COMPANY REGISTRATION NUMBER 03359615 Annual Report Year ended 31st December 2017
CONTENTS Page 01 Chairman's Statement 02 Chief Executive Officer's Review 04 Strategic Report 06 Directors' Report 07 Corporate Governance Report 09 Statement of Directors' Responsibilities 10 Independent Auditor's Report 12 Consolidated Income Statement and Consolidated Statement of Comprehensive Income 13 Consolidated Statement of Financial Position 14 Company Statement of Financial Position 15 Consolidated Statement of Changes in Shareholders' Equity and Company Statement of Changes in Shareholders' Equity 16 Consolidated Cash Flow Statement 17 Company Cash Flow Statement 18 Notes to the Financial Statements 39 Company Information
Chairman's Statement 2017 I am very pleased to report that the Company continued to make strong progress in 2017, thanks to the growth of our core businesses and robust performance in our main balance sheet investments in green energy and commodities trading. In April 2018 we rebranded the business better to reflect our current activities and plan: Integrated Asset Management PLC is renamed iam Capital Group PLC and Integrated Alternative Investments Ltd is now called iam Invest Ltd. We are looking forward to a transformational year in which we are hoping to expand and bring strong synergies to in all our areas of activity delivering accelerating growth in shareholder value. On behalf of our shareholders, I would like to thank our management team and staff for their efforts and achievements during the last year as we look forward to building on the successes of the last year. J D S Booth Chairman 20th June, 2018 1
Chief Executive Officer's Review Overview of 2017 The last year saw the continuation and acceleration of our stated strategy to turn the Company into a niche merchant banking group focused more widely on alternative investments such as Renewable Energy and infrastructure, real estate and innovative financial technologies. Our financial results testify to the beginnings of that growth, with total revenue exceeding 14.9m (+105% year on year), EBITDA at 9.5m (+206% year on year), and net profit after tax at 1.9m compared with a loss in the previous year. Asset Management We have continued to grow our Luxembourg-based investment platform which is now mainly invested in real estate and renewable energy. Strong underlying performance has resulted in higher management and performance fees, which we are partly re-investing into upgrading our investment and support teams. Balance Sheet Investments Our main balance sheet investments are JRJ Partners which holds the MarexSpectron investment and Integrated Energy Holdings Ltd. During the year both businesses have performed well, as summarised in the Results table below. Excellent irradiation and more efficient management has produced good results in the energy subsidiaries, while a return to volatility, coupled with an initial round of US rate increases has produced strong results for MarexSpectron Ltd. Corporate Transactions No new corporate investments were made in 2017; however, in June 2018 we acquired 15% of Sheritage Capital Ltd ("Sheritage"), a new global multi-family office offering high net worth families and individuals a wide range of wealth management and administrative services. Sheritage benefits from a seasoned management team with decades of experience as well as a broad network of relationships. We believe our investment offers significant potential for important expansion opportunities and synergies in the years ahead. Cost structure and Balance Sheet In 2017, we started to grow our headcount and to upgrade our staff to reflect higher levels of activity and projected growth. We were able to finance this with cost reductions in other areas. Our comparable cost from continuing operations in 2017 were 987,000 as opposed to 994,000 in 2016. We believe our expanded inhouse capacity will provide us with the bandwidth to handle multiple transactions simultaneously, to develop valuable synergies among our business segments, better position us to proactively manage investor relations, and strengthen our position in the market. Our gross consolidated cash position (before commitments) has improved markedly in the last year thanks to the strong cash production of the energy business and to the acquisition of a hedge fund portfolio that we have begun to liquidate. Results Summary Continuing operations only Central Green Fund Operating Energy Management Consultancy Costs Total Total 000 000 000 000 000 000 Turnover 13,652 1,262 - - 14,914 7,264 Cost of sales (2,788) (76) - - (2,864) (1,542) Net Revenue 10,864 1,186 - - 12,050 5,722 Depreciation and amortisation (3,850) - - (16) (3,866) (1,877) Operating costs (1,494) (270) - (717) (2,481) (1,543) Operating profit/(loss) before currency exchange differences 5,520 916 - (733) 5,703 2,302 Currency exchange differences - 5 - (18) (13) 275 Acquisition transaction costs expense - - - - - (1,663) Net (loss)/profit on financial assets - (227) - 142 (85) 316 Share of loss of associate - - - (10) (10) (19) Operating profit/(loss) 5,520 694 - (619) 5,595 1,211 Net finance and other income (4,446) - - (77) (4,523) (2,230) Profit/(loss) before tax 1,074 694 - (696) 1,072 (1,019) Operating Margins Operating margins were positive in 2017. There was a net foreign currency exchange loss of 13,000 compared with a gain of 275,000 in 2016. 2
