

The merger reserve is a non-statutory reserve and represents the difference between the fair value and nominal value of the shares exchanged for shares on acquisition of Reverse Take-Over Investments Plc which took place in 2003.

The fair value reserve represents the cumulative surplus and deficits on recognition of available-for-sale investments at fair value, less tax attributable to the net surplus.

 

29.       Related parties

Details of the remuneration of directors is given in note 10. In addition to the information given in that note, the following provides further details of related party transactions involving the company and its directors.

 

The directors are the key management personnel of the group.

 

Simmonds & Co 

The group made payments of £26,500 (2017-£38,904) as contributions towards office and secretarial costs to Simmonds & Co, Chartered Accountants, a practice in which G Simmonds is sole proprietor. No amounts were due at 31 December 2018 (2017 - £Nil).

 

In March 2017, G Simmonds was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to these new warrants are given in note 30.

 

R Owen

The company paid for office facilities to R Owen of £13,611 (2017- £ 23,686). No amounts were due to R Owen at the 31 December 2018 (2017- Nil).

 

In March 2018, R Owen was issued with 125,000 A Warrants and 125,000 B Warrants. Further details relating to these new warrants are given in note 30.

 

30.          Share-based payment transactions

 

Warrants

In March 2018, the company issued new warrants to subscribe for shares. 750,000 A Warrants and 750,000 B Warrants were issued exercisable at a price of 10p and 25p respectively per new ordinary share.

 

Warrants are valued using the Black-Scholes option pricing model. The fair value per option granted and the assumptions used in the calculation are as follows:

 

Grant date	13 March 2018	13 March 2018
Share price at grant date	15p per share	15p per share
Exercise price	10p per share	25p per share
Shares under warrant	250,000	250,000
Expected volatility	100.0%	100.0%
Option life (years)	3 years	3 years
Expected life (years)	3 years	3 years
Risk-free interest rate	1.25%	1.25%
Fair value per option	3.15p	2.8p

 

In accordance with IFRS2, the fair value of the warrants issued and recognised as a charge in the accounts for the year is £10,800. In arriving at this amount, the expected volatility is based on historical volatility, the expected life is the average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK government bond for a term consistent with the assumed option life.

 

30.          Share-based payment transactions (continued).

 

Options

 

At the date of this report, options to acquire 577,500 ordinary shares share have been granted to employees or key executives involved in the group's trading operations. To date options over 270,000 shares have lapsed and there remain options over 307,500 shares that are exercisable.

 

Grant date	17 January 2011	6 March 2014	30 April 2014
Share price at grant date	25p per share	27.5p per share	27.5p per share
Exercise price	25p per share	27.5p per share	27.5p per share
Shares under option	210,000	167,500	200,000
Expected volatility	17.0%	20.9%	20.9%
Option life (years)	10 years	7 Years	7 Years
Expected life (years)	10 Years	7 Years	7 Years
Risk-free interest rate	2.0%	2.0%	2.0%
Fair value per option	0.4p	0.07p	0.07p

 

In accordance with IFRS2, the fair value of the share options issued and recognised as a charge in the accounts for the year is £Nil (2017 - £Nil). In arriving at the amount, the expected volatility is based on historical volatility, the expected life is the average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK government bond for a term consistent with the assumed option life.

 

31.          Capital management and financial instruments 

 

The group is solely equity funded which represents the group's capital.

 

The group's objectives when maintaining capital are:

 

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

-      To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

 

The group sets the amounts of capital it requires in proportion to risk. The group manages its capital structure and makes adjustments to it in light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

 

Capital for the group comprises all components of equity - share capital of £2,388,664 (2017: £2,281,164), share premium of £782,031 (2017: £393,454), other reserves of £325,584 (2017: £325,584), the retained deficit of £2,979,116 (2017: £2,840,795) and debts which comprises loans of £Nil (2017: £2,000).

 

During the year ended 31 December 2018 the group's strategy was to preserve net cash resources by limiting cash absorbed from losses and through good cash management.

Financial assets and financial liabilities are recognised in the group's balance sheet when the group becomes a party to the contractual provision of the instrument.

At 31 December 2018 and 31 December 2017, there were no material differences between the fair value and the book value of the group's financial assets and liabilities. All financial assets and liabilities are measured at amortised cost.  Relevant financial assets and liabilities are set out below.

