2016-06-28 | Final Results | NYSE:NTG

RNS Number : 4079C

Red24 PLC

28 June 2016

red24 PLC

("Red24" or the "Company")

Final Results

red24 plc, the crisis assistance company, is pleased to announce its audited final results for the year ended 31 March 2016.

Highlights:

· Revenue increased by 11% to £6,614,524 (2015: £5,947,246)

· Adjusted* profit before tax up 10% to £1,005,732 (2015: £915,170)

· Completion of first acquisition - RISQ Worldwide

· Cash balances down 17% to £2,830,585 (2015: £3,417,956)

· Final dividend increased by 11% to 0.30p per share (2015: 0.27p).

· Adjusted* basic EPS up 22% to 1.79p (2015: 1.50p)

· Basic earnings per share down 45% to 1.00p (2015: 1.83p)

* Adjustments to profit before tax are detailed in note 5 and include currency movements, the amortisation of acquired intangibles and provision for acquisition earn out payments. Adjusted earnings per share is based on the retained profit with these adjustments added back.

Simon Richards, Chairman, commented:

"The business continues to develop successfully and for many of our KPIs in a way that has exceeded our expectations. We have worked hard to build up a reputation with well-established clients for high quality work and we see future growth both from our existing services and also from the addition of other services that are likely to be of assistance to those clients.

Although there are risks to any business, the Board feel encouraged by the way we have continued to progress over the last year, and are excited by the growth prospects offered by our European partners, Allianz, the US product safety team, cross-selling RISQ services and potential further acquisition."

Enquiries

red24 PLC Tel : +44(0) 203 291 2424

Simon Richards, Chairman

Maldwyn Worsley-Tonks, CEO

finnCap Tel: +44(0) 20 7220 0500

Julian Blunt / James Thompson (Corporate Finance)

Alice Lane (Corporate Broking)

Yellow Jersey PR Ltd Tel: +44(0) 7768 534 641 / +44(0) 7584 085 670

Philip Ranger, Aidan Stanley

About red24

red24 is headquartered in the UK and is listed on the London Stock Exchange (AIM: REDT). Further information is available at www.red24plc.com

red24 is a crisis assistance company that provides a range of security and business support services, offering preventative and reactive advice to help organisations and individuals avoid or manage security and business risks to themselves, their families and their businesses. Its products and services are distributed through leading international financial service companies.

STRATEGIC REPORT

Chairman's Statement

Introduction

I am pleased to present our report for the year ended 31 March 2016.

Financial overview

The business continues to develop successfully and for many of our KPIs in a way that has exceeded our expectations. Revenue has increased by 11% to £6,614,524 from £5,947,246 achieved last year. Of course the acquisition of RISQ is responsible for this but there is a strong organic growth underlying these numbers if one take account of the loss of our largest customer from the previous financial year, who contributed £850k to the 2015 numbers. So taking RISQ out of the 2016 revenue brings our like for like sales down to £5,704k, but adjusting for the loss of HSBC from travel safety brings last year's "base" revenue to £5,097k. Thus the underlying increase from organic growth is a very creditable 12%.

The Chief Executive reviews the income streams in more detail in his report, but the growth in travel assistance and product safety is most noticeable. This growth is reflected in the increase in staff numbers and a large increase in amortisation charges following our investment in new services, particularly travel tracker. This has held back the growth in profitability as has a rather different currency environment. In addition accounting standards require the entire RISQ earn out payments to be treated as remuneration rather than adding to the consideration paid. The Board believe it is best to show the effects of these large currency movements, the effect of the earn out and the amortisation of the identified intangibles in RISQ as exceptional items, to enable a better understanding of the underlying trend in profitability. Taking these factors into account underlying profits have increased by 10%.

The exceptional items and the tax charge reduce the retained earnings but the dividend is covered 1.9 times. The net assets per share continue to increase and are now 9.2p per share up from 8.7p last year. The Board are recommending a final dividend of 0.30p be paid in September, which is an increase of 11% on the 0.27p final dividend paid last year, and brings the dividend return for the year as a whole to 0.55p as compared to 0.50p last year.

Financial position

Our cash position remains strong with year end cash balances of £2,830,585 (2015:£3,417,956) despite the acquisition and reducing the local bank loan which part funded the purchase of the building in Cape Town and which remains our only debt, though we do have commitments to pay the deferred consideration on the purchase of RISQ; the first tranche of which is due this summer and looks likely to be at the top end of the range, reflecting the strong performance of the business since acquisition.

Outlook

We have worked hard to build up a reputation with well-established clients for high quality work and we see future growth both from our existing services and also from the addition of other services that are likely to be of assistance to those clients.

Staff

Our staff are absolutely crucial to the quality of service provided and to creating an environment where we can attract good quality people who want to come to work for us. The Board are most grateful to all the staff for their hard work and are gratified that so many of them are choosing to build their careers with the group.

Simon Richards

Chairman

27 June 2016

Chief Executive's Report

red24 is a risk management group that provides a range of security and business support services. The acquisition of RISQ Worldwide, in Singapore, has added an investigations business stream to our existing distinct streams of revenue: travel assistance, including accident and healthcare, special risks, consulting and product safety. We have developed an excellent reputation for assisting clients in minimising risks to their personnel, operations and profitability and this reputation is key to our ability to grow the business into related areas and to expanding our geographic coverage.

Business model

The heart of our business operation is our 24/7 Crisis Response Management Centre (CRM) in Cape Town. This state of the art response centre is staffed 24 hours a day, 365 days a year by a dedicated team of multi-lingual customer service representatives, regional analysts and experienced security professionals. The centre enables our experts to give accurate impartial, up to the minute information and advice to our clients. Across the group clients are offered escalating levels of assistance that are appropriate to the threat.

Travel assistance

Over the last two years we have made a significant investment in our travel assistance services to enhance the technical platform making it both easier to interface with new clients and with new travel data bases. The service now offers travel tracking, e-learning and mobile apps.

However we do not believe that technology alone will enable us to provide the tailored and personalized approach that HR and Security managers are looking for from a service provider. We keep a close watch on competitor initiatives to ensure that we have the balance right and believe the results for the year show that our approach is meeting market needs.

In the year underlying revenues have grown by 28%, once one strips out the revenue contribution, in the previous year, from the HSBC Premier and Advance books in the UK, which we lost in November 2014. This has been achieved by recruiting direct sales staff to focus efforts on building a broader customer base that is less vulnerable to such shocks.

Special risks

Our special risks business had another active year and although the number of incidents dropped there was a significant extortion case in the Middle East that ran for three months. This business is now more dependent on incident related revenue than in the past as there has been a reduction in retainer income reflecting the number of insurers underwriting. Our Munich office has made a significant contribution to gaining European business and there have been significant client wins for those insurers. We continue to publish our respected "Threat forecast".

Consulting and response

The year lacked the large evacuation job in Libya, which contributed 50% of this streams 2015 revenue. In the current year the largest incident related to the Nepalese earthquake which contributed 24% of revenue. Outside these two major incidents revenue increased by 3%.

Investigations

We acquired RISQ Worldwide on 1 July 2015 and so these figures include just 9 months of revenue. RISQ is a Singapore based investigations business that specializes in employment screening and business investigations - primarily for European businesses with Asian investments. In the first 9 months the business was 11% ahead of the budget set and has made a significant contribution to the group. We believe that this will grow as the services offered expand the range that can be put to the HR or security purchase holder, both in Europe and in Asia. Some cross selling has already occurred and this will develop in the coming year as we rebrand as red24 Asia Pacific.

Product safety

Red24 Assist, our product safety brand, has shown a 35% increase in revenue. This increase is largely attributable to adding a major provider of this insurance in the United States and to the start of a business to business product safety service there. This follows the recruitment of a US based team early in October. Business to business growth is behind our expectations but we are hopeful that the original goals set will be achieved by the end of 2016. We have aligned our training in this field with academic institutions so that it becomes possible to achieve a Masters degree in this field and we have entered into a revenue sharing deal with a University which should benefit 2017, once the course is launched.

Principal risks and uncertainties

The principal risks and uncertainties which could have a material effect on the group have been identified and set out in a risk register which assesses each risk for the likelihood of its occurrence and the potential impact on the group.

The Board regularly review the group's exposure to currency risk, which is one of the key risks impacting the group. The longer term currency presents an on-going challenge for the group; the economic environment, which remains a challenging one as many governments struggle with debt constraints, will determine the relative value of currencies - not least sterling, which is our functional and reporting currency. In the shorter term we monitor the situation regularly and react to favourable spot opportunities, utilising up to twelve month hedging instruments when appropriate, though our hedging the risk against a change in government in the UK in 2015 has been costly. A fuller discussion of the sensitivity of our exposure to currency risk is contained in note 29 to the financial statements.

Other risks and uncertainties that are largely within the control of the group, have been categorised into strategic, operational, financial and administrative risks. These include the maintenance of the group's competitive position to ensure the achievement and collection of sufficient revenue to meet the group's objectives. The group maintains significant cash reserves both to mitigate against the possibility of periods of reduced working capital and to ensure adequate working capital is available to meet any sudden increase in the level of response work clients may require. Internally we have worked hard, and with some success, to broaden the customer base and reduce dependence on key accounts. Other normal business risks include dependence on the continued availability of key personnel to ensure that our clients receive the level of service they are entitled to expect, and the ability of the group to continue to provide that level of service. The reputation of the group is critical to its continued success and it works hard to develop and protect that reputation by ensuring that it only associates itself with activities that are appropriate for a business in its sector.

Looking forward

I am delighted that our first acquisition has started so strongly and brought significant strength to the group. Our task in the coming year is to push ahead with integrating the marketing of our broader service offering to ensure we gain access to opportunities to cross sell services. It is a reflection of this broader range that we have moved to describing ourselves as a risk management company and not just a crisis assistance company.

We have also expanded organically by adding product safety specialists in the United States and our opening of an office in Germany has played a key part in winning business with Allianz. We act as their responder on Special Risks and Product Safety and have partnered with their Worldwide Care team to offer clients a combined, comprehensive, one-stop medical and travel risk package, which has exciting prospects.

Although the market for our services is becoming ever more competitive we believe that we have a good track record of innovation that should enable us to win more business and that increased competition creates greater awareness of the need for these services which leads to a larger market.

Expansion in areas outside our reporting currency is affected by exchange rate movements. A substantial proportion of our revenue is now denominated in US dollars and a growing proportion in euros, whereas almost 50% of our costs are incurred in Rand. Exchange rate movements are influenced by many complex factors. Last year, faced with a very uncertain General Election in the UK, the Board decided to buy forward 80% of our Rand requirements for the year to March 2016. The unexpected election outcome combined with the fall in commodity prices were largely responsible for a large and unfavourable move against that view and the year has suffered from a significant currency loss as opposed to substantial gain in the previous year. Currency fluctuations remain a significant risk and the Board have shown the "before" and "after" effect to enable readers to take an informed view.