Chief Executive Officer's Review Capital and Cash Flow 000 000 Net assets 10,831 7,747 Net current assets/(liabilities) 666 (2,600) Cash at bank 3,508 1,444 Dividends The Company does not recommend the payment of a dividend (2016: nil). I would like to thank all our staff for their continuing support and commitment. E M Arbib Chief Executive Officer 20th June, 2018 3
Strategic Report The Directors present the Strategic Report, Directors' Report and the audited financial statements of iam Capital Group PLC ("iamcap") for the year ended 31st December, 2017. Change of name To reflect an expanded business vision, the Directors decided to change the name of the company from Integrated Asset Management PLC to iam Capital Group PLC on 28 March, 2018. The name change reflects iamcap's gradual progression from a hedge fund of funds manager into a global proprietary investment group. Overview iam Capital Group PLC is the parent company of an asset management, green energy and consultancy group (the "Group"). The principal activities of the group are fund management, green energy and consultancy services. A review of iamcap s business activities during 2017 along with future developments and risk management is given in the Chairman s Statement and the Chief Executive's Review on pages 1 to 3. Business review Key performance indicators In 2017 we continued to operate our traditional businesses with overall turnover higher, and as a result profit contribution up on 2016. As was highlighted in the previous year, revenue for consulting was down, as available resources were concentrated in the direction of enhancing the fund management and green energy operations side of the business. At the same time, central overheads were reduced year on year. No strict comparison is available for our green energy business which was acquired half way through 2016 and which is therefore shown separately and eliminated in the table below for comparison. The following table summarises the key performance indicators used by the directors to assess the performance of the Group as of the dates and years indicated. 2017 2017 Change Energy Existing Continuing Total business business Total 000s 000s 000s 000s Turnover 14,914 13,652 1,262 498 153% Operating costs 2,481 1,494 987 994 1% Operating result 5,595 5,520 75 (91) 182% Net assets 10,831 3,652 7,179 6,784 6% Principal risk and uncertainties Operating in the financial services industry, the Group faces a number of risks which are inherent to its activities and which require active management. The principal risks for the Group have been identified as operational risk and financial risks and in relation to our fund management business and the investment assets held by the Group, investment risk. Operational Risk Operational risk is the risk that the Group suffers a loss, either directly or indirectly, from inadequate or failed internal processes and systems or from external events. This risk manifests itself in slightly different ways across our two businesses, fund management and consultancy, but in summary would include: - Administrative error in the settlement of a deal or in the instruction of a trade on behalf of a fund. - Loss of key investment professionals. - Introduction of new products and related issues in the legal, fiscal, regulatory and accounting domains. Given the nature of such risks, it is Group policy to review continually the controls in place to manage them, to ensure that such controls are appropriate and adequate for the risks involved and that the controls have evolved and developed to reflect the changes in our underlying businesses and how it is carried out. Financial Risk The Group operates in a number of different countries and is exposed to a number of financial risks and particularly currency risk. Through its green energy business the Group is also subject to interest rate risk due to the substantial loans taken out at the time of acquisition. Details of these and the measures undertaken by the Group to manage them are given in note 23 of the financial statements. Investment Risk Poor investment performance in our underlying funds, either absolute or relative to the particular fund s peer group, may result in a decrease in management and performance fees and may increase redemptions from the funds by investors with similar effect. Poor investment performance in the investment type assets we hold in our balance sheet, will result in losses for shareholders. Regulatory Environment One of the Group's operating subsidiaries is subject to regulation. In the United Kingdom, iam Invest Ltd ("iaminv") is regulated and authorised by the Financial Conduct Authority. The Group seeks to ensure that it maintains full compliance with its regulatory obligations and, with regard to its regulatory capital, to maintain a surplus over and above that required at both an operating company level and at a consolidated group level. 4
