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DJ Netalogue Technologies Plc Final Results and Dividend

 
TIDMNTLP 
 
NETALOGUE TECHNOLOGIES PLC 
 
ANNUAL REPORT 
 
FOR THE YEAR ENDED 
 
 
31 MARCH 2018 
 
The information contained in this announcement is extracted from the audited 
financial statements of the Company. 
 
Chairman's Statement for the year ended 31 March 2018 
 
Dear Shareholder, 
 
 I am pleased to report continued growth in the second half of the year leading 
to an increase on last year's revenue and a net profit. 
 
·        Sales of GBP1,073,000 (2017: GBP1,043,000) 
 
·        EBITDAE profit of GBP158,000 GBP (2017: GBP20,000) 
 
·        Net Profit before tax of GBP82,000 (2017: Loss GBP46,000) 
 
·        Net assets of GBP770,000 with a strong cash balance, no debt, no 
borrowings (2017: GBP701,000) 
 
·        Interim Dividend of 0.4p per share declared payable (2017: GBP nil) 
 
Results Commentary 
 
In a highly competitive market it has always been a core strategy to operate 
Netalogue in a financially prudent and responsible manner.  As such, a key 
objective in Fy18 was to return to net profitability and it is excellent to see 
this has been achieved as a result of investments and transformational changes 
in numerous key areas of the business.   These changes will provide a solid 
platform for growth in the new financial year. 
 
It is also rewarding to see customer satisfaction levels are extremely high, 
resulting in higher levels of ongoing investment as our clients yield higher 
levels of revenue and profitability through using the Netalogue B2B platform. 
Customers continuing to keep pace with developments in the Netalogue platform, 
staying current is a double positive for Netalogue; proof that our product 
development is invested in the correct manner and reduced ongoing support 
costs. 
 
Costs have been managed well in Fy18 and coupled with the revenue increase this 
has yielded both a profit and a boost to our net asset position with the 
debtors subsequently translating into a post year end cash reserve boost. 
 
Netalogue are committed to delivering shareholder value through its dividend 
policy, and given our strengthened net asset position, a dividend of 0.4p per 
share will be payable on 1st September 2018. 
 
Dividend 
 
The directors have approved an interim dividend of 0.4p per Ordinary Share of 
1p each payable to shareholders included in the register of shareholders on 3 
August 2018 (the record date). The payment date will be 1st September 2018 and 
the shares will be ex dividend on 2nd August 2018. 
 
The amount and frequency of future dividend will be based upon the on the 
profitability of the business taking into account the working capital and 
investment requirements of the business. 
 
Outlook 
 
In common with many B2B enterprises our sales are generated via our partner 
network or direct with companies who are not clients of our partners.  It is 
good to see that, after a tough period of trading and market uncertainty, we 
are seeing growth in the number of opportunities coming through both channels 
as companies are becoming more aware of the strengths and benefits of the 
Netalogue platform. Due to customer demand Partners are increasingly 
recommending our solution as an integral part of their offering and a key 
differentiator in winning deals, this has resulted in us entering FY19 with a 
strong sales pipeline. 
 
It is interesting to note that organisations are becoming more aware of the 
risks and spiralling costs of investing in platforms that are not designed to 
deal with the complex challenges of B2B ecommerce.   We are starting to see 
organisations that have previously decided to develop a 'home grown' solution 
using other solutions or purchasing less sophisticated B2C/B solutions - are 
returning to the market.  Recent client wins are testament that our strategy 
and the Netalogue platform is correctly aligned with the marketplace and will 
deliver both customer and shareholder value. 
 
To support our market perspective, we continue to invest in expanding our team 
and strengthening our routes to market. Most recently we are pleased to have 
recruited a channel partner manager who will focus on continued business 
development by growing revenue through our existing and new partners. 
 
Nick Barley, 
 
Chairman, 
 
Netalogue Technologies plc. 
 