Key performance indicators

The key performance indicators ("KPIs") for the group are those that communicate the financial performance and strength of the group, as a whole, to shareholders. A summary of the KPI's is as follows (derived from continuing operations only):

	2016 £'000	2015 £'000
Financial
Revenue	6,614	5,947
Gross profit	5,141	4,418
Adjusted* profit before tax	1,006	915
Adjusted* earnings per share	1.79p	1.50p
Available cash	2,831	3,418

Maldwyn Worsley-Tonks

Chief Executive

27 June 2016

Corporate Social Responsibility Report

The red24 brand and our corporate values are the key to our approach to Corporate Social Responsibility (CSR). Our CSR strategy is focused on the following key issues:

Business Ethics

The Board is committed to maintaining high ethical standards across the group and expect the same commitment from our staff, customers and suppliers. Our reputation is vital to our continued business success and we do not tolerate any form of bribery, corruption or fraud. We have anti-bribery policies in place of which all employees are made aware when they join as well as through the group intranet and through training.

Employee engagement

The Board recognise that our employees are fundamental to our success. As a professional services business we have a highly skilled workforce who assist in delivering our strategic objectives. The Board aim to ensure that there are equal opportunities for all employees and that decisions affecting employees are taken based on merit and not on such factors as race, gender, nationality or religious beliefs. In South Africa there are legislative requirements that expect the workforce to be reflective of the mix of peoples in the Western Cape. The board regularly monitor progress towards this.

Many of the group's employees have become shareholders through the share loan scheme. In 2013 an employee benefit trust was created. The Board have provided a loan of £150,000 to the Trustees to acquire shares in the market and, at 31 March 2016 the Trust held 1,100,000 shares in the Group. The Board intend that these shares will be used to satisfy staff share awards made as part of a longer term incentive scheme. The remaining step will be to create a new, approved, Enterprise Management Incentive Scheme open to all qualifying staff.

The optional defined contribution pension schemes, introduced in 2012, for all staff based in either South Africa or the United Kingdom, have been taken up 80% of our staff.

Health and safety

The Board are committed to providing a safe workplace for all our staff and to ensure that our services are provided in a way that delivers our services safely for clients and staff, including contractors. Responsibility for health and safety rests with the Chief Executive.

Sustainability

The Board monitor staffing needs to ensure that it is regularly reviewed and appropriate plans put in place to ensure we retain and develop the necessary levels of skills and take action where necessary.

We monitor and work to minimise our impact on the environment. We measure our carbon footprint and work to reduce it. We provide the green24 website as an open access one, allowing individuals and corporates to live and work in a more sustainable way.

Community engagement

Red24 established a charity committee in 2007, "Project Infundo", which means education. Through the work of this committee we support educational initiatives. In Cape Town, we assist a disadvantaged primary school in Constantia and a teacher improvement programme in Khayelitsha; whilst in London we assist a community voluntary charity.

On behalf of the Board

J E A Mocatta

Secretary

27 June 2016

DIRECTORS' REPORT

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

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

red24 plc is incorporated in Scotland and domiciled in England. Its shares are listed on the AIM Market ("AIM") of the London Stock Exchange. The company acts as a holding company. The principal activities of its wholly-owned trading subsidiaries are the provision of security risk management and other assistance services. These activities are expected to continue for the foreseeable future.

A fair review of the business, and its future prospects, including consideration of the principal risks facing the group and a review of our performance against financial key performance indicators is contained in the Strategic Report above.

The Board exercises proper and appropriate corporate governance for the group. It ensures that there are effective systems of internal controls in place to manage the shareholders' interests and the group's assets, including the assessment and management of the risks to which the group's businesses are exposed. A discussion of the principal risks is contained in the strategic review and in note 29 to the financial statements.

RESULTS FOR THE YEAR

The financial result for the year ended 31 March 2016 and the comparative result for the year ended 31 March 2015 are set out later in this announcement. An interim dividend of 0.25p per share (2015: 0.23p) was paid on 25 February 2016. A final dividend of 0.30p per share (2015: 0.27p) will be recommended to the AGM on 3 August 2016, to be paid on 16 September 2016.

DIRECTORS

S A Richards, L Adlam, J E A Mocatta and M S H Worsley-Tonks all held office throughout the year. J M Brigg was appointed a director on 2 May 2016.

S A Richards retires by rotation at the forthcoming annual general meeting and, being eligible, offers himself for re-election. J M Brigg having been appointed since the last Annual General Meeting and, being eligible, offers himself for re-appointment.

BIOGRAPHIES OF DIRECTORS

Simon Richards, who is a Chartered Accountant, is the company's executive chairman. Simon has been a director since 1995 and oversaw the company's first listing on AIM in 1999 and the re-listing on the acquisition of the security business in 2002. He also acts as the part time finance director as well as being the chairman of Sidebell Limited.

Maldwyn Worsley-Tonks joined the Board in 2003 and has been the group's chief executive since 2007. Maldwyn has overseen the profitable development of the group. A former Lieutenant Colonel in the British Army, having commanded a regular Parachute Battalion, he has many years' experience in the security industry and is an expert in crisis contingency planning for businesses.

John Mocatta, who is a Chartered Accountant, is the company's senior non-executive director and joined the Board in 1999 to assist in the AIM listing and to be the independent voice of shareholders. He is a specialist in corporate finance and has previously been both an executive and a non-executive director of a number of public and private companies.

Lorraine Adlam joined the board in October 2014 as a non-executive Director. She has over thirty years' experience in the insurance sector in a variety of roles including CEO of a Lloyd's Underwriting business and Chairman of a Lloyd's Broker. She is also a non-executive director of Thompson, Heath and Bond Limited.

Micky Brigg joined the Board in May 2016 and has extensive knowledge and experience across the insurance industry with a particular focus on Asia, India and the Middle East and is a former head of RSA's operations for South-East Asia and India. He is an Associate of the Chartered Insurance Institute.

DIRECTORS' INTERESTS

The interests of the directors in the company's share capital, including shares held by companies controlled by the directors, were as follows:

	31 March 2016
		Ordinary shares of 1p each	Ordinary share options ^(iv)
S A Richards (i)		630,000	-
J E A Mocatta (ii)		650,000	-
M S H Worsley-Tonks		963,500	750,000
L Adlam		50,000	-

	1 April 2015
		Ordinary shares of 1p each	Ordinary share options ⁽ⁱⁱⁱ⁾	Ordinary share options ^(iv)
S A Richards (i)		630,000	-	-
J E A Mocatta (ii)		650,000	-	-
M S H Worsley-Tonks		963,500	500,000	750,000
L Adlam		50,000	-	-

(i) S A Richards is interested in the shares of Sidebell Limited, which held 13,889,250 ordinary shares of 1p each at 31 March 2016 (1 April 2015: 13,389,250 ordinary shares of 1p each).

S A Richards was also interested in the shares of Financial & General Securities Limited, which held no ordinary shares of 1p each at 31 March 2016 (1 April 2015: 440,000).

(ii) J E A Mocatta is also interested in 18,000 (1 April 2015: 12,000) ordinary shares held in trust for his granddaughter.

(iii) On 2 March 2010 options over ordinary shares of 1p each at a price of 8p per share were granted to M S H Worsley-Tonks. These options were exercised on 16 March 2016.

(iv) On 8 August 2012 options over ordinary shares of 1p each at a price of 10.5p per share were granted to M S H Worsley-Tonks. These options are exercisable between 8 August 2015 and 8 August 2018.

(v) J M Brigg held 3,475,000 shares at the date of his appointment and is interested in a further 4,981,500 shares held by EMIS.

SUBSTANTIAL SHAREHOLDINGS

The following shareholders had advised the company of holding an interest of 3 per cent or more in the issued ordinary share capital of the company at 9 May 2016:

	Number of ordinary shares of 1p each	Percentage of issued ordinary share capital
Sidebell Limited	13,889,250	28.07
J M Brigg and EMIS	8,456,500	17.09
Hargreave Hale Nominees	2,615,000	5.28
PFS Downing Active Management Fund	2,049,056	4.14
Barclays Wealth Management	1,963,181	3.97
Hargreaves Lansdown Nominees	1,855,268	3.75
Jarvis Investment Management	1,839,799	3.72
Pershing Nominees	1,670,100	3.38

DIRECTORS' AND OFFICERS LIABILITY INSURANCE

During the year the company has maintained insurance to indemnify the directors against potential claims arising from the performance of their duties.

RELATED PARTIES

The group considers that the Directors, their spouses and children and other companies or businesses of which the Directors, their spouses or children are either directors or principals, or both, are related parties. Full details of transactions with related parties are disclosed in note 28 to these accounts. The interests of related parties in the shares of the company are set out above.

CORPORATE SOCIAL RESPONSIBILITY

The group corporate social responsibility report is set earlier in the announcement.

EQUAL OPPORTUNITIES

The group endorses and supports the principles of equal employment opportunities. It is the policy of the group to provide equal employment opportunities to all qualified individuals, which ensures that all employment decisions are made, subject to legal obligations, on a non-discriminatory basis.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that the training, career development and promotion opportunities of disabled persons should, as far as possible, be identical with those of other employees.

PRODUCT DEVELOPMENT

The group invests in its products and services on a continuous basis to ensure that its offerings remain at the forefront of those on offer in the market place.

Suppliers' payment terms

It is the policy of the group to agree terms of payment with its suppliers when trading relationships are established, to ensure that the terms of payment are clear and to abide by the agreed terms, provided the suppliers meet their obligations. Payable days at 31 March 2016 were 15 (2015: 26) for the group and 44 (2015: 32) for the company.

FINANCIAL INSTRUMENTS

Details of the financial instruments of the company and its subsidiary undertakings are contained in note 29.

Employee participation

The group values the involvement of its employees and keeps them informed of matters affecting them and on the various factors affecting the performance of the group. Employees are encouraged to become shareholders in the company.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR

Each of the directors confirms that, so far as he is aware, there is no relevant audit information of which the company's auditor is unaware, and that he has taken all 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 company's auditor is aware of that information.

Auditor

A resolution proposing that RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP), Chartered Accountants, be appointed as auditor of the company will be put to the members at the Annual General Meeting. RSM UK Audit LLP has indicated its willingness to continue in office.

On behalf of the Board

J E A Mocatta

Secretary

27 June 2016

CORPORATE GOVERNANCE STATEMENT

The company is committed to high standards of corporate governance. The board is accountable to the company's shareholders for good corporate governance. The company has complied substantially throughout the period with the corporate governance guidelines for smaller quoted companies issued by the Quoted Companies Alliance and details are provided below.

