Annual Financial Report

RNS Number : 3589C
Ross Group PLC
30 April 2012
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Final Results

 

 

Ross Group plc is pleased to file final audited accounts for the year ended 31st December 2011.

A full review for the year is included within the accounts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                                          

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                   Report of the Directors and

 

                                         Consolidated Financial Statements for the Year Ended 31 December 2011

 

                                                                                                         for

 

                                                                               Ross Group Plc & Subsidiaries


Ross Group Plc & Subsidiaries

 

 

 

 

 

 

Contents of the Consolidated Financial Statements

for the Year Ended 31 December 2011

 

 

 

 

                                                                                                                  Page

 

Company Information  

1

 

Chairman's statement  

2

 

Operating and Financial Review  

3

 

Report of the Directors  

4

 

Corporate Governance Statement  

8

 

Directors' Remuneration Report  

 

11

 

Corporate Social Responsibility  

 

12

 

Report of the Independent Auditors  

13

 

Consolidated Income Statement  

15

 

Consolidated Statement of Comprehensive Income 

16

 

Consolidated Statement of Financial Position 

17

 

Company Statement of Financial Position 

18

 

Consolidated Statement of Changes in Equity 

19

 

Company Statement of Changes in Equity 

20

 

Consolidated Statement of Cash Flows  

21

 

Company Statement of Cash Flows  

22

 

Notes to the Statements of Cash Flows  

23

 

Notes to the Consolidated Financial Statements 

24

 


Ross Group Plc & Subsidiaries

 

Company Information

for the Year Ended 31 December 2011

 

 

 

 

 

 

 

                                DIRECTORS:                                         W L Hopkins

                                                                                                   B Pettitt

                                                                                                   M J Simon

                                                                                                   S C Mehta

 

 

 

 

 

 

SECRETARY:

M J Simon

 

 

 

 

 

                                REGISTERED OFFICE:                        35 Paul Street

                                                                                                   London

                                                                                                   EC2A 4UQ

 

 

 

 

 

                                REGISTERED NUMBER:                     00131902 (England and Wales)

 

 

 

 

 

                                AUDITORS:                                            Everett & Son

                                                                                                   Chartered Accountants & Statutory Auditors

                                                                                                   35 Paul Street

                                                                                                   London

                                                                                                   EC2A 4UQ


ROSS GROUP PLC & SUBSIDIARIES

 

CHAIRMAN'S STATEMENT

for the Year Ended 31 December 2011

 

 

 

RESULTS

 

 

Dear Shareholders,



I am pleased to report on the business activities and financial results of the Group for the financial year ended 31 December 2011



It has been a year of continued progress towards our stated strategy of achieving long-term financial stabilisation of the business while also exploring several potential acquisitions or strategic alliances.

 

Whilst this has been our initial aim since the new management came into the Group at the end of 2008 it has, however, always been the prime objective to try to provide the best value for our shareholders and, in this respect, we have actively decided to pursue specific opportunities in mining, mineral resources and energy-related supply chain management services.



Concurrently, we have ensured that sufficient existing profitable business was being closed to fund all the necessary business research and development activities, such that the Group companies could fulfil their financial obligations in a timely and professional manner. 



In each of the previous two years, prior to these set of results, the Group have reported a small modest profit on the providing of specific supply chain management services and the underlying operational performance of the business is not in any material way different from those previous two years, showing a operating profit of £ 2,000 for 2011.



Nevertheless, as we approach the end of this financial, fully focused on research and negotiation, we are now beginning to close in on an appropriate significant proposal to be recommended to our shareholders and, as a result, the Board feels it now an appropriate time to structure the Group Balance Sheet to be as deal-ready as possible in preparation for such an event. As a result, certain items of costs, which have been increasingly incurred over the last two years both in connection with the setting up possible future alliances and trade business, initially recorded in the accounts as an investment in such projects, have now been duly written-off during the year. In total, these sums amount to £ 343,000 and are therefore the reason for a net loss of £ 341,000 

  

The Board is satisfied with the progress made during 2011 and very much looks forward with confidence to 2012 to ensure the next phase of future development and growth for the Group.

 

Once again, I would very much like to thank the elected Board of Directors, employees, contractors and consultants for all their excellent support, commitment and hard work in helping the Group achieve its aims.  I would also like to personally thank our extraordinary loyal and long-suffering shareholders for their continued patience and understanding.

 

 

 

 

 

Barry Richard Pettitt

Chairman & Chief Executive Officer

30 April 2012


ROSS GROUP PLC & SUBSIDIARIES

 

OPERATING AND FINANCIAL REVIEW

for the Year Ended 31 December 2011

 

 

 

Business Review

 

 

 

The Group at 31 December 2011 consisted of Ross Group plc, and two wholly owned subsidiaries Sansui Electronics (UK) Ltd and San Gain Limited, a corporation registered in Hong Kong. 

 

The main focus of the Board during 2011 continued to be the safe custodianship of the Group and its businesses, engaging in a modest degree of low-risk trading,  sufficient to fund the activities the  group directors who were actively researching and negotiating  new global trading and acquisition opportunities for Ross Group plc.

 

To this end,  just as in 2010, we concluded a small number of supply-chain deals in the Far East via San Gain; in addition,  there was a disposal of certain trademark assets in the UK.  Consequently,  our turnover figure for the year is broadly comparable to that of 2010 and 2009.