Consolidated statement of comprehensive income for the year ended 31 March 2018 
 
                                            2018          2017 
 
                                            GBP000        GBP000 
 
Turnover                                    1,073         1,043 
 
Cost of sales                               (26)          (67) 
 
Gross profit                                1,047         976 
 
Administrative expenses                     (965)         (984) 
 
Operating profit before depreciation,       158           20 
amortisation and exceptionals 
 
Depreciation of tangible assets             (6)           (8) 
 
Amortisation of intangible assets           (70)          (20) 
 
Exceptional items                           -             (38) 
 
Operating profit/(loss)                     82            (8) 
 
Profit/(loss) on ordinary activities before 82            (46) 
taxation 
 
Tax on profit/(loss) on ordinary activities (13)          9 
 
Profit/(loss) for the financial year        69            (37) 
 
Profit/(loss) per ordinary share expressed  0.142         (0.076) 
in pence per share - basic 
 
Profit/(loss) per ordinary share expressed  0.133         (0.076) 
in pence per share  - diluted 
 
 
 
Total comprehensive income/(expense) for 
the year attributable to: 
 
Owners of the parent company              69             (37) 
 
Total comprehensive income/(expense) for  69             (37) 
the year 
 
Consolidated group and company balance sheets at 31 March 2018 
 
                                              2018        2017 
 
                                                 GBP000   GBP000 
 
Fixed assets 
 
Intangible assets                                   215      200 
 
Tangible assets                                      22       23 
 
Subsidiary undertakings                               -        - 
 
                                                    237      223 
 
Current assets 
 
Debtors                                             369      206 
 
Cash at bank and in hand                            502      614 
 
                                                    871      820 
 
Creditors: amounts falling due within             (311)    (336) 
one year 
 
Net current assets                                  560      484 
 
Total assets less current liabilities               797      707 
 
Provisions for liabilities                         (27)      (6) 
 
Net assets                                          770      701 
 
Capital and reserves 
 
Called up share capital                             487      487 
 
Share Premium                                       210      210 
 
Profit and loss account                              73        4 
 
Total equity                                        770      701 
 
 1. Summary of significant accounting policies 
 
The principal accounting policies applied in the preparation of these financial 
statements are set out below. These policies have been consistently applied to 
all the years presented, unless otherwise stated. 
 
Basis of preparation 
 
These financial statements are prepared on a going concern basis, under the 
historical cost convention. 
 
The preparation of financial statements in conformity with FRS 102 requires the 
use of certain critical accounting estimates. It also requires management to 
exercise its judgement in the process of applying the group and company's 
accounting policies. The areas involving higher degree of judgement or 
complexity, or areas where assumptions and estimates are significant to the 
financial statements are disclosed in note 2. 
 
Going concern 
 
The group meets its day to day working capital requirements through its cash 
reserves. The current economic conditions continue to create uncertainty over 
the level of demand for the group's services. The group's forecasts and 
projections, taking into account of reasonably possible changes in trading 
performance, show that the group should be able to operate within the level of 
its current cash reserves. The directors have a reasonable expectation that the 
company has adequate resources to continue in operational existence for the 
foreseeable future. The group therefore continues to adopt the going concern 
basis in preparing its financial statements. 
 
Basis of consolidation 
 
The group consolidated financial statements include the financial statements of 
the Company and all of its subsidiary undertakings. 
 
A subsidiary is an entity controlled by the Group. Control is the power to 
govern the financial and operating policies of an entity so as to obtain 
benefits from its activities. 
 
Intercompany transactions and balances between group companies are eliminated 
on consolidation and the accounting policies of subsidiaries are changed when 
necessary to ensure consistency with group accounting policies. 
 
Foreign currency 
 
i)         Functional and presentation currency 
 
The group financial statements are presented in pound sterling. 
 
The company's functional and presentation currency is the pound sterling. 
 
Revenue recognition 
 
Revenue is measured at the fair value of the consideration received or 
receivable and represents the invoiced value of the sale of B2B ecommerce 
software solutions and support services. Revenue on sales of software products 
is recognised on the delivery and acceptance of the systems. Revenue on 
software licences and support is recognised over the period in which the 
licence or support is available to the customer. 
 