 

 

31.          Capital management and financial instruments (continued).

	Group				Company
	2018		2017		2018		2017
	£		£		£		£
Financial assets
Cash and cash equivalents	535,329		129,611		413,656		81,459
Due from subsidiary undertakings	-		-		347,102		318,053
Trade and other short- term receivables	70,395		32,571		-		-
	605,724		162,182		760,758		399,512
Financial liabilities (which are included at amortised cost)
Trade and other short- term payables	34,432		2,198		-		-
Due to subsidiary undertakings	-		-		287,793		273,573
Loans	-		2,000		-		-
	34,432		4,198		287,793		273,573

 

 

The group's financial instruments comprise cash and cash equivalents, receivables, payables, loan obligations that arise directly from its operations

 

 

Amounts shown in trade and other short term receivables exclude prepayments and deferred expenditure for the group of £8,311 (2017: £27,235) and VAT recoverable of £11,054 (2017: £9,175) for the group and for the company £4,522 (2017: £Nil) of short term receivables and VAT recoverable of £10,166 (2017: £7,430).

 

Trade and short- term payables exclude deferred income and accruals of £106,020 (2017: £96,482), tax and social security creditors of £99,459 (2017: £74,981). For the company - for tax and accruals of £31,922 (2017: £10,744).

 

The group has not adopted a policy of using financial derivatives and does not rely on the use of interest rate hedges.

 

In common with other businesses, the group is exposed to risks that arise from its use of financial instruments.  There have been no substantive changes to the group's response to financial instrument risk and the methods used to measure them from previous periods.

 

The main risks arising from the group's financial instruments are market, credit and liquidity risks.

 

Market risk arises mainly from uncertainty about future prices of available-for-sale investments held by the group. The board monitors movements in the carrying value of its investments on a regular basis. As there are no remaining investments there is no longer any market risk attributable to investments.

 

Credit risk arises from trade receivables where the party fails to discharge their obligation in relation to the instrument. To minimise this risk, management have appropriate credit assessment methods to establish credit worthiness of new customers and monitor receivables by regularly reviewing aged receivable reports. There is no concentration of credit risk other than in respect to cash held on deposit at the company's bank as set out above.

 

 

The amount exposed to risk in respect of trade receivables at 31 December 2018 was £62,768 (2017: £24,371).

 

Liquidity risk arises in relation to the group's management of working capital and the risk that the company or any of its subsidiary undertakings will encounter difficulties in meeting financial obligations as and when they fall due.  To minimise this risk the liquidity position and working capital requirements are regularly reviewed by management.

 

The directors do not consider changes in interest rates have a significant impact on the group's cost of finance or operating performance.

 

As the group's operations are conducted in the United Kingdom, risks associated with foreign currency fluctuations are not relevant.

 

32.         Notes to statement of cash flows

 

a)             Analysis of net funds

	At 1 January 2018 £	Cash Flow £	At 31 December 2018 £
Group
Cash and cash equivalents	129,611	405,718	535,329
Borrowings	(2,000)	2,000	-
Net funds	127,611	407,718	535,329
Company
Cash and cash equivalents	81,459	332,197	413,656
Net funds	81,459	332,197	413,636

 

 (b) Reconciliation of net cash flow to movement in net funds

			Group £		Company £
Increase in cash and cash equivalents in the year			405,718		332,197
Cash outflow on borrowings repaid in the year			2,000		-
Movement in net funds			407,718		332,197

 

(c) Statement of cash flows from discontinued activities

				2018		2017
				£		£
Cash flow from discontinued activities
Profit/(loss) before tax				-		53,567
Adjustments for:
Gain on disposal of trade				-		(82,600)
Movements in working capital
Increase in debtors				-		(914)
Decrease/(Increase) in creditors				13,865		(42,084)
Cash generated/absorbed from operations				13,865		(72,031)
Investing activities
Net proceeds on disposal of trade				-		82,600
Net cash used in investing activities				-		82,600
Financing activities
Repayment of borrowings				-		(2,000)
Net cash used in financing activities						(2,000)
Net cash increase in cash and cash equivalents				13,865		8,569
Cash and cash equivalents at the beginning of the year				(13,865)		(22,434)
Cash and cash equivalents at the end of the year				-		(13,865)