ipplus plc - secure & compliant payment solutions for ... · voice response (“ivr”)...

IPPLUS PLC+

INTELLIGENT PROFESSIONAL SOLUTIONS

ANNUAL REPORT & AccOUNTSFOR ThE yEAR ENdEd 30 jUNE 2013

AIm STOck cOdE: IPP

www.ipplusplc.comAim stock code: ipp

AnnuAl RepoRts & AccountsFoR the yeAR ended 30 June 2013

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CONTENTS

04 CHAIRMAN’S STATEMENT

05 BUSINESS REVIEW

09 REMUNERATION COMMITTEE REPORT

11 DIRECTORS AND ADVISORS

12 DIRECTORS’ REPORT

16 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IPPLUS PLC

17 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

18 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

20 CONSOLIDATED STATEMENT OF CASH FLOWS

21 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

50 COMPANY BALANCE SHEET

51 NOTES TO THE FINANCIAL STATEMENTS

• Group revenues increased by 20% to £8.1 million up from £6.8 million• Underlyingprofitbeforetaxationroseby43%from£290,705to£417,108whennon-recurringitemsare

excluded(seebelow)• Profitbeforetaxationincreasedto£345,856upfrom£330,665• Profitaftertaxationincreasedto£472,856from£408,096• Closingcashbalanceof£559,574,givinganetbalanceof£530,407afterbankdebt• Capitalexpenditureduringtheyearof£324,613• Maidendividendproposedat0.3pencepershare(subjecttoshareholderapproval)

• Ansabackrevenuesincreasedby17%to£5,759,218• CallScripterrevenuesincreasedby26%to£1,490,042• IP3TelecomawardedPCIDSS(PaymentCardIndustryDataSecurityStandards)Level1compliance,the

highestlevelofcomplianceissuedbythegoverningbodyforglobalpaymenthandling• Ancorarevenuesrose28%to£826,898• Officespacedoublesto15,500squarefeetfollowingthepurchaseoftheofficefreeholdon1July2013

OPERATIONAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS



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BUSINESS REVIEW

Business summaryIPPlusPLCoperatesthroughtwoprincipalsubsidiaries,CallScripterLimitedandIPPlus(UK)Limited.

TheGrouptradesunderfivetradingstylesnamelyCallScripter,Ansaback(includingIP3TelecomandPCI-PAL)andAncoraSolutions.

CallScripterisanenhancedcustomerinteractionsoftwaresuitespecificallydevelopedforcontactcentres,telesalesandtelemarketingoperations.OurclientsgainmajorbenefitsbyintroducingCallScripter’sdynamicscriptingenvironmentandadvancedreportingsoftwareintotheirorganisations.Thesoftwarefacilitatestherapidset-up,handlingandreportingofsophisticatedinboundcalls,outboundcallsande-mailcampaigns.

Ansabackisa24hoursaday,7daysaweekbureautelephonyserviceprovidingoverflowandoutofhourscallhandling,emergencycover,dedicatedphoneresource,non-geographic,lowcallandFreephonetelephonefacilitiesaswellasdisasterrecoverylinesandotherancillarytelecommunicationservices.

IP3Telecomisacuttingedgeproviderofhosted“Cloud”telephonytechnology,providingbespokeautomatedInteractiveVoiceResponse(“IVR”)solutionstothebankingandfinancialsectors,hostedcontactcentresinfrastructurefornewbusinesses,telephonenumbers,campaignresponse,callrecording,reportingandloneworkerstafflines.Thetriplesitednetworkensuresarobustinfrastructurecapableofhandlinghighvolumesandpeaksincalltraffic,withinoneofthemostreliableintelligenttelephonynetworksintheUK.

PCI-PALoffersaPCIDSS(“PaymentCardIndustryDataSecurityStandard”)solutionwhichallowscallcentresandtelephoneagentstotakepaymentsinaPCIcompliantfashionwithcustomerserviceunaffectedandexistingoperationalprocessesmaintained.PCI-PALmakescontactcentrepaymentcollectioneasyandsecure,de-scopingtheoperationfromtherequirementsofPCIDSS.

AncoraSolutionsprovidessecuredocumentarchiving,confidentialshredding,librarymovesandspecialistremovalsservingmanyleadingbluechipcompanieswithinthelegal,medical,property,andtransportationsectors.

The marketOffshoreandhomeworkershavearoletoplaybutthecallcentrethatendcustomersassociatewithcontinuestobeevolvingintheUK.ThepressureforbusinessestoofferbetterservicesaroundtheclocklendsitselftoouroutsourcedAnsabackmodel.WecontinuetowinprestigeaccountswhoseekacosteffectiveyetfriendlyUKcustomerfacingsolution.Wehaveincreasedourdedicatedfixedseatsandwecontinuetoprospectforlargerclientswhoseekamixofdedicatedandbureaudesks.

TheIP3TelecommarketisprincipallyintheUK,althoughitdoeshavesomeinternationalclients.

WhilstthemarketforadvancedtelephonyservicesislargethespecialistnatureofcomplexIVRcontinuestoprovideuswithexcellentprospectsforgrowth.

ThemarketforPCIcompliantservicesisexpectedtoincreasedramaticallyinthenextfewyearsasmorecompaniesbecomeincreasinglyconcernedaboutcomplyingwithdatasecurity.Themainrisktocompaniesislosingtheirpaymentprocessingcontractsandthenbeingforcedtopaylargepremiums/finestobecomecompliantbythemaincreditcardprocessors.Therehavebeensomerecentexamplesofhighprofiledatalosseswhichwillpushanybusinesshandlingcreditcarddatatoreviewtheirprocess.

ThemarketforourCallScriptersoftwareisnotboundedbytheUKandthepercentageofourbusinessnowconductedabroadhasexceeded50%andislikelytogrowfurtherinthenextfewyearswithgrowthintonewterritories.

AncoraSolutions’archivingandsecuredestructionmarketisfocusedontheEasternRegionoftheUKandLondon.Withtheimplementationofanewwebbasedarchivingsystemthismarketareaisalsoexpectedtoexpandasclientscometoexpectelectronicdeliveryoffiles.

Risks

PRINCIPAL BUSINESS RISK AND UNCERTAINTIES TheprincipalrisksfacingtheGroupanddiscussedbytheBoardrelatebroadlytoitsacquisitionstrategy,intellectualproperty,themarketplaceandcompetitiveenvironment,dependenceonkeypeopleandinformationtechnology:

Acquisitions:TheGroup’sstrategyincludesseekingacquisitionsofcompaniesorbusinessesthatarecomplementarytoitsbusinesses.Asaconsequencethereisariskthatmanagement’sattentionmaybedivertedandtheGroup’songoingbusinessmaybedisruptedortheGroupmayfailtoretainkeyacquiredpersonnel,orencounterdifficultiesinintegratingacquiredoperations.Thedirectorsremainawareofthisdisruptionandplantoensurethatthemainbusinessisnotaffected.

Intellectualpropertyrights(“IPR”):TheGroupisreliantonIPRsurroundingitsinternallygeneratedandlicensed-insoftware.WhilstitreliesuponIPRprotectionsincludingpatents,copyrights,trademarksandcontractualprovisionsitmaybepossibleforthirdpartiestoobtainandusetheGroup’sintellectualpropertywithoutitsauthorisation.Thirdpartiesmayalsochallengethevalidityand/orenforceabilityoftheGroup’sIPR,althoughthedirectorsdonotenvisagethisrisktobesignificant.Inaddition,thedirectorsareawareofthesupplyriskoflosingkeysoftwarepartners.Asthesearenotasignificantpartofthecoreproducts,thiswouldonlyhaveashort-termimpactontheGroupasitsoughttoidentifyandthentrainstaffinalternativeproducts.

Financial summaryTheBoardispleasedtoreportgoodprogressandanincreaseinbothturnoverandprofit.TheGroupachievedaprofitbeforetaxationfortheyearended30June2013of£345,856(2012:£330,665),onturnoverof£8,076,158(2012:£6,748,159).

Howeverunderlyingprofit(afternon-recurringitemsareexcluded)improvedfrom£290,705to£417,108asshownbelow.

2013£

2012£

Declaredprofitbeforetaxation 345,856 330,665)

ProfitfromsaleofCommercial Finance Brokers(UKLimited) - (39,960)

PCInon-recurringcosts 71,252 -)

Underlying profit before taxation 417,108 290,705)

Business summaryCallScripterincreaseditsrevenueby26%intheyear,whilstrecurringrevenuestreamsincreasedto£600,000.CallScripteralsomadeitsmaidendivisionalprofitof£23,172,(beforetheallocationofcentraloverheadstogiveasegmentalloss),followingadivisionallossof£37,776inthepreviousyear.

CallScripterhasalsomadefurtherprogressinestablishingnewchannelsforitssoftwareintheyear.Thetotalnumberoflicencesworldwideisnowinexcessof18,000,upfrom15,700attheendoflastfinancialyear,whichhavebeendeployedin40countries.

Ansabackrecordedexcellentgrowthduringtheyearwitha17%increaseinrevenuesandthisistheprimereasonwhytheGrouppurchaseditsprincipalplaceofbusinessasannouncedon1July2013.Theincreasednumberofdedicateddeskshasalsonecessitatedthismove.

IP3Telecomreportedlastyearthatitwouldinvestinthedevelopmentofitsbusinessofferingsandwhilstithasgrownitsbusiness,ithasspentconsiderableresourcesinlaunchingitsPCIcompliantofferingPCI-PAL.PCI-PALachievedLevel1PCIaccreditationandisoneofonlyfourUKrecognisedcompliantsuppliers.PCI-PALincurrednon-recurringone-offcostsof£71,252duringthisexercise.Thefruitsofthishaveyettobeseen,butwillcontinuetobuildinthenext12months.Over£28millionofrevenuehasalreadypassedthroughthesecureprocessingportal.ThemajorityofAnsabackclientsnowuseIP3’snetworktelephonyplatformtoenhanceservicesandprovideprimarydisasterrecoveryfunctions. Havinghadadisappointingpreviousyear,theboardispleasedtoreportthatAncoraSolutions(“Ancora”)hasreverseditsfortunesandhasnowreturnedtodivisionalprofitability(beforetheallocationofcentraloverheadstogiveasegmentalloss).ThemarketinspecialistremovalsremainsfiercelycompetitivebutdespitethisAncorahasbeenabletosecuregoodcontracts.Newarchivingcontractshavebeensecuredandallarchiveclientshavebeentransferredtoournewrecordstorageandmanagementsoftwaresystemwhichhasresultedinamorestreamlinedservice.

Building purchase On1July2013theGrouppurchasedthefreeholdofitsprincipalplaceofbusinessat1-2MelfordCourt,TheHavens,RansomesEuropark,IpswichIP39SJforthesumof£1,550,000.Thispurchasehasbeenfundedbyamortgageof£1,192,500fromNatWestBankPLCandexistingcashresources.

TheGrouphasoccupiedthegroundfloorofthisbuildingsinceMay2000andisnowatastagewheremorespaceisrequired.ThepurchaseprovidestheupperflooroftheofficeblockfortheGroup’splannedexpansion.

Whilstannualoverheadsareexpectedtoincreasemarginallyreflectingincreasedratesontheenlargedpropertyuse,theGroup’sfloorspacehasalmostdoubledto15,500squarefeetandthemortgagerepaymentsfortheentirebuildingwillbelessthanthecurrentrentforthegroundfloor.

Inaddition,andsubsequenttothepurchaseofthefreehold,thecurrentsub-tenantoftheupperfloorhasagreedtotheearlyterminationofitslease,inconsiderationofwhichithaspaidtheGroupthesumofapproximately£353,000.ThesefundshavebeenutilisedbytheGrouptoassistthepurchaseofthefreehold,makingthetransactionbroadlycashneutral,andwillberecordedasaprofitintheresultsfortheyearended30June2014.

Weexpecttospendafurther£100,000duringthecurrentfinancialyearonfittingouttheadditionalspacethatwehaveacquired.

DividendEachyeartheBoarddecideswhethertodeclareadividendorreturncapitaltoshareholdersorpurchasesharesinthemarkettobeheldastreasurystock.Thisdecisionistakenprincipallyinthelightofthe:Group’spresentnetcashbalance;itsfutureworkingcapitalrequirements;investmentplansforthefuturedevelopmentoftheGroup;and,thebankingclimate,withparticularregardtotheirwillingnesstosupportSMEs.

TakingthesefactorsintoconsiderationtheBoardispleasedtoannouncethatitwillbeproposingthepaymentofamaidendividendof0.3ppershare(subjecttoshareholderapproval).Asthiswasproposedpostyearendnoliabilityhasbeenrecognisedintheaccounts.

PeopleIwouldliketothankeachoftheemployeesandDirectorsforalloftheireffortsduringthepastyear.Theircommitment,loyaltyandsupportareappreciatedandarevitaltoachievingfurtherpositiveprogress.

OutlookNotwithstandinganextremelycompetitiveandchallengingbusinessenvironment,theDirectorsareconfidentaboutthefutureprospectsfortheGroupandlookforwardtoreportingfurtherprogress.

Philip Dayer30August2013

CHAIRMAN’S STATEMENT



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Theconcentrationofcreditriskislimitedduetothelargeandunrelatedcustomerbasecomprisingmainlybluechipcompaniesandpublicsectororganisations.Creditriskalsoarisesfromcashandcashequivalentsanddepositswithbanksandfinancialinstitutions.Attheyear-endtheGroup’scashatbankwasheldwithtwomajorUKclearingbanks.