Application of the Principles of Good Governance

At the year end, the Board consisted of two executive directors and two non-executive directors. Both non-executive directors are regarded as independent. The full Board met 11 times during the year (2015: 12) and receives appropriate information from management in advance of its meetings. Certain functions are delegated to Board Committees.

The Remuneration Committee is chaired by the senior independent non-executive director and consists of that director, the other non-executive director and the Chairman. Its key role is to make recommendations to the Board, within agreed terms of reference, on the Company's framework of executive remuneration and its cost and to determine on behalf of the Board specific remuneration packages for the Executive Directors.

The Audit Committee consists of the Chairman and the two non-executive directors, two of whom are Chartered Accountants. The Committee, which is chaired by the senior non-executive director, meets with the independent auditor to consider the group's financial reporting in advance of its publication.

The Board considers that its structure is appropriate to its present stage of development and that both non-executive directors are independent of the executives in both character and judgement.

Internal control

The Board has overall responsibility for ensuring that the group maintains a system of internal control to provide it with reasonable assurance regarding the reliability of information used within the business and for publication and that assets are safeguarded. There are inherent limitations in any system of internal control and, accordingly, even the most effective system can provide only reasonable, and not absolute, assurance with respect to the preparation of financial information and the safeguarding of assets.

The key features of the internal control system that operated during the year may be summarised as follows:

· Board responsibility for overall strategy and for approving budgets, forecasts and plans;

· Board and business heads participate in the annual strategic planning process which sets the framework for the budgets of individual business units;

· clear lines of authority, responsibility and financial accountability within each business unit, ensuring an appropriate organisational structure for planning, executing, controlling and monitoring its business operations;

· consideration and review by the Board of monthly management accounts which compare actual results with budgets and prior years' results;

· regular reporting of legal, accounting, human resources and health and safety developments and issues to the Board; and

· comprehensive accounting policies and regular reviews of compliance with those policies.

The Audit Committee reviews the operation and effectiveness of this framework on a regular basis and, on behalf of the Board, has reviewed the half yearly report and the annual financial statements along with the nature and scope of the external audit.

The directors consider that there have been no weaknesses in internal financial control that have resulted in any material losses, contingencies or uncertainties requiring disclosure in the group's financial statements.

RElations WItH SHAREHOLDERS

The Chairman and Chief Executive make themselves available to major shareholders on request and periodically attend meetings with and presentations to shareholders. The Annual General Meeting is normally attended by all directors and shareholders are invited to ask questions during the meeting and to meet with directors after the formal proceedings have ended.

Going concern

Having made enquiries, the directors have a reasonable expectation that the company and the group as a whole will have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts.

AUDITOR INDEPENDENCE

The Audit Committee undertakes a formal assessment of the external auditor's independence each year which includes:

· a review of non-audit services provided to the group and related fees;

· receipt from the auditor of a written report detailing relationships with the company and any other parties that could affect independence or the perception of independence;

· a review of the auditor's own procedures for ensuring independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

· obtaining written confirmation from the auditor that, in their professional judgement, they are independent.

An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in note 4 to the financial statements.

On behalf of the board

J E A Mocatta

Audit Committee Chairman

27 June 2016

Remuneration Report

The Remuneration Committee comprises J E A Mocatta, as Chairman, L Adlam and S A Richards.

Policy on remuneration of executive directors

The purpose of the Remuneration Committee is to consider all aspects of executive directors' remuneration and determine the specific remuneration packages of each of the executive directors and, as appropriate, other senior executives, ensuring that the remuneration packages are competitive within the service industry and reflect both group and personal performance.

The current remuneration packages of the executive directors consist of basic salary, share options and a discretionary bonus.

M S H Worsley-Tonks has a letter of appointment dated 1 April 2008, which is capable of termination by twelve months notice by either party.

S A Richards has a letter of appointment dated 23 September 2004, which is capable of termination by twelve months notice by either party.

Non-Executive DirectorS

The remuneration of the Non-Executive Directors is set by the Board as a whole.

J E A Mocatta, the senior non-executive director, has a letter of appointment dated 1 July 2015, which is capable of termination by the giving of six months notice on either side. These services were previously provided by John Mocatta & Co.

L Adlam has a letter of appointment dated 1 October 2014, which is capable of termination by six months notice by the company and at no notice by the director.

J M Brigg has a letter of appointment dated 9 May 2016, which is capable of termination by three months notice on either side.

Directors' remuneration

The emoluments of the individual directors, which comprise salaries or fees and bonus were as follows:

	2016
		Salary or fees £	Bonus £	Total £
S A Richards		92,500	9,250	101,750
J E A Mocatta		42,600	-	42,600
M S H Worsley-Tonks		145,000	21,750	166,750
L Adlam		24,480	-	24,480

		304,580	31,000	335,580

On 16 March 2016 M S H Worsley-Tonks exercised his option to subscribe for 500,000 Ordinary Shares of 1p each at a price of 8p per share, which were then placed at a price of 18p per share thereby realising a gain of £50,000.

Directors' remuneration

	2015
		Salary or fees £	Bonus £	Total £
S A Richards		90,700	13,600	104,300
J E A Mocatta		42,036	-	42,036
M S H Worsley-Tonks		133,900	26,800	160,700
L Adlam		12,000	-	12,000
D J Gill		5,015	-	5,015

		283,651	40,400	324,051

DIRECTORS' BENEFITS

None of the directors received any benefits in kind during the year or during the previous year, nor were any pension contributions made on behalf of any director in either year. On 1 August 2013 the group introduced a three times salary death in service benefit scheme of which the executive directors are members.

DIRECTORS' INTERESTS IN SHARES AND OPTIONS

The interests of the directors holding office at 31 March 2016 in the company's share capital, including share options and also including shares held by companies controlled by the directors, are shown in the directors' report on page 9 of the Annual Report and Accounts.

The Board believe that the direct participation in the equity of the company leads to a significant reduction in staff turnover and is an effective method of ensuring that the longer term interests of staff and shareholders coincide. In 2013 the Board set up an Employee Benefit Trust with the intention of empowering the Trust to acquire shares at appropriate opportunities to satisfy future staff share awards. At 31 March 2016 1,100,000 shares (2015: 1,050,000) had been acquired by the trust. In the coming year a new Enterprise Management Incentive Scheme is planned.

Executive directors, managers and staff will all be eligible to participate in the scheme after a minimum length of service and the Board envisage that the present system of discretionary cash bonuses will move to one where there is a short and long term element to the award, the former will continue to be paid in cash and the later by way of share options, under the EMI Scheme for those eligible.

The Board are pleased to note that at 31 March 2016 18 members of staff (2015: 20) were shareholders in the company.

J E A Mocatta

Remuneration Committee Chairman

27 June 2016

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report and the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare group and company financial statements for each financial year. The directors are required by the AIM Rules of the London Stock Exchange to prepare group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and have elected under company law to prepare the company financial statements in accordance with IFRS as adopted by the EU.

The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the group and the company and the financial performance of the group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period.

In preparing the group and company financial statements, the directors are required to:

a. select suitable accounting policies and then apply them consistently;

b. make judgements and accounting estimates that are reasonable and prudent;

c. state whether they have been prepared in accordance with IFRSs adopted by the EU;

d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the red24 plc website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

CONSOLIDATED INCOME STATEMENT	Notes	2016 £	2015 £

REVENUE	3	6,614,524	5,947,246
Cost of sales		(1,473,201)	(1,587,478)

Gross profit		5,141,323	4,359,768
Administrative expenses	4	(4,135,591)	(3,444,598)

OPERATING PROFIT before exceptional items		1,005,732	915,170

Exceptional items	5	(379,193)	162,034

OPERATING PROFIT		626,539	1,077,204

Finance income	7	15,497	13,211
Finance costs	8	(17,692)	(24,017)

PROFIT before tax	3	624,344	1,066,398

Tax charge	12	(147,592)	(178,240)

PROFIT FOR THE YEAR ATTRIBUTABLE TO THE OWNERS OF THE PARENT		476,752	888,158

Earnings per share
Basic	14	1.00 p	1.83 p
Diluted		0.99 p	1.82 p

CONSOLIDATED STATEMENT OF coMPREHENSIVE INCOME

	Notes	2016 £	2015 £
Profit for the year		476,752	888,158
Other comprehensive income for the year net of tax
Items that may be subsequently reclassified to profit or loss
Revaluation of property		53,610	19,184
Currency translation differences	25	(58,529)	(3,308)

Total comprehensive income for the year attributable to owners of the parent		471,833	904,034

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent	Share capital £	Share premium £	Other reserves £	Retained earnings £	Total £
Balance at 1 April 2014	489,834	223,652	57,397	2,936,454	3,707,337

Profit for the year	-	-	-	888,158	888,158
Revaluation of property	-	-	19,184	-	19,184
Currency translation differences	-	-	(3,308)	-	(3,308)

Total comprehensive income for the year	-	-	15,876	888,158	904,034

Transactions with owners
Own shares acquired	-	-	(121,586)	-	(121,586)
Share based payments	-	-	(12,130)	21,170	9,040
Dividends paid	-	-	-	(222,218)	(222,218)

Total transactions with owners	-	-	(133,716)	(201,048)	(334,764)


Balance at 31 March 2015	489,834	223,652	(60,443)	3,623,564	4,276,607

Profit for the year	-	-	-	476,752	476,752
Revaluation of property	-	-	53,610	-	53,610
Currency translation differences	-	-	(58,529)	-	(58,529)

Total comprehensive income for the year	-	-	(4,919)	476,752	471,833

Transactions with owners
Own shares acquired	-	-	(9,257)	-	(9,257)
Shares options exercised	5,000	35,000	(14,850)	14,850	40,000
Dividends paid	-	-	-	(249,128)	(249,128)

Total transactions with owners	5,000	35,000	(24,107)	(234,278)	(218,835)


Balance at 31 March 2016	494,834	258,652	(89,469)	3,866,038	4,530,055

COMPANY STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent	Share capital £	Share premium £	Other reserves £	Retained earnings £	Total £
Balance at 1 April 2014	489,834	223,652	54,100	1,436,573	2,206,159
Total comprehensive income for the year	-	-	-	423,835	423,835

Transactions with owners
Own shares acquired	-	-	(121,586)	-	(121,586)
Share based payments	-	-	(12,130)	21,170	9,040
Dividends paid	-	-	-	(222,218)	(222,218)

Total transactions with owners	-	-	(133,716)	(201,048)	(334,764)


Balance at 31 March 2015	489,834	223,652	(79,616)	1,661,360	2,295,230

Total comprehensive income for the year	-	-	-	423,255	423,255

Transactions with owners
Own shares acquired	-	-	(9,257)	-	(9,257)
Shares options exercised	5,000	35,000	(14,850)	14,850	40,000
Dividends paid	-	-	-	(249,128)	(249,128)