Employee benefits 
 
The company provides a range of benefits to employees, including annual bonus 
arrangements, paid holiday arrangements and defined contribution pension plans. 
 
i)     Short term benefits 
 
Short term benefits, inducing holiday pay and other similar non-monetary 

(MORE TO FOLLOW) Dow Jones Newswires

July 20, 2018 05:15 ET (09:15 GMT)

DJ Netalogue Technologies Plc Final Results and Dividend

 
TIDMNTLP 
 
NETALOGUE TECHNOLOGIES PLC 
 
ANNUAL REPORT 
 
FOR THE YEAR ENDED 
 
 
31 MARCH 2018 
 
The information contained in this announcement is extracted from the audited 
financial statements of the Company. 
 
Chairman's Statement for the year ended 31 March 2018 
 
Dear Shareholder, 
 
 I am pleased to report continued growth in the second half of the year leading 
to an increase on last year's revenue and a net profit. 
 
·        Sales of GBP1,073,000 (2017: GBP1,043,000) 
 
·        EBITDAE profit of GBP158,000 GBP (2017: GBP20,000) 
 
·        Net Profit before tax of GBP82,000 (2017: Loss GBP46,000) 
 
·        Net assets of GBP770,000 with a strong cash balance, no debt, no 
borrowings (2017: GBP701,000) 
 
·        Interim Dividend of 0.4p per share declared payable (2017: GBP nil) 
 
Results Commentary 
 
In a highly competitive market it has always been a core strategy to operate 
Netalogue in a financially prudent and responsible manner.  As such, a key 
objective in Fy18 was to return to net profitability and it is excellent to see 
this has been achieved as a result of investments and transformational changes 
in numerous key areas of the business.   These changes will provide a solid 
platform for growth in the new financial year. 
 
It is also rewarding to see customer satisfaction levels are extremely high, 
resulting in higher levels of ongoing investment as our clients yield higher 
levels of revenue and profitability through using the Netalogue B2B platform. 
Customers continuing to keep pace with developments in the Netalogue platform, 
staying current is a double positive for Netalogue; proof that our product 
development is invested in the correct manner and reduced ongoing support 
costs. 
 
Costs have been managed well in Fy18 and coupled with the revenue increase this 
has yielded both a profit and a boost to our net asset position with the 
debtors subsequently translating into a post year end cash reserve boost. 
 
Netalogue are committed to delivering shareholder value through its dividend 
policy, and given our strengthened net asset position, a dividend of 0.4p per 
share will be payable on 1st September 2018. 
 
Dividend 
 
The directors have approved an interim dividend of 0.4p per Ordinary Share of 
1p each payable to shareholders included in the register of shareholders on 3 
August 2018 (the record date). The payment date will be 1st September 2018 and 
the shares will be ex dividend on 2nd August 2018. 
 
The amount and frequency of future dividend will be based upon the on the 
profitability of the business taking into account the working capital and 
investment requirements of the business. 
 
Outlook 
 
In common with many B2B enterprises our sales are generated via our partner 
network or direct with companies who are not clients of our partners.  It is 
good to see that, after a tough period of trading and market uncertainty, we 
are seeing growth in the number of opportunities coming through both channels 
as companies are becoming more aware of the strengths and benefits of the 
Netalogue platform. Due to customer demand Partners are increasingly 
recommending our solution as an integral part of their offering and a key 
differentiator in winning deals, this has resulted in us entering FY19 with a 
strong sales pipeline. 
 
It is interesting to note that organisations are becoming more aware of the 
risks and spiralling costs of investing in platforms that are not designed to 
deal with the complex challenges of B2B ecommerce.   We are starting to see 
organisations that have previously decided to develop a 'home grown' solution 
using other solutions or purchasing less sophisticated B2C/B solutions - are 
returning to the market.  Recent client wins are testament that our strategy 
and the Netalogue platform is correctly aligned with the marketplace and will 
deliver both customer and shareholder value. 
 
To support our market perspective, we continue to invest in expanding our team 
and strengthening our routes to market. Most recently we are pleased to have 
recruited a channel partner manager who will focus on continued business 
development by growing revenue through our existing and new partners. 
 
Nick Barley, 
 
Chairman, 
 
Netalogue Technologies plc. 
 