ThemainriskwithinAnsabackistheexposuretothefailureofamajorclient,asthetop20clientsrepresent69%ofturnover.However,apartfromthemajorutilityclientwhichhasauniquecontractandasignificantcreditrating,noindividualclientaccountsformorethan8%ofthedivisionalturnover.Continuedvigilanceistakenwithcreditcontrolandnewclientstominimiseexposure.

Marketrisk:Thedirectorsconsiderthatexposuretomarketrisk,arisingfromtheGroup’suseofinterest-bearingandforeigncurrencyfinancialinstruments,isnotsignificant.Thisisassessedinnote21tothesefinancialstatements.

Liquidityrisk:LiquidityriskarisesfromtheGroup’smanagementofworkingcapital.ItistheriskthattheGroupwillencounterdifficultyinmeetingitsfinancialobligationsastheyfalldue.Thedirectorsreviewanannual12monthcashflowprojectionaswellasinformationregardingcashbalancesonamonthlybasis.Atthebalancesheetdate,liquidityriskwasconsideredtobelowgiventhefacttheGroupiscashgenerativeandcashandcashequivalentsarethoughttobeatacceptablelevels.

Review of operationsWearepleasedtoannouncecontinuedgrowthinGroupturnoverandprofitability.Asummaryoftheoperationalhighlightsintheyearto30June2013follows:

Ansaback• Ansabackrevenuesincreasedby17%to£5,759,218• Fixedseatrevenuefromdedicatedandoutboundservices

increasedby35%• Howeverbureausaleshaveconsequentlydecreased12%as

thebusinessmatures

Amajorutilityclient,towhomwecurrentlysupplytelephonyservices,hasincreasedtheirrequirementsandanareaofthenewofficespacewillbebroughtintoimmediateuseinservicingthisclient’sbusiness.Ourtraditionalmarketsectorshaveheldupwellandweonlylostonesignificantclientinthefinalquarteroftheyear.Whilstfrustrating,thisbaddebtwasminimisedandnewbusinesshasbeensignedupwhichwillreplacetheloss.TherearestillsomefluctuationsincallvolumesinthecharitysectorbutourpositionintheTelecomssectorcontinuestobestrong.

Themovetowardslargerclientswithagreaterneedformorededicatedagentseatsislikelytocontinue.Therecruitmentofsuitablyexperiencedhighcalibresalespersonnelwillremainafocusforthedivision.

Ansaback sales by market

IP3 Telecom and PCI-PALThiswasabreakthroughyearforthedivisionwiththefirstclientsusingthePCI-PALcompliantplatformandover£28millionofcreditcardpaymentsbeingtransacted.Thesalespipelinefornewbusinessisgrowingrapidlyandwearelookingforwardtoreportingcontinuedgrowth.Thehostedmodelhassignificantadvantagesindescopingthecomplianceforbusinessesincontrasttoaninhousesolutionwithitsassociatedcosts.ThetimetakenfromenquirytoimplementationisconsiderablylongerthananticipatedandthishasbeensimilarlyreportedbyothervendorsofPCIsolutions.WethinkthisdelayindecisionmakingisinevitableuntilthecreditcardcompaniesstarttotightenthecomplianceissueandmakeitcompulsorytouseaPCIacceptedsolution.AtpresentPCI-PALisoneofonlyfourUKorganisationswithaLevel1PCIDSScertification,thehighestlevelofcomplianceissuedbythegoverningbodyforglobalpaymenthandling.

TheexistingIP3businesscontinuestogrowandremainsprofitable.TherefreshedIP3websiteisnowgeneratingasteadyflowofnewenquiries,andthesalesteamhasbeenexpanded,contributingtowardsthegrowthoftheIP3directclientbase.

CallScripterCallScriptermadeexcellentprogressintheyearandrevenuesincreasedby26%to£1,490,042withover50%ofitsrevenuesderivedfromexportmarkets.

InSeptember2012CallScripterwonanorderfor335agentlicences,inconjunctionwithitslongeststandingworldwideOEMpartner,foroneofthelargestoutsourcersworldwide.

CallScripterrenewedits7yearoldworldwideOEMrelationshipwithInteractiveIntelligenceInc.,inAugust2012,fortheprovisionoftheunderlyingsoftwaretechnologybehindInteractionEasyScripter™,theenhancedcallscriptingsolutionforInteractionDialer®.

CallScripterhassignificantlyexpandeditscommitmenttotheAvayaDevConnectinternationalpartnerprogrammetoincreasethepositionofCallScripteras‘anadvancedscriptingproductofchoice’acrossAvaya’srangeofcontactcentresolutions.

Risks (continued)

PRINCIPAL BUSINESS RISK AND UNCERTAINTIES (continued)Marketplaceandcompetition:ThesectorinwhichtheGroup’sCallScripterdivisionoperatesinand/orroutestomarketmayundergorapidandunexpectedchangesornotdevelopatapaceinlinewiththedirectors’expectations.Itisalsopossiblethatcompetitorswilldevelopsimilarproducts;theGroup’stechnologymaybecomeobsoleteorlesseffective;orthatconsumersusealternativechannelsofcommunications,whichmayreducedemandfortheGroup’sproductsandservices.Inaddition,theGroup’ssuccessdependsuponitsabilitytodevelopnew,andenhanceexistingproducts,onatimelyandcosteffectivebasis,thatmeetchangingcustomerrequirementsandincorporatetechnologicaladvancements.Thedirectorsreviewthemarketmovements,clientrequirementsandcompetitivesupplierstoensurethatthecurrentportfolioisasrequired.TheAnsabackandAncoramarketsarewideanddiverse,andwhileothercompetitorsmayenterthearena,divisionalsuccessrestswiththesalesteam.Thedirectorsensurethattheteamareproperlydirected,trainedandmotivatedtoaddressthisissue.

Keypersonnel:TheGroupdependsontheservicesofitskeytechnical,operations,salesandmanagementpersonnel.ThelossoftheservicesofanyoneormoreofthesepersonscouldhaveamaterialadverseeffectontheGroup’sbusiness.TheGroupmaintainsanactivepolicytoidentify,hire,train,motivateandretainhighlyskilledpersonnelinkeyfunctions.

Informationtechnology:DatasecurityandbusinesscontinuityposeinherentrisksfortheGroup.TheGroupinvestsinandkeepsunderreviewformaldatasecurityandbusinesscontinuitypolicieswhichareindependentlyaudited.

TheriskstotheCallScripterdivisionremainunchanged–principallytheabilityofoursalesteamandthepartnerresellerstoachievemarketpenetration.Thechannelstomarket,betheyviaOriginalEquipmentManufacturer(“OEM”)arrangements,orintegratedwithadialleraspartofatailoredcallhandlingsolutionneedconstantattentiontopreserveexistingmarketshare.

Additionalrisksincludethetechnologyutilisedinthecontactcentreandwehaveamoderntelephoneswitch.Thisswitchincludesfail-oversystemstofurtherincreaseourbusinesscontinuity/disasterrecoveryreadinesswhilstalsoenablingustoofferadditionalservicestoclients.Itisalsosplitacrosstwolocationstofurtherreducetheriskoffailure.

ToreducetheoperationalriskswehaveaDisasterRecoveryandDataCentrefacilityatanoffice5milesawayfromthemainbuilding.Thisofficecanaccommodateupto60agentsandhasindependenttelephonelines,phoneswitchandcomputerdatasystemssynchronisedtothemainbuildingthatcanautomaticallyfail-overintheeventofamajorincident.

Lookingatothercontactcentreriskswehaveastandbygeneratorincaseofpowercutstoloweroursusceptibilitytopoweroutages,whilstourmaincomputersystemshavebeenupgradedtoimprovetheirresilienceandminimiseanydown-timeshouldaproblem arise.

IP3Telecomusesanetworktelephonyplatformwithtripleredundancy(sitesinLondon,BirminghamandManchester),butcouldbeaffectediftherewasamajorcarrierbreakdownaffectingtheentirenetwork.

PCI-PALoperatesoutofastateoftheartdatacentreintheheartofthecity.Thisfacilityhasanextremelyhighlevelsecurityand99.999%availabilitywhichisthelevelrequiredbybanksandemergencyservices.Theriskofthisbeingpenetratedbyhackersislimitedasnodataisstored–theriskwouldthereforeonlybedisruptivetotheprocessingofcards.

TherisktoAncoraSolutionsismainlywithinthearchivingcomponentofthedivision.Thisriskisacombinationoftheimpactofalossofasignificantcustomerandtheinabilitytoreplacesuchacustomerquickly.Digitalstoragesolutionsanddocument scanning are becoming more prevalent as a means ofdocumentstorageandthedivisioniscurrentlydevelopingitsdigitaloffering.Legislativechangesaffectingdocumentrecordretentiondatesmayaffectthenumberofrecordsheldandthedivisionneedstoensurethatitcomplieswithallrelevantdataprotectionrequirements.Securityofrecords,thepulpingoftheserecordsandcompliancewithcurrentlegislationmayforcechangesinworkingpractice.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESTheprincipalfinancialinstrumentsusedbytheGroup,fromwhichfinancialriskarises,aretradereceivables,cashatbankandtradeandotherpayables.TheGrouphasnosignificantnetforeigncurrencymonetaryassetsorliabilitiesnoranysignificanthedgedtransactionsorpositions.TheBoardhasoverallresponsibilityforthedeterminationoftheGroup’sfinancialriskmanagementobjectivesandpoliciesand,whileretainingultimateresponsibilityforthem,ithasdelegatedtheauthorityfordesigning,operatingandreportingthereoftotheGroup’sfinancefunction.TheoverallobjectiveistosetpoliciesthatseektoreduceriskasfaraspossiblewithoutundulyaffectingtheGroup’scompetitivenessandflexibility.Furtherdetailsregardingthesepoliciesaresetoutbelow:

Creditrisk:CreditriskistheriskoffinanciallosstotheGroupifacustomeroracounterpartytoafinancialinstrumentfailstomeetitscontractualobligations.TheGroupismainlyexposedtocreditriskfromcreditsales.ItisGrouppolicytoassessthecreditriskofnewcustomersbeforeenteringcontractsandithasafrequentandproactivecollectionsprocess.

BUSINESS REVIEW (Continued)



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AstheCompanyisquotedontheAIMitisnotrequiredtosetoutitsremunerationpolicybutisdoingsoonavoluntarybasis.AsrequiredbyAIMRule19,theCompanyhasdisclosedinnote3oftheDirectors’Reporttheremunerationreceivedbyitsdirectorsduringthefinancialyear.

Remuneration committeeTheRemunerationCommitteeconsistsofnon-executivedirectorsBernieWaldron(CommitteeChairman)andPhilipDayer.Thecommittee’sroleistoensurethatthefollowingprinciplesareappliedinIPPlusPLCinapragmaticandaffordableway.

• Levelsofremunerationshouldbesufficienttoattract,retainandmotivatedirectorsofthequalityrequiredtoruntheGroupsuccessfullybutshouldavoidpayingmorethanisnecessaryforthispurpose.

• Asignificantproportionofexecutivedirectors’remunerationshouldbestructuredsoastolinkrewardstocorporateandindividual performance.

• Thereshouldbeaformalandtransparentprocedurefordevelopingpolicyonexecutiveremunerationandforfixingtheremunerationpackagesofindividualdirectors.Nodirectorshouldbeinvolvedindecidinghisorherownremuneration.

Remuneration policy• Secure,retainandrewardtheexecutivesthattheGroup

needs.Themaincomponentsofexecutiveremunerationarebasicsalary,performance-relatedbonus,contributionstopersonalpensionplans,otherbenefits(forexample,carallowance)andaperformance-basedshareoptionscheme.

• EnsurekeyBoardandnon-BoardExecutiveshaveanappropriatebalanceoffixedandvariablecompensationinlinewithGroupperformance.

• EnsurethatwhenGroupperformanceisstrong,theexecutivesshareinthatsuccessandthattherewardsaretiedtoactualGroupand/ordivisionalfinancialresults.

• Increasefocusonacontinuingcycleofmedium/longtermstrategic planning.

• EnsureotherkeyemployeesaremotivatedtodrivetheGroup’s success.

• Inconstructingcompensationschemes,ensurethatwemakeefficientuseoftheequityallocatedtoShareOptionschemesthusavoidingtherequirementforfurtherdilutionofexistingshareholdersandthatwepreservetheCompany’scashforgrowth,investmentsand/ordividendpayments.

REMUNERATION COMMITTEE REPORT

Annual performance bonus Forboardexecutives,abonuswillbepaiddependantonthelevelofachievementagainsttheannualGroupProfitbeforetaxtargets.ThisbonuswillbesetannuallybytheRemunerationCommittee.

Long term incentive planLongTermIncentiveswillcontinuetobesetunderthenewLongTermIncentivePlan(“LTIP”)approvedatlastyear’sAnnualGeneralMeeting.ThekeyelementsofthisLTIPareasfollows.

• TheGroupwillreviewitsmediumandlongtermstrategyonanannualbasis,towardstheendofeachfinancialyear.Theoutputofthisannualreviewwillbeanupdatedsetofactionstoimplementormodifyexistingornewstrategicimperatives,andanupdatedfinancialplanrollingforward3years,withtheupcomingfinancialyearasYear1.

• DesignatedexecutiveswillparticipateintheLTIP.AtthestartofeachfinancialyeartheRemunerationCommitteewillagreetheparticipantsfortheupcomingcycle.Usingtherolling3yearplanasinput,theRemunerationCommitteewillgrantanumberofshareoptionstoparticipantswhichwillvestattheendofYear3,dependingonthelevelofperformanceagainsttheYear3plannedProfitbeforetax.