Strategic Report Acquisitions, disposals and investment in subsidiaries On 17 May 2017, the Company made a 100% investment in its subsidiary Integrated Recovery Ltd which was incorporated on the 27 April 2017 in the British Virgin Islands. On 1 November 2017, the Company's subsidiary iam Invest Ltd made a 100% investment in Integrated Alternative Investments USA, LLC which was incorporated on the 2 February 2016 in Michigan USA. There were no other changes in the equity interests in the Group's subsidiaries Share Capital There were no changes to the Company's issued share capital during the year. The Company had 19,969,215 shares in issue throughout the year. In May 2017, the Integrated Asset Management 2007 Employee Benefit Trust (the "Trust"), agreed to sell 1,800,000 shares in the Company to Eurydice Premier Ltd, an entity owned by a trust whose beneficiaries include an individual who was a director of iamcap at the time of the sale, at a price of 30p per share. Following this transaction which was approved at a Board Meeting of the Company, the Trust was then able to repay 540,000 of its outstanding loan to the Company in June 2017. Creditor Payment Policy The Group does not follow any code or standard on payment practice, but adopts the following policy regarding the payment of its suppliers: a b c To agree payment terms with suppliers in accordance with contractual or other legal obligations; To ensure that suppliers are aware of the terms of payment; and To make payment in accordance with the payment terms. Average trade creditor days at 31st December 2017 were 30 days for the Company (2016: 40 days). Going Concern The Directors are satisfied that the Company and the Group have adequate resources to continue to operate for the foreseeable future. The Directors confirm that the Company and the Group are going concerns and accordingly continue to adopt the going concern basis in preparing the financial statements. By Order of the Board J D S Booth Director 20th June, 2018 5
Directors' Report The Directors present their annual report together with the audited financial statements for the year ended 31st December 2017 Directors The Directors of the Company during the year and up to the date of this report were:- Mr E M Arbib Mr D Bierbaum Mr J D S Booth Mr D Masetti Mr M B Segall (appointed 5 March 2018) Mr S D Shane (resigned 28 February 2018) There were no changes to the Board of Directors during the year. The following Directors are due to retire by rotation at the next Annual General Meeting and, being eligible, offers themselves for reappointment: Mr Emanuel Arbib, Mr Detlef Bierbaum. Mr Mark Segall also offers himself for reappointment following his appointment during the year. Results and Dividends The profit attributable to equity holders for the year ended 31st December 2017 was 703,000 (2016: Loss 302,000). The Directors have not proposed the payment of a dividend for the year ended 31st December 2017 (2016: nil). Donations During the year the Group made charitable donations totalling 20,000 (2016: nil). During the year the Group made political donations totalling nil (2016: nil). Third Party Indemnity Provision The group has arranged qualifying third party indemnity for all of its Directors. Subsequent Events In June, 2018, iamcap closed on an investment in Sheritage Capital Ltd ("Sheritage"), an Israeli limited company. Sheritage offers family office administrative and consulting services to a global client base. In the transaction iamcap invested US$ 272,000 in debt and equity in exchange for a 15% interest in Sheritage. Employees The Group operates an equal opportunity policy in the recruitment, promotion and training of all its employees. The Group believes that employees play a major role in the long-term success of the business and accordingly it promotes a working environment in which employees feel valued and respected. All employees are kept updated of the Group's performance and progress on a regular basis Annual General Meeting ("AGM") The Company s AGM is expected to be held in September, 2018. A notice of the AGM will be sent to shareholders in due course. Auditor Sopher + Co LLP have indicated their willingness to continue in office and resolutions will be proposed at the Annual General Meeting to reappoint them as Auditor of the Company. Each person who was a Director at the date of approving this report confirms that: a b so far as each Director is aware, there is no relevant audit information of which the Company s Auditor is unaware; and each Director has taken all the steps that ought to have been taken as a Director, including making appropriate enquiries of fellow Directors and of the Company s Auditor for that purpose, in order to be aware of any information needed by the Company s Auditor in connection with preparing their report and to establish that the Company s Auditor is aware of that information. By Order of the Board J D S Booth Director 20th June, 2018 6