 

As noted in the Chairman's statement, the Board decided during the year to write down a  number of deal-project investments,  and this has resulted in a loss being recognised in the 2011  profit and loss account.  The Directors are confident that the underlying value of the Group as a whole has not been diminished by this.

 

 

 

Business Outlook

 

The Board is confident that the outlook for the Group will only be enhanced by developments currently being researched and negotiated,  which we believe will result in significant improvements  to the structure and operation of the business.


ROSS GROUP PLC & SUBSIDIARIES

 

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

 

 

 

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2011.

 

PRINCIPAL ACTIVITY

 

The Group has two operating subsidiaries which concentrate on the following activities:

           - The distribution of consumer electronic branded products through Sansui Electronics (UK) Limited.

           - The distribution of consumer electronic branded products and complementary supply chain management

             services through San Gain Industrial Company Limited.

 

 

STRATEGY

 

Sansui Electronics (UK) Ltd and San Gain Industrial Company Limited continue to conduct and seek business in both consumer electronics trading, sales agency and supply chain management activities.  These trading activities were profitable during the year and contributed to the group results.

 

As noted in the Chairman's statement, the Group's management continued throughout 2011 in its efforts to actively seek out new  business opportunities. Various projects have presented themselves and are currently under active research and consideration.  The Board is confident that these will lead to increased profitability and shareholder value in the future.

 

The Group is also continuing in its pursuing of plans to establish subsidiaries in certain overseas countries, with a view to expanding its business infrastructure geographically across the World.

 

 

 

REVIEW OF BUSINESS

 

The results for the year and financial position of the company and the group are as shown in the annexed financial statements and detailed in the Operating and Financial Review.

 

 

 

DIVIDENDS

 

No dividends will be distributed for the year ended 31 December 2011.

 


ROSS GROUP PLC & SUBSIDIARIES

 

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

 

 

DIRECTORS

 

 

B R Pettitt (Chief Executive Officer)

Barry Richard Pettitt, aged 52, was appointed to the board on 22 December 2008 as the CEO of the Group and elected as its Chairman and CEO on 28 April 2009. He has more than 30 years experience within the consumer electronics industry, during which time he successfully started a specialist supply chain management services company, ISO International (Holdings) Ltd., which was subsequently purchased by a Hong Kong Public Company for HK$ 155,000,000 in 2003. In addition, he has managed a number of Public Company divisions (in the capacities of President and Managing Director) and recently successfully relisted a Hong Kong Public Company, Vision Tech Ltd., as its CEO in 2007. Through Premier Consultants Ltd., a specialist consulting company, of which he was a founding member and has specialised primarily in working with major consumer electronics and electrical Public Companies, usually all being based in Hong Kong; where he has resided since 1990.  Prior to that, he was the joint Managing Director of Ross Consumer International Ltd. and a main board director of the Ross Group (formerly Ross Consumer Electronic plc) in 1988/89 after which he has continued to be a shareholder in Ross Group for the last 20 years.

 

 

M J Simon (Non Executive Director)

Michael Jonathan Simon, aged 53, was reappointed to the board on 29 April 2009. He is an economics graduate from the University of Cambridge and a fellow of the Institute of Chartered Accountants in England and Wales and also of the Association of Chartered Certified Accountants.  Mr Simon is in a partnership in public practice and a non-executive director of several other companies.

 

 

W L Hopkins (Executive Director)

 Wade Lionel Hopkins, aged 63, was appointed to the board 22 December 2009. He has over 35 years of experience in both Consumer Electronics and the Electronic Components Industry.  He has previously worked for the Ross Group as Managing Director of a subsidiary, Britimpex, in 1988/90.

 

 

S C Mehta (Executive Director)

Shashi Mehta, aged 53, was appointed to the Board 22 December 2009. He holds a BSc (Hons) in Manufacturing and has had a distinguished career in a variety of industrial and manufacturing trouble-shooting roles.  He brings a wealth of experience and expertise to the Group. He spent many years working for the Ford Motor Company, and was Operations Manager in Ross Consumer Electronics during the 1980's.

 

 

 

 

GROUP'S POLICY ON PAYMENT OF CREDITORS

It is the policy of the company that it and each of its subsidiaries should agree appropriate terms and conditions for its transactions with suppliers (by means ranging from standard written terms to individually negotiated contracts) and that payment should be made in accordance with those terms and conditions, provided that the supplier has also complied with them.

 

 

FINANCIAL INSTRUMENTS

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

 

 

 

EMPLOYEE INVOLVEMENT

Currently the directors are the only employees.

 


ROSS GROUP PLC & SUBSIDIARIES

 

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

 

 

DIRECTORS INTERESTS

Directors

 

The directors had no interests in contracts of significance with the company.

 

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

 

The total number of shares controlled by Barry Pettitt, directly and indirectly through Prime Growth Enterprises Limited, Vidacos Nominees and Premier Consultants Limited, at the date of this report was 37,835,702 (25.26%).