Total transactions with owners	5,000	35,000	(24,107)	(234,278)	(218,835)


Balance at 31 March 2016	494,834	258,652	(103,723)	1,850,337	2,500,100

BALANCE SHEETS
		Group	Group	Company	Company
		2016	2015	2016	2015
ASSETS	Notes	£	£	£	£
NON-CURRENT ASSETS Intangible assets	15	822,044	432,335	15,577	27,791
Property, plant & equipment	16	770,087	756,170	-	-
Investment in group companies	17	-	-	672,747	408,334
Deferred tax assets	19	51,806	51,315	41,500	38,100
Trade and other receivables	20	-	6,490	868,386	537,414

		1,643,937	1,246,310	1,598,210	1,011,639

Current assets
Trade and other receivables	20	1,417,978	905,501	232,388	212,899
Cash and cash equivalents	21	2,830,585	3,417,956	1,086,458	1,359,576

		4,248,563	4,323,457	1,318,846	1,572,475
Assets classified as held for sale	18	125,000	250,000	125,000	250,000

TOTAL ASSETs		6,017,500	5,819,767	3,042,056	2,834,114


capital and reserves Called up share capital	24	494,834	489,834	494,834	489,834
Share premium account	25	258,652	223,652	258,652	223,652
Other reserves	25	(103,723)	(79,616)	(103,723)	(79,616)
Revaluation reserves	25	14,254	19,173	-	-
Retained earnings	25	3,866,038	3,623,564	1,850,337	1,661,360

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT	25	4,530,055	4,276,607	2,500,100	2,295,230

NON-CURRENT LIABILITIES
Deferred tax liabilities	19	57,069	43,549	-	-
Borrowings	23	122,552	215,370	-	-

		179,621	258,919	-	-

CURRENT LIABILITIES
Trade and other payables	22	1,169,155	1,180,485	541,956	538,884
Corporation tax		124,177	86,350	-	-
Borrowings	23	14,492	17,406	-	-

		1,307,824	1,284,241	541,956	538,884

TOTAL EQUITY AND LIABILITIES		6,017,500	5,819,767	3,042,056	2,834,114

The accompanying notes are an integral part of these financial statements.

CASH FLOW STATEMENTS

		Group	Group	Company	Company
		2016	2015	2016	2015
	Notes	£	£	£	£
Cash generated from operating activities	26	59,093	1,642,496	(317,838)	441,640

Investing activities
Interest received		15,497	13,211	25,088	21,619
Dividend received		-	-	380,000	180,000
Investment in subsidiary		-	-	(264,413)	-
Held for sale investment		125,000	122,000	125,000	122,000
Purchase of intangibles		(90,010)	(217,020)	(2,570)	(19,305)
Purchase of property, plant & equipment		(106,439)	(46,017)	-	-
Purchase of subsidiary net of cash acquired		(195,242)	-	-	-

Net cash (used in)/generated from investing activities		(251,194)	(127,826)	263,105	304,314

Financing activities
Shares issued		40,000	-	40,000	-
Dividends paid		(249,128)	(222,218)	(249,128)	(222,218)
Interest paid		(17,692)	(24,017)	-	-
Purchase of own shares		(9,257)	(121,586)	(9,257)	(121,586)
Bank loans repaid		(64,751)	(19,651)	-	-

Net cash used in financing activities		(300,828)	(387,472)	(218,385)	(343,804)

Net (decrease)/increase in cash and cash equivalents	26	(492,929)	1,127,198	(273,118)	402,150
Cash and cash equivalents at the beginning of the year		3,417,956	2,302,577	1,359,576	957,426
Effect of foreign exchange rate changes		(94,442)	(11,819)	-	-

Cash and cash equivalents at the end of the year		2,830,585	3,417,956	1,086,458	1,359,576

The accompanying notes are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1 Accounting policies

(a) Basis of preparation

From 1 April 2007, the group and company have adopted International Financial Reporting Standards ("IFRS") and the International Financial Report Interpretations Committee ("IFRIC") interpretations as adopted by the European Union ("EU") in the preparation of its financial statements and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost basis, except for trade investments and land and buildings which have been measured at fair value.

The accounts are prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the directors have taken into account relevant available information about the future including profit and cash forecasts for the next two financial years and the assumptions on which they are based. After reviewing this information, the directors consider that it is appropriate to prepare the financial statements on a going concern basis.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the company and all of the entities controlled by the company (its subsidiaries) made up to 31 March each year. Control is obtained when the company has exposure or rights to the variable returns from the involvement in the investee entity and the ability to affect those returns through its power over the investee. The acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange of contracts. Costs directly attributable to the acquisition are expensed as incurred.

The results of subsidiaries sold or acquired are included in the consolidated income statement up to, or from, the date control passes. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The company has not presented its own income statement as permitted by Section 408 of the Companies Act 2006. The profit for the year was £423,255 (2015: £423,835).

Revenue represents the fair value of the consideration received or receivable in respect of services provided in the normal course of business, net of discounts, value added tax and other sales related taxes. Sales of services are recognised when the services have been provided, services invoiced in advance are treated as deferred income and income is accrued where services have been provided but not yet invoiced.

Interest income is accrued on a time-apportioned basis. Dividend income is accounted for when received.

(d) Cost of sales, gross profit and operating profit

Cost of sales represent the fair value of costs directly incurred in the supply of goods sold and services provided. Costs are recognised at the time when the goods have been supplied or the services have been provided. Costs relating to still to be provided services are carried forward in other receivables to the extent it is considered probable they will be recovered.

Gross profit is defined as revenue recognised less cost of sales.

Operating profit is arrived at after deducting all administrative expenses from gross profit, including restructuring and impairment costs, but before finance income and finance costs.

(e) Borrowing costs

All borrowing costs are recognised in the income statement in the period in which they are incurred. Interest costs are accrued on a time basis by reference to the principal outstanding at the effective interest rate applicable.

(f) Taxation

The tax credit or expense represents the sum of the current tax expense and deferred tax.

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the income statements because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using the applicable rate for the period the taxable profits are earned in.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. Deferred tax is charged or credited in the income statement, except where it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax is provided on temporary timing differences arising on investments in subsidiary companies, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.

(g) Intangible assets

Goodwill, being the excess of the cost of acquisition over the fair value of net assets, including any intangible assets identified, acquired, is capitalised. Goodwill is not amortised but is tested at least annually for impairment and carried at cost less accumulated impairment provisions.

Goodwill is allocated to cash generating units for the purpose of impairment testing. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, then any goodwill is considered to be impaired. Impairment losses recognised for goodwill are not reversed in subsequent periods.

The recoverable amounts of cash generating units are determined from value in use calculations. The group prepares cash flow forecasts from the most recent financial budgets approved by management. The cash flows are discounted at an appropriate interest rate, based on the likely cost of loan capital, to determine value in use.

Other intangible assets include intellectual properties and those intangibles identified in assessing the fair value of assets acquired in a business combination, including customer lists.

Intellectual properties, including computer software licences, training courses, websites and trademarks are capitalised at cost and are amortised on a straight-line basis over their estimated useful economic lives of between two and four years.

Identified, acquired intangibles, other than customer relationships, are amortised on a straight-line basis over their estimated useful economic lives, not exceeding ten years. Customer lists are amortised on a discounted cash flow basis over ten years.

(h) Investment

A trade investment is an entity over which the group does not have significant influence and that is neither a subsidiary, an associate nor a joint venture. Such investments are initially measured at fair value, to which transaction costs are added. Such assets are financial assets and any gain or loss arising on remeasurement is recognised in profit and loss.

(i) Property, plant & equipment and depreciation

Land and buildings held for use in the provision of services, or for administrative purposes, are initially valued at cost, including transaction costs. Subsequent to initial measurement land and buildings are revalued regularly and held in the balance sheet at the revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation. A gain or loss arising from a change in fair value is included in taken to a revaluation reserve in the period in which it arises.

Plant and equipment is valued at cost less accumulated depreciation and less provisions for impairment. Depreciation is provided at the following annual rates in order to write off each asset, on a straight-line basis, over its estimated useful life:

Buildings 3% per annum

Fixtures, fittings and equipment 16.67% to 50% per annum

Motor vehicles 20% per annum

The depreciation charge is time apportioned in the year of acquisition and disposal of assets. Freehold land is not depreciated.

(j) Product development

Product development is written off to the income statement as incurred unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

(k) Foreign currency translation

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position of each group company are expressed in sterling, which is the functional currency of the company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions expressed in currencies other than the entity's functional currency (foreign currencies) are translated at rates of exchange approximating to those ruling at the date of the transaction. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at rates ruling at the balance sheet date. Non monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the profit or loss before tax for the period.

In presenting the consolidated financial statements the assets and liabilities of the overseas subsidiary are translated at the rate ruling at the balance sheet date. The results of the overseas subsidiary have been translated at the average exchange rate ruling during the year. Differences arising on retranslation are added to or deducted from the group's translation reserve

(I) Financial assets

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as "Loans and receivables". These receivables are initially recognised at fair value and subsequently measured at their amortised cost using the effective interest rate method less any provision for impairment.

Financial assets are assessed for indications of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset have been impacted. For trade and other receivables the carrying amount is reduced by an allowance reflecting the impairment. When a trade receivable is uncollectible it is written off against the allowance, subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance are reflected in the income statement.

Cash and cash equivalents comprise cash in hand and on demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

(m) Financial liabilities and equity

Financial liabilities and equity 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 its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the transaction. At the date of issue the fair value of the liability is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or upon the instrument reaching maturity. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised in equity through other reserves and is not subsequently re-measured.

Other financial liabilities are initially measured at fair value, net of transaction costs, and subsequently at amortised cost using the effective interest method. Interest bearing bank loans and overdrafts together with obligations under finance leases are classified as "Borrowings".

(n) Net cash

Net cash is defined as the excess of cash and cash equivalents over borrowings.

(o) Investments

Non-current investments representing investments in subsidiary undertakings are valued at cost less any provision for impairment in the value of the investment.

Held-for-sale investments that do not have a quoted market price are held at fair value, where that can be reliably measured, otherwise they are held at cost less any identified impairment losses at the end of each reporting period.

(p) Dividends

Dividend payments are recognised as liabilities once they are appropriately authorised and no longer at the discretion of the company.

(q) Share based payments

The group issues equity-settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date is expensed on a straight line basis over the vesting period, based on the group's estimate of options that will eventually vest. Fair value is measured by use of the Black Scholes model. The assumptions underlying the number of awards expected to vest are subsequently adjusted to reflect conditions prevailing at the balance sheet date. At the vesting date of an award, the cumulative expense is adjusted to take account of the awards that actually vest.