Corporate Governance Report The Board is committed to creating and implementing high corporate governance standards and practices throughout the Group. The Directors recognise the importance that corporate governance plays in the protection and maintenance of Shareholders interests and strive to implement best practice policies to achieve this. The Board of Directors The Group is headed by an experienced Board of Directors which consists of one Executive Director and four Non-Executive Directors. The Board is responsible for ensuring that the Group always acts in the best interests of its Shareholders while maintaining its ethical values and integrity. The Board monitors decisions that are made by senior management to ensure that they are made with the aim of enhancing long-term shareholder value. The Board is also responsible for ensuring that adequate levels of internal controls are maintained which assist in the efficient and effective operation of the business and to ensure compliance with applicable laws and regulations. In particular, the Board is responsible for making Group decisions and approvals regarding the following: - Long-term objectives and strategies. - Major investments, acquisitions and disposals. - Annual operating and capital expenditure budgets. - Annual and interim dividends. - Treasury policy. - Risk management strategy. The roles of the Chairman, John Booth, and Chief Executive Officer, Emanuel Arbib, are clearly divided. John Booth is primarily responsible for the leadership of the Board and for ensuring effective communication with shareholders while Emanuel Arbib is responsible for making and approving senior management decisions which affect the operating and financial performance of the business. The Board fulfils its duties to the Group s Shareholders through Board meetings or by delegating responsibilities to Board Committees. Details of the Remuneration Committee, Audit Committee and Nomination Committee are shown below. Appointments to the Board Any Directors appointed by the Board are subject to re-election by the Shareholders at the Annual General Meeting following their appointment. All Directors are subject to reappointment at intervals of not more than three years. Prior to their appointment, Non-Executive Directors are subject to a review process to assess their independence and to confirm that they have no other relationships that may affect their judgement as a Director of the Group. All new Directors are provided with appropriate training and briefings which consider their individual qualifications and experience. Support to the Board All Directors have access to the advice and services of the Company Secretary, Daniel Baron, who is responsible for ensuring that Board procedures and applicable rules are observed. In addition, there is also a procedure that enables any Director to obtain independent professional advice in respect of their duties at the Group s expense. The Group also maintains liability insurance for its Directors and officers, which is reviewed annually to ensure that the appropriate level of cover is held. Board Meetings A number of Board and Board Committee meetings were held during the year. The Nomination Committee did not meet during the year. Appropriate briefing papers are distributed to Directors in advance of Board meetings. Any Director who was unable to attend a Board meeting during the year received appropriate and timely information in advance of the meeting so that their views could be taken into consideration. Audit Committee The Audit Committee comprises of two of the four Non-Executive Directors. The Directors who served on the Committee during the year were Detlef Bierbaum (Chairman) and John Booth. The Committee is primarily responsible for the following: - Monitoring the integrity of the Group s financial statements and any announcements relating to the Group s financial activities. - Reviewing the Group s internal financial controls and risk management systems. - Making recommendations for the appointment, reappointment and removal of the external Auditors and approving their remuneration and terms of engagement. Remuneration Committee The Remuneration Committee comprises of two of four Non Executive Directors. The Directors who served on the Committee during the year were John Booth (Chairman) and Detlef Bierbaum. The Committee is primarily responsible for the following: - The review and approval of the Group s remuneration strategy and policies; - The approval of any new remuneration schemes; and - The design and review of performance targets and conditions that are attached to performance-related remuneration schemes. 7