 

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

 

 

No. of Ordinary Shares


% of Issued Share Capital


Michael Simon

 

624,302


0.42%


Wade Hopkins

 

92,962


0.06%


 

Substantial shareholdings

 

As at 31st December 2011 the following were registered as being materially interested in 3% or more of the company's issued share capital, or being a related shareholder:

 

 

No. of Ordinary Shares


% of Issued Share Capital


Keniworth Capital Limited

 

40,000,000


26.70%


Prime Growth Enterprises Limited

 

30,567,555


20.41%


Escalating Investments Limited

 

22,200,720


14.82%


Partner Plus Limited

 

 6,809,096


4.55%


 

 





 

 





 

 





Barry Pettitt had the following interest through his nominees:

Vidacos Nominees

 

3,636,359


2.43%


Premier Consultants Limited

 

3,404,548


2.27%


 

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

 

Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors are required to prepare the Group the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and have chosen to prepare the parent company financial statements under IFRSs as adopted by the EU. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period.  In preparing these financial statements, International Accounting Standard 1 requires the directors to:

 

-

select suitable accounting policies and then apply them consistently;

-

present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-

make judgements and accounting estimates that are reasonable and prudent;

-

provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

-

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

 


ROSS GROUP PLC & SUBSIDIARIES

 

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

DIRECTORS' RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

 

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

 

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

 

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

 

AUDITORS

The auditors, Everett & Son, will be proposed for re-appointment at the forthcoming Annual General Meeting.

 

 

ON BEHALF OF THE BOARD:

 

 

 

 

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

M J Simon - Secretary

 

 

30 April 2012

 




ROSS GROUP PLC & SUBSIDIARIES

 

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

 

 

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

 

 

Application Of The Principles Of The Combined Code

 

The Board

There is an effective and appropriately constituted board which in the year under review consisted of four directors. The Chief Executive, Mr Pettitt who is normally based overseas, also serves as Chairman and during 2011 was supported by three other directors: W L Wade and M J Simon, both appointed in April 2009, and S C Mehta appointed in December 2009.  Mr Simon has acted as Company Secretary since April 2009. 

 

The non-executive director Mr Simon is considered to be independent as there are no circumstances or relationships as described by Code provision A.3.1 which apply to his appointment. The Group's definition of a non-executive director is one who considers the interest of all the shareholders and this is demonstrated during the board meetings.  At the time of writing,  the Board is  actively engaged in a process of selecting  an individual with the appropriate experience and skill to serve as a second  non-executive director on the Board.

 

Board Procedure

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

 

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

 

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

 

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

 

 

Attendance

Board meetings are held regularly throughout the year.  Due to the location of the directors, the meetings are often held electronically.

 

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

 

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

 


ROSS GROUP PLC & SUBSIDIARIES

 

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

 

 

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

 

Internal audit and control

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

 

Financial Reporting

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

 

Quality and Integrity of Personnel

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

 

Capital Investment

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

 

Professional Advice

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

 

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

 

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

 


ROSS GROUP PLC & SUBSIDIARIES

 

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

 

 

Going Concern

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

 

External Audit and Audit Committee

The Audit Committee during 2011 was comprised of the non-executive director, Mr Simon, as well as Executive Directors Mr Mehta and Mr Wade.  It met periodically to review the adequacy of the Group's internal control systems, accounting policies, corporate governance policies and compliance with applicable accounting standards and to consider the appointment of the external auditors and to review their fees. Everett & Son is invited to attend these meetings. The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and obtain external professional advice as is necessary.

 

 

By order of the Board

 

 

 

 

Barry Richard Pettitt
Chairman & Chief Executive Officer

30 April 2012

 



ROSS GROUP PLC & SUBSIDIARIES

 

DIRECTORS' REMUNERATION REPORT

for the Year Ended 31 December 2011

 


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

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

The Company policy during the restructuring period throughout 2011 was to pay directors only a nominal £1 salary.  This policy will be reconsidered as occasion arises and as the new business opportunities open to the Group are realised. The directors feel it would be inappropriate to take any reward until then.

 

B R Pettitt

Chairman/

Chief Executive

£1

Nil

Nil

£1

£1

M J Simon

 

Non executive director

£1

Nil

Nil

£1

£1

W L Hopkins

Executive

Director

£1

Nil

Nil

£1

£1

S C Mehta

Executive

Director

£1

Nil

Nil

£1

£1

J C Broadley

Non executive director

 

(resigned 31/12/2010)

Nil

Nil

Nil

Nil   (resigned)

£1

Total


£4

Nil

Nil

£4

£5

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

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

 

 

ROSS GROUP PLC & SUBSIDIARIES

 

CORPORATE SOCIAL RESPONSIBILITY (CSR)

for the Year Ended 31 December 2011

 


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

 

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

 

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

 

Employees

During 2011 the only employees of the company were its directors. However, as the new business opportunities planned in 2010 begin to be realised in 2012 and beyond, this will not remain the case.

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

The health and safety of the employees is paramount to the company. Staff will be issued with data sheets on the handling of any substances which might be toxic and will be trained in the correct procedures to follow. The company has a Health and Safety committee where any potential issues can be raised.

 

Environment

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

Customers

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

Local Community

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

 

Commitment

 

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

 


Report of the Independent Auditors to the Members of

Ross Group Plc & Subsidiaries

 

We have audited the financial statements of Ross Group Plc for the year ended 31 December 2011 which comprise the Group and Parent Company Statements of Financial Position, the Group Income Statement, the Group Statement of Comprehensive Income, the Group and Parent Company Statements of Cash Flow, the Gorup and Parent Company Statement of Changes in Equity and the related notes 1 to 21. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

 

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of directors and auditors

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

 

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements.  If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

 

Opinion on financial statements

In our opinion:

-

the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2011 and of the group's loss for the year then ended;

-

the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

-

the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

-

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006and as regards to the group financial statements, Article 4 of the IAS Regulation.