• Enoughoptionstosatisfyanyannualindividualtaxliabilityresultingfromvestedoptionsmaybeexercisedandsoldattheendofeach3-yearcycle.

• Inordertoalignshareholderandexecutivesinterests,theremainingvestedoptionsfromanycyclemayonlyberealised(i.e.sold)iftheBoardannounces,aspartofthereleaseoftheYear3financialresults,thatitwillreturnfundstoshareholdersbymeansofeitheradividendpaymentorasharebuyback.ThelevelofanydividendorsharebuybackwilldependupontheoverallfinancialstatusoftheGroupatthatpointintimeandwillbeatalevelappropriatetothatstatus.Ifnodividendorsharebuybackisannounced,executiveswillberequiredtoholdtheremainingvestedoptionsuntilthenextdividendorsharebuybackisannounced.

ForthelatestLTIPcyclecoveringJuly2013-June2015,conditionaloptionswereissuedatanoptionpriceof1pencetoexecutivesandmanagementover2%oftheGroup’sequity.

CallScripter (continued)WehavenowestablishedconnectionsintheUKwithCISCOwhofeaturestronglyintheGartnerMagicquadrantforCallCentreInfrastructure.ThisassociationhasbeenhelpedbyCallScripteralreadyhavingarelationshipwithCISCOintheUSviaeLoyalty.Thisalsostrengthensthepotentialglobalchannel.

Wehavealsoincreasedourwebpresencethrougharevisedwebsiteandfurthersearchengineoptimisationwhichhasincreasedourleadgeneration.

Ancora SolutionsTheAncorabusinessmadesignificantprogressinthefinancialyearended30June2013reversingthelowerthanexpectedresultofthepreviousyear.Newarchivecustomershavebeenwonandthebusinesswasawardedtwosignificantarchiverelocationjobs.

TheO’Neil’ssoftwarewithbarcodingscannersandanonlinewebportalhavebeenabenefittothebusinessinstreamliningitsprocessesandimprovingclientsatisfaction.HighlightsfromtheAncoraSolutionsbusinessinclude:

• Archiving-twoexcellentnewcustomers-aHospitalandafirmofSolicitors

• Removals-wontwolargecontracts-aCountyCouncil’sandamajorinsurancecompany’sarchiverelocations

• Removalsandcratehiresalesincreasedby60%• Archivingandstoragesalesincreasedby32%

Post balance sheet event - Building purchaseWiththecontinuedgrowthofthebusiness,andinparticulartheamountoffixedseatbusinessthatwehavewon,thequestionofspace,orratherthelackofit,intheexistingbuildingbecamearealconcern.Weactivelystartedtoconsiderthisover12monthsagoandcontinuedtoreviewtheoptionsavailableincludingpurchasingorrentingnewspace.

TheopportunityarosetoacquirethebuildingandIPPlusPLCannouncedthaton1July2013theGrouppurchaseditsprincipalplaceofbusinessatMelfordCourt,RansomesEuropark,IpswichIP39SJforthesumof£1,550,000.Thepurchasehasbeenfundedbyamortgageof£1,192,500fromtheNatWestBankPLCandexistingcashresources.

TheGrouphasoccupiedthe7,500squarefeetofthegroundfloorofthebuildingsinceMay2000andthepurchaseprovidestheupperflooroftheofficeblockprovidinganadditional8,000squarefeetofofficespaceforplannedexpansion.

Whilstannualoverheadsareexpectedtoincreasemarginallyreflectingincreasedratesontheenlargedpropertyuse,theGroup’sfloorspacehasdoubledandthemortgagerepaymentsfortheentirebuildingwillbelessthanthecurrentrentforthegroundfloor.

BUSINESS REVIEW (Continued)

Inaddition,andsubsequenttothepurchase,thecurrentsub-tenantoftheupperflooragreedtotheearlyterminationofitsleaseinconsiderationofwhichithaspaidtheGroupthesumofapproximately£353,000.ThesefundshavebeenutilisedbytheGrouptofundtherequireddeposit,makingthetransactionbroadlycashneutral,andwillberecordedasaone-offprofitintheresultsfortheyearended30June2014.

Employee relations and social responsibilitiesAspreviouslyreportedtheGroupcontinuestoadvocateahealthystaffpolicyviaitsparticipationinInvestorsinPeopletogetherwithpursuingaHealthandWellBeingpolicyforencouraginghealthypractices.RecentlyithassuccessfullybeenreassessedandretainsitsInvestorsinPeoplestanding.TheITteamisactivelyengagedwithCarbonChampionsforitsecologicalandgreeninitiativesregardingtechnology.WehaveintroducednewpoliciesincludingaLowCarbonandEnvironmentalPurchasingPolicy,whilsttheGroupencouragescarsharing,bususageandthecycletoworkinitiative.

Thestaffareencouragedtoparticipateincorporateteamsportingactivitiesandlastyearweenteredteamsforthreelocalhalfmarathonsandacanoetrip.

Thesecondyearoftheinternalapprenticeschemewascarriedoutwherebycallcentrestaffcouldworkforuptoamonthforthevariousdivisions.Thisgavemanagementthechancetoevaluatewhethertheseemployeeshadpotentialtoprogresstoafulltimeroleandsimilartolastyearwehaveseentwoapprenticestakeonfulltimeroles.Weforeseeacontinuityofthisinitiativebasedonits popularity and success.

TheGroup’semployeessupportadesignatedcharityeveryyearandraised£1,594forTheWoolverstoneWishFund.

Summary and outlookTheGrouphasmadesignificantprogressduringthefinancialyearended30June2013,notwithstandinganextremelycompetitiveandchallengingbusinessenvironment,andwiththeincreasedspacenowavailabletheboardisoptimisticaboutprogressintheyearahead.

William A Catchpole30August2013



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DIRECTORS AND ADVISORS

Company registration number: 3869545

Registered office: Melford Court TheHavens RansomesEuropark Ipswich Suffolk IP39SJ

Telephone: +44(0)1473321800

Directors: PhilipJohnDayer BernardJosephWaldron WilliamAlexanderCatchpole GeoffreyForsyth RobertStuartMcWhinnieGordon

Secretary: RobertStuartMcWhinnieGordonBAFCMACGMA

Bankers: NationalWestminsterBankPLC BarclaysBankPLC

Auditors: GrantThorntonUKLLP

Nominated advisers and brokers: Nplus1 Singer

Lawyers: ShepherdandWedderburnLLP

Registrars: Capita Registrars LimitedTelephone: (UK):08716640300 (Overseas):+442086393399

Financial statements are available at: www.ipplusplc.com

REMUNERATION COMMITTEE REPORT

Long term incentive plan (continued)

Theservicecontractsandlettersofappointmentofthedirectorsincludethefollowingterms:

Executive Directors Date of appointment Noticeperiod

WACatchpole 27October1999 12months

R S M Gordon 13April2000 12months

GForsyth 27November1999 12months

Non-Executive Directors Date of appointment Noticeperiod

PJDayer 1October2005 Annual Service Contract

BJWaldron 1January2011 Annual Service Contract

Note3oftheDirectors’ReportsetsoutthedetailedremunerationandshareoptionsgrantedtoeachDirectorwhoservedduringtheyear.

Bernard Waldron30August2013

http://www.ipplusplc.com



12 13

On29June2012,directorsweregrantedoptionstosubscribeforordinarysharesintheCompanyasfollows:

Number of shares

Exercise price (pence)

WACatchpole 101,508 1.00

R S M Gordon 101,508 1.00

GForsyth 101,508 1.00

OptionsareconditionaloncertainvestingcriteriaincludinganannualGroupProfitbeforetaxtargetfortheyearended30June2014.

On27November2012,directorsweregrantedoptionstosubscribeforordinarysharesintheCompanyasfollows:

Number of shares

Exercise price (pence)

WACatchpole 100,000 1.00

R S M Gordon 100,000 1.00

GForsyth 100,000 1.00

OptionsareconditionaloncertainvestingcriteriaincludinganannualGroupProfitbeforetaxtargetfortheyearended30June2015.

4. Share price and substantial shareholdingsDuringtheyear,thesharepricefluctuatedbetween10.125penceand21.375penceandclosedat19.625penceon28June2013.

ThebeneficialandotherinterestsofothersubstantialshareholdersandtheirfamiliesinthesharesoftheCompanyat28June2013and1July2012wereasfollows:

30 June 2013Ordinary

sharesof1peach

1 July 2012Ordinary

sharesof1peach

P Wildey 6,132,500 5,800,000

ACatchpole 2,860,000 2,410,000

PMBrown 1,940,000 2,129,779

R Clement 1,930,435 1,930,435

5. Directors’ responsibilities for the financial statementsThedirectorsareresponsibleforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandregulations.

Companylawrequiresthedirectorstopreparefinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtoprepareGroupfinancialstatementsinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion(“IFRSs”)andhaveelectedtoprepareCompanyfinancialstatementsinaccordancewithUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).UndercompanylawtheDirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsandprofitandlossoftheCompanyandtheGroupforthatperiod.Inpreparingthesefinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently

• makejudgementsandaccountingestimatesthatarereasonable and prudent

• statewhetherapplicableAccountingStandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingadequateaccountingrecordsthatdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

Thedirectorsconfirmthat:

• sofaraseachdirectorisaware,thereisnorelevantauditinformationofwhichtheCompany’sauditorisunaware;and

• thedirectorshavetakenallstepsthattheyoughttohavetakentomakeasdirectorsinordertomakethemselvesawareofanyrelevantauditinformationandtoestablishthattheauditorsareawareofthatinformation.

DIRECTORS’ REPORTThedirectorspresenttheirreporttogetherwiththefinancialstatementsfortheyearto30June2013.

1. Principal activityTheCompany(companynumber3869545)operatesprincipallyasaholdingcompany.Themainsubsidiariesareengagedintheprovisionofa24hoursaday,7daysaweekoutofhoursandoverflowtelephonyservice,thedevelopmentandsaleofcontactcentrecallrelationshipmanagementsoftwareandtheprovisionofsecurestorageanddestructionofdocuments.

2. Results, dividends, future prospectsThetradingresultsoftheGrouparesetoutintheannexedac-countsandaresummarisedasfollows:

2013£

2012£

Revenue 8,076,158 6,748,159

Profitbeforetaxation 345,856 330,665

Profitaftertaxation 472,856 408,096

TheChairman’sStatementandBusinessReviewcontainafullexplanationofdevelopmentsduringtheyear,keyperformanceindicators,principalrisksanduncertaintiesandtheGroup’sfutureprospects,whicharerequirementsoftheDirectors’Report.

Thedirectorsrecommendpaymentofamaidendividendof0.3pencepershare(2012:£nil)(subjecttoshareholderapproval)attheGroup’sAnnualGeneralMeetingtobeheldon10October2013.

On1July2013theGrouppurchasedthefreeholdofitsprincipalplaceofbusinessat1-2MelfordCourt,TheHavens,RansomesEuropark,IpswichIP39SJforthesumof£1,550,000.Thispurchasehasbeenfundedbyamortgageof£1,192,500fromNatWestBankPLCandexistingcashresources(Note28)

3. DirectorsThepresentmembershipoftheBoardissetoutbelow,allofwhomservedduringtheyear.

ThebeneficialandotherinterestsofthedirectorsandtheirfamiliesinthesharesoftheCompanyat30June2013and1July2012wereasfollows:

30 June2013

1 July2012

Ordinary shares of 1p each

Ordinary shares of 1p each

WACatchpole 2,525,440 2,369,979

GForsyth 991,456 892,657

R S M Gordon 951,433 834,455

PJDayer(non-executive) 293,619 293,619

BJWaldron(non-executive) - -

Theaboveinterestsinclude33,220(2012:33,220)ordinarysharesheldbyoronbehalfofW.A.Catchpole’swife.

2012/13 Salary£

Benefits£

Bonus£

Total£

Pension £

WACatchpole 158,628 4,393 6,428 169,449 15,528

R S M Gordon 122,227 2,043 4,286 128,556 11,776

GForsyth 109,290 2,690 4,286 116,266 10,906

PJDayer(non-executive) 32,500 - - 32,500 -

BJWaldron(non-executive) 25,000 - - 25,000 -

2011/12 Salary£

Benefits£

Bonus£

Total£

Pension £

WACatchpole 155,422 3,602 8,472 167,496 14,196

R S M Gordon 116,941 1,938 6,314 125,193 10,581

GForsyth 109,465 2,348 6,314 118,127 10,243

PJDayer(non-executive) 30,375 - - 30,375 -

BJWaldron(non-executive) 22,782 - - 22,782 -

TheDirectors’remunerationwasasfollows:



14 15

13. Treasury sharesTheGroupacquired48,229ofitsownshareson13May2013atacostof£9,887(2012:£nil)andtheseareheldasTreasuryShares.

13. Going concernAftermakingenquiriesandpreparingforecasts,whichtakeabal-ancedviewofthefuturegrowthprospects,thedirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Forthesereasons,thedirectorscontinuetoadoptthegoingconcernbasisinpreparingtheaccounts.

14. AuditorsGrantThorntonUKLLPhaveexpressedwillingnesstocontinueinoffice.InaccordancewithS489(4)oftheCompaniesAct2006,aresolutiontoreappointGrantThorntonUKLLPasauditorswillbeproposedattheAnnualGeneralMeetingtobeheldon10October2013.