Corporate Governance Report Nomination Committee The Nomination Committee is responsible for identifying, assessing and nominating individuals for Board positions as and when they arise. This includes consideration of the reappointment of Non-Executive Directors at the conclusion of their specified term of office. It is also responsible for considering succession planning for both the Board and senior management positions. The Committee comprised John Booth (Chairman) and Detlef Bierbaum, all of which are Non-Executive Directors. Internal Control and Risk Management The Board has overall responsibility for the Group s system of internal control and risk management. While acknowledging that no system of internal control can provide absolute assurance against material loss or misstatement, the Board believes the Group s current systems of internal control and risk management are effectively designed to manage the risks which are inherent in the Group s business. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks that are faced by the Group. The key components of these are outlined in the Strategic Report. Investor Relations The Group updates its Investors Relations section of its website (www.iamcapital.com) to provide investors with important information regarding the Company s activities. This includes information such as annual financial statements as well as press releases the Group issues on important events in its development. Going Forward The Board believes that good corporate governance is a key contributor to the Group s long-term growth and will continue to invest time and resources to ensure the maintenance and improvement of its high standards. 8
Statement of Directors' Responsibilities The directors are responsible for preparing the directors report, the strategic report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and applicable law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and accounting estimates that are reasonable and prudent; - state whether the financial statements have been prepared in accordance with IFRS as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 9
Independent Auditor's Report to the Members of IAM Capital Group PLC Opinion We have audited the financial statements of IAM Capital Group PLC (formerly Integrated Asset Management PLC) for the year ended 31 December 2017, set out on pages 12 to 38. 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. In our opinion the financial statements give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2017 and of the Group's profit 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 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. Other information The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinion on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report and the Directors' Report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or the parent Company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. 10
Independent Auditor's Report to the Members of IAM Capital Group PLC Opinion Responsibilities of the directors As explained more fully in the Directors' Responsibilities Statement on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Auditors' responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. The description forms part of our Auditors' Report. Use of our report 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 an Auditors' Report 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. Martyn Atkinson FCA (Senior Statutory Auditor) for and on behalf of Sopher + Co LLP Chartered Accountants Statutory Auditors 5 Elstree Gate Elstree Way Borehamwood Hertfordshire WD6 1JD 26th June, 2018 11
Consolidated Income Statement for the year ended 31 December 2017 Total Total Note 000s 000s Revenue 14,914 7,264 Cost of sales (2,864) (1,542) Net revenue 12,050 5,722 Operating costs (6,360) (3,145) Net (loss)/profit on financial assets 13 (219) 316 Net profit on financial liability 134 - Share of loss of equity-accounted investees (10) (19) Acquisition transaction costs expense - (1,663) Operating profit 5,595 1,211 Finance income 5-2 Finance expense 5 (4,523) (2,232) Profit/(loss) before taxation 3 1,072 (1,019) Taxation 6 865 (292) Profit/(loss) for the year 1,937 (1,311) Attributable to : Total Owners of the parent 703 (302) Non-controlling interest 1,234 (1,009) 1,937 (1,311) Earnings per share 7 Total Basic 3.66p -1.66p Diluted 3.66p -1.66p Consolidated Statement of Comprehensive Income for the year ended 31 December 2017 Year ended Year ended 31 December 31 December Note 000s 000s Profit/(loss) for the year 1,937 (1,311) Currency translation differences on overseas operations 142 159 Net (loss)/gain on available for sale financial assets 13 (143) 529 Net gain on interest rate swap 608 330 Total comprehensive income for the year 2,544 (293) Total comprehensive income attributable to : Owners of the parent 808 403 Non-controlling interest 1,736 (696) 2,544 (293) 12
Consolidated Statement of Financial Position as at 31 December 2017 As at As at 31 December 31 December Note 000s 000s Assets Non-current assets Intangible assets 8 27,598 26,969 Tangible fixed assets 9 64,525 65,721 Equity-accounted investees 10 15 24 Financial assets 13 3,835 3,890 Other investments, including derivatives 14 1,240 440 Deferred Tax assets 16 2,955 1,734 Trade and other receivables 11 386 1,996 100,554 100,774 Current assets Trade and other receivables 11 6,970 5,488 Cash and cash equivalents 12 3,508 1,444 Other financial assets 13 205 182 10,683 7,114 Total assets 111,237 107,888 Liabilities Non-current liabilities Loans and borrowings 17 (88,509) (90,307) Bank guarantee (1,582) - Deferred tax liabilities (298) (120) (90,389) (90,427) Current liabilities Loans and borrowings (4,913) (4,742) Trade and other payables 18 (4,929) (4,811) Tax payable (175) (161) (10,017) (9,714) Total liabilities (100,406) (100,141) Net assets 10,831 7,747 Capital and Reserves Called up share capital 19 998 998 Share Premium Account 1,029 1,029 Capital redemption reserve 672 672 Share options reserve - - Exchange difference reserve 171 87 Investment in own shares - (2,519) Available for sale financial assets reserve 291 433 Other reserves 253 90 Retained earnings 4,307 5,583 Equity attributable to equity owners of the parent 7,721 6,373 Non-controlling interests 3,110 1,374 Total equity 10,831 7,747 The annual financial statements were approved and authorised for issue by the Board on 20th June, 2018 and signed on their behalf by: J D S Booth Director E M Arbib Director 13
