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Registered number: SC166543
THE INSIGHTS GROUP LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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THE INSIGHTS GROUP LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditors
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THE INSIGHTS GROUP LIMITED
CONTENTS
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated balance sheet
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Notes to the financial statements
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THE INSIGHTS GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2017
The directors present their strategic report and the audited financial statements for the year ended 31 March 2017.
Turnover for the year was £42.2M, an increase of 29.4% on the previous year (2016 - £32.6M).
The operating profit for the year was £5.2M, an increase of 14.6% on the previous year (2016 - £4.5M). The total operating profit for the year, including the group’s share of profits of associates, was £6.5M, an increase of 18.6% on the previous year (2016 - £5.5M)
The Group’s balance sheet shows net current assets of £10.7M (2016 – £8.5M). Net assets are £21.4M (2016 - £18.6M) and shareholders’ funds are £21.0M (2016 - £18.5M).
During the year the Group achieved strong growth in turnover and operating profits. This has been organic growth and has come from strong performances across the majority of the Group’s geographic regions. Europe and the US have performed particularly well and it is encouraging to see the ongoing expansion of the Group into Asia, including the opening of a formal base of business operations in Singapore.
At the core of the Group’s strategy is the commitment and ambition to be irresistibly attractive to its Chosen Customers. In support of this, during the year the company refined and further developed the proposition it offers its customers. This has been built around the promise ‘Insights for your people:breakthroughs for your business’. It draws on the Group’s long established and industry-leading expertise in helping learners understand themselves and others better, and then supporting them to apply this knowledge to achieve breakthroughs on real business issues.
A major strategic focus during the year has been activity to understand and meet the needs of clients that are global in their operations. This has included the implementation of a new global sales model dedicated to supporting these key clients. Global clients are a key component of the Group’s future growth strategy, with a clear intent to delight these customers in a consistent way across all their global locations and supporting them with operations that have a global mind-set.
Page 1
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THE INSIGHTS GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
Principal risks and uncertainties
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The Group manages competitive trading risk by continually updating the products, services and learning experience it has to offer.
The Group’s principal financial instruments comprise cash and cash equivalents. Other financial assets and liabilities, such as trade creditors, arise directly from the company’s operating activities.
The main risk associated with the group’s financial assets and liabilities as set out below.
Interest Rate Risk
The Group has monies in floating rate interest yielding bank accounts, therefore interest income and cashflow can be affected by movements in interest rates.
The Group has bank borrowings, therefore interest costs and cash flow can be affected by movements in interest rates.
Price Risk
Insights is subject to competitive pressure from other vendors within the Learning and Development market.
While we are confident of the value we bring to our clients, price pressure is a risk to our future financial
performance. We mitigate this risk by continuously improving and differentiating our offering.
Liquidity Risk
The Group aims to mitigate liquidity risk by managing cash generated by its operations. Major capital expenditure is approved at Board level. Flexibility is maintained by retaining surplus cash in readily accessible bank deposit and current accounts.
Foreign Currency Risk
The Group’s principal transactions are sales denominated in Euros, US Dollars, Canadian Dollars, Singapore Dollars and Swiss Francs. As a result the Group’s cash flow can be affected by movements in the exchange rate.
Financial key performance indicators
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The Group use a number of key performance indicators (KPI’s) to manage its daily operations and management review. These include, but are not limited to, the KPI’s detailed below:
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Turnover per full time equivalent headcount
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This report was approved by the board on 30 January 2018 and signed on its behalf.
Page 2
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THE INSIGHTS GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2017
The directors present their report and the financial statements for the year ended 31 March 2017.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £3,403,034 (2016 - £4,205,769).
Dividends totalling £2,000,000 were paid to shareholders during the year. There is no final dividend declared.
The directors who served during the year were:
Page 3
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THE INSIGHTS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
The Group has achieved strong growth throughout its history and considers ongoing strategic growth to be a critical part of its long-term future. A large part of the Group’s successful growth story globally has been the creation of effective partnerships and co-ownership arrangements with locally-based management teams, particularly in Europe and Canada.
To achieve its future global growth ambitions and to effectively scale the company in the longer term, it is now essential that the Group has a global approach to managing all its business operations, which ensures it is able to meet customer needs in a consistent way. With this in mind, a strategic decision has been taken to create a single, global, Insights Learning and Development organisation via the acquisition of all co-owned businesses.
On 22 December 2016, the Group acquired the remaining 70% in Insights Schweiz AG and on 31 March 2017 the Group increased their shareholding in Insights Poland SP.ZO.O from 70% to 85% and agreed terms to acquire the remaining 15% on 31 March 2018.