(r) Leased assets and obligations

An asset is acquired when substantially all the risks and rewards are transferred and is capitalised as an asset under a finance lease with the corresponding liability to the finance company included in trade and other payables. Depreciation on assets held under finance leases is provided in accordance with the policy noted in (i) above. Finance lease payments are treated as consisting of capital and interest elements and the interest is charged to the income statement on a constant rate basis over the period of the agreement. Finance charges are charged directly to income. All other leases are operating leases.

Rentals receivable or payable under operating leases are credited or charged to the income statement on a straight line basis over the lease term.

(s) Adoption of new and revised standards

In the current financial year the group has adopted the following improvements to IFRSs which were effective for this financial period. These have had no material impact on the financial statements of the Group:

• IAS 19 'Employee benefits';

• Annual improvements to IFRS 2011-2013 Cycle;

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

• IAS 1 'Disclosure initiative';

• IAS 19 'Employee benefits';

• IAS 16 and IAS 38 'Acceptable methods of depreciation and amortisation'

• Annual Improvements to IFRS 2010-2014.

The directors do not anticipate that they will have a material impact on the financial statements.

2 Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are evaluated on a continual basis and are based on historical experience together with expectations of future events believed to be reasonable at the time. In considering the possible impairment of intangible assets and in recognising deferred tax assets, estimates of future revenues are particularly critical. The directors have prepared forecasts of revenues and expenses covering the next two financial years to assist in the making of estimates and judgements.

In the process of applying the group's accounting policies, which are described in note 1, the directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements.

Estimation uncertainty - Intangible assets

The group depends on its intangible assets to generate revenue and invests to develop and maintain those assets. New intangible assets are recognised on the balance sheet and tested annually for impairment, as described further in note 15. Estimates supporting these impairment tests are based on future revenue projections and discount rates and are inherently uncertain.

The group recognises acquired intangible assets acquired as part of a business combination at fair value at the date of acquisition. The determination of those fair values and the useful economic life of those assets is based upon management's judgement and includes assumptions on the timing of future cash flows to be generated by those assets.

In addition management must assess the value of contingent consideration that is due to the seller following the completion of the initial purchase. The value of this is based upon the future financial performance of the acquired business. Hence management must assess the likely value of this performance to place a value on this consideration. Actual post-completion performance may vary from this estimate.

3 Revenue and segment analysis

The group recognises five streams of revenue (2015: four) each of which is supported by the Crisis Response Management Centre (CRM) in Cape Town. The Chief Operating Decision Maker which is deemed to be the group board of directors, receives reports of revenue and cost of sales by revenue stream but it is considered neither desirable nor practical to allocate the administrative overheads to those revenue streams.

The following tables provide details of revenue and gross profit for each revenue stream:

Revenue Stream			31 March 2016
	Travel assistance	Special Risks		Consultancy & response	Investigations	Product Safety	Consolidated
	£	£		£	£	£	£
Revenue	2,062,546	1,648,254		614,698	910,073	1,378,953	6,614,524

Gross profit	2,002,095	1,104,520		297,300	713,269	1,024,139	5,141,323

Administrative expenses							(4,135,591)

Operating profit before exceptional items							1,005,732
Exceptional items							(379,193)

Operating profit							624,344
Finance income							15,497
Finance expense							(17,692)

Profit before tax							624,344
Tax charge							(147,592)

Profit after tax							476,752

Revenue Stream	31 March 2015
	Travel assistance	Special Risks	Consultancy & response	Product Safety	Consolidated
	£	£	£	£	£
Revenue	2,192,504	1,595,008	1,143,468	1,016,266	5,947,246

Gross profit	2,116,679	1,197,888	363,008	682,193	4,359,768

Administrative costs					(3,444,598)

Operating profit before exceptional items					915,170
Exceptional items					162,304

Operating profit					1,077,204
Finance income					13,211
Finance expense					(24,017)

Profit before tax					1,066,398
Tax charge					(178,240)

Profit after tax					888,158

The group's operations are located in the United Kingdom, in Singapore, South Africa and in the USA. The following tables provide an analysis of the group's sales by location of customer, irrespective of the origin of the services, and a geographical analysis of the location of segment assets and additions to property, plant and equipment and intangible assets.

Geographic segment		Revenue	Revenue	Segment assets	Segment assets	Segment liabilities	Segment liabilities
		2016	2015	2016	2015	2016	2015
		£	£	£	£	£	£
	United Kingdom	2,325,249	2,832,560	3,643,269	4,172,484	982,952	1,056,372
	Rest of Europe	990,386	471,844	-	-	-	-
	South Africa	24,433	37,447	1,490,124	1,628,882	290,052	465,296
	United States of America	2,250,188	1,821,225	14,787	18,401	97,754	21,492
	Rest of the World	1,024,268	784,170	869,420	-	116,687	-

		6,614,524	5,947,246	6,017,500	5,819,767	1,487,445	1,543,160

The following tables provide details of capital expenditure and amortisation by geographic segment:

Intangible assets
Geographic segment		Capital expenditure	Capital expenditure	Amortisation	Amortisation
		2016	2015	2016	2015
		£	£	£	£
	United Kingdom	81,867	217,020	92,033	55,878
	South Africa	8,143	-	8,300	8,226
	Singapore	414,955	-	51,097	-

		504,965	217,020	151,430	64,104

Property, plant & equipment
Geographic segment		Capital expenditure	Capital expenditure	Amortisation	Amortisation
		2016	2015	2016	2015
		£	£	£	£
	United Kingdom	54,160	4,836	2,897	5,216
	South Africa	35,605	41,181	46,553	27,994
	Singapore	16,129	-	7,916	-
	United States	545	-	87	1,545

		106,439	46,017	57,453	34,755

No (2015: Two) customer accounted for more than 10% of group revenue. In 2015 a distributor accounted for 14.0% and the client for whom we carried out a major response also accounted for 14.0% of group revenue.

4 Administrative expenses	2016 £	2015 £
Staff costs	2,737,256	2,220,578
Other administrative costs	1,130,724	1,053,391
Amortisation of intangible assets	103,984	64,104
Depreciation of property, plant and equipment	57,453	34,755
Operating lease rentals - land and buildings	99,066	65,591
- equipment	7,108	6,179

Total administrative expenses	4,135,591	3,444,598


Fees payable to the auditor for the audit of the company and group annual accounts	21,350	16,850
Audit of the company's subsidiaries pursuant to legislation	16,650	18,150
Fees payable to the auditor and their associates for other services:
Other services pursuant to legislation	2,300	1,800
Fees payable for the audit of the South African subsidiaries	11,050	12,001
Fees payable to the auditor's associates for other services	23,858	13,524

Fees payable to other auditors of overseas subsidiaries	3,077	-

5 Exceptional items

Exceptional items are those which, in the management's judgement, need to be disclosed separately by virtue of their size or incidence in order for the reader to obtain a proper understanding of the financial information.

Exceptional charges/(credits)	2016 £	2015 £
Foreign currency movements	167,170	(103,482)
Prior year refund of sales taxes	-	(58,552)
Surplus of assets acquired over consideration paid (note 6)	(5,851)	-
Provision for vendor earnout on acquisition	170,428	-
Amortisation of acquired intangibles	47,446	-

	379,193	(162,034)

The impact of foreign currency movements on our results between 2015 and 2016 are sufficiently material that, in the opinion of the directors, it is necessary to separately analyse these to enable a proper understanding of the financial information to be obtained.

6 Acquisitions

On 1 July 2015 the Company acquired the entire share capital of RISQ Worldwide Holdings Pte. Ltd an investigations business based in Singapore. The initial cash consideration was £259,425 (SGD 550,000) with further contingent consideration of up to £826,320 (SGD 1,600,000) payable depending on the profit before tax for the three years to 30 June 2018. One of the contingent events is the continued involvement of the vendor, as such IFRS3 - Business Combinations requires the entire consideration to be treated as remuneration. The directors' best estimate of the amount of consideration likely to be payable for the year to 31 March 2016 is £170,428 and this has been provided for and is included in exceptional charges.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out below:

			Fair value £
Intangible assets			414,955
Property, plant and equipment			13,048
Deferred tax liability			(9,914)
Trade and other receivables			213,894
Cash and cash equivalents			64,184
Trade and other payables			(430,891)

Fair value acquired			265,276
Cash consideration paid			259,425

Surplus of assets acquired over consideration paid			5,851

Acquisition related costs of £19,127 have been expensed in the current year.

7 Finance income	2016 £	2015 £
Bank and other interest receivable	15,497	13,211

8 Finance costs	2016 £	2015 £
Interest on bank loans and overdrafts	17,692	24,017

9 Employees	2016 Number	2015 Number
(a) Average monthly number of employees of the group, including executive directors, during the year:
Consultants and sales	7	6
Office and management	84	78

	91	84

	2016 £	2015 £
(b) Staff costs including executive directors: Wages and salaries	2,484,897	2,002,207
Social security costs	120,808	124,729
Pension and medical benefits	131,551	84,602
Share based payments	-	9,040

Employee costs in administrative expenses	2,737,256	2,220,578
Provision for earn out - exceptional item (note 5)	170,428	-

	2,907,684	2,220,578

10 Share based payments

The company has issued share options, none of which are subject to performance conditions, to certain directors and employees. The options cannot be exercised in the first three years following their grant and, under normal circumstances, the options lapse if an employee leaves the group.

On 2 March 2010, the company granted 500,000 options to subscribe for ordinary shares of 1p each under the company's executive share option scheme, exercisable at 8p per share; these were exercised on 16 March 2016.

On 8 August 2012 the company granted 750,000 options to subscribe for ordinary shares of 1p each under the company's executive share option scheme, exercisable at 10.5p per share at any time between 8 August 2015 and 8 August 2018.

At 31 March 2016 750,000 outstanding options are exercisable (2015: 1,250,000) at a weighted average exercise price of 10.5p (2015: 9.5p).

The total charge recognised in administration expenses in the income statement from share based transactions, all equity-settled, amounted to £Nil (2015: £9,040).

The following movement took place in the year:

	2010 Series	2012 Series	Total
At 1 April 2015	500,000	750,000	1,250,000
Exercised during the year	(500,000)	-	(500,000)

At 31 March 2016	-	750,000	750,000

The following movements took place in the previous year:

	2010 Series	2012 Series	Total
At 1 April 2014	500,000	750,000	1,250,000
Exercised during the year	-	-	-

At 31 March 2015	500,000	750,000	1,250,000

11 Directors' emoluments

The total emoluments of the directors, who are considered to be the key management personnel, were as follows:

	2016	2015
	£	£
Salaries, fees and bonuses	335,580	324,051
Social security costs	41,918	32,562
Share based payments	-	9,040

	377,498	365,653

Bonus payments were made to the executive directors during the year, and for the previous year, based on a percentage of annual salary, as shown in the remuneration report. The executive directors are members of the group death in service scheme. Other than that, the directors received no benefits in kind during the year or during the previous year, nor were any pension contributions made on behalf of any director in either year. Details of the highest paid director are shown in the remuneration report and details of the directors' interests in share options are given in the directors' report.