 

Emphasis of matter - going concern

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 1 to the financial statements concerning the Group's ability to continue as a going concern.  The Group's total liabilities exceeded its total assets by £6.47 million.  This condition, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern.  However, the Chairman has pledged his personal support to cover the overheads of the Group up to 31 December 2013.  The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

 

Opinion on other matter prescribed by the Companies Act 2006

In our opinion:

-

the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

-

the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

 


Report of the Independent Auditors to the Members of

Ross Group Plc & Subsidiaries

 

 

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

 

Under the Companies Act 2006 we are required to report to you if, in our opinion:

-

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-

the parent company financial statements are not in agreement with the accounting records and returns; or

-

certain disclosures of directors' remuneration specified by law are not made; or

-

we have not received all the information and explanations we require for our audit.

 

Under the Listing Rules we are required to review:

-

the directors' statement, set out on page six, in relation to going concern; and

-

the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review; and

-

certain elements of the report to shareholders by the Board on directors' remuneration.

 

 

 

 

 

Jonathan N Cross FCA (Senior Statutory Auditor)

for and on behalf of Everett & Son

Chartered Accountants & Statutory Auditors

35 Paul Street

London

EC2A 4UQ

 

Date:  30th April 2012


Ross Group Plc & Subsidiaries

 

Consolidated Income Statement

for the Year Ended 31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                              Notes                                                     £'000                                                  £'000

 

CONTINUING OPERATIONS

Revenue                                                                    2                                                          100                                                     113

 

 

Other operating income                                          3                                                            90                                                          -

Administrative expenses                                                                                                   (547)                                                      15




OPERATING (LOSS)/PROFIT                                                                                       (357)                                                    128

 

Finance costs                                                                                                                         16                                                      (13)

 




 

(LOSS)/PROFIT BEFORE INCOME TAX

5

(341)

115

 

Income tax                                                                 6                                                               -                                                          -




(LOSS)/PROFIT FOR THE YEAR                                                                                 (341)                                                    115




(Loss)/profit attributable to:

Owners of the parent                                                                                                         (341)                                                    115




 

Earnings per share expressed

in pence per share:                                                  8

Basic                                                                                                                                    -0.23                                                    0.08

Diluted                                                                                                                                 -0.23                                                    0.08





Ross Group Plc & Subsidiaries

 

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                                                                                             £'000                                                  £'000

 

(LOSS)/PROFIT FOR THE YEAR                                                                                 (341)                                                    115

 

OTHER COMPREHENSIVE INCOME                                                                                -                                                          -

 




 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(341)

                                    115

 




 

 

Total comprehensive income attributable to:

Owners of the parent                                                                                                         (341)                                                    115





Ross Group Plc & Subsidiaries

 

Consolidated Statement of Financial Position

31 December 2011

 

                                                                                                                                          31.12.11                                             31.12.10

                                                                              Notes                                                     £'000                                                  £'000

ASSETS

CURRENT ASSETS

Trade and other receivables                                11                                                            62                                                     190

Cash and cash equivalents                                  12                                                              2                                                         5




                                                                                                                                                  64                                                     195




TOTAL ASSETS                                                                                                                   64                                                     195




EQUITY

SHAREHOLDERS' EQUITY

Called up share capital                                          13                                                     11,149                                                11,136

Share premium                                                        14                                                       2,535                                                  2,317

Other reserves                                                        14                                                     15,384                                                15,384

Retained earnings                                                  14                                                    (35,534)                                             (35,193)




TOTAL EQUITY                                                                                                             (6,466)                                               (6,356)




LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables                                    15                                                       6,288                                                  6,288




CURRENT LIABILITIES

Trade and other payables                                    15                                                          229                                                     248

 

Financial liabilities - borrowings

16

                                                            13

                               15

 




 

                                                                                                                                                242                                                     263




TOTAL LIABILITIES                                                                                                     6,530                                                  6,551




TOTAL EQUITY AND LIABILITIES                                                                                64                                                     195




 

 

The financial statements were approved by the Board of Directors on 26th April 2012 and were signed on its behalf by:

 

 

 

Barry Richard Pettitt

Director

 

 

 

Shahshank Mehta

Director

 


Ross Group Plc & Subsidiaries

 

Company Statement of Financial Position

31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                              Notes                                                     £'000                                                  £'000

ASSETS

CURRENT ASSETS

Trade and other receivables                                11                                                            16                                                     194

Cash and cash equivalents                                  12                                                              2                                                         4




                                                                                                                                                  18                                                     198




TOTAL ASSETS                                                                                                                   18                                                     198




EQUITY

SHAREHOLDERS' EQUITY

Called up share capital                                          13                                                     11,149                                                11,136

Share premium                                                        14                                                       2,535                                                  2,317

Other reserves                                                        14                                                     30,938                                                30,938

Retained earnings                                                  14                                                    (50,543)                                             (50,188)




TOTAL EQUITY                                                                                                             (5,921)                                               (5,797)




LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables                                    15                                                       2,278                                                  2,278




CURRENT LIABILITIES

Trade and other payables                                    15                                                       3,661                                                  3,717