Further acquisition of Insightsworld Learning Ireland Limited, Insights Learning & Development B.V., Insights Danmark ApS, Insights Sverige AB, Insights Learning & Development (Atlantic) Limited, Insights Discovery Learning & Development Limited, Insights Discovery Espana SL and Insights learning & Development (Canada West) Limited were completed post year end, details of which are disclosed at note 28 to the financial statements.
As a further step in the growth and diversification of The Insights Group, on 29 June 2017 it acquired DOGFI.SH Mobile Ltd, a cutting-edge enterprise mobility specialist working with some of the world’s most successful companies.
The acquisition enhanced the capabilities of the Group, with DOGFI.SH sitting alongside Insights Group’s existing global people development company, Insights Learning and Development Ltd. Both companies operate at arm’s length within the Group with each company continuing to support its existing and growing customer base.
DOGFI.SH has been an important strategic technology partner for Insights Learning and Development (ILD) for over five years. By bringing this business within the Group, it reduces risk and establishes a vital source of technology expertise. It also demonstrates the company’s commitment to put technology at the heart of its offering to customers all around the globe.
To accommodate the acquisitions of the co-owned business and the acquired Dogfish entities, a new company structure was developed. This involved the following changes to our corporate structure and share ownership:
• Insights Business Holdings was created on 24th April 2017. Insights Business Holdings is 100% owned by
Insights Group Limited. Insights Group Limited transferred 100% ownership of Insights Learning and
Development Limited and Dogfish Mobile Limited to Insights Business Holdings on 20th December 2017.
• Dogfish Mobile Limited has a 100% ownership of Dogfi.sh Mobile India Private Limited.
• We are in the process of dissolving Dogfish Mobile Overseas Limited.
Post year-end, the Group has transitioned its banking to HSBC Bank PLC. A facilities agreement is in place that includes the following funds. Agreement A £2m loan. Agreement B €4.6m loan and agreement C is a £3m revolving credit facility. These funds have been used to acquire DOGFI.SH Mobile Ltd and the remainder of the Groups co-owned businesses.
Page 4
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THE INSIGHTS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
Research and development activities
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One of the operating company’s employs a team of people in its research department to ensure the validity of its current product offerings and to understand the opportunities emerging from new market developments and thinking.
The Group is also investing heavily in the development of new products and solutions that it expects to bring to market during 2017 – 2020.
Innovation and the skills of our employees continue to form the basis of the Group’s success.
The Group have invested heavily in high calibre senior personnel to drive both revenue growth and operational efficiencies and the Directors are confident both revenue and profitability will grow in 2018.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
The auditors, EQ Accountants LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 30 January 2018 and signed on its behalf.
Page 5
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THE INSIGHTS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF THE INSIGHTS GROUP LIMITED
We have audited the financial statements of The Insights Group Limited for the year ended 31 March 2017, set out on pages 8 to 42. The relevant financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
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As explained more fully in the Directors' responsibilities statement on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's Ethical Standards for Auditors.
Scope of the audit of the financial statements
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An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the Group's and the parent Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Group strategic report and the Directors' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
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In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and the parent Company's affairs as at 31 March 2017 and of the Group's profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit, the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with those financial statements and such reports have been prepared in accordance with applicable legal requirements.
In the light of our knowledge and understanding of the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report and the Directors' report.
Page 6
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THE INSIGHTS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF THE INSIGHTS GROUP LIMITED (CONTINUED)
Matters on which we are required to report by exception
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Douglas Rae (Senior statutory auditor)
for and on behalf of
EQ Accountants LLP
Chartered Accountants
Statutory Auditors
14 City Quay
Dundee
DD1 3JA
30 January 2018
Page 7
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THE INSIGHTS GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
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Share of profit of associates
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Income from shares in group undertakings
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Income from fixed assets investments
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Interest receivable and similar income
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Interest payable and expenses
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Profit for the financial year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Profit for the year attributable to:
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Non-controlling interests
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Owners of the parent Company
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Total comprehensive income for the year attributable to:
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Owners of the parent Company
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Page 8
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THE INSIGHTS GROUP LIMITED
REGISTERED NUMBER: SC166543
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2017
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Equity attributable to owners of the parent Company
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Non-controlling interests
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 January 2018.
The notes on pages 17 to 42 form part of these financial statements.
Page 9
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THE INSIGHTS GROUP LIMITED
REGISTERED NUMBER: SC166543
COMPANY BALANCE SHEET
AS AT 31 MARCH 2017
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 January 2018.