Consolidated statement of comprehensive income for the year ended 31 March 2018 
 
                                            2018          2017 
 
                                            GBP000        GBP000 
 
Turnover                                    1,073         1,043 
 
Cost of sales                               (26)          (67) 
 
Gross profit                                1,047         976 
 
Administrative expenses                     (965)         (984) 
 
Operating profit before depreciation,       158           20 
amortisation and exceptionals 
 
Depreciation of tangible assets             (6)           (8) 
 
Amortisation of intangible assets           (70)          (20) 
 
Exceptional items                           -             (38) 
 
Operating profit/(loss)                     82            (8) 
 
Profit/(loss) on ordinary activities before 82            (46) 
taxation 
 
Tax on profit/(loss) on ordinary activities (13)          9 
 
Profit/(loss) for the financial year        69            (37) 
 
Profit/(loss) per ordinary share expressed  0.142         (0.076) 
in pence per share - basic 
 
Profit/(loss) per ordinary share expressed  0.133         (0.076) 
in pence per share  - diluted 
 
 
 
Total comprehensive income/(expense) for 
the year attributable to: 
 
Owners of the parent company              69             (37) 
 
Total comprehensive income/(expense) for  69             (37) 
the year 
 
Consolidated group and company balance sheets at 31 March 2018 
 
                                              2018        2017 
 
                                                 GBP000   GBP000 
 
Fixed assets 
 
Intangible assets                                   215      200 
 
Tangible assets                                      22       23 
 
Subsidiary undertakings                               -        - 
 
                                                    237      223 
 
Current assets 
 
Debtors                                             369      206 
 
Cash at bank and in hand                            502      614 
 
                                                    871      820 
 
Creditors: amounts falling due within             (311)    (336) 
one year 
 
Net current assets                                  560      484 
 
Total assets less current liabilities               797      707 
 
Provisions for liabilities                         (27)      (6) 
 
Net assets                                          770      701 
 
Capital and reserves 
 
Called up share capital                             487      487 
 
Share Premium                                       210      210 
 
Profit and loss account                              73        4 
 
Total equity                                        770      701 
 
 1. Summary of significant accounting policies 
 
The principal accounting policies applied in the preparation of these financial 
statements are set out below. These policies have been consistently applied to 
all the years presented, unless otherwise stated. 
 
Basis of preparation 
 
These financial statements are prepared on a going concern basis, under the 
historical cost convention. 
 
The preparation of financial statements in conformity with FRS 102 requires the 
use of certain critical accounting estimates. It also requires management to 
exercise its judgement in the process of applying the group and company's 
accounting policies. The areas involving higher degree of judgement or 
complexity, or areas where assumptions and estimates are significant to the 
financial statements are disclosed in note 2. 
 
Going concern 
 
The group meets its day to day working capital requirements through its cash 
reserves. The current economic conditions continue to create uncertainty over 
the level of demand for the group's services. The group's forecasts and 
projections, taking into account of reasonably possible changes in trading 
performance, show that the group should be able to operate within the level of 
its current cash reserves. The directors have a reasonable expectation that the 
company has adequate resources to continue in operational existence for the 
foreseeable future. The group therefore continues to adopt the going concern 
basis in preparing its financial statements. 
 
Basis of consolidation 
 
The group consolidated financial statements include the financial statements of 
the Company and all of its subsidiary undertakings. 
 
A subsidiary is an entity controlled by the Group. Control is the power to 
govern the financial and operating policies of an entity so as to obtain 
benefits from its activities. 
 
Intercompany transactions and balances between group companies are eliminated 
on consolidation and the accounting policies of subsidiaries are changed when 
necessary to ensure consistency with group accounting policies. 
 
Foreign currency 
 
i)         Functional and presentation currency 
 
The group financial statements are presented in pound sterling. 
 
The company's functional and presentation currency is the pound sterling. 
 
Revenue recognition 
 
Revenue is measured at the fair value of the consideration received or 
receivable and represents the invoiced value of the sale of B2B ecommerce 
software solutions and support services. Revenue on sales of software products 
is recognised on the delivery and acceptance of the systems. Revenue on 
software licences and support is recognised over the period in which the 
licence or support is available to the customer. 
 