TOTAL LIABILITIES                                                                                                     5,939                                                  5,995




TOTAL EQUITY AND LIABILITIES                                                                                18                                                     198




 

 

The financial statements were approved by the Board of Directors on 26 April 2012 and were signed on its behalf by:

 

 

 

 

 

Barry Richard Pettitt - Director

 


Ross Group Plc & Subsidiaries

 

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2011

 

 

                                                                            Called up                Profit

                                                                               share                 and loss                 Share                  Other                   Total

                                                                              capital                 account              premium             reserves                equity

                                                                                  £'000                     £'000                    £'000                    £'000                     £'000

 

Balance at 1 January 2010                               11,136                 (35,308)                   2,317                  15,384                   (6,471)

 

Changes in equity

Total comprehensive income                                       -                        115                            -                            -                        115

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2010                          11,136                 (35,193)                   2,317                  15,384                   (6,356)

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

Issue of share capital                                                 13                            -                       218                            -                        231

Total comprehensive income                                       -                      (341)                           -                            -                      (341)

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2011                          11,149                 (35,534)                   2,535                  15,384                   (6,466)

 

 

 

 

 

 

 

 

 

 


Ross Group Plc & Subsidiaries

 

Company Statement of Changes in Equity

for the Year Ended 31 December 2011

 

 

                                                                            Called up                Profit

                                                                               share                 and loss                 Share                  Other                   Total

                                                                              capital                 account              premium             reserves                equity

                                                                                  £'000                     £'000                    £'000                    £'000                     £'000

 

Balance at 1 January 2010                               11,136                 (50,047)                   2,317                  30,938                   (5,656)

 

Changes in equity

Total comprehensive income                                       -                      (141)                           -                            -                      (141)

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2010                          11,136                 (50,188)                   2,317                  30,938                   (5,797)

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

Issue of share capital                                                 13                            -                       218                            -                        231

Total comprehensive income                                       -                      (355)                           -                            -                      (355)

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2011                          11,149                 (50,543)                   2,535                  30,938                   (5,921)

 

 

 

 

 

 

 

 

 

 


Ross Group Plc & Subsidiaries

 

Consolidated Statement of Cash Flows

for the Year Ended 31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                              Notes                                                     £'000                                                  £'000

Cash flows from operating activities

Cash generated from operations                           1                                                         (264)                                                        6

Interest paid                                                                                                                            16                                                      (13)




Net cash from operating activities                                                                                   (248)                                                      (7)




 

Cash flows from financing activities

Loan repayment                                                                                                                      (2)                                                        -

Amount introduced by directors                                                                                         16                                                          -

Share issue                                                                                                                            231                                                          -




Net cash from financing activities                                                                                     245                                                          -




 

 




 

Decrease in cash and cash equivalents

(3)

(7)

Cash and cash equivalents at beginning of year


2


5


12

 




 

Cash and cash equivalents at end of year

2

2

5

 




 


Ross Group Plc & Subsidiaries

 

Company Statement of Cash Flows

for the Year Ended 31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                              Notes                                                     £'000                                                  £'000

Cash flows from operating activities

Cash generated from operations                           1                                                         (265)                                                        5

Interest paid                                                                                                                            16                                                      (13)




Net cash from operating activities                                                                                   (249)                                                      (8)




 

Cash flows from financing activities

Amount introduced by directors                                                                                         16                                                          -

Share issue                                                                                                                            231                                                          -




Net cash from financing activities                                                                                     247                                                          -




 

 




 

Decrease in cash and cash equivalents

(2)

(8)

Cash and cash equivalents at beginning of year


2


4


12

 




 

Cash and cash equivalents at end of year

2

2

4

 




 


Ross Group Plc & Subsidiaries

 

Notes to the Statements of Cash Flows

for the Year Ended 31 December 2011

 

1.

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

 

             Group

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             (Loss)/profit before income tax                                                                                                        (341)                      115

             Creditor balance written back                                                                                                                 -                      (185)

             Finance costs                                                                                                                                        (16)                        13




                                                                                                                                                                            (357)                       (57)

             Decrease in trade and other receivables                                                                                          128                          25

             (Decrease)/increase in trade and other payables                                                                            (35)                        38

 




 

 

Cash generated from operations

(264)

6

 




 

 

             Company

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             Loss before income tax                                                                                                                      (355)                     (141)

             Finance costs                                                                                                                                        (16)                        13




                                                                                                                                                                            (371)                     (128)

             Decrease/(increase) in trade and other receivables                                                                        177                        (19)

             (Decrease)/increase in trade and other payables                                                                            (71)                      152

 




 

 

Cash generated from operations

(265)

5

 




 

 

2.          CASH AND CASH EQUIVALENTS

 

The amounts disclosed on the statements of cash flow in respect of cash and cash equivalents are in respect of these statement of financial position amounts:

 

                                                                                                                          Group                                             Company

             Year ended 31 December 2011

                                                                                                          31.12.11                 1.1.11                 31.12.11                  1.1.11

                                                                                                                £'000                    £'000                    £'000                     £'000

             Cash and cash equivalents                                                          2                           5                           2                            4








             Year ended 31 December 2010

                                                                                                          31.12.10                 1.1.10                 31.12.10                  1.1.10

                                                                                                                £'000                    £'000                    £'000                     £'000

             Cash and cash equivalents                                                          5                         12                           4                          12









Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements

for the Year Ended 31 December 2011

 

1.          ACCOUNTING POLICIES

 

             Basis of preparation

The financial statements have been prepared in accordance with IFRS and IFRIC interpretations on a going concern basis.  The adoption of all relevant new Standards issued by the International Accounting Standards Board in the current period has not led to any changes in the Group's accounting policies or financial statements.  The directors have adopted these policies to the extent they feel is appropriate.