12 Taxation

(a) Analysis of income tax charge for the year

	2016 £	2015 £
Current tax
United Kingdom	124,129	58,409
- adjustments to prior periods	(29,036)	(789)

	95,093	57,620
Overseas	51,840	97,482

	146,933	155,102
Deferred tax:
United Kingdom	(9,400)	35,360
Overseas	10,059	(12,222)

	147,592	178,240

(b) Factors affecting the income tax charge for the year

The charge for the year can be reconciled to the profit per the income statement as follows:

2016

2015

Profit before taxation

624,344

1,066,398

Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20% (2015: 21%)	124,869	223,944
Effects of:
Permanent differences	42,768	(15,057)
Temporary differences	13,422	3,043
Utilisation of tax losses not previously recognised in deferred tax	(46,381)	(54,308)
Tax losses not recognised in deferred tax	30,580	-
Adjustments to prior periods	(29,036)	(789)
Difference in overseas tax rates	11,370	21,407

Income tax charge	147,592	178,240

The company has capital losses for tax purposes at 31 March 2016 of £605,994 (2015: £605,994) available to carry forward against future capital gains and excess management expenses of £643,245 (2015: £882,917), subject to acceptance by H M Revenue & Customs.

The group and the company have potential deferred tax assets not included in the financial statements as recovery is not sufficiently certain, calculated at a corporation tax rate of 18% (2015: 20%), as follows:

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Tax losses carried forward:
Capital losses	109,079	121,199	109,079	121,199
Management expenses	78,416	138,500	78,416	138,500
Trading losses	27,522	-	-	-
Non-current asset temporary differences	-	1,042	-	-

	215,017	260,741	187,495	259,699

The potential deferred tax asset in respect of trading losses is recoverable against future profits from the same trade.

13 Dividends per share	2016	2015
The following dividends per share were paid by the group:
Interim dividend	0.25p	0.23p


The following dividends per share are proposed by the group:
Final dividend	0.30p	0.27p

The interim dividend for 2016 was paid on 25 February 2016 at a total cost of £119,708 (2015: paid on 24 February 2015 at a total cost of £110,247).

The payment of the final dividend remains discretionary until paid. The final proposed dividend for 2016 of 0.30p per share (2015: 0.27p) was not recognised at the year end and will be paid on 16 September 2016 subject to authorisation by shareholders at the Annual General Meeting. The final dividend for 2015 was paid on 18 September 2015 at a total cost of £129,420.

14 Earnings per share	2016	2015
Attributable profit for the year (£)	476,752	888,158

Weighted average number of ordinary shares in issue for the purposes of basic earnings per share	47,939,844	48,477,670
Effect of dilutive potential ordinary shares on exercise of options	397,650	434,410

Weighted average number of ordinary shares in issue for the purposes of diluted earnings per share	48,337,494	48,912,080

Earnings per share
Basic earnings per share (pence)	1.00p	1.83p

Diluted earnings per share (pence)	0.99p	1.82p


Adjusted earnings per share
Attributable profit for the year (£)	476,752	888,158
Exceptional items, net of tax	379,193	(162,034)

Adjusted attributable profit for the year from continuing operations (£)	855,945	726,124

Adjusted earnings per share
Basic earnings per share (pence)	1.79p	1.50p

Diluted earnings per share (pence)	1.77p	1.49p

15 Intangible assets
Group	Goodwill £	Intangibles identified on acquisition £	Other intangible assets £	Total £
Cost
At 1 April 2014	137,556	-	249,809	387,365
Foreign currency adjustment	-	-	(1,053)	(1,053)
Additions	-	-	217,020	217,020

At 1 April 2015	137,556	-	465,776	603,332
On acquisition (note 6)	-	414,955	-	414,955
Foreign currency adjustment	-	38,973	(6,007)	32,966
Additions	-	-	90,010	90,010
Disposals	-	-	(1,946)	(1,946)

At 31 March 2016	137,556	453,928	547,833	1,139,317

Amortisation and impairment
At 1 April 2014	-	-	107,259	107,259
Foreign currency adjustment	-	-	(366)	(366)
Amortisation charge for the year	-	-	64,104	64,104

At 1 April 2015	-	-	170,997	170,997
Foreign currency adjustment	-	-	(3,208)	(3,208)
Amortisation charge for the year	-	47,446	103,984	151,430
Disposals	-	-	(1,946)	(1,946)

At 31 March 2016	-	47,446	269,827	317,273

Carrying amount
At 31 March 2016	137,556	406,482	278,006	822,044

At 31 March 2015	137,556	-	294,779	432,335

At 1 April 2014	137,556	-	142,550	280,106

The carrying amount of goodwill had been allocated as follows: special risks £137,566. Other intangible assets

arising on acquisition represent customer relationships, operating licences, supply networks and systems.

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Charges for amortisation and impairment of goodwill and other intangible assets are included within administrative expenses, except for amortisation of intangibles recognised on acquisition, which is shown as an exceptional item.

The recoverable amounts of the cash generating units are determined from value in use calculations. The group prepares cash flow forecasts from the most recent financial budgets approved by management. The cash flows are then discounted at an appropriate interest rate to determine value in use.

The forecast cash flows for the next two years, taking forecast revenues, based upon historical experience, and anticipated expenditure are then discounted at a rate of ten percent per annum to arrive at a recoverable amount for each cash generating unit. This shows that each cash generating unit has a recoverable amount in excess of the carrying value of goodwill and that no charge for impairment in necessary.

The key assumptions are those regarding discount rate, growth rates, expected sales and direct costs during the period. Growth forecasts are based on the experience of the past three years. The discount rate applied is based on the cost of loan capital.

Company	Intellectual Property £	Total £
Cost
At 1 April 2014	48,356	48,356
Additions	19,305	19,305

At 31 March 2015	67,661	67,661
Additions	2,570	2,570

At 31 March 2016	70,231	70,231

Amortisation and impairment
At 1 April 2014	26,588	26,588
Amortisation charge for the year	13,282	13,282

At 31 March 2015	39,870	39,870
Amortisation charge for the year	14,784	14,784

At 31 March 2016	54,654	54,654

Carrying amount
At 31 March 2016	15,577	15,577

At 31 March 2015	27,791	27,791

At 1 April 2014	21,768	21,768

At 31 March 2016 the group had capital commitments of £69,125 (2015: £20,008).

16 Property, plant & equipment
Group	Land and buildings £	Other fixed assets £	Fixtures, fittings and equipment £	Total £
Cost At 1 April 2014	633,219	3,425	226,220	862,864
Foreign currency adjustment	(15,009)	(81)	(4,014)	(19,104)
Additions	-	-	46,017	46,017
Revaluation	19,184	-	-	19,184
Disposals	-	-	(3,737)	(3,737)

At 1 April 2015	637,394	3,344	264,486	905,224
Foreign currency adjustment	(87,605)	(459)	(23,831)	(111,895)
On acquisition of subsidiary	-	-	56,002	56,002
Additions	-	-	106,439	106,439
Revaluation	38,893	-	-	38,893
Disposals	-	-	(40,750)	(40,750)

At 31 March 2016	588,682	2,885	362,346	953,913

Depreciation At 1 April 2014	-	2,713	116,782	119,495
Foreign currency adjustment	-	(64)	(1,646)	(1,710)
Charge for the year	-	334	34,421	34,755
Disposals	-	-	(3,486)	(3,486)

At 1 April 2015	-	2,983	146,071	149,054
Foreign currency adjustment	-	(410)	(9,758)	(10,168)
On acquisition of subsidiary	-	-	42,954	42,954
Charge for the year	14,717	288	42,449	57,454
Revaluation	(14,717)	-	-	(14,717)
Disposals	-	-	(40,750)	(40,750)

At 31 March 2016	-	2,862	180,966	183,826

Carrying amount At 31 March 2016	588,682	24	181,380	770,087

At 31 March 2015	637,394	361	118,415	756,170

At 1 April 2014	633,219	712	109,438	743,369

The depreciation has been charged to administrative expenses.

The group's freehold property was valued on 21 January 2016 by Pears Property Group, Cape Town, independent valuers, at Rand 11,436,000 compared to its historic cost of R 11,135,165.

17 Investment in group companies Investments in subsidiary companies:	Company £
Cost At 1 April 2014 and 31 March 2015	1,927,338
Additions	264,413

At 31 March 2016	1,927,338

Impairment provisions
At 1 April 2014 and 31 March 2015 and 31 March 2016	1,519,004

Net book amount
At 31 March 2016	672,747

At 1 April 2014 and 31 March 2015	408,334

The subsidiary companies at 31 March 2016 and their activities during the year were:

Held directly:	Country of incorporation	% of ordinary share capital held	Activity
red24 Operations Limited	UK	100%	Crisis management services
red24 CRM (Pty) Limited	South Africa	100%	Crisis management services
red24 Sales Limited	UK	100%	Dormant
red24 Inc	USA	100%	Crisis management services
Red24 Asia Pacific Pte. Ltd	Singapore	100%	Holding company
RISQ Worldwide Pte. Ltd	Singapore	100%	Investigations
RISQ Worldwide HK Limited	Hong Kong	100%	Investigations
Green 24 Limited	UK	100%	Environmental assistance
Silvermine Properties (Pty) Limited	South Africa	100%	Property ownership
The red24 Employees' Share Trust	Jersey	100%	Employee equity participation

The company's investment in red24 CRM (Pty) Limited includes R1,300,000 5% convertible redeemable cumulative preference shares of R1 each. The company has waived its right to the dividend due on these shares up to 31 March 2016. For the year to 31 March 2016 this would have amounted to R65,000 (£3,175).

Each year the company reviews the carrying value of the investment in each subsidiary against the amount estimated to be recoverable from that subsidiary, if recovery is not reasonably foreseeable then the investment is considered impaired and a charge made.

18 Available-for-sale financial assets

Linx International Limited ("Linx"), a company incorporated in England & Wales, was the company's sole trade investment. Linx offers security consulting services and also acts as the holding company of a group that provides security management training, both in the United Kingdom and overseas. At 31 March 2014 the group held a 25% stake in the equity of Linx and that stake was held directly by the parent company. On 12 August 2014 the company agreed to sell down its holding in Linx in three equal instalments at a fixed price of £125,000 per instalment. At the 31 March 2016 the group holds 8.33% of the equity in Linx but is contracted to sell it on 12 August 2016. The directors expects this to happen on or before the due date and the investment is considered as held for sale.