Employee benefits 
 
The company provides a range of benefits to employees, including annual bonus 
arrangements, paid holiday arrangements and defined contribution pension plans. 
 
i)     Short term benefits 
 
Short term benefits, inducing holiday pay and other similar non-monetary 

(MORE TO FOLLOW) Dow Jones Newswires

July 20, 2018 05:15 ET (09:15 GMT)

DJ Netalogue Technologies Plc Final Results and -2-

benefits, are recognised as an expense in the period in which the service is 
received. 
 
Taxation 
 
Taxation expense for the period comprises current and deferred tax recognised 
in the reporting period. Tax is recognised in the profit and loss account, 
except to the extent that it relates to items recognised in other comprehensive 
income or directly in equity. 
 
Current or deferred taxation assets and liabilities are not discounted. 
 
i)         Current tax 
 
Current tax is the amount of income tax payable in respect of the taxable 
profits for the year or prior years. Tax is calculated on the basis of tax 
rates and laws that have been enacted or substantively enacted by the period 
end. 
 
ii)        Deferred tax 
 
Deferred tax arises from timing differences that are differences between 
taxable profits and total comprehensive income as stated in the financial 
statements. These timing differences arise from the inclusion of income and 
expenses in tax assessments in the periods different from those in which they 
are recognised in financial statements. 
 
Deferred tax is recognised on all timing differences at the reporting date 
except for certain exceptions. Unrelieved tax losses and other deferred tax 
assets are only recognised when it is probable that they will be recovered 
against the reversal of deferred tax liabilities or other future taxable 
profits. 
 
Deferred tax is measured using tax rates and laws that have been enacted or 
substantively enacted by the period end and that are expected to apply to the 
reversal of the timing difference. 
 
Business combinations and goodwill 
 
Business combinations are accounted for by applying the purchase method. 
Purchased goodwill (representing the excess of the fair value of the 
consideration given over the fair value of the separable net assets acquired) 
arising on consolidation in respect of acquisitions is capitalised.  Goodwill 
is amortised on a straight line basis over its estimated useful economic life. 
The estimated useful economic life is calculated having regard to the period 
over which the Group expects to derive economic benefits from the assets.  The 
directors consider the estimated useful economic life of the purchased goodwill 
to be 10 years. 
 
Intangible assets 
 
Intangible assets relates to software development costs. The costs of software 
development are stated at cost less accumulated amortisation and accumulated 
impairment losses. Intangible assets are amortised on a straight line basis 
over their estimated useful economic life, this period is considered to be 3 to 
5 years. 
 
Tangible assets 
 
Tangible assets are stated at cost (or deemed cost) less accumulated 
depreciation and accumulated impairment losses. Cost includes the original 
purchase price and costs directly attributable to bringing the asset to its 
working condition for its intended use. 
 
i)         Computer equipment 
 
Computer equipment is stated at cost less accumulated depreciation and 
accumulated impairment losses. 
 
ii)        Plant and machinery 
 
Plant and machinery are stated at cost less accumulated depreciation and 
accumulated impairment losses. 
 
iii)       Depreciation 
 
Depreciation on tangible assets is calculated to write off the cost of the 
assets concerned on a reducing balance basis as follows: 
 
  * Computer equipment- 25% 
 
  * Plant and machinery- 25% 
 
vi) Derecognition 
 
Tangible assets are derecognised on disposal or when no future economic 
benefits are expected. On disposal, the difference between the net disposal 
proceeds and the carrying amount is recognised in profit and loss and included 
in 'Other operating (losses)/gains'. 
 
Leased assets 
 
Operating leased assets 
 
Leases that do not transfer all the risks and rewards of ownership are 
classified as operating leases. Payments under operating leases are charged to 
the profit and loss account on a straight-line basis over the period of the 
lease. 
 
Cash and cash equivalents 
 
Cash and cash equivalents includes cash in hand. Bank overdrafts, when 
applicable, are shown within borrowings in current liabilities. 
 
Financial instruments 
 
The company enters into basic financial instruments transactions that result in 
the recognition of financial assets and liabilities like trade and other 
accounts receivable and payable and loans to related parties. 
 