Melford Court BY ORDER OF THE BOARD TheHavens RansomesEuropark R S M Gordon Ipswich,Suffolk SecretaryIP39SJ 30August2013

DIRECTORS’ REPORT

5. Directors’ responsibilities for the financial statements (continued)ThedirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheCompany’swebsite.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

6. Qualifying third party indemnity provision Duringthefinancialyear,aqualifyingthirdpartyindemnityprovisionforthebenefitofthedirectorswasinforce.

7. Research and developmentTheGroupcontinuestodevelopCallScripter,awebbasedworkflowmanagementsoftwaresuiteformoderncontactcentres.

8. Payment practiceItistheCompany’spolicytosettlethetermsofpaymentwithsupplierswhenagreeingthetermsofthetransaction,toensurethatsuppliersareawareofthetermsandtoabidebythem.Tradepayablesattheyear-endamountto123days(2012:122days)ofaveragesuppliesfortheyear.

9. Employee policyTheGroupoperatesapolicyofnon-discriminationinrespectofethnicity,sexualorientation,gender,religionanddisabilityandencouragesthepersonalandprofessionaldevelopmentofallpersonsworkingwithintheGroupbygivingfullandfairconsiderationforallvacanciesinaccordancewiththeirparticularaptitudesandabilities.

10. Corporate governanceTheGrouprecognisestherequirementforhighstandardsofcorporategovernancebutisrestrictedbyhavingasmallboardofdirectors,40%ofwhomarenon-executivedirectors.

AsanAIMlistedCompany,wearenotobligedtocomplywiththeUKCorporateGovernanceCode,butwedoacknowledgetheoverallimportanceoftheguidelinesandapplyasmanyoftheprinciplesthereinasappropriatetoaGroupofoursizeandnature.

Internal financial controlTheboardisresponsibleforestablishingandmaintainingtheGroup’ssystemofinternalcontrolandreviewingitseffectiveness.InternalcontrolsystemsaredesignedtomeetparticularneedsoftheGroupconcernedandtheriskstowhichitisexposedandbytheirnaturecanprovidereasonable,butnotabsolute,assuranceagainstmisstatementorloss.ThedirectorsconfirmthattheyhaveestablishedsuchproceduresasnecessarytoimplementtheGroup’s internal controls.

Thefullboardmeetsonatleastsixoccasionseachyeartoreviewtrading performance and discuss strategy and policy issues. Budgets are approved annually and management accounts are producedonamonthlybasis.Alldirectorsreviewtheseaccounts.TheexecutiveboardmeetsonaregularbasistodiscusstheGroup’sperformance,invitinginputfromthenon-executivedirectorsasappropriate.TheGroupreportstoshareholderstwiceayear.TheboardconsidersthataseparateinternalauditfunctionisnotjustifiedhavingregardtothesizeoftheGroup.

TheChairman,whocarriesouthisdutiesonapart-timebasis,isprimarilyresponsibleforrunningtheboard.TheChiefExecutiveisresponsiblefortheday-to-dayrunningoftheGroupandforimplementingGroupstrategy.

AlldirectorsareawareoftheirrighttoseekindependentprofessionaladviceattheCompany’sexpensetoassistthemintheirdutiesandtohaveaccesstotheservicesoftheCompanySecretary.

Audit CommitteeWhilsttheAuditCommitteeformallyconsistsofPhilipDayerandBernardWaldron,duetothesizeoftheGroup,anybusinessrelatingtotheaudithasbeenconsideredbythefullboard.

OurauditorscanhoweverraiseanyissuesandrequestameetingoftheCommitteeifitisfeltthatanygovernanceorotherissuesneedtobediscussedwithouttheexecutivedirectors’attendance.

Remuneration CommitteeTheRemunerationCommitteeconsistsofBernardWaldronandPhilipDayer.

TheCommitteeisresponsibleforsettingthetermsandconditionsofemploymentfortheexecutivedirectorsandmetontwooccasionsduringtheyear.Thecurrentpolicyistosetremunerationinaccordancewithmarketconditionsinordertoattract,retainandmotivatetheexecutiveboard.TheCommitteereviewsGroupperformanceand,arisingfromthosereviews,maydetermine performance related bonuses.

Thefeesfornon-executivedirectorsaresetatsmallerturnoverAIMquotedmarketratestoattractindividualswiththenecessaryexperienceandabilitytomakeasubstantialcontributiontotheGroup’saffairsanditscontinueddevelopment.

11. Financial risk managementThefinancialriskmanagementpoliciesandobjectivesaredisclosedintheBusinessReviewandinnote21,alongwithinformationregardingexposuretocreditrisk,interestrateriskandliquidityrisk.



16 17

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFortheyearended30June2013

Note 2013£

2012£

Revenue 8,076,158) 6,748,159)

Cost of sales (4,715,865) (3,838,766)

Grossprofit 3,360,293) 2,909,393)

Administrativeexpenses (3,001,749) (2,568,473)

Operatingprofit 358,544) 340,920)

Finance income 6 3,105) 1,428)

Financeexpenditure 7 (15,793) (11,683)

Profit before taxation 5 345,856) 330,665)

Incometaxcredit 11 127,000) 77,431)

Profit and total comprehensive income attributable to equity holders of the parent company 472,856) 408,096)

Basicanddilutedearningspershare 10 1.49p 1.29p

AllactivitiesoftheGroupareclassedascontinuing.

Theaccompanyingaccountingpoliciesandnotesformanintegralpartofthesefinancialstatements.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IPPLUS PLCWehaveauditedthefinancialstatementsofIPPlusplcfortheyearended30June2013whichcomprisetheconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementoffinancialposition,theconsolidatedstatementofcashflows,theconsoli-datedstatementofchangesinequity,thecompanybalancesheet,andtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedinthepreparationoftheGroupfinancialstatementsisapplicablelawandInternationalFinancialReportingStandards(“IFRSs”)asadoptedbytheEuropeanUnion.Thefinancialreport-ingframeworkthathasbeenappliedinthepreparationoftheparentcompanyfinancialstatementsisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAc-ceptedAccountingPractice).

ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCom-pany’smembers,asabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditorAsexplainedmorefullyintheDirectors’ResponsibilitiesStatementsetoutonpages13and14,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’s(“APB’s”)EthicalStandards for Auditors.

Scope of the audit of the financial statementsAdescriptionofthescopeofanauditoffinancialstatementsisprovidedontheAPB’swebsiteatwww.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statementsInouropinion:• thefinancialstatementsgiveatrueandfairviewofthestate

oftheGroup’sandoftheparentcompany’saffairsasat30June2013andoftheGroup’sprofitfortheyearthenended;

• theGroupfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion;

• theparentcompanyfinancialstatementshavebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and

• thefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006

Opinion on other matter prescribed by the Companies Act 2006InouropiniontheinformationgivenintheDirectors’Reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.

Matters on which we are required to report by exception

WehavenothingtoreportinrespectofthefollowingmatterswheretheCompaniesAct2006requiresustoreporttoyouif,inouropinion:• adequateaccountingrecordshavenotbeenkeptbythe

parentcompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• theparentcompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or

• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.

Mark HandleySenior Statutory AuditorforandonbehalfofGrantThorntonUKLLPStatutoryAuditor,CharteredAccountantsIPSWICH30August2013

http://www.frc.org.uk/apb/scope/private.cfm

http://www.frc.org.uk/apb/scope/private.cfm



18 19

Note2013

£2012

£

EQUITY

Equity attributable to equity holders of the parent

Sharecapital 20 317,212 317,212

Sharepremium 89,396 89,396

Otherreserves 18,396 18,396

Profitandlossaccount 2,033,674 1,570,705

Total equity 2,458,678 1,995,709


TheBoardofDirectorsapprovedandauthorisedtheissueofthefinancialstatementson30August2013.

W A Catchpole Director

R S M Gordon Director

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAsat30June2013

Note 2013£

2012£

ASSETS

Non-current assets

Land 14 62,482) 52,832)

Plantandequipment 13 390,058) 445,284)

Intangible assets 12 548,828) 544,739)

Deferredtaxation 18 373,000) 280,000)

Non-currentassets 1,374,368) 1,322,855)

Current assets

Tradeandotherreceivables 15 1,604,583) 1,446,078)

Currenttaxassets 20,759) 55,387)

Cashandcashequivalents 559,574) 396,517)

Current assets 2,184,916) 1,897,982)

Total assets 3,559,284) 3,220,837)

LIABILITIES

Current liabilities

Tradeandotherpayables 16 (905,543) (916,660)

Currentportionoflong-termborrowings 16 (92,163) (101,970)

Currentliabilities (997,706) (1,018,630)

Non-current liabilities

Longtermborrowings 17 (37,900) (130,088)

Deferredtaxation 18 (65,000) (76,410)

Non-currentliabilities (102,900) (206,498)

Total liabilities (1,100,606) (1,225,128)

Net assets 2,458,678) 1,995,709)

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAsat30June2013



20 21

2013£

2012£

Cash flows from financing activities

Repaymentofborrowings (50,000) (50,000)

Buy-backofTreasuryShares (9,887) -)Capitalelementoffinanceleaserentals (60,659) (37,220)Netcashusedinfinancingactivities (120,546) (87,220)Net increase in cash 163,057) 75,384)

Cashandcashequivalentsatbeginningofyear 396,517) 321,133)

Netincreaseincash 163,057) 75,384)

Cash and cash equivalents at end of year 559,574) 396,517)

Share capital

£

Sharepremium

£

Other reserves

£

Profit and loss account

£

Total equity

£

Balanceat1July2011 317,212 89,396) 18,396 1,162,609) 1,587,613)

Profitandtotalrecognisedincomeandexpensefortheyear - - - 408,096) 408,096)

Balance at 1 July 2012 317,212 89,396 18,396 1,570,705) 1,995,709)

SharesplacedintoTreasury - - - (9,887) (9,887)

Transactionswithowners - - - (9,887) (9,887)

Profitandtotalrecognisedincomeandexpensefortheyear - - - 472,856) 472,856)

Balance at 30 June 2013 317,212 89,396 18,396 2,033,674) 2,458,678)


CONSOLIDATED STATEMENT OF CASH FLOWSFortheyearended30June2013

2013£

2012£

Cash flows from operating activities

Profitaftertaxation 472,856) 408,096)Adjustmentsfor:Depreciation 212,217) 164,015)Amortisationofintangibleassets 153,883) 133,802)Interest income (3,105) (1,428)Interestexpense 3,126) 4,492)Interestelementoffinanceleases 9,295) 3,819)Otherinterest 3,372) 3,372)Incometaxes (22,590) (82,431)Deferredtaxprovision (104,410) 5,000)Profitondisposalofassociate -) 39,960)Profitonsaleoffixedassets (600) (100))Increaseintradeandotherreceivables (169,506) (524,454)(Decrease)/increaseintradeandotherpayables (12,657) 192,737)Decrease in inventories -) (3,636)

Cash generated from operations )5541,881) 350,516)

Incometaxesreceived 55,387) 27,044)

Interestelementoffinanceleases (9,295) (3,819)

Interest paid (3,126) (4,492)Net cash generated from operating activities 584,847) 369,249)

Cash flows from investing activities

AcquisitionofAncorabusiness (24,000) (24,000)DeferredconsiderationforpurchaseofCommercialFinanceBrokers(UK)Limited (11,000) -)

Purchaseofplantandequipment (133,977) (63,795)Capitalisationofdevelopmentcosts (157,972) (120,378)Interest received 3,105) 1,428)Proceedsfromsaleoffixedassets 600) 100)Net cash used in investing activities (301,244) (206,645)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFortheyearended30June2013

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)Fortheyearended30June2013



22 23

4. Principal accounting policiesa) Basis of preparationThefinancialstatementshavebeenpreparedonagoingconcernbasisinaccordancewiththeaccountingpoliciessetoutbelow.ThesearebasedontheInternationalFinancialReportingStandards(“IFRS”)issuedinaccordancewiththeCompaniesAct2006applicabletothosecompaniesreportingunderIFRSasadoptedbytheEuropeanUnion(“EU”).

Thefinancialstatementsarepresentedinpoundssterling(£),whichisalsothefunctionalcurrencyoftheparentcompany,andunderthehistoricalcostconvention.

b) Basis of consolidationTheGroupfinancialstatementsconsolidatethoseoftheCompanyanditssubsidiaryundertakings(seenote19)drawnupto30June2013.AsubsidiaryisacompanycontrolleddirectlybytheGroupandallofthesubsidiariesare100%ownedbytheGroup.ControlisachievedwheretheGrouphasthepowertogovernthefinancialandoperatingpoliciesoftheinvesteeentitytoobtainbenefitsfromitsactivities.

Allintra-Grouptransactions,balances,incomeandexpensesareeliminatedonconsolidation.

UnrealisedgainsontransactionsbetweentheGroupanditssubsidiariesareeliminated.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.AmountsreportedinthefinancialstatementsofsubsidiarieshavebeenadjustedwherenecessarytoensureconsistencywiththeaccountingpoliciesadoptedbytheGroup.

TheGrouphasutilisedtheexemption(withinIFRS1)nottoapplyIFRStopre-transitionbusinesscombinations.TheresultsofIPPlus(UK)Limitedareconsolidatedusingmergeraccountingprinciples.Allothersubsidiariesareaccountedforusingtheacquisitionmethod.

c) RevenueRevenueismeasuredbyreferencetothefairvalueofconsiderationreceivedorreceivablebytheGroupforservicesprovided,excludingVATandtradediscounts.Revenueisrecognisedupontheperformanceofservicesorthetransferofrisktothecustomer.