Page 10
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THE INSIGHTS GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
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Capital redemption reserve
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Equity attributable to owners of parent Company
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Non-controlling interests
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Comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Dividends: Minority interest
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Total transactions with owners
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Page 11
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THE INSIGHTS GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
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Capital redemption reserve
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Equity attributable to owners of parent Company
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Non-controlling interests
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Comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Dividends: Minority Interest
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Total transactions with owners
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The notes on pages 17 to 42 form part of these financial statements.
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Page 12
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THE INSIGHTS GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Page 13
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THE INSIGHTS GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 17 to 42 form part of these financial statements.
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Page 14
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THE INSIGHTS GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2017
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Impairments of fixed assets
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Loss on disposal of tangible assets
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Decrease/(increase) in debtors
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Share of operating (profit) in associates
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Purchase of fixed asset investments
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Purchase of share in associates
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Associates interest received
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Net cash from investing activities
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Page 15
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THE INSIGHTS GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
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Cash flows from financing activities
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Dividends paid to non controlling interests
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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Page 16
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
The Insights Group Limited is a private company, limited by shares, domiciled in Scotland with a registration number SC166543. The registered office is Terra Nova, 3 Explorer Road, Dundee, DD2 1EG.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 April 2014.
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Associates and joint ventures
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An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.
An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated statement of comprehensive income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated balance sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.
Page 17
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Page 18
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Integral features within buildings
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated statement of comprehensive income.
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Impairment of fixed assets and goodwill
|
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Investments in listed company shares are remeasured to market value at each Balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.
Page 19
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Investments in non-convertible preference shares and in non-puttable ordinary and preference shares are measured:
∙at fair value with changes recognised in the Consolidated statement of comprehensive income if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference
Page 20
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
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Financial instruments (continued)
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between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated statement of comprehensive income within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Page 21
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
Finance costs are charged to the Consolidated statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to the Consolidated statement of comprehensive income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 April 2015 to continue to be charged over the period to the first market rent review rather than the term of the lease.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
Interest income is recognised in the Consolidated statement of comprehensive income using the effective interest method.
All borrowing costs are recognised in the Consolidated statement of comprehensive income in the year in which they are incurred.
Page 22
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Consolidated statement of comprehensive income in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Page 23
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the process of applying the Company's accounting policies, management has made the following judgments that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below)
Share Options
An EMI Scheme has been designed to grant members of the management team with an option to buy shares at a future date. These shares can be sold back to the Company so that the management team receive an immediate return.
The directors use their judgment to determine whether the key terms of the EMI Scheme will be met and provide for an expected pay out.
As at 31 March 2017, the directors are of the opinion that a number of the key terms will be met and so
have recognised an accrual for the expected pay out amounting to £2,013,597.
Capitalised research and development
The Group has invested in the development of a Digital Learning Hub (DLH). The cost of this development has been capitalised within the financial statements as the directors are of the opinion that this development cost will generate rewards in the future, as noted in the accounting policy note 2.23. These costs are to being amortised over the maximum 5 years.
Depreciation and amortisation
The directors review the depreciation and amortisation policy regularly to determine whether the rates and method are reasonable for each category of asset. If the net book value of these assets were considered to change significantly, a change in the amortisation policy may be required.
The whole of the turnover is attributable to providing learning solutions to businesses.
Analysis of turnover by country of destination:
Page 24
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Deficit on revaluation of tangible fixed assets
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Amortisation of intangible assets, including goodwill
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Impairment of intangible assets
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Fees payable to the Group's auditor and its associates for the audit of the Company's annual financial statements
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Other operating lease rentals
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Defined contribution pension cost
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Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
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Fees payable to the Group's auditor and its associates in respect of:
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Taxation compliance services
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Page 25
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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EMI option cost accrual (see note 27)
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The average monthly number of employees, including the directors, during the year was as follows:
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The Company has no employees other than the directors, who did not receive any remuneration (2016 - £NIL)
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During the year retirement benefits were accruing to no directors (2016 - 76,884) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £317,592 (2016 - £NIL).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2016 - £70,322).
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Page 26
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Dividends received from unlisted investments
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Interest receivable and similar income
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Share of associates' interest receivable
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Other interest receivable
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Interest payable and similar charges
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Page 27
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Foreign tax on income for the year
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Share of associates' current tax
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Page 28
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
12.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2016 - higher than) the standard rate of corporation tax in the UK of 20% (2016 - 20%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2016 - 20%)
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