The movements on the investment in the consolidated financial statements is shown below:

		£
Fair value at date of acquisition		372,000

At 31 March 2014		372,000
Sold during the year		(122,000)

At 31 March 2015		250,000
Sold during the year		(125,000)

At 31 March 2016		125,000

19 Deferred tax

The deferred tax assets and liabilities represent the following:

	Group			Company
	Total £	Tax losses carried forward £	Temporary differences £		Tax losses carried forward £
At 1 April 2014	30,898	35,800	(4,902)		35,800
Foreign currency adjustment	6	-	6		-
Income statement (charge)/credit	(23,138)	2,300	(25,438)		2,300

At 1 April 2015	7,766	38,100	(30,334)		38,100
Liability acquired (note 6)	(9,914)	60,425	(70,339)		-
Foreign currency adjustment	(2,456)	4,639	(7,095)		-
Income statement (charge)/credit	(659)	(10,019)	9,360		3,400

At 31 March 2016	(5,263)	93,145	(98,408)		41,500


Assets	51,806	41,500	10,306		41,500
Liabilities	(57,069)	51,645	(108,714)		-

	(5,263)	93,145	(98,408)		41,500

The deferred tax assets recognised in respect of tax losses carried forward represent £41,500 (2015: £38,100) relating to UK companies and £51,645 relating to overseas companies. Tax losses, which may be carried forward indefinitely, are recoverable against future profits from the same trade and in the country in which they were incurred.

20 Trade and other receivables

	Group		Company
Current assets:	2016 £	2015 £	2016 £	2015 £
Trade receivables (i)	910,207	716,554	-	-
Provisions for impairment (ii)	(8,262)	(44,115)	-	-

	901,945	672,439	-	-
Due from subsidiary undertakings (iii)	-	-	185,169	166,851
Other receivables	111,050	36,738	9,949	10,010
Prepayments and accrued income	404,983	196,324	37,270	36,038

	1,417,978	905,501	232,388	212,899

Non-current assets:
Due from subsidiary undertakings (iii)	-	-	868,386	557,414
Provisions for impairment (ii)	-	-	-	(20,000)

Net amount due from subsidiary undertakings (iii)	-	-	868,386	537,414
Other receivables	-	6,490	-	-

	-	6,490	868,386	537,414

(i) The average credit period on sales of services is 50 days (2015: 43 days). Trade receivables over 60 days at the balance sheet date are provided for on estimated irrecoverable amounts. The carrying value of trade and other receivables is considered to be the same as their fair value.

Included in trade receivables are receivables with a carrying amount of £630,854 (2015: £339,560) that are designated in foreign currencies, of which £347,633 (2015: £253,569) are designated in US dollars and £283,221 (2015: £85,991) in other currencies.

Included in the group's trade receivables are debtors with a carrying amount of £169,207 (2015: £127,192) which are overdue at the balance sheet date for which the group has not provided as there has not been a significant change in credit quality and the group believes that these amounts are still recoverable. The group does not hold any collateral over these balances. The ageing of amounts past due but not impaired is as follows:

	2016 £	2015 £
60-90 days	118,099	88,756
90-120 days	-	6,337
120+ days	11,088	-

	129,187	95,093

At the balance sheet date only one customer who owed £202,000 (2015: £112,000) accounted for more than 10% of the balance due to the group in trade and other receivables.

(ii) Movement in the allowances against trade and other receivables:

	Group		Company
	Trade receivables		Due from subsidiary undertakings
	2016 £	2015 £	2016 £	2015 £
Balance at 1 April	44,115	28,953	20,000	60,000
(Decrease)/increase in provision	(35,853)	15,162	-	-
Release of provision to income statement	-	-	(20,000)	(40,000)

Balance at 31 March	8,262	44,115	-	20,000

(iii) With the exception of the loan made to Silvermine Properties (Pty) Ltd to purchase the property the amounts due from subsidiary companies are unsecured and interest to 31 March 2016 has been waived. There are no fixed terms for repayment. £274,271 (2015: £236,914) was due to the company from Silvermine Properties (Pty) Ltd and this loan is denominated in Rand and bears interest at 10.5% per annum.

21 Cash and cash equivalents

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Cash and cash equivalents	2,830,585	3,417,956	1,086,458	1,359,576

Cash and cash equivalents comprise cash held in short-term bank deposits with a maturity of three months or less. The carrying amount of these assets approximated to their fair value. Repatriation of funds to the UK is subject to South African exchange control legislation; at 31 March 2016 £612,872 (2015: £686,209) was held with banks in South Africa.

22 Trade and other payables due within one year

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Trade payables	118,149	193,140	39,636	42,846
Due to subsidiary companies	-	-	243,908	385,813
Other taxation and social security	75,728	116,805	13,359	10,825
Accruals and deferred income	975,278	870,540	245,053	99,400

	1,169,155	1,180,485	541,956	538,884

The average credit period taken on purchases of services is 15 days (2015: 26 days). The carrying value of trade and other payables is considered to be the same as their fair value.

Included in group trade payables are payables with a carrying amount of £45,427 (2015: £80,826) that are designated in foreign currencies, of which £30,944 (2015: £72,747) are designated in US dollars and £31,310 (2015: £8,079) in other currencies.

23 Borrowings

Due within one year	Group		Company
Due within one year	2016 £	2015 £	2016 £	2015 £
Bank loan	14,492	17,406	-	-

	14,492	17,406	-	-


Due after more than one year	Group		Company
Due after more than one year	2016 £	2015 £	2016 £	2015 £
Bank loan	122,552	215,370	-	-

	122,552	215,370	-	-

The carrying value of borrowings is considered to be the same as their fair value.

The loan is secured by a fixed charge over the land and buildings of Silvermine Properties (Pty) Limited. The loan is being repaid by fixed instalments of R62,650 (£3,005) (2015: R62,650 - £3,491) per calendar month; the fixed instalments are inclusive of interest. The interest charged on the loan is 2.75% per annum over the prime rate of Standard Bank of South Africa.

24 Share capital

Authorised
Number of shares	Number	£
Ordinary shares of 1p each
At 1 April 2014 and 31 March 2015 and 2016	75,000,000	750,000

issued & Fully paid
Number of shares	Number	£
At 1 April 2014 and 31 March 2015	48,983,355	489,834
Issued during the year	500,000	5,000

At 31 March 2016	49,483,355	494,834

25 Other reserves

	Group
	Revaluation reserve £	Translation reserve £	Own share reserve £	Share option reserve £	Total £

1 April 2014	-	3,297	-	54,100	57,397
Own shares purchased	-	-	(121,586)	-	(121,586)
Share based payments	-	-	-	9,040	9,040
Adjustments for lapsed share based payments	-	-	-	(21,170)	(21,170)
Revaluation of property	19,184	-	-	-	19,184
Exchange difference on translation of overseas operations	-	(3,308)	-	-	(3,308)

31 March 2015	19,184	(11)	(121,586)	41,970	(60,443)
Own shares purchased	-	-	(9,257)	-	(9,257)
Share options exercised	-	-	-	(14,850)	(14,850)
Revaluation of property	53,610	-	-	-	53,610
Exchange difference on translation of overseas operations	(2,742)	(55,797)	-	-	(58,529)

31 March 2016	70,052	(55,798)	(130,843)	27,120	(89,469)

	Company
	Own share reserve £	Share option reserve £	Total £
1 April 2014	-	54,100	54,100
Own shares purchased	(121,586)	-	(121,586)
Share based payments	-	9,040	9,040
Adjustments for lapsed based payments	-	(21,170)	(21,170)

1 April 2015	(121,586)	41,970	(79,616)
Own shares purchased	(9,257)	-	(9,257)
Share options exercised	-	(14,850)	(14,850)

31 March 2016	(130,843)	27,120	(103,723)

The revaluation reserves comprise the translation reserve and the reserve arising from the adjustment to fair value of group property. The translation reserve arises from currency differences arising on the retranslation of foreign currency balances as explained in accounting policy 1(k); there is no tax effect.

The share option reserve represents the cumulative amount charged to the income statement in respect of the company's share options as set out in note 8 and the own share reserve represents the cost of shares acquired by the Employee Benefit Trust which held 1,100,000 shares at 31 March 2016 (2015: 1,050,000).

The share premium reserve records the premium above the par value of the shares paid on the issue of shares by the company, less the costs of the issue of shares.

Retained earnings is the balance of profit retained by the group and company and is the company's distributable reserve.

26 Notes to the cash flow statement

Cash generated from operating activities

	Group	Group	Company	Company
	2016	2015	2016	2015
Operating activities	£	£	£	£
Profit before tax	624,344	1,066,398	423,255	423,835
Adjustments for:
Finance income	(15,497)	(13,211)	(405,088)	(201,619)
Finance costs	17,692	24,017	-	-
Depreciation and amortisation	208,883	98,859	14,784	13,282
Share based payments	-	9,040	-	9,040
Exchange losses/(gains)	19,241	14,160	-	-
Income tax paid	(115,089)	(222,967)	-	-
(Increase)/decrease in receivables	(319,885)	355,547	(353,861)	(78,656)
(Decrease)/increase in payables	(360,596)	310,653	3,072	275,758

Cash generated from/(consumed by) operating activities	59,093	1,642,496	(317,838)	441,640

27 Operating lease commitments

At 31 March 2016 the group was committed to making minimum lease payments under non-cancellable operating leases as follows:

	Group
	Office equipment		Land and buildings
	2016	2015	2016	2015
	£	£	£	£
Within one year	1,580	1,148	168,698	34,918
Between one and two years	-	1,148	180,685	-
Between two and five years	-	-	338,100	-

	1,580	2,296	687,483	34,918

Operating leases represent rental payments payable by the group for its UK office property and items of office equipment. The average contractual life of these leases is three years. One property lease extends to March 2026, with a rent review in March 2021, otherwise the rents are fixed.

28 Related party transactions

Since 1 January 2005, the company has paid Sidebell Limited amounts for the use of Sidebell's offices and the use of accountancy services. S A Richards, a director of the company, has a minority interest in the share capital of Sidebell Limited. In the year to 31 March 2016, these amounts were £2,000 per month, totalling £24,000 (2015: £24,000). The balance due to Sidebell Limited at 31 March 2016 was £Nil (2015: £Nil).

The directors' report sets out the interests of the directors in the share capital of the company; the director's received the same dividends per share as other shareholders. In addition all the directors hold share options under the group's share option scheme and these are also disclosed in that report.

Refer to the remuneration report, and note 9, for further details of the remuneration of key management who are also the directors of the company.