Debt instruments (other than those wholly repayable or receivable within one 
year), including loans and other accounts receivable and payable, are initially 
measured at present value of the future cash flows and subsequently at 
amortised cost using the effective interest method. Debt instruments that are 
payable or receivable within one year, typically trade payables or receivables, 
are measured, initially and subsequently, at the undiscounted amount of the 
cash or other consideration, expected to be paid or received. However, if the 
arrangements of a short-term instrument constitute a financing transaction, 
like the payment of a trade debt deferred beyond normal business terms or 
financed at a rate of interest that is not a market rate or in case of an 
out-right short-term loan not at market rate, the financial asset or liability 
is measured, initially, at the present value of the future cash flow discounted 
at a market rate of interest for a similar debt instrument and subsequently at 
amortised cost. 
 
Financial assets that are measured at cost and amortised cost are assessed at 
the end of each reporting period for objective evidence of impairment. If 
objective evidence of impairment is found, an impairment loss is recognised in 
the Statement of Comprehensive Income. 
 
For financial assets measured at amortised cost, the impairment loss is 
measured as the difference between an asset's carrying amount and the present 
value of estimated cash flows discounted at the asset's original effective 
interest rate. If a financial asset has a variable interest rate, the discount 
rate for measuring any impairment loss is the current effective interest rate 
determined under the contract. 
 
Financial assets and liabilities are offset and the net amount reported in the 
Balance sheet when there is an enforceable right to set off the recognised 
amounts and there is an intention to settle on a net basis or to realise the 
asset and settle the liability simultaneously. 
 
Share capital 
 
Ordinary shares are classified as equity. Incremental costs directly 
attributable to the issue of new ordinary shares are shown in equity as a 
deduction, net of tax, from the proceeds. 
 
Distribution to equity holders 
 
Dividends and other distributions to the Group's shareholders are recognised as 
a liability in the financial statements in the period in which the dividends 
and other distributions are approved by the shareholders. These amounts are 
recognised in the statement of changes in equity. 
 
Related party transactions 
 
The group discloses transactions with related parties which are not wholly 
owned within the same group. It does not disclose transactions with members of 
the same group that are wholly owned. 
 
2. Critical judgements in applying the entity's accounting policies 
 
Estimates and judgements are continually evaluated and are based on historical 
experience and other factors, including expectations of future events that are 
believed to be appropriate and reasonable in the circumstances. 
 
a) Critical judgements in applying the company's accounting policies 
 
The directors do not consider there to be any critical accounting judgments to 
the financial statements. 
 
b) Key accounting estimates and assumptions 
 
The company makes estimates and assumptions concerning the future. The 
resulting accounting estimates will, by definition, seldom equal the related 
actual results. The estimates and assumptions that have a significant risk of 
causing a material adjustment to the carrying value amounts of assets and 
liabilities within the next financial year are addressed below. 
 
i)     Useful economic lives of tangible and intangible  assets 
 
The annual depreciation charge for tangible assets and amortisation charge for 
intangible assets are sensitive to changes in the estimated useful economic 
lives of the assets. The useful economic lives are re-assessed and amended when 
necessary to reflect current estimates, based on technological advancement, 
future investments, economic utilisation and physical condition of the assets. 
 
ii)    Impairment of debtors 
 
The company makes an estimate of the recoverable value of trade and other 
debtors. When assessing impairment of trade and other debtors, management 
considers factors including the current credit rating of the debtor, the ageing 
profile of debtors and historical experience. See note 12 for the net carrying 
amount of the debtors and associated impairment provision. 
 
Non-statutory accounts 
 
The information above represents non-statutory accounts as set out in section 
435 Companies Act 2006. Statutory accounts for the year ended 31 March 2018 
will be delivered to the Registrar of Companies in due course. 
 
An auditor's report has been made on the accounts for the year ended 31 March 
2018. The audit report was unqualified  and contained no reference to any 
matters to which the auditor drew attention by way of emphasis without 
qualifying the report and contained no statement under section 498(2) 
(accounting records or returns inadequate or accounts not agreeing with records 
or returns) or section 498 (3) (failure to obtain necessary information and 
explanation). 
 