Company Statement of Financial Position as at 31 December 2017 As at As at 31 December 31 December Note 000s 000s Assets Non-current assets Tangible fixed assets 9 81 90 Investment in subsidiaries 15 6,031 6,570 Investment in associate 10 15 24 Financial assets 13 3,530 3,890 Other investments, including derivatives 14 - - 9,657 10,574 Current assets Trade and other receivables 11 654 185 Cash and cash equivalents 12 84 79 Other financial assets 13 204 182 942 446 Total assets 10,599 11,020 Current liabilities Trade and other payables 18 (3,944) (3,966) (3,944) (3,966) Net assets 6,655 7,054 Capital and Reserves Called up share capital 19 998 998 Share Premium Account 1,029 1,029 Capital redemption reserve 672 672 Share options reserve - - Available for sale financial assets reserve 290 433 Retained earnings 3,666 3,922 Total equity 6,655 7,054 The annual financial statements were approved and authorised for issue by the Board on 20th June, 2018 and signed on their behalf by: J D S Booth Director E M Arbib Director 14
Consolidated Statement of Changes in Shareholders' Equity for the year ended 31 December 2017 Share Share Retained Other Non-controlling capital premium earnings reserves interests Total 000s 000s 000s 000s 000s 000s Balance at 1 January 2017 998 1,029 5,583 (1,237) 1,374 7,747 Currency translation adjustments - - - 84 58 142 Net gain on available for sale financial assets - - - (143) - (143) Net gain on interest rate swap - - - 164 444 608 Total other comprehensive income - - - 105 502 607 Profit for the year - - 703-1,234 1,937 Total comprehensive income for the year - - 703 105 1,736 2,544 Non-controlling interest on acquisition - - - - - - Dividends - - - - - - Cancellation of Investment in own shares - - (1,979) 2,519-540 Cancelled/forfeited share options - - - - - - Balance 31 December 2017 998 1,029 4,307 1,387 3,110 10,831 Share Share Retained Other Non-controlling capital premium earnings reserves interests Total 000s 000s 000s 000s 000s 000s Balance at 1 January 2016 998 1,029 5,879 (1,937) - 5,969 Currency translation adjustments - - - 87 72 159 Net gain on available for sale financial assets - - - 529-529 Net gain on interest rate swap - - - 89 241 330 Total other comprehensive income - - - 705 313 1,018 Loss for the year - - (302) - (1,009) (1,311) Total comprehensive income for the year - - (302) 705 (696) (293) Non-controlling interest on acquisition - - - - 2,978 2,978 Dividends - - - - (908) (908) Cancellation of Investment in own shares - - - - - - Cancelled/forfeited share options - - 6 (5) - 1 Balance 31 December 2016 998 1,029 5,583 (1,237) 1,374 7,747 Company Statement of Changes in Shareholders' Equity for the year ended 31 December 2017 Share Share Retained Share Options Other capital premium earnings reserve reserves Total 000s 000s 000s 000s 000s 000s Balance at 1 January 2017 998 1,029 3,922-1,105 7,054 Net gain on available for sale financial assets - - - - (143) (143) Total other comprehensive income - - - - (143) (143) Loss for the year - - (256) - - (256) Total comprehensive income for the year - - (256) - (143) (399) Cancelled/forfeited/expired share options - - - - - - Balance 31 December 2017 998 1,029 3,666-962 6,655 Share Share Retained Share Options Other capital premium earnings reserve reserve Total 000s 000s 000s 000s 000s 000s Balance at 1 January 2016 998 1,029 2,863 6 576 5,472 Net gain on available for sale financial assets - - - - 529 529 Total other comprehensive income - - - - 529 529 Profit for the year - - 1,053 - - 1,053 Total comprehensive income for the year - - 1,053-529 1,582 Cancelled/forfeited/expired share options - - 6 (6) - - Balance 31 December 2016 998 1,029 3,922-1,105 7,054 15