 

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

 

Going concern

Although the Group has incurred significant losses in the past resulting in negative retained earnings and total liabilities exceed total assets the Directors feel the going concern basis is appropriate.  The change in management structure that took place in 2009 year has led to a new strategy being adopted by the Group and will allow them to take advantage of new, profitable business opportunities.  The directors are confident these opportunities will come to fruition in 2012, but if they are delayed Barry Pettitt will continue to support the Group.

 

             Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2011.  Profits or losses on intra-group transactions and intra-group balances are eliminated in full. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities which exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.

 

             Revenue recognition

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

 

             Financial instruments

Financial assets and liabilities are recognised on the balance sheet when the entity becomes party to the contractual provisions of the instrument.

 

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

 

Cash and cash equivalents

Cash and cash equivalents comprise cash and short term deposits held with banks, bank overdrafts are recorded under current liabilities on the balance sheet.

 

Trade and other receivables

Trade and other receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts and included in current assets, except for maturities greater than 12 months from the balance sheet date.

 

Trade and other payables

Trade and other payables are stated at their nominal value and included in current liabilities, except for maturities greater than 12 months from the balance sheet date.

 

             Deferred taxation

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

 

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


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

1.

ACCOUNTING POLICIES - continued

 

             Foreign currencies

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

 

2.          SEGMENTAL REPORTING

 

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

 

3.          OTHER OPERATING INCOME

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             Sale of trademark                                                                                                                                    90                            -




 

4.          EMPLOYEES AND DIRECTORS

 

There were no staff costs for the year ended 31 December 2011 nor for the year ended 31 December 2010.

 

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

                                                                                                                                                                    31.12.11                31.12.10

 

             Management                                                                                                                                          4                            5




 

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £                           £

             Directors' remuneration                                                                                                                           4                            5




 

5.          (LOSS)/PROFIT BEFORE INCOME TAX

 

The loss before income tax (2010 - profit before income tax) is stated after charging:

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             Auditors' remuneration                                                                                                                         36                          35




 

6.          INCOME TAX

 

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2011 or for the year ended 31 December 2010.

 

Subject to the agreement with HM Revenue and Customs, the Group has allowable trading losses at 31 December 2011 for set-off against future trading profits of £11.72m (2010: £11.41m).

 

A deferred tax asset of £3.05m (2010: £3.47m) arises due to the large trading losses described above.  As it is not known when the Group will be able to make use of these losses the asset has not been recognised in the financial statements.


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

7.          LOSS OF PARENT COMPANY

 

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements.  The parent company's loss for the financial year was £(355,792) (2010 - £(140,042)).

 

 

8.          EARNINGS PER SHARE

 

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

 

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

 

Reconciliations are set out below.

 

 

                                                                                                                                                                    31.12.11

                                                                                                                                                                   Weighted

                                                                                                                                                                    average

                                                                                                                                                                     number                Per-share

                                                                                                                                      Earnings                    of                      amount

                                                                                                                                          £'000                   shares                    pence

             Basic EPS

 

Earnings attributable to ordinary shareholders

(341)

149,799,116

-0.23

             Effect of dilutive securities                                                                                        -                            -                            -






             Diluted EPS

             Adjusted earnings                                                                                                (341)        149,799,116                     -0.23






 

 

                                                                                                                                                                    31.12.10

                                                                                                                                                                   Weighted

                                                                                                                                                                    average

                                                                                                                                                                     number                Per-share

                                                                                                                                      Earnings                    of                      amount

                                                                                                                                          £'000                   shares                    pence

             Basic EPS

 

Earnings attributable to ordinary shareholders

115

136,181,924

0.08

             Effect of dilutive securities                                                                                        -                            -                            -






             Diluted EPS

             Adjusted earnings                                                                                                  115         136,181,924                       0.08







Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

9.          SUBSIDIARIES

 

At 31 December 2011 the company held 100% of the allotted equity share capital of the following:-

 

 



Name of subsidiary undertaking

 

Country of registration and incorporation



Class of share capital held




Nature of business


 

Sansui Electronics (UK) Limited

 

England and Wales


Ordinary


Distribution of consumer electronic branded products.


San Gain Industrial Company Limited

 

Hong Kong


Ordinary


Distribution of consumer electronic branded products and complementary supply chain management services.


 

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

 

10.        INVESTMENTS

 

             Group

                                                                                                                                                                                                   Unlisted

                                                                                                                                                                                              investments

                                                                                                                                                                                                        £'000

             COST

             Reclassification/transfer                                                                                                                                                   344


 

             At 31 December 2011                                                                                                                                                        344


 

             PROVISIONS

 

             Impairments                                                                                                                                                                        344


 

             At 31 December 2011                                                                                                                                                        344


 

             NET BOOK VALUE

             At 31 December 2011                                                                                                                                                             -


 


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

10.