 
 
END 
 

(END) Dow Jones Newswires

July 20, 2018 05:15 ET (09:15 GMT)

DJ Netalogue Technologies Plc Final Results and -2-

benefits, are recognised as an expense in the period in which the service is 
received. 
 
Taxation 
 
Taxation expense for the period comprises current and deferred tax recognised 
in the reporting period. Tax is recognised in the profit and loss account, 
except to the extent that it relates to items recognised in other comprehensive 
income or directly in equity. 
 
Current or deferred taxation assets and liabilities are not discounted. 
 
i)         Current tax 
 
Current tax is the amount of income tax payable in respect of the taxable 
profits for the year or prior years. Tax is calculated on the basis of tax 
rates and laws that have been enacted or substantively enacted by the period 
end. 
 
ii)        Deferred tax 
 
Deferred tax arises from timing differences that are differences between 
taxable profits and total comprehensive income as stated in the financial 
statements. These timing differences arise from the inclusion of income and 
expenses in tax assessments in the periods different from those in which they 
are recognised in financial statements. 
 
Deferred tax is recognised on all timing differences at the reporting date 
except for certain exceptions. Unrelieved tax losses and other deferred tax 
assets are only recognised when it is probable that they will be recovered 
against the reversal of deferred tax liabilities or other future taxable 
profits. 
 
Deferred tax is measured using tax rates and laws that have been enacted or 
substantively enacted by the period end and that are expected to apply to the 
reversal of the timing difference. 
 
Business combinations and goodwill 
 
Business combinations are accounted for by applying the purchase method. 
Purchased goodwill (representing the excess of the fair value of the 
consideration given over the fair value of the separable net assets acquired) 
arising on consolidation in respect of acquisitions is capitalised.  Goodwill 
is amortised on a straight line basis over its estimated useful economic life. 
The estimated useful economic life is calculated having regard to the period 
over which the Group expects to derive economic benefits from the assets.  The 
directors consider the estimated useful economic life of the purchased goodwill 
to be 10 years. 
 
Intangible assets 
 
Intangible assets relates to software development costs. The costs of software 
development are stated at cost less accumulated amortisation and accumulated 
impairment losses. Intangible assets are amortised on a straight line basis 
over their estimated useful economic life, this period is considered to be 3 to 
5 years. 
 
Tangible assets 
 
Tangible assets are stated at cost (or deemed cost) less accumulated 
depreciation and accumulated impairment losses. Cost includes the original 
purchase price and costs directly attributable to bringing the asset to its 
working condition for its intended use. 
 
i)         Computer equipment 
 
Computer equipment is stated at cost less accumulated depreciation and 
accumulated impairment losses. 
 
ii)        Plant and machinery 
 
Plant and machinery are stated at cost less accumulated depreciation and 
accumulated impairment losses. 
 
iii)       Depreciation 
 
Depreciation on tangible assets is calculated to write off the cost of the 
assets concerned on a reducing balance basis as follows: 
 
  * Computer equipment- 25% 
 
  * Plant and machinery- 25% 
 
vi) Derecognition 
 
Tangible assets are derecognised on disposal or when no future economic 
benefits are expected. On disposal, the difference between the net disposal 
proceeds and the carrying amount is recognised in profit and loss and included 
in 'Other operating (losses)/gains'. 
 
Leased assets 
 
Operating leased assets 
 
Leases that do not transfer all the risks and rewards of ownership are 
classified as operating leases. Payments under operating leases are charged to 
the profit and loss account on a straight-line basis over the period of the 
lease. 
 
Cash and cash equivalents 
 
Cash and cash equivalents includes cash in hand. Bank overdrafts, when 
applicable, are shown within borrowings in current liabilities. 
 
Financial instruments 
 
The company enters into basic financial instruments transactions that result in 
the recognition of financial assets and liabilities like trade and other 
accounts receivable and payable and loans to related parties. 
 