Contactcentreturnoverisrecognisedbasedonbillableminutesinthemonth,alongwithstandingmonthlychargesandanyspecificsupplementaryservicecharges.

Softwareturnoverisrecognisedatthepointofsaleforcontractssoldinperpetuity,asitisatthispointthattheGrouphasperformedallofitsobligations.Turnoverfromannualsoftwarelicencesandmaintenancecontractsmaybereceivedinasingleamountorinmonthlyinstalments.Suchturnoverisrecognisedevenlyovertheperiodtowhichitrelates,reflectingtheperformanceofobligationsovertime.

Ancoraturnoverisrecognisedbasedontheservicesprovidedinthemonth,alongwithstandingmonthlychargesandanyspecificsupplementaryservicecharges.

d) Significant judgements and estimatesTheGroupmakesestimatesconcerningthefutureinassessingthecarryingamountsofcapitaliseddevelopmentcosts.TosubstantiatethecarryingamountthedirectorshaveappliedthecriteriaofIAS38andconsideredthefutureeconomicbenefitlikelyasaresultoftheinvestment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Authorisation of financial statements TheGroup’sconsolidatedfinancialstatements(the“financialstatements”)ofIPPlusPLC(the“Company”)anditssubsidiaries(togetherthe“Group”)fortheyearended30June2013wereauthorisedforissuebytheBoardofDirectorson30August2013andtheChiefExecutive,WilliamCatchpole,andtheChiefFinancialOfficer,R.StuartGordon,signedthebalancesheet.

2. Nature of operations and general information IPPlusPLCistheGroup’sultimateparentcompany.ItisapubliclimitedcompanyincorporatedanddomiciledintheUnitedKingdom.IPPlusPLC’ssharesarequotedandpubliclytradedontheAIMdivisionoftheLondonStockExchange.TheaddressofIPPlusPLC’sregisteredofficeisalsoitsprincipalplaceofbusiness.

TheCompanyoperatesprincipallyasaholdingcompany.Themainsubsidiariesareengagedintheprovisionofa24hoursaday,7daysaweekoutofhoursandoverflowtelephonyservice,thedevelopmentandsaleofcallcentrecontactrelationshipmanagementsoftwareandtheprovisionofsecurestorageanddestructionofdocuments.

3. Statement of compliance with IFRSThesefinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropean Union.

TheprincipalaccountingpoliciesadoptedbytheGrouparesetoutinnote4.TheaccountingpolicieshavebeenappliedconsistentlythroughouttheGroupforthepurposesofpreparationofthesefinancialstatements.

Standards and interpretations in issue, not yet effective

Newstandardsandinterpretationscurrentlyinissuebutnoteffectiveforaccountingperiodscommencingon1July2012are:

• IFRS10ConsolidatedFinancialStatements(effective1January2014)• IFRS11JointArrangements(effective1January2014)• IFRS12DisclosureofInterestsinOtherEntities(effective1January2014)• IFRS13FairValueMeasurement(effective1January2013)• IAS19EmployeeBenefits(RevisedJune2012)(effective1January2013)• IAS27(Revised)SeparateFinancialStatements(effective1January2014)• IAS28(Revised)InvestmentsinAssociatesandJointVentures(effective1January2014)• DeferredTax:RecoveryofUnderlyingAssets-AmendmentstoIAS12IncomeTaxes(effective1January2013)• PresentationofItemsofOtherComprehensiveIncome–AmendmentstoIAS1(effective1July2013)• Disclosures–OffsettingFinancialAssetsandFinancialLiabilities–AmendmentstoIFRS7(effective1January2013)• OffsettingFinancialAssetsandFinancialLiabilities–AmendmentstoIAS32(effective1January2014)• AnnualImprovements2009-2012Cycle(effective1January2013)

ThedirectorsanticipatethattheadoptionofthesestandardsandinterpretationsinfutureperiodswillhavenomaterialeffectonthefinancialstatementsoftheGroup.



24 25

4. Principal accounting policies (continued)e) Intangible assets (continued) Research and development (continued)Thecostofaninternallygeneratedintangibleassetcomprisesalldirectlyattributablecostsnecessarytocreate,produceandpreparetheassettobecapableofoperatinginthemannerintendedbymanagement.Directlyattributablecostsincludedevelopmentengineer’ssalaryandon-costsincurredonsoftwaredevelopment.Thecostofinternallygeneratedsoftwaredevelopmentsarerecognisedasintangibleassetsandaresubsequentlymeasuredinthesamewayasexternallyacquiredsoftware.However,untilcompletionofthedevelopmentproject,theassetsaresubjecttoimpairmenttestingonly.

Amortisationcommencesuponcompletionoftheasset,andisshownwithinadministrativeexpensesinthestatementofcomprehensiveincome.Amortisationiscalculatedtowritedownthecostlessestimatedresidualvalueofallintangibleassetsbyequalannualinstalmentsovertheirexpectedusefullives.Theratesgenerallyapplicableare:

• Developmentcosts 33%

Ancora Customer RelationshipsUponreviewoftheAncoraSolutionsbusinesstheDirectors’opinionwasthattheClientSalesRelationships,oncewon,werelikelytoremainforthelongtermdueto:

a) Oncetheboxeswereputintostorageandnotonviewtotheclient,theservicestendedtorollalongb) Amajorityoftheclientshavelongtermstoragerequirements(legalandhealthrecords)whichrequiredocumentstobe retainedandthencalledoutofstorageasrequiredc) Therearesignificantcostsinmovingtheboxestoanotherstorageunit.Assuchcustomersaremorelikelytostartusing anothersupplierwhilstmaintainingtheexistingoperationratherthancompletelytransferringthebusiness

Atacquisition,thesalesandon-goingcostsoftheexistingoperationwereforecastandwerediscountedbackusingtheGroup’sWeightedAverageCostofCapital.Thisgaveavaluationof£280,000,whichisamortisedover10yearsonastraight-linebasis,beingtheestimatedlifeoftheseassets.Theamortisationchargeisshownwithinadministrativeexpenses.

Ancora Solutions Brand Valuation TherelieffromroyaltyvaluationmethodassumesthatifabusinessdidnotowntheAncoraSolutionsbranditwouldhavetopayaroyaltytotheownersofthebrandforitsuse.Thevalueofthebrandisthecapitalisedvalueoftheroyaltiesthattheownerisrelievedfrompayingasaresultoftheownershipoftheasset.TheroyaltyattributedtothepurchasewasvaluedusingasimilarbasistotheCustomerRelationshipsandapplyinga0.25%royaltyrate.Atacquisitionthisgaveavaluationof£3,000,whichisamortisedover10yearsonastraight-linebasis,beingtheestimatedlifeoftheseassets.Theamortisationchargeisshownwithinadministrativeexpenses.

f) Land, plant and equipmentPlantandequipmentisstatedatcost,netofdepreciationandanyprovisionforimpairment.Leasedplantisincludedinplantandequipmentonlywhereitisheldunderafinancelease.

Disposal of assetsThegainorlossarisingondisposalofanassetisdeterminedasthedifferencebetweenthedisposalproceedsandthecarryingamountoftheassetandisrecognisedinprofitorloss.

DepreciationDepreciationiscalculatedtowritedownthecostlessestimatedresidualvalueofallplantandequipmentassetsbyequalannualinstalmentsovertheirexpectedusefullives.

4. Principal accounting policies (continued)d) Significant judgements and estimates (continued)Carefuljudgementbythedirectorsisappliedwhendecidingwhethertherecognitionrequirementsfordevelopmentcostshavebeenmet.Thisisnecessaryastheeconomicsuccessofanyproductdevelopmentisuncertainandmaybesubjecttofuturetechnicalproblemsatthetimeofrecognition.Judgementsarebasedontheinformationavailableateachbalancesheetdate.Inaddition,allinternalactivitiesrelatedtotheresearchanddevelopmentofnewsoftwareproductsarecontinuouslymonitoredbythedirectors.

Thecalculationofthedeferredtaxassetinvolvedtheestimationoffuturetaxableprofits.

DetailedcalculationswereundertakeninapreviousyeartovaluetheassetsacquiredduringthepurchaseofAncoraSolutions.Thesecalculationsusedthefuturesalesandcosts,estimatesofa3.5%annualinflationrate,estimatesofa10%attritionrate,andaWeightedAverageCostofCapitalof13.2%.

Thesecalculationsandestimatesgaverisetovaluationsofgoodwill,customerrelationshipsandroyaltieswhicharefurtherexplainedinnote(e).

IncalculatingthevalueanduseoftheCallScripterdivision,managementmakejudgementsandestimatesoffuturecashflowsanddonotconsidertheIntangibleAssetsinthisdivisiontobeimpaired.

ManagementappliedjudgementsregardingtheperformancecriteriaoftheEmployeeShareOptionsanddonotexpectthesetovest.

e) Intangible assetsGoodwillGoodwillwascreatedonthepurchaseofAncoraSolutions.ThisGoodwillisnotamortisedbutissubjecttoannualimpairmentreviewtoensurethevalueisrecoverable.

Customer contractsCustomercontractsareincludedatcost,andcostlessestimatedresidualamountisamortisedonastraight-linebasisovertheirusefuleconomiclives.Theamortisationchargeisshownwithinadministrativeexpenses.Theratesapplicableare:• Customer contracts 20%• Ancoraclientrelationships 10%• Ancora brand 10%

Research and developmentExpenditureonresearch(ortheresearchphaseofaninternalproject)isrecognisedasanexpenseintheperiodinwhichitisincurred.

Developmentcostsincurredarecapitalisedwhenallofthefollowingconditionsaresatisfied:

• completionoftheintangibleassetistechnicallyfeasiblesothatitwillbeavailableforuseorsale• theGroupintendstocompletetheintangibleasset• theGroupisabletouseorselltheintangibleasset• theintangibleassetwillgenerateprobablefutureeconomicbenefits.Amongotherthings,thisrequiresthatthereisamarketfor

theoutputfromtheintangibleassetitself,or,ifitistobeusedinternally,theassetwillbeusedingeneratingsuchbenefits• thereareadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleasset• theexpenditureattributabletotheintangibleassetduringthedevelopmentcanbemeasuredreliably




26 27

4. Principal accounting policies (continued)i) Taxation (continued) Deferredtaxliabilitiesareprovidedinfull,withnodiscounting.Deferredtaxassetsarerecognisedtotheextentthatitisprobablethattheunderlyingdeductibletemporarydifferenceswillbeabletobeoffsetagainstfuturetaxableincome.Currentanddeferredtaxassetsandliabilitiesarecalculatedattaxratesthatareexpectedtoapplytotheirrespectiveperiodofrealisation,providedtheyareenactedorsubstantivelyenactedatthebalancesheetdate.

Changesindeferredtaxassetsorliabilitiesarerecognisedasacomponentoftaxexpenseinthestatementofcomprehensiveincome,exceptwheretheyrelatetoitemsthatarechargedorcreditedtoothercomprehensiveincomeordirectlytoequityinwhichcasetherelatedtaxchargeisalsochargedorcrediteddirectlytoothercomprehensiveincomeofequity.

j) DividendsDividenddistributionspayabletoequityshareholdersareincludedin“othershorttermfinancialliabilities”whenthedividendsareapprovedingeneralmeetingpriortothebalancesheetdate.

k) Financial assets and liabilitiesTheGroup’sfinancialassetscomprisecashandtradeandotherreceivables,whichunderIAS39areclassedas“loansandreceivables”.Financialassetsarerecognisedoninceptionatfairvalueplustransactioncosts.Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Loansandreceivablesaremeasuredsubsequenttoinitialrecognitionatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.Anychangeintheirvaluethroughimpairmentorreversalofimpairmentisrecognisedinprofitorlossintheyear.

ProvisionagainsttradereceivablesismadewhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsduetoitinaccordancewiththeoriginaltermsofthosereceivables.Theamountofthewrite-downisdeterminedasthedifferencebetweentheassets’carryingamountandthepresentvalueofestimatedfuturecashflows.

AstheGrouphasnotenteredintoanyderivativecontractsitdoesnothaveanyfinancialliabilities,whicharecarriedatfairvaluethroughprofitorloss.TheGrouphasanumberoffinancialliabilitiesincludingtradeandotherpayablesandbankborrowings.Theseareclassedas“otherfinancialliabilities”inIAS39.Thesefinancialliabilitiesarecarriedoninceptionatfairvaluenetoftransactioncosts,andarethereaftercarriedatamortisedcostundertheeffectiveinterestmethod.

l) Cash and cash equivalentsCashandcashequivalentscomprisecashonhandanddemanddeposits,togetherwithothershort-termhighlyliquidinvestmentsthatarereadilyconvertibleintoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

m) EquityEquitycomprisesthefollowing:• “Sharecapital”representsthenominalvalueofequityshares• “Otherreserves”representstheMergerReserveresultingfromthedemergerfromKDMInternationalPLCinNovember1999and

representsthedifferencebetweenthevalueofthesharesacquired(nominalvalueplusrelatedsharepremium)andthenominalvalueofsharesissued

• “Profitandlossaccount”representsretainedprofits

n) Contribution to defined contribution pension schemesThepensioncostschargedagainstprofitsrepresenttheamountofthecontributionspayabletotheschemesinrespectoftheaccountingperiod.