Consolidated Cash Flow Statement for the year ended 31 December 2017 Year ended Year ended 31 December 31 December 000s 000s Cash flows from operating activities Cash generated/(used) from operations 9,495 (3,807) Income tax paid - (1,393) Tax received - 1,050 Interest paid (3,791) (2,083) Cash flows from operating activities - total Group 5,704 (6,233) Cash flows from investing activities Purchase of property, plant and equipment (229) (4) Purchase of subsidiaries - 6,348 Purchase of associate - (43) Purchase of non-current financial assets (532) - Purchase of current financial assets (913) (76) Purchase of financial portfolio (74) - Sale of non-current financial assets 198 240 Sale of current financial assets 913 588 Cash acquired in lieu of bank guarantee 1,790 - Interest received - 2 Cash flows from investing activities - total Group 1,153 7,055 Cash flows from financing activities Payment of dividends - (908) Repayment of loan receivable 540 - Repayment of borrowings (5,333) (830) Cash flows from financing activities - total Group (4,793) (1,738) Net increase/(decrease) in cash and cash equivalents 2,064 (916) Cash and cash equivalents at beginning of year 1,444 2,360 Net cash and cash equivalents at end of year 3,508 1,444 Reconciliation of Operating Profit to Net Cash (Outflow)/Inflow from Operating Activities for the year ended 31 December 2017 Year ended Year ended 31 December 31 December 000s 000s Operating profit on ordinary activities 5,595 1,211 Depreciation and amortisation 3,866 1,877 Movement in fair value on financial assets 219 (316) Net profit on financial liability (134) - Result of associated company 10 19 Other non-cash movements - (1,185) Foreign currency translation 286 4 Increase in trade and other receivables (230) (1,593) Decrease in trade and other payables (117) (3,824) Net cash inflow/(outflow) from operating activities 9,495 (3,807) 16
Company Cash Flow Statement for the year ended 31 December 2017 Year ended Year ended 31 December 31 December 000s 000s Cash flows from operating activities Cash used from operations (717) 897 Income tax paid - - Cash flows from operating activities (717) 897 Cash flows from investing activities Purchase of property, plant and equipment (7) (4) Purchase of subsidiary (1) (2,380) Purchase of associate - (43) Purchase of non-current financial assets - - Sale of non-current financial assets 198 240 Purchase of current financial assets (8) (76) Sale of current financial assets - 588 Disposal of discontinued operation, net of cash disposed - - Interest received - 1 Cash flows from investing activities 182 (1,674) Cash flows from financing activities Interest paid - - Repayment of Employee Share Ownership Trust Loan 540 - Cash flows from financing activities 540 - Net increase/(decrease) in cash and cash equivalents 5 (777) Cash and cash equivalents at beginning of year 79 856 Cash and cash equivalents at end of year 84 79 Reconciliation of Operating (Loss)/Profit to Net Cash (Outflow)/Inflow from Operating Activities for the year ended 31 December 2017 Year ended Year ended 31 December 31 December 000s 000s Operating (loss)/profit on ordinary activities (256) 1,050 Depreciation 16 14 Movement in fair value on financial assets - (316) Result of associated company 10 19 Write back of impairment in investments - (270) Additional costs/profit on sale of subsidiary - - Foreign currency translation 17 (20) Increase in trade and other receivables (482) (43) (Decrease)/Increase in trade and other payables (22) 463 Net cash (outflow)/inflow from operating activities (717) 897 17
Notes to the Financial Statements 1 Principal accounting policies iam Capital Group PLC ("the Company") is a public limited company incorporated and domiciled in the United Kingdom. The principal accounting policies applied in the presentation of these group financial statements are set out below. These policies have been consistently applied to all the years presented. (a) Basis of preparation The group financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board ( IASB ) as adopted by the European Union ( EU ). The group financial statements have been prepared on the going concern basis under the historical cost convention, except for the measurement of certain financial assets that are held at fair value. The directors are confident that for the foreseeable future, the Group will continue to meet its liabilities as they fall due. The Company is taking advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual income statement and related notes that form part of the financial statements. (b) New IFRS's and interpretations Standards effective in 2017: A number of new standards, amendments and interpretations are effective for the first time for 2017. The Group has adopted the amendments and revisions to standards as detailed below: Amendments to IAS 12 Various standards Amendments to IAS 7 Recognition of Deferred Tax Assets for Unrealised Losses Annual improvements to IFRSs 2014-2016 Cycle Disclosure initiative The adoption of these new standards, amendments and interpretations has not had a material impact on the results of financial position of the Group. Standards and interpretations which become effective in future periods: The International Accounting Standards Board and IFRS Interpretations Committee have issued a number of new accounting standards, amendments to existing standards and interpretations with an effective date after the date of these financial statements. The Group has not decided to early adopt the following and as such the new standards are not applicable to these financials statements. Although relevant, they are not expected to have a material impact on the Group s results: Effective Date IFRS 9 - "Financial Instruments: Classification and Measurement". IFRS 15 - "Revenue from Contracts with Customers". IFRS 16 - "Leases". 