Debt instruments (other than those wholly repayable or receivable within one 
year), including loans and other accounts receivable and payable, are initially 
measured at present value of the future cash flows and subsequently at 
amortised cost using the effective interest method. Debt instruments that are 
payable or receivable within one year, typically trade payables or receivables, 
are measured, initially and subsequently, at the undiscounted amount of the 
cash or other consideration, expected to be paid or received. However, if the 
arrangements of a short-term instrument constitute a financing transaction, 
like the payment of a trade debt deferred beyond normal business terms or 
financed at a rate of interest that is not a market rate or in case of an 
out-right short-term loan not at market rate, the financial asset or liability 
is measured, initially, at the present value of the future cash flow discounted 
at a market rate of interest for a similar debt instrument and subsequently at 
amortised cost. 
 
Financial assets that are measured at cost and amortised cost are assessed at 
the end of each reporting period for objective evidence of impairment. If 
objective evidence of impairment is found, an impairment loss is recognised in 
the Statement of Comprehensive Income. 
 
For financial assets measured at amortised cost, the impairment loss is 
measured as the difference between an asset's carrying amount and the present 
value of estimated cash flows discounted at the asset's original effective 
interest rate. If a financial asset has a variable interest rate, the discount 
rate for measuring any impairment loss is the current effective interest rate 
determined under the contract. 
 
Financial assets and liabilities are offset and the net amount reported in the 
Balance sheet when there is an enforceable right to set off the recognised 
amounts and there is an intention to settle on a net basis or to realise the 
asset and settle the liability simultaneously. 
 
Share capital 
 
Ordinary shares are classified as equity. Incremental costs directly 
attributable to the issue of new ordinary shares are shown in equity as a 
deduction, net of tax, from the proceeds. 
 
Distribution to equity holders 
 
Dividends and other distributions to the Group's shareholders are recognised as 
a liability in the financial statements in the period in which the dividends 
and other distributions are approved by the shareholders. These amounts are 
recognised in the statement of changes in equity. 
 
Related party transactions 
 
The group discloses transactions with related parties which are not wholly 
owned within the same group. It does not disclose transactions with members of 
the same group that are wholly owned. 
 
2. Critical judgements in applying the entity's accounting policies 
 
Estimates and judgements are continually evaluated and are based on historical 
experience and other factors, including expectations of future events that are 
believed to be appropriate and reasonable in the circumstances. 
 
a) Critical judgements in applying the company's accounting policies 
 
The directors do not consider there to be any critical accounting judgments to 
the financial statements. 
 
b) Key accounting estimates and assumptions 
 
The company makes estimates and assumptions concerning the future. The 
resulting accounting estimates will, by definition, seldom equal the related 
actual results. The estimates and assumptions that have a significant risk of 
causing a material adjustment to the carrying value amounts of assets and 
liabilities within the next financial year are addressed below. 
 
i)     Useful economic lives of tangible and intangible  assets 
 
The annual depreciation charge for tangible assets and amortisation charge for 
intangible assets are sensitive to changes in the estimated useful economic 
lives of the assets. The useful economic lives are re-assessed and amended when 
necessary to reflect current estimates, based on technological advancement, 
future investments, economic utilisation and physical condition of the assets. 
 
ii)    Impairment of debtors 
 
The company makes an estimate of the recoverable value of trade and other 
debtors. When assessing impairment of trade and other debtors, management 
considers factors including the current credit rating of the debtor, the ageing 
profile of debtors and historical experience. See note 12 for the net carrying 
amount of the debtors and associated impairment provision. 
 
Non-statutory accounts 
 
The information above represents non-statutory accounts as set out in section 
435 Companies Act 2006. Statutory accounts for the year ended 31 March 2018 
will be delivered to the Registrar of Companies in due course. 
 
An auditor's report has been made on the accounts for the year ended 31 March 
2018. The audit report was unqualified  and contained no reference to any 
matters to which the auditor drew attention by way of emphasis without 
qualifying the report and contained no statement under section 498(2) 
(accounting records or returns inadequate or accounts not agreeing with records 
or returns) or section 498 (3) (failure to obtain necessary information and 
explanation). 
 
 
 
END 
 

(END) Dow Jones Newswires

July 20, 2018 05:15 ET (09:15 GMT)