4. Principal accounting policies (continued)f) Plant and equipment (continued)

Theratesgenerallyapplicableare:

• Land not depreciated• Motorvehicles 33%• Fixturesandfittings 20%to50%• Plant 20%to50%• Computerequipment 33%

Materialresidualvalueestimatesareupdatedasrequired,butatleastannually.

g) Impairment testing of goodwill, other intangible assets, plant and equipmentForthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(“cash-generatingunits”).Asaresult,someassetsaretestedindividuallyforimpairmentandsomearetestedatcash-generatingunitlevel.

Goodwillandintangibleassetsnotyetavailableforusearetestedforimpairmentatleastannually.Allotherindividualassetsorcash-generatingunitsaretestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.

Animpairmentlossisrecognisedfortheamountbywhichtheasset’sorcash-generatingunit’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigheroffairvalue,reflectingmarketconditionslesscosttosell,andvalueinusebasedonaninternaldiscountedcashflowevaluation.Anyimpairmentlossisfirstappliedtowritedowngoodwilltonilandthenischargedproratatotheotherassetsinthecash-generatingunit.Withtheexceptionofgoodwill,allassetsaresubsequentlyreassessedforindicationsthatanimpairmentlosspreviouslyrecognisednolongerexists.

h) Leased assetsInaccordancewithIAS17,theeconomicownershipofaleasedassetistransferredtothelesseeifthelesseebearssubstantiallyalltherisksandrewardsrelatedtotheownershipoftheleasedasset.Therelatedassetisrecognisedatthetimeofinceptionoftheleaseatthefairvalueoftheleasedassetor,iflower,thepresentvalueoftheminimumleasepaymentsplusincidentalpayments,ifany,tobebornebythelessee.Acorrespondingamountisrecognisedasafinanceleasingliability.

Theinterestelementofleasingpaymentsrepresentsaconstantproportionofthecapitalbalanceoutstandingandischargedtoprofitorlossovertheperiodofthelease.

Allotherleasesareregardedasoperatingleasesandthepaymentsmadeunderthemarechargedtoprofitorlossonastraight-linebasisovertheleaseterm.Leaseincentivesarespreadoverthetermofthelease.

i) TaxationCurrenttaxisthetaxpayablebasedontheprofitfortheyear.

Deferredincometaxesarecalculatedusingtheliabilitymethodontemporarydifferences.Deferredtaxisgenerallyprovidedonthedifferencebetweenthecarryingamountsofassetsandliabilitiesandtheirtaxbases.However,deferredtaxisnotprovidedontheinitialrecognitionofgoodwill,northeinitialrecognitionofanassetorliability,unlesstherelatedtransactionisabusinesscombinationoraffectstaxoraccountingprofit.Inaddition,taxlossesavailabletobecarriedforwardaswellasotherincometaxcreditstotheGroupareassessedforrecognitionasdeferredtaxassets.




28 29

7. Finance expenditure 2013

£2012

£

Interestonbankborrowings 3,126 4,492

Financechargesinrespectoffinanceleases 9,295 3,819

Other 3,372 3,372

15,793 11,683

8. Directors and employeesStaffcostsoftheGroup,includingthedirectorswhoareconsideredtobekeymanagementpersonnel,duringtheyearwereasfollows:

2013 £

2012 £

Wages and salaries 5,096,151 4,224,187

Social security costs 426,358 367,401

Otherpensioncosts 78,390 65,884

5,600,899 4,657,472

2013 Heads

2012 Heads

Averagenumberofemployeesduringtheyear 248 238

Remunerationinrespectofdirectorswasasfollows:

2013 £

2012 £

Emoluments 471,771 463,973

Pensioncontributionstomoneypurchasepensionschemes 38,210 35,020

509,981 498,993

Duringtheyear3(2012:3)directorsparticipatedinmoneypurchasepensionschemes.

Theamountssetoutaboveincluderemunerationinrespectofthehighestpaiddirectorasfollows:

2013 £

2012£

Emoluments 169,449 167,496

Pensioncontributionstomoneypurchasepensionschemes 15,528 14,196

AdetailedbreakdownoftheDirectors’Emoluments,inlinewiththeAIMrules,appearsintheDirectors’Report.

4. Principal accounting policies (continued)o) Foreign currenciesTransactionsinforeigncurrenciesaretranslatedattheexchangeraterulingatthedateofthetransaction.Monetaryassetsandliabilitiesinforeigncurrenciesaretranslatedattheratesofexchangerulingatthebalancesheetdate.Anyexchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitemsatratesdifferentfromthoseatwhichtheywereinitiallyrecordedarerecognisedintheprofitorlossintheperiodinwhichtheyarise.

p) Share optionsThedirectorsdonotconsiderthattheamountsinvolvedarematerialand,astheperformancecriteriaarenotexpectedtobemet,nochargehasbeenrecognisedasexplainedinNote20.

q) Capital managementThecapitalstructureoftheGroupconsistsofdebt,cash,loansandequity.TheGroup’sobjectivewhenmanagingcapitalistomaintainthecashpositiontoprotectthefutureon-goingprofitablegrowthwhichwillreflectinshareholdervalue.

At30June2013theGrouphadaclosingcashbalanceof£559,574andanoutstandingbankloanbalanceof£29,167.

5. Profits before taxation Profitonordinaryactivitiesisstatedafter:

2013£

2012£

Auditors’ remuneration

FeespayabletotheCompany’sauditorsfortheauditofthecompany’sannualaccounts 8,500 8,500

Fees payable to the Group’s auditors for other services

TheauditoftheCompany’ssubsidiariespursuanttolegislation 11,000 11,000

Taxationservices 4,200 6,150

Allotherservices 3,313 2,000

Depreciation and amortisation – charged in administrative expenses

Intangible assets 153,883 133,802

Plantandequipment–owned 164,218 142,436

Plantandequipment–leased 47,999 215,79

Rents payable 187,695 21,579

Foreignexchangecost 5,212 176,626

Profitondisposalofinvestment - 39,960

Profitonsaleoffixedasset 600 100

6. Finance income 2013

£2012

£

Bankinterestreceivable 3,105 1,428




30 31

9. Segmental information (continued)

2012Ansaback

£CallScripter

£Ancora

£Unallocated

£Total

£

Revenue 4,917,176 1,183,283) 647,700) - 6,748,159)

Segment result 531,067 (93,714) (96,433) - 340,920)

Finance income 1,428)

Finance costs (11,683)

Profitbeforetax 330,665)

Taxation 77,431)

Profit for the year from continuing operations 408,096)

Segment assets 1,249,789 655,129) 507,862) 808,057) 3,200,837)

Segmentliabilities - -) -) (1,225,128) (1,225,128)

Othersegmentitems:

CapitalExpenditure

-PlantandEquipment 154,918 1,650) 44,653) -) 201,221)

-IntangibleAssets - 120,378) -) -) 120,378)

Depreciation(note13) 108,472 3,573) 51,970) -) 164,015)

Amortisationofintangibleassets(note12) 3,008 102,494) 28,300) -) 133,802)

8. Directors and employees (continued) Keymanagementcompensation:

2013 £

2012 £

Shorttermemployeebenefits 758,787 737,013

Postemploymentbenefits 54,023 50,645

812,810 787,658

9. Segmental information IPPlusPLCoperatesthreebusinesssectors,Ansaback,CallScripterandAncora.ThesedivisionsarethebasisonwhichtheGroupreportsitssegmentinformation.IP3TelecomandPCI-PALarepartoftheAnsabackdivision.Theresultsofthesetwoactivitiesarenotreportedseparatelytomanagementandarenottreatedasseparatesegments.Theinter-segmentsalesareinsignificant.Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.Unallocatedassetscompriseitemssuchascashandcashequivalents,taxationandborrowings.Allliabilitiesareunallocated.Segmentcapitalexpenditureisthetotalcostincurredduringtheyeartoacquiresegmentassetsthatareexpectedtobeusedformorethanoneperiod.

2013Ansaback

£CallScripter

£Ancora

£Unallocated

£Total

£

Revenue 5,759,218 1,490,042) 826,898) - 8,076,158)

Segment result 458,456 (49,936) (49,976) - 358,544)

Finance income 3,105)

Finance costs (15,793)

Profitbeforetax 345,856)

Taxation 127,000)

Profit for the year from continuing operations 472,856)

Segment assets 1,428,658 632,309) 437,969) 1,060,348) 3,559,284)

Segmentliabilities - - - (1,100,606) (1,100,606)

Othersegmentitems:

CapitalExpenditure

-PlantandEquipment 115,468 16,651) 24,872) -) 156,991)

-IntangibleAssets - 157,972) -) -) 157,972)

Depreciation(note13) 144,251 6,837) 61,129) -) 212,217)

Amortisationofintangibleassets(note12) 2,505 123,078) 28,300) -) 153,883)




32 33

10. Earnings per shareThecalculationoftheearningspershareisbasedontheprofitaftertaxationaddedtoreservesdividedbytheweightedaveragenumberofordinarysharesinissueduringtherelevantperiod.Nodilutedprofitpershareisshownbecausealloptionsarenon-dilutiveasthevestingconditionsarenotmetattheyearend.Detailsofpotentialshareoptionsaredisclosedinnote20.

12 monthsended

30 June2013

12 monthsended

30 June2012

Profitaftertaxationaddedtoreserves £472,856 £408,096

Weightedaveragenumberofordinarysharesinissueduringtheperiod 31,714,825 31,721,178

Basicanddilutedearningspershare 1.49p 1.29p

11. Taxation2013

£2012

£

Analysis of charge in the year

Currenttax:

Inrespectoftheyear:

UKCorporationtaxbasedontheresultsfortheyearat23.75%(2012:25.5%) - -)

Adjustmentsinrespectofpriorperiods 22,590 82,431)

Total current tax credited 22,590 82,431)

Deferredtax:

Originationandreversaloftemporarydifferences 93,000

Movement on capitalised intangibles 11,410 (5,000)

Total deferred tax credited/(charged) 104,410 (5,000)

Credit 127,000 77,431)

Factors affecting current tax charge

ThetaxassessedontheprofitonordinaryactivitiesfortheyearwaslowerthanthestandardrateofcorporationtaxintheUKof23.75%(2012:25.5%).

9. Segmental information (continued)Revenuecanbesplitbylocationofcustomersasfollows:

2013£

2012£

Ansaback

UnitedKingdom 5,733,104 4,884,476

United States 3,758 14,672

Ireland 8,336 5,969

Othercountries 14,020 12,059

5,759,218 4,917,176

Ancora

UnitedKingdom 826,898 647,700

826,898 647,700

CallScripter

UnitedKingdom 621,490 725,542

United States 624,261 301,329

Ireland 29,356 61,045

Australia 59,239 50,805

Nigeria 22,080 -

Luxembourg 20,306 17,185

Belgium 10,610 10,042

Netherlands 6,427 1,394

Denmark 87,892 9,354

Cyprus 5,960 5,425

Othercountries 2,421 1,162

1,490,042 1,183,283

8,076,158 6,748,159

Onesingleexternalcustomergenerates30%oftheAnsabackdivision’srevenues.

Allnon-currentassetsarelocatedintheUnitedKingdom.




34 35

12. Intangible assets (continued )

2013

Cost Goodwill£

Purchased intangibles

£

Capitalised development costs

£Total

£

Goodwill 32,500 - - 32,500

Customer contracts - - - -

Ancora brand - 3,000 - 3,000

Ancoraclientrelationships - 280,000 - 280,000

CallScripter internal salaries - - 926,025 926,025

Cost at 30 June 2013 32,500 283,000 926,025 1,241,525

Amortisation(included within administrative expenses): Goodwill

£


£


£Total

£

Goodwill - -) - -

Customer contracts - 12,533) - 12,533)

Ancora brand - 400) - 400)

Ancoraclientrelationships - 37,333) - 37,333)

CallScripter internal salaries - -) 503,586 503,586)

Amortisation at 1 July 2012 - 50,266) 503,586 553,852)

Goodwill - -) - -)

Customer contracts - 2,505) - 2,505)




Charge for the year - 30,805) 123,078 153,883)

Goodwill - -) - -)

Customer contracts - (15,038) - (15,038)

Ancora brand - -) - -)

Ancoraclientrelationships - -) - -)

CallScripter internal salaries - -) - -)

Written out in the year - (15,038) - (15,038)

Goodwill - -) - -)

Customer contracts - -) - -)




Amortisation at 30 June 2013 - 66,033) 626,664 692,697)


11. Taxation (continued ) 2013£

2012£

Profitonordinaryactivitiesbeforetax 345,856) 330,665)

ProfitonordinaryactivitiesmultipliedbystandardrateofcorporationtaxintheUKof23.75%(2012:25.5%) 82,141) 84,320)

Expensesnotdeductiblefortaxpurposes 4,272) 4,650)

Depreciationinexcessof/(lessthan)capitalallowancesfortheyear 1,737) (12,613)

Utilisationoftaxlosses (90,432) (65,917)

Other 2,282) (10,440)

ResearchandDevelopmentclaim (22,590) (82,431)

Deferredtaxlossesrecognisedonleasesurrender (93,000) -)

Liability on capitalised intangibles (11,410) 5,000)

Total tax credit for the year (127,000) (77,431)

Duringtheyearto30June2013theGroupsubmittedaResearchandDevelopmentclaimtoHMRCrelatingtotheyearended30June2012of£22,590.Paymentwasreceivedon5July2013.ThiscreditwasrecognisedintheIncomeStatementandincludedinDebtors.

Duringtheyearto30June2012theGroupsubmittedaResearchandDevelopmentclaimtoHMRCrelatingtotheyearended30June2011of£55,387.Paymentwasconfirmedon22June2012,butwasnotreceiveduntil3July2012.ThiscreditwasrecognisedintheIncomeStatementandincludedinDebtors.InJuly2011,aResearchandDevelopmenttaxcreditclaimfor£27,044inrespectofthe12monthperiodto30June2010wasreceived.