01 January 2018 01 January 2018 01 January 2019 There are a number of other standards and interpretations, and revisions to existing standards and interpretations, in issue but not in force at 31 December 2017. These are not considered likely to have a material impact on the Group's financial statements. (c) Critical accounting estimates and judgements The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on management s best judgement at the date of preparation of the financial statements deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. The areas where a higher degree of judgement or complexity arise, or areas where assumptions and estimates are significant to the consolidated financial statements, are discussed below. i) Fair value assessment of Available-for-sale financial assets Management must make judgements concerning the fair value of its Available-for-sale financial assets. Judgements and assessments are made using standard pricing techniques and models, as well as consideration of the current economic climate when estimating the fair value of investments held where quoted prices are not available from active markets. ii) Share-based payments Management must make judgements concerning the probability of share options vesting when calculating the fair value of options granted. These judgements consider the historical average length of time option holders stay with the Group and the probability of option holders achieving certain performance criteria based on their performance to the statement of financial position date. iii) Acquisition of subsidiary Fair value of the consideration transferred and fair value of the assets acquired and liabilities assumed, measured on a provisional basis. iv) Bank guarantee Management must make judgements concerning the fair value of the bank guarantee held against cash reserves. Judgements and assessments are made using standard pricing techniques and models, as well as consideration of the current legal status of potential and on-going proceedings. 18
Notes to the Financial Statements continued (d) Consolidation Subsidiaries The Group financial statements include the financial statements of the Company and its subsidiaries. Subsidiaries are all entities over which the Company has the power to govern the operating and financial policies so as to obtain benefits from their activities. The financial statements of subsidiaries are included in the Group s financial statements from the date on which control is transferred to the Group to the date that control ceases. i) Business combinations The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group s share of the identifiable net assets acquired is recorded as goodwill. All intra-group transactions and balances are eliminated on consolidation. ii) Non-controlling interests Non-controlling interests are measured at their proportionate share of the acquiree's identifiable net assets at the date of acquisition. iii) Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group s share of its associates post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying value of the investment. Gains on transactions between the Group and its associates are eliminated to the extent of the Group s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. (e) Segment reporting A business segment is a group of assets and operations engaged in providing services that are subject to risks and returns that are different from those of other business segments. The Group s activities are divided into two business segments, Hedge Fund Management and Consultancy Services. These reflect the Group s internal reporting segments. A geographical segment is engaged in providing services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments. During the year the Group operated in two geographical segments (Europe and North America). No geographical segment analysis has been shown as our internal review is on the basis of business segments only. The Group distinguishes between discontinued operations to those of a continuing nature in its segmental reporting analysis. (f) Foreign currency translation i) Functional and presentation currency Items included in the financial statements of each of the Group s entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in pounds sterling (GBP), whilst the Group's functional currency is the Euro. The Board believes that by presenting the financial statements in GBP it provides an enhanced understanding of the underlying information to the users of the financial statements. ii) Transactions and balances Foreign currency transactions are translated into the relevant Group entity s functional currency using the exchange rate prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. iii) Group companies The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: - assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; - income and expenses for each income statement are translated at average exchange rates for the relevant accounting periods; and - all resulting exchange differences are included in the cumulative translation adjustment reserve within equity. Cumulative translation differences are taken to the income statement on the disposal of a net foreign operation. 19