INVESTMENTS - continued

 

             Company

                                                                                                                                                                                                   Unlisted

                                                                                                                                                                                              investments

                                                                                                                                                                                                        £'000

             COST

             Reclassification/transfer                                                                                                                                                   344


 

             At 31 December 2011                                                                                                                                                        344


 

             PROVISIONS

 

             Impairments                                                                                                                                                                        344


 

             At 31 December 2011                                                                                                                                                        344


 

             NET BOOK VALUE

             At 31 December 2011                                                                                                                                                             -


 

 

The directors decided to capitalise the amount Ross Group plc lent to Ross Group (USA) Inc and account for it as an investment.  However since Ross Group (USA) Inc is currently not trading the directors have decided to fully impair the investment.  This impairment of £343,672 has been included in administrative expenses in the consolidated and company's income statements.

 

11.        TRADE AND OTHER RECEIVABLES

 

                                                                                                                          Group                                             Company

                                                                                                          31.12.11               31.12.10               31.12.11                31.12.10

                                                                                                                £'000                    £'000                    £'000                     £'000

Current:

             Trade debtors                                                                              60                            -                         10                            -

             Amounts owed by group undertakings                                     -                            -                           4                            4

             Other debtors                                                                                 -                       190                            -                        190

             VAT                                                                                                 2                            -                           2                            -








                                                                                                                     62                       190                         16                        194








 

12.        CASH AND CASH EQUIVALENTS

 

                                                                                                                          Group                                             Company

                                                                                                          31.12.11               31.12.10               31.12.11                31.12.10

                                                                                                                £'000                    £'000                    £'000                     £'000

             Bank current account                                                                   2                           5                           2                            4









Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

13.        CALLED UP SHARE CAPITAL

 

Group and Company

 

 

31.12.11


31.12.10


Authorised share capital:

 

£000


£000


 

195,000,000 Deferred shares of 4.8p each

 

9,360

9,360

67,052,306 Deferred shares of 4p each

 

2,682

2,682

300,000,000 Ordinary shares of 0.1p each

 

300

300

2,700,000,000 Deferred shares of 0.1p each

 

2,700

2,700

 





 

 

15,042

15,042

 





 

Alloted, called up and fully paid:

 

147,745,300 Deferred shares of 4.8p each

 

7,092

7,092

67,052,306 Deferred shares of 4p each

 

2,682

2,682

149,799,116 Ordinary shares of 0.1p each

 

150

136

1,225,628,316 Deferred shares of 0.1p each

 

1,226

1,226

 





 

 

11,150

11,136

 





 

 

 

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

 

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

 

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

 

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

 

Managing Capital

 

The Group's objectives when managing capital are:

 

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

 

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

 

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

 

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


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

14.        RESERVES

 

             Group

                                                                                                          Retained                Share                   Other

                                                                                                          earnings              premium              reserves                Totals

                                                                                                                £'000                    £'000                    £'000                     £'000

 

             At 1 January 2011                                                               (35,193)                   2,317                  15,384                 (17,492)

             Deficit for the year                                                                   (341)                                                                                (341)

             Cash share issue                                                                            -                       218                            -                        218








 

             At 31 December 2011                                                          (35,534)                   2,535                  15,384                 (17,615)








 

 

             Company

                                                                                                          Retained                Share                   Other

                                                                                                          earnings              premium              reserves                Totals

                                                                                                                £'000                    £'000                    £'000                     £'000

 

             At 1 January 2011                                                               (50,188)                   2,317                  30,938                 (16,933)

             Deficit for the year                                                                   (355)                                                                                (355)

             Cash share issue                                                                            -                       218                            -                        218








 

             At 31 December 2011                                                          (50,543)                   2,535                  30,938                 (17,070)








 

 

Other reserves of the Group consist of a capital redemption reserve of £1.92m (2010: £1.92m), a non-distributable capital reserve of £3.33m (2010: £3.33m), and a special reserve of £10.13m (2010: £10.13m).

 

Other reserves of the company consist of a capital redemption reserve of £1.92m (2010: £1.92m) and a special reserve of £29.02m (2010: £29.02m).

 

15.        TRADE AND OTHER PAYABLES

 

                                                                                                                          Group                                             Company

                                                                                                          31.12.11               31.12.10               31.12.11                31.12.10

                                                                                                                £'000                    £'000                    £'000                     £'000

Current:

             Trade creditors                                                                            76                         87                         76                          86

             Amounts owed to group undertakings                                      -                            -                    3,437                     3,480

             Other creditors                                                                             23                         23                         23                          23

             Accruals and deferred income                                                114                       138                       109                        128

             Directors' current account                                                         16                            -                         16                            -








                                                                                                                   229                       248                    3,661                     3,717








             Non-current:

             Amounts owed to participating interests                           4,226                    4,226                       216                        216

             Other loans                                                                              2,062                    2,062                    2,062                     2,062








                                                                                                                6,288                    6,288                    2,278                     2,278








 

             Aggregate amounts                                                               6,517                    6,536                    5,939                     5,995









Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

16.