12. Intangible assetsTheDirectorshavenotconsideredthecarryingvalueoftheAncoradivisiongoodwillasitisnotconsideredmaterial.

2013

Cost Goodwill£


£


£Total

£

Goodwill 32,500 - - 32,500)

Customer contracts - 15,038 - 15,038)

Ancora brand - 3,000 - 3,000)

Ancoraclientrelationships - 280,000 - 280,000)

CallScripter internal salaries - - 768,053 768,053)

Cost at 1 July 2012 32,500 298,038 768,053 1,098,591)

Goodwill - - - -)

Customer contracts - - - -)

Ancora brand - - - -)

Ancoraclientrelationships - - - -)

CallScripter internal salaries - - 157,972 157,972)

Additions - - 157,972 157,972)

Goodwill - - - -)

Customer contracts - (15,038) - (15,038)

Ancora brand - - - -)

Ancoraclientrelationships - - - -)

CallScripter internal salaries - - - -)

Disposals - (15,038) - (15,038)



36 37


2012Amortisation(included within administrative expenses): Goodwill

£


£


£Total

£

Goodwill - - - -

Customer contracts - 9,525 - 9,525

Ancora brand - 100 - 100



Amortisation at 1 July 2011 - 18,958 401,092 420,050

Goodwill - - - -





Charge for the year - 31,308 102,494 133,802

Goodwill - - - -





Amortisation at 30 June 2012 - 50,266 503,586 553,852

Net book amount

Goodwill 32,500 - - 32,500


Ancora brand - 2,600 - 2,600



Net book amount at 30 June 2012 32,500 247,772 264,467 544,739



Net book amountGoodwill

£


£


£Total

£

Goodwill 32,500 - - 32,500


Ancora brand - 2,300 - 2,300



Net book amount at 30 June 2013 32,500 216,967 299,361 548,828

2012Cost Goodwill

£


£


£Total

£

Goodwill 32,500 - - 32,500


Ancora brand - 3,000 - 3,000



Cost at 1 July 2011 32,500 298,038 647,675 978,213

Goodwill - - - -


Ancora brand - - - -

Ancoraclientrelationships - - - -


Additions - - 120,378 120,378

Goodwill 32,500 - - 32,500


Ancora brand - 3,000 - 3,000



Cost at 30 June 2012 32,500 298,038 768,053 1,098,591



38 39

14. Land2013

£2012

£

Cost and net book value

Costandnetbookvalueat1July2012 52,832 52,832

Additions 9,650 -

Cost and net book value at 30 June 2013 62,482 52,832

15. Trade and other receivables2013

£2012

£

Trade receivables 1,364,065 1,203,947

Otherreceivables 61,845 39,984

Prepayments and accrued income 178,673 202,147

Trade and other receivables 1,604,583 1,446,078

Allamountsfallduewithinoneyearandthereforethefairvalueisconsideredtobeapproximatelyequaltothecarryingvalue.AlloftheGroup’stradeandotherreceivablesaredenominatedinpoundssterling.Themaximumexposuretocreditriskatthereportingdateisthecarryingvalueofeachclassofreceivablesmentionedabove.TheGroupholds£13,981(2012:£18,062)ofdepositsassecurityagainst certain accounts.

Tradereceivableshavebeenreviewedforindicatorsofimpairmentandaprovisionhasbeenrecordedasfollows:

2013£

2012£

Openingprovisionat30June2012 4,899 4,218

Chargedtoincome 7,798 681

Closing provision at 30 June 2013 12,697 4,899

Inadditionsomeofthenon-impairedtradereceivablesarepastdueatthereportingdate:

2013£

2012£

0-30dayspastdue 15,223 20,299

30-60dayspastdue 13,381 677

Over 60 days past due 496 180

29,100 21,156

Amountswhicharenotimpaired,whetherpastdueornot,areconsideredtoberecoverableattheircarryingvalue.


13. Plant and equipment

2013 Plant£

Motor vehicles £

Fixtures and fittings

£

Computer equipment

£Total

£

Cost:

At1July2012 121,756) 56,113) 394,874) 474,700)) 1,047,443)

Additions 21,865) 10,000) 9,945) 115,181)) 156,991)

Disposals (8,000) (8,000) (4,581) (141,843) (162,424)

At 30 June 2013 135,621) 58,113) 400,238) 448,038) 1,042,010)

Depreciation(includedwithinadministrativeexpenses):

At1July2012 35,716) 31,690) 232,844) 301,909)) 602,159)

Chargefortheyear 28,710) 12,313) 70,162) 101,032)) 212,217)

Disposals (8,000) (8,000) (4,581) (141,843) (162,424)

At 30 June 2013 56,426) 36,003) 298,425) 261,098)) 651,952)

Net book amount at 30 June 2013 79,195) 22,110) 101,813) 186,940) 390,058)

2012 Plant£

Motor vehicles £

Fixtures and fittings

£

Computer equipment

£Total

£

Cost:

At1July2011 121,989) 35,763) 353,887) 354,241 865,880)

Additions 667) 20,350) 48,119) 132,085 201,221)

Disposals (900) -) (7,132) (11,626) (19,658)

At 30 June 2012 121,756) 56,113) 394,874) 474,700 1,047,443)

Depreciation(includedwithinadministrativeexpenses):

At1July2011 9,718) 21,429) 177,522) 249,133 457,802)

Chargefortheyear 26,898) 10,261) 62,454) 64,402 164,015)

Disposals (900) -) (7,132) (11,626) (19,658)

At 30 June 2012 35,716) 31,690) 232,844) 301,909 602,159)

Net book amount at 30 June 2012 86,040) 24,423) 162,030) 172,791 445,284)

Includedwithinthenetbookamountof£390,058(2012:£445,284)is£108,100(2012:£123,435)relatingtoassetsheldunderfinanceleases.Thedepreciationchargedtothefinancialstatementsintheyearinrespectofsuchassetsamountedto£47,999(2012:£21,579).



40 41


17. Non-current liabilities (continued)

Borrowings Bankloansarerepayableasfollows:

2013£

2012£

Withinoneyear 29,167 50,000

Afteroneyearandwithintwoyears - 29,167

29,167 79,167

On21January2012theGroupobtainedanunsecuredloanof£150,000repayableover36monthsinequalmonthlyinstalmentsof£4,167.Interestontheloanispayableat3.5%abovethebankbaserate.

Interestonthebankloanfallsdueasfollows:

2013£

2012£

Withinoneyear 338 1,969

Afteroneyearandwithintwoyears - 338

338 2,307

Amountsdueunderfinanceleasesaresecuredontherelatedassets.

Amountsdueunderfinanceleasesfalldueasfollows:

2013£

2012£

Withinoneyear 68,297 61,014

Afteroneyearandwithintwoyears 37,161 55,377

Aftertwoandwithinfiveyears - 23,448

105,458 139,839

Theabovetableincludesinterestof£5,301duewithinoneyearand£1,261dueafteroneyearbutwithintwoyears.

16. Current liabilities

2013£

2012£

Trade payables 162,259 287,853

Socialsecurityandothertaxes 390,868 352,622

Otherpayables 352,416 276,185

Trade and other payables 905,543 916,660

Bankloans(note17) 29,167 50,000

Amountsdueunderfinanceleases 62,996 51,970

Current portion of long-term borrowings 92,163 101,970

997,706 1,018,630

Amountsdueunderfinanceleasesaresecuredontherelatedassets.

17. Non-current liabilities

2013£

2012£

Bankloans - 29,167

Amountsdueunderfinanceleases 35,900 74,921

Otherpayables 2,000 26,000

Long term borrowings 37,900 130,088

Deferredtaxation 65,000 76,410

102,900 206,498



42 43

19. Group undertakings At30June2013,theGroupincludedthefollowingsubsidiaryundertakings,whichareincludedintheconsolidatedaccounts:

Name Country ofIncorporation

Class of sharecapital held

Proportionheld

Nature ofbusiness

IPPlus (UK) Limited England Ordinary 100% Outofhoursandover-flowtelephonyservices,

document storage and destructionandsoftware

company

CallScripter Limited England Ordinary 100% Softwarereseller

Ancora Solutions Limited England Ordinary 100% Dormant

Ansaback Limited England Ordinary 100% Dormant

CallScripter (U.K.) Limited

England Ordinary 100% Dormant

EasyScripter Limited England Ordinary 100% Dormant

Fault Solutions 365Limited


IP3 Telecom Limited England Ordinary 100% Dormant

PCI-PAL Limited(formerlyIPPlusNomineesLimited)


The Number Experts Limited


Vital Contact (UK) Limited England Ordinary 100% Dormant

20. Share capital

Group 2013Number

2013£

2012Number

2012£

Authorised:Ordinarysharesof1peach 100,000,000 1,000,000 100,000,000 1,000,000

Allottedcalledupandfullypaid:Ordinarysharesof1peach 31,721,178 317,212 31,721,178 317,212

TheGroupacquired48,229ofitsownshareson13May2013atacostof£9,887(2012:£nil)andtheseareheldasTreasuryShares.ThisvalueisdeductedintheConsolidatedStatementofChangesinEquityandisreflectedintheweightedaveragenumberofsharesinissueduringtheperiod(Note10).


18. Deferred taxation Deferredtaxationiscalculatedatarateof23%(2012:24%).

Tax losses£

Capitalised intangibles

£Total

£

Openingbalanceat1July2011 280,000 (71,410) 208,590)

Chargedthroughthestatementofcomprehensiveincomeintheyear - (5,000) (5,000)

At30June2012 280,000 (76,410) 203,590)

Chargedthroughthestatementofcomprehensiveincomeintheyear 93,000 11,410) 104,410)

At 30 June 2013 373,000 (65,000) 308,000)

2013£

2012£

Unprovideddeferredtaxassets

Acceleratedcapitalallowances 14,000 6,000

Trading losses 39,000 157,000

53,000 163,000

Thedeferredtaxassetof£373,000inrespectofcarriedforwardtaxlosseshasbeenrecognisedonthebasisthatthedirectorsbelievethatitismorelikelythannottoberealisedagainstfuturetaxableprofitsoftheGroup.Thishasbeenincreasedtorecognisethelosseswhichwillbeutilisedinrelationtotheearlysurrenderofthetenantlease.

Thereareunprovideddeferredtaxlossesof£170,000.

Theunprovideddeferredtaxassetsarecalculatedatarateof23%(2012:24%).Theunprovideddeferredtaxassetsattributabletolossesshouldberecoverableagainstfutureprofits.



44 45


20. Share capital (continued)2013 Share

options2012 Share

options

Amounts in issue at beginning 5,560,425) 4,926,000

Granted in period 700,000) 634,425

Expirationsinperiod (4,376,000) -Amounts in issue at year end 1,884,425 5,560,425

21. Financial instrumentsTheGroupusesvariousfinancialinstrumentsincludingcash,tradereceivables,tradepayables,otherpayables,loansandleasingthatarisedirectlyfromitsoperations.ThemainpurposeofthesefinancialinstrumentsistomaintainadequatefinancefortheGroup’soperations.TheexistenceofthesefinancialinstrumentsexposestheGrouptoanumberoffinancialrisks,whicharedescribedindetailbelow.Thedirectorsdonotconsiderpricerisktobeasignificantrisk.Thedirectorsreviewandagreepoliciesformanagingeachoftheserisks,assummarisedbelow,andtheseremainunchangedfrompreviousyears.

Financial risk management and objectives

TheGroupseekstomanagefinancialrisktoensuresufficientliquidityisavailabletomeetforeseeableneedsandtoinvestcashassetssafelyandprofitably.Thedirectorsachievethisbyregularlypreparingandreviewingforecastsbasedonthetrendsshowninthemonthlymanagementaccounts.

Interest rate risk

Thetotalloanbalanceat30June2013is£29,167(2012:£79,167).Interestispayableat3.5%abovethebank’sbaserate(note17).

TheGroupfinancesitsoperationsthroughamixtureofcashandloansandhassomerisktointerestratemovementswhicharenotdeemedsignificantintheshortterm.

Credit risk

TheGroup’sprincipalfinancialassetsarecashandtradereceivables,withtheprincipalcreditriskarisingfromtradereceivables.InordertomanagecreditriskstheGroupconductsthirdpartycreditreviewsonallnewclients,takesdepositswherethisisdeemednecessaryandcollectspaymentbydirectdebitonallnewAnsabackandAncoraaccounts,limitingtheexposuretoabuildupofalargeoutstandingdebt.TheGroupalsoconductsthirdpartycreditreviewsonCallScripteraccounts,whichalsohaveanagreedpaymentplantailoredtotheriskoftheindividualclient.

Liquidity risk

TheGroupaimstomitigateliquidityriskbycloselymonitoringcashgenerationandexpenditure.Cashismonitoreddailyandforecastsareregularlypreparedtoensurethatthemovementsareinlinewiththedirectors’strategy.

20. Share capital (continued)Contingent rights to the allotment of sharesTheGrouphasgrantedthefollowingshareoptions,inrespectofordinarysharesof1peach,whichwerestillvalidandunexercisedat30June2013.

Date of grant Number of shares Exercise price Period exercisable

1February2004 150,000 12.36p Seebelow*

1July2005 400,000 12.36p Seebelow*

29June2012 634,425 1.00p Seebelow**

27November2012 700,000 1.00p Seebelow***

Duringtheyear,thesharepricefluctuatedbetween10.125penceand21.375penceandclosedat19.625penceon30June2013.