During the year the company entered into the following transactions with its subsidiaries:

	2016 £	2015 £
Management charges receivable	780,000	852,000
Dividends receivable	380,000	180,000
Licence fee receivable	120,000	120,000
Amounts owed by subsidiaries at year end	868,386	557,414
Amounts owed to subsidiaries at year end	243,908	385,813

The management charges reflect a charge to partly recover the time of the group directors and the cost of central services such as administrative offices, the conduct of the audit and the maintenance of professional insurances.

As shown in note 20, impairment provisions totalling £Nil (2015: £20,000) have been made against the amounts shown as due from subsidiaries in the table above.

29 Financial instruments and risk summary

(a) Financial risk policies and objectives

The group's financial instruments comprise cash and cash equivalents, trade and other receivables, trade and other payables, and loans. Details of the significant accounting policies in relation to these financial assets and liabilities are disclosed in note 1 to the financial statements.

All financial assets are categorised as loans and receivables as follows:

	Group		Company
Non-current financial assets:	2016 £	2015 £	2016 £	2015 £
Trade and other receivables	-	6,490	868,386	537,414

	-	6,490	868,386	537,414

Current financial assets:
Trade and other receivables	1,012,995	709,177	195,118	176,861
Cash and cash equivalents	2,830,585	3,417,956	1,086,458	1,359,576

	3,843,580	4,127,133	1,281,576	1,536,437

Total	3,843,580	4,133,623	2,149,962	2,073,851

All financial liabilities are categorised at amortised cost as follows:

	Group		Company
Current financial liabilities:	2016 £	2015 £	2016 £	2015 £
Trade and other payables	118,149	193,140	496,903	428,659
Accruals	465,324	350,948	-	-
Bank loan	14,492	17,406	-	-

	597,965	561,494	496,903	428,659

Non-current financial liabilities:
Bank loan	122,552	215,370	-	-

Total	720,517	776,864	496,903	428,659

The Board's principal objective in managing its financial assets and liabilities is to ensure that the operating units have sufficient working capital for their day-to-day needs. Surplus cash is maintained on call deposits with the clearing bankers to the operating units, as the group is not yet sufficiently cash generative to warrant a separate treasury function or take advantage of greater returns that may be available from other sources or maturities. The group does derive income in overseas currencies, principally the US dollar, and does incur expenses in overseas currencies, principally the staff costs of its overseas in South Africa, Singapore and the United States.

At 31 March 2016 the group had no forward currency commitments. At the previous year end the group had purchased R5 million forward for sterling at a rate of R17.90:£1 and R5 million forward for dollars at a rate of R11.36: $1 exercisable at any time between 1 April 2015 and 30 September 2015; the fair value of the financial liability is immaterial to the financial statements.

(b) Capital risk management

The directors consider the company's capital comprises its share capital and reserves and bank and other loans. In general the group finances its operations from equity share issues and from the retention of profits. To ensure that equity markets remain open to the group as a source of capital, the market price of the group's shares is regularly reviewed by the Board, to check it remains above par value. The group's investment in South Africa includes the property there; this purchase was financed through a combination of retained earnings and locally sourced bank finance to act as a hedge against country and currency risk. The acquisition of RISQ is dependent on an earn out denominated in Singapore dollars and this represents a currency risk.

The group has six overseas subsidiaries whose functional currencies are not sterling and which do not generate sufficient local currency revenue to cover their operating costs, which are predominantly in their functional currency. In addition the group undertakes sale and purchase transactions denominated in foreign currencies, principally US dollars and euros, hence exposures to exchange rate fluctuations arise. The carrying amount of the group's foreign currency denominated financial assets and financial liabilities at the reporting date is as follows:

	Assets		Liabilities
	2016 £	2015 £	2016 £	2015 £
Rand	433,768	545,554	233,167	236,644
Dollar	922,817	881,291	30,944	72,747
Other currencies	487,203	91,004	30,919	6,621

	1,843,788	1,517,849	295,030	316,012

The company's only exposure to foreign currencies is the intercompany loan to Silvermine Properties of £274,271 (2015: £236,914) which is denominated in Rand. All other transactions are in sterling; though the earn-out consideration on the acquisition of RISQ, which is a contingent liability is denominated in Singapore dollars.

The group's exposure to the Rand is such that were the Rand to appreciate by 10% against sterling the cost of its operations in South Africa would rise by £149,566 (2015: £147,905), this would be mitigated by a rise in the value in the group's Rand assets, principally the office building, of £99,385 (2015: £115,613).

The Singapore dollar is RISQ's functional currency and the majority of its revenues are denominated in US dollars; were the Singapore dollar to appreciate by 10% against the US dollar then the cost of the operation there would rise by £106,957.

The group's exposure to the euro arises from sales to and purchases from Eurozone countries and is such that were the euro to depreciate by 10% against sterling profit would be reduced by £65,234 (2015: £70,308).

The group's exposure to the US dollar arises both from dollar denominated sales and purchases and from the operating expenses of the US subsidiary. Such that were the dollar to depreciate by 10% against sterling gross profit would be reduced by £178,183 (2015: £80,314) but this would be mitigated by a reduction in operating costs of £49,969 (2015: £24,681).

The Board are aware that these are significant risks and the impact of currency movements on earnings cannot be reliably forecast and remains an area of uncertainty.

(d) Market risk

The group's activities expose it to the financial risks of changes in foreign currency exchange rates (see section (c)) and interest rates (see section (g)). As explained above, the group has, for the present, accepted exposure to these risks.

(e) Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which regularly reviews the short, medium and long term funding and liquidity requirements. As a general principle the board consider that equity remains the most appropriate source of funds for the business and endeavours to maintain access to equity capital markets to fund medium and long term liquidity requirements. However, where significant overseas investments are contemplated an evaluation of currency, country and other risk factors are taken into account and opportunities to finance a proportion of that investment locally will be considered. Financial assets are maintained on short term deposit to assist with the management of day-to-day working capital requirements.

(f) Fair value of financial instruments

There is no material difference between the fair value and carrying value of financial assets and liabilities.

(g) Interest rate risk

The group has financial assets of £3,843,580 at 31 March 2016 (2015: £4,113,623) comprising cash deposits and trade and other receivables. Trade and other non-interest bearing receivables have been excluded from the following tables as they are non-interest bearing.

The interest rate profile of the group's financial assets, excluding trade and other receivables was:

Group	Floating rate deposits 2016 £	Average rate 2016	Floating rate deposits 2015 £	Average rate 2015
Currency
Sterling	1,792,134	0.1%	2,294,485	0.1%
Rand	307,880	6%	491,826	6%
United States Dollar	539,912	0%	614,145	0%
Euro	119,391	0%	17,500	0%
Singapore Dollar	71,268	0%	-	-

	2,830,585		3,417,956

Company
Sterling	1,086,458	0.1%	1,359,576	0.1%
Rand	274,271	10.5%	236,914	9%

	1,360,729		1,596,490

The group has financial liabilities of £720,517 (2015: £776,864).

The interest rate profile of the group's financial liabilities, excluding trade and other payables, at 31 March 2016 was:

Group	Floating rate liabilities £	Fixed rate liabilities £	Total financial liabilities £	Average rate of floating rate liabilities
Currency
Rand bank loan	137,044	-	137,044	10.5%

The interest rate profile of the group's financial liabilities, excluding trade and other payables, at 31 March 2015 was:

Group	Floating rate liabilities £	Fixed rate liabilities £	Total financial liabilities £	Average rate of floating rate liabilities
Currency
Rand bank loan	232,776	-	232,776	9.0%

The following table details the remaining contractual maturity for the group's financial liabilities. The table is based on the earliest date on which the group can be required to pay. The table includes both principal cash flows and interest, or an estimate of interest for floating rate instruments and excludes trade and other payables as the contractual maturities are all due within one year of the balance sheet date.

Group	Due within one year	Due in one to two years	Due in two to five years	Due in over five years	Total
2016	£	£	£	£	£
Floating rate bank loan	28,197	28,197	84,593	51,696	192,683
- Average rate 10.5%
	28,197	28,197	84,593	51,696	192,683


2015	£	£	£	£	£
Floating rate bank loan	41,902	41,902	125,706	118,723	328,233
- Average rate 9.0%
	41,902	41,902	125,706	23,266	328,233

(h) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. The group has a credit policy of only dealing with creditworthy counterparties as a means of mitigating this risk. The group's exposure to credit risk is monitored on a monthly basis and remedial action taken where appropriate.

The group endeavour to ensure a spread of customers to avoid the risks associated with concentration of credit. At the balance sheet date one customer accounted for 22.2 % (2015: 15.6%) of the group's trade and other receivables, no other customer accounted for more than 10%. These receivables are within their trading terms but nonetheless present an ongoing risk. The group is endeavouring to mitigate this risk by gaining new customers at a faster rate than business with these two counterparties develops.

The group's maximum exposure to credit risk on its financial assets is £3,843,580, (2015: £4,133,623). For the company its maximum exposure, excluding amounts due from subsidiaries, is £1,096,407 (2015: £1,369,586). The group does not hold any collateral against these financial assets.

30 Contingent liabilities

As explained more fully in note 6, the group and the company has a contingent liability in respect of the deferred consideration payable following the acquisition of RISQ Worldwide Holdings Pte. Ltd. The amount payable is dependent on performance of that business but could amount to a maximum of SGD1,600,000 (£826,300) and relates to the three years to 30 June 2018.

The company has a contingent liability in respect of the value added tax of certain subsidiary companies under a group registration and is therefore jointly and severally liable for all the other group companies' debt in this respect. At 31 March 2016 the maximum potential liability was £29,515 (2015: £90,871).

DIRECTORS

S A Richards, MA MSc FCA (Executive Chairman)

M S H Worsley-Tonks MBE (Chief Executive Officer)

L Adlam (Non-Executive Director)

J M Brigg (Non-Executive Director)

J E A Mocatta, MA FCA (Non-Executive Director)

SECRETARY

J E A Mocatta, MA FCA

REGISTERED OFFICE:	ADMINISTRATIVE OFFICE:

Third Floor Centenary House 69 Wellington Street Glasgow G2 6HG	The Coach House Bill Hill Park Wokingham Berkshire RG40 5QT



NOMINATED ADVISER AND BROKER:	BANKERS:

finnCap Limited 60 New Broad Street London EC2M 1JJ	HSBC Bank plc 26-28 Broad Street Reading Berkshire RG1 2BU



REGISTRARS:	SOLICITORS:

Capita Registrars PXS 34 The Registry Beckenham Kent BR3 4TU	Field Seymour Parkes LLP 1 London St Reading RG1 4QW



INDEPENDENT AUDITOR:

RSM UK Audit LLP Chartered Accountants 25 Farringdon Street London EC4A 4AB

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR AKODDABKDNAB

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Final Results

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