FINANCIAL LIABILITIES - BORROWINGS

 

                                                                                                                                                                                    Group

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             Current:

             Other loans                                                                                                                                             13                          15




 

 

             Terms and debt repayment schedule

 

             Group

 

                                                                                                                                                                                                   1 year or

                                                                                                                                                                                                       less

                                                                                                                                                                                                        £'000

             Other loans                                                                                                                                                                           13


 

 

17.        FINANCIAL INSTRUMENTS

 

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

 

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

 

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

 

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

 

Short-term debtors and creditors

 

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

 

Interest rate risk

 

The Group finances its operations through a mixture of borrowings.  It relies on a loan from its shareholders, Keniworth Capital Limited and Prime Growth Enterprises Limited to ensure sufficient liquidity is available to meet foreseeable needs.

 

Prime Growth Enterprises Limited has waived it's right to the 6% interest it initially stated was payable on the loan of £216,000.  The directors of Prime Growth Enterprises Limited have back-dated this decision to the inception of the loan.  This means the Group's exposure to interest rate fluctuations has been limited by the fact that none of the loans incur interest.

 

Maturity of financial liabilities

 

For the Group financial liabilities analysis at 31 December 2011 see note 15.

 


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

 

Currency risk

 

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

 

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

 

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

 

Fair values

 

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

 

18.        RELATED PARTY DISCLOSURES

 

Group

The Group had the following balances with related parties at the year end:

 

31.12.11

31.12.10

 

£000

£000

Receivables

 

Ross Group (USA) Inc.

 

-

189

 





 

 

-

189

 





 

 

Payables

 

Amount owed to Barry Pettitt

 

16

-

Amount owed to Prime Growth Enterprises Limited

 

216

216

Amount owed to Keniworth Capital Limited

 

4,010

4,010

 





 

 

4,242

4,226

 





 

 

 

The directors decided to capitalise the amount Ross Group plc lent to Ross Group (USA) Inc and account for it as an investment.  However since Ross Group (USA) Inc is currently not trading the directors have decided to fully impair the investment.  This impairment of £343,672 has been included in administrative expenses in the consolidated and company's income statements.

 

Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc, owns Prime Growth Enterprises Limited and controls Ross Group (USA) Inc.  Prime Growth Enterprises Limited owns 20% of the ordinary share capital in Ross Group Plc.

 

Keniworth Capital Limited owns 27% of the ordinary share capital in Ross Group Plc.

 

Barry Pettitt has pledged to cover the overheads of the Group until 31 December 2013.

 


Ross Group Plc & Subsidiaries

 

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Company

 

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

 

 

31.12.11

31.12.10

 

£000

£000

Receivables

Sansui Electronics (UK) Limited

 

4

4

Ross Group (USA) Inc.

 

-

189

 





 

 

4

193

 





 

Payables

San Gain Industrial Company Limited

 

3,437

3,480

Prime Growth Enterprises Limited

 

216

216

Barry Pettitt

 

16

-

 





 

 

3,669

3,696

 





 

 

 

19.        EVENTS AFTER THE REPORTING PERIOD

 

Since the 31 December 2011, Ross Group plc has issued 7,340,156 new ordinary shares of 0.1p each.  Following this, the company's total issued share capital is 157,139,272 ordinary shares.

 

20.        ULTIMATE CONTROLLING PARTY

 

The directors consider that there is no ultimate controlling party of Ross Group Plc and subsidiaries for 2011; however Barry Pettitt, by virtue of his position as CEO within the Group and his 25% shareholding, exerts a significant influence.

 

21.        RECONCILIATION OF MOVEMENTS IN RESERVES

 

             Group

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             (Loss)/profit for the financial year                                                                                                   (341)                      115

             Shares issued in the year                                                                                                                    231                            -




             Net (reduction)/addition to reserves                                                                                               (110)                      115

             Opening reserves                                                                                                                            (6,356)                  (6,471)




             Closing reserves                                                                                                                             (6,466)                  (6,356)




 

             Company

                                                                                                                                                                    31.12.11                31.12.10

                                                                                                                                                                          £'000                     £'000

             Loss for the financial year                                                                                                                 (355)                     (141)

             Shares issued during the year                                                                                                           231                            -




             Net reduction of reserves                                                                                                                 (124)                     (141)

             Opening reserves                                                                                                                            (5,797)                  (5,656)




             Closing reserves                                                                                                                             (5,921)                  (5,797)





Ross Group Plc & Subsidiaries

 

Consolidated Income Statement Summaries

for the Year Ended 31 December 2011

 

                                                                                                                                       31.12.11                                             31.12.10

                                                                                                                                             £'000                                                  £'000

 

             REVENUE

             Sales                                                                                                                         100                                                     113




                                                                                                                                                100                                                     113




 

             OTHER OPERATING INCOME

             Sale of trademark                                                                                                      90                                                          -




                                                                                                                                                  90                                                          -




 

             ADMINISTRATIVE EXPENSES

             Administrative expenses

             Management charge                                                                                                   -                                                         3

             Post and stationery                                                                                                    4                                                         7

             Travel & subsistence                                                                                               36                                                       24

             Legal and professional fees                                                                                    39                                                       45

             Accountancy fees                                                                                                      6                                                       22

             Auditors' remuneration                                                                                            36                                                       35

             Impairment of investment                                                                                      344                                                          -

             Exceptional items                                                                                                         -                                                    (185)

             Finance costs

             Bank charges                                                                                                               2                                                         1

             Bad debt provision                                                                                                   80                                                       33




                                                                                                                                                547                                                      (15)




 

             FINANCE COSTS

             Loan                                                                                                                          (16)                                                      13




                                                                                                                                                 (16)                                                      13




 


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