*Theseoptionscanberealisedonthefollowingformulabetweenthreeandtenyearsfromtheirgrant:

If the share price is at or above Percentage of options realisable

25p 25%

40p 50%

65p 75%

100p 100%

Thefairvalueoftheshareoptionsgrantedafter7November2002andnotvestedat1July2006hasbeenassessedinaccordancewithIFRS2.Thedirectorsdonotconsiderthattheamountsinvolvedarematerialandthereforenochargehasbeenrecognised.

**Theseoptionsweregrantedatanexercisepriceof1penceeachon29June2012.TheoptionsareconditionaloncertainvestingcriteriaincludinganannualGroupProfitbeforetaxtargetfortheyearended30June2014.

***Theseoptionsweregrantedatanexercisepriceof1penceeachon27November2012.TheoptionsareconditionaloncertainvestingcriteriaincludinganannualGroupProfitbeforetaxtargetfortheyearended30June2015.

TheweightedaveragefairvalueoftheNovember2012LTIPgrantedduringtheperiod,determinedusingtheBlack-Scholesvaluationmodel,was15.375penceperoption(2012:nil).Thesignificantinputsintothemodelweremid-marketsharepriceof16.375penceatthegrantdate;exercisepriceshownabove;anexpected10yeartimetoexpiry;anannualrisk-freeinterestrateof0.5%;dividendyieldofnil;volatilityofsharepriceofnil.

TheweightedaveragefairvalueoftheJune2012LTIPgrantedduringtheperiod,determinedusingtheBlack-Scholesvaluationmodel,was9.125penceperoption(2012:nil).Thesignificantinputsintothemodelweremid-marketsharepriceof10.125penceatthegrantdate;exercisepriceshownabove;anexpected10yeartimetoexpiry;anannualrisk-freeinterestrateof0.5%;dividendyieldofnil;volatilityofsharepriceofnil.

Noshareoptionsarecurrentlyexercisable.TheWeightedAverageExercisePriceofshareoptionsoutstandingat30June2012was11.1p,withaweightedaveragelifeof16monthsandat30June2013was4.2p,withaweightedaveragelifeof24months.

Noshareoptionchargehasbeenrecognisedduringtheyearbecausemanagementareoftheopinionthattheperformanceconditionswillnotbemet.



46 47


21. Financial instrumentsLiquidity risk (continued)

Tradepayablesandloansfalldueasfollows:

2013 Less than one year £

One to two years £

Two to five years£

Total £

Trade payables 162,259 - - 162,259

Otherpayables 333,616 2,000 - 335,616

Lease capital and interest 68,297 37,099 - 105,396

Loans 29,505 - - 29,505

At 30 June 2013 593,677 39,099 - 632,776

2012 Less than one year £

One to two years £

Two to five years£

Total £

Trade payables 287,853 - - 287,853

Otherpayables 276,185 26,000 - 302,185

Lease capital and interest 61,014 55,377 23,448 139,839

Loans 51,969 29,505 - 81,474

At 30 June 2012 677,021 110,882 23,448 811,351

Foreign currencies

Duringtheyearexchangedifferencesof£5,212(2012:£7,240)havearisenandattheyear-end£nil(2012:£48)washeldinforeigncurrencybankaccounts.ItistheGroup’spolicytoholdlimitedamountsinforeigncurrencyinordertoreduceexposuretocurrencyrisk.TheGroupdoesnotsellorbuyanycurrencyforwardorenterintoanyhedgingcontracts.

Transactionsinforeigncurrenciesaretranslatedattheexchangeraterulingatthedateofthetransactionandmonetaryassetsandliabilitiesinforeigncurrenciesaretranslatedattheratesrulingatthebalancesheetdate.Atpresentforeignexchangeisminimalandhedgingandriskmanagementisnotdeemednecessary.


21. Financial instruments (continued)

Financial assets by category

2013 Loans and receivables£

Non financial assets£

Balance sheet£

Cashatbank 559,574 - 559,574

Tradereceivables-current 1,364,065 - 1,364,065

Otherreceivables 61,845 - 61,845

Currenttaxasset - 20,759 20,759

Prepayments - 178,673 178,673

1,985,484 199,432 2,184,916

2012 Loans and receivables£

Non financial assets£

Balance sheet£

Cashatbank 396,517 - 396,517

Tradereceivables-current 1,203,947 - 1,203,947

Otherreceivables 39,984 - 39,984

Currenttaxasset - 55,387 55,387

Prepayments - 202,147 202,147

1,640,448 257,534 1,897,982

Thefairvaluesofloansandreceivablesareconsideredtobeapproximatelyequaltothecarryingvalues.

Financial liabilities by category

2013Financial liabilities

measured at amortised cost£

Other financial liabilities£

Non-financial liabilities£

Balance sheet£

Trade payables - 162,259 - 162,259

Accruals - 314,026 - 314,026

Otherpayables - 14,390 - 14,390

VATandtaxpayable - - 390,868 390,868

Deferred payments - - 24,000 24,000

Loans 29,167 - - 29,167

Leases - - 62,996 62,996

29,167 490,675 477,864 997,706



48 49


21. Financial instruments (continued)

Financial liabilities by category (continued)

2012 Financial liabilities measured at amortised cost

£Other financial liabilities

£Non-financial liabilities

£Balance sheet

£

Trade payables - 287,853 - 287,853

Accruals - 244,931 - 244,931

Otherpayables - 7,254 - 7,254

VATandtaxpayable - - 352,622 352,622

Deferred payments - - 24,000 24,000

Loans 50,000 - - 50,000

Leases - - 51,970 51,970

50,000 540,038 428,592 1,018,630

Thefairvaluesoffinancialliabilitiesareconsideredtobeapproximatelyequaltothecarryingvalues.

22. Capital commitments Aspernote27theparentcompanypurchasedtheIpswichofficeon1July2013.Thiswasauthorisedbutnotcontractedforattheyearend.TheGrouphasnocapitalcommitmentsat30June2013or30June2012.

23. Contingent assetsTheGrouphasnocontingentassetsat30June2013or30June2012.

24. Contingent liabilitiesTheGrouphasnoothercontingentliabilitiesat30June2013or30June2012.

25. Operating lease commitments2013

£2012

£

Totalfutureleasepayments:

Lessthanoneyear 125,077 142,619

Afteroneandwithintwoyears 76,497 125,085

Aftertwoandwithinfiveyears 3,466 79,966

OperatingleasecommitmentsrelatetotheleaseofbuildingsatIpswich,Martlesham,Tuddenham,andBentwaterswhichexpireinMay2020(withabreakclauseinJuly2015,January2016,June2014andJanuary2014respectively).

On1July2013theIpswichofficewaspurchasedandtheleasecommitmentexpiredreducingthe“Lessthanoneyear”commitmentto£45,077andthe“Afteroneandwithintwoyears”commitmentto£5,917.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFortheyearended30June2013

26. Transactions with directorsTherewerenotransactionswithdirectorsintheyeartoJune2013orJune2012.

27. Post balance sheet events

Building purchase

On1July2013theGrouppurchaseditsprincipalplaceofbusinessatMelfordCourt,TheHavens,RansomesEuropark,IpswichIP39SJforthesumof£1,550,000fundedbyamortgageof£1,192,500,payableover25yearswitha5yearbreak,at2.66%abovethethreemonthLIBORratefromtheNatWestBankPLCandexistingcashresources.

Inaddition,andsubsequenttotheTransaction,thesub-tenantoftheupperflooragreedtotheearlyterminationofitsleaseinconsiderationofwhichithaspaidtheGroupthesumof£353,115.ThesefundshavebeenutilisedbytheGrouptofundtherequireddeposit,makingthetransactionbroadlycashneutral,andwillberecordedasaone-offprofitintheresultsfortheyearended30June2014.

Proposed dividend

Thedirectorshaveproposedadividendof0.3pencepersharepostyearend(subjecttoshareholderapproval).Asthiswasproposedpostyearendnoliabilityhasbeenrecognisedintheaccounts.



50 51

COMPANY BALANCE SHEETAsat30June2013

Note2013

£2012

£

Fixed assets

Investments 3 201,609) 201,609)

Land and Buildings 3 8,300) -)

209,909) 201,609)

Current assets

Debtors 4 510,570) 390,927)

Cashatbankandinhand 8,184) 7,175)

518,754) 398,102)

Creditors:amountsfallingduewithinoneyear 5 (19,987) (27,771)

Net current assets 498,767) 370,331)

Total assets less current liabilities 708,676) 571,940)

Capital and reserves

Sharecapital 7 317,212) 317,212)

Sharepremiumaccount 8 89,396) 89,396)

Profitandlossaccount 8 302,068) 165,332)

708,676) 571,940)

TheBoardofDirectorsapprovedthefinancialstatementson30August2013.

W A CatchpoleDirector

R S M Gordon Director

NOTES TO THE FINANCIAL STATEMENTS

1. Accounting policies Basis of preparation

ThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewithapplicableUnitedKingdomlawandaccountingstandards(UnitedKingdomGenerallyAcceptedAccountingPractice)andunderthehistoricalcostconventionandalsoinaccordancewiththeCompaniesAct2006.

TheprincipalaccountingpoliciesoftheCompanyaresetoutbelow,andareunchangedfromthepreviousyear.

Thedirectorshavecontinuedtoadoptthegoingconcernbasisinpreparingthefinancialstatements.

Merger relief

TheCompanyisentitledtomergerreliefofferedbytheCompaniesAct,andthesharesissuedwhenthesubsidiaryundertaking,IPPlus(UK)Limited,wasacquiredareshownattheirnominalvalue.

Deferred taxation

DeferredtaxisrecognisedonalltimingdifferenceswherethetransactionsoreventsthatgivetheCompanyanobligationtopaymoretaxinthefuture,orarighttopaylesstaxinfuture,haveoccurredbythebalancesheetdate.Deferredtaxassetsarerecognisedwhenitismorelikelythannotthattheywillberecovered.Deferredtaxismeasuredonanundiscountedbasisusingratesoftaxthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

Investments

Sharesinsubsidiaryundertakingsareincludedatoriginalcostlessanyamountswrittenoffforpermanentdiminutioninvalue.

Share options

TheCompanypolicyisthesameasthepolicydetailedinGroupaccountingpolicies,asIFRS2isthesameasFRS20.

2. Profit for the financial yearTheCompanyhastakenadvantageofsection408oftheCompaniesAct2006andhasnotincludeditsownprofitandlossaccountinthesefinancialstatements.TheprofitfortheCompanyfortheyearwas£146,623(2012:£194,607).

3. Fixed assets – investments

Subsidiary undertakings£

Associate companies£

Total£

Costat1July2011 201,609 40) 201,649)

Disposals - (40) (40)

Costat30June2012 201,609 -) 201,609)

Additions - -) -)

Cost at 30 June 2013 201,609 -) 201,609)

On29June2012theCompanysoldits40%shareholdinginCommercialFinanceBrokers(UK)Limitedtoitsexecutivedirectorsforthesumof£40,000,payablebywayof12monthlyinstalmentsof£1,000commencing30July2012,18monthlyinstalmentsof£1,500commencing30July2013andabalancinginstalmentof£1,000oncompletion.

TheGroupisexemptfromtherequirementsofFRS8todisclosetransactionsbetweenwhollyownedmembersoftheGroup.



52 53

NOTES TO THE FINANCIAL STATEMENTSFortheyearended30June2013

3. Fixed assets – Land and buildings

Cost and net book value2013

£2012

£

Costandnetbookvalueat1July2012 - -

Additions 8,300 -

Cost and net book value at 30 June 2013 8,300 -

4. Current assets

2013 £

2012£

Otherdebtors 63,173 42,729

AmountowedbyGroupundertaking 349,626 343,608

Deferredtaxation 93,000 -

Prepayments and accrued income 4,771 4,590

510,570 390,927

5. Creditors: Amounts falling due within one year

2013 £

2012£

Trade creditors 19,487 22,974

Accruals and deferred income 500 4,797

19,987 27,771

6. Deferred taxation

Deferredtaxassetsarecalculatedatarateof23%(2012:24%).

2013 £

2012£

Provided-tradinglosses 93,000 -

Unprovided-tradinglosses - 100,670

93,000 100,670

7. Share capital

2013 Number

2013£

2012 Number

2012 £

Authorised:Ordinarysharesof1peach 100,000,000 1,000,000 100,000,000 1,000,000

Allottedcalledupandfullypaid:Ordinarysharesof1peach 31,721,178 317,212 31,721,178 317,212

Contingent rights to the allotment of shares

TheCompanyhasgrantedoptions,inrespectofordinarysharesof1peach,whichwerestillvalidandunexercisedat30June2013,whicharedetailedinGroupnote20.

8. Reserves

Share premium

account £

Profit and loss account

£

At1July2012 89,396 165,332)

Purchaseoftreasuryshares - (9,887)

Profitfortheyear - 146,623)

At 30 June 2013 89,396 302,068)

8. Reconciliation of movement in shareholders funds2013

£

At1July2012 571,940)

Purchaseoftreasuryshares (9,887)

Profitfortheyear 146,623)

At 30 June 2013 708,676)

IPPlus Plc2 melford court

The havensRansomes Europark

Ipswich, SuffolkIP3 9Sj, Uk

T: +44 (0)1473 321800F: +44 (0)1473 321801E: [email protected]

www.ipplusplc.com

IPPLUS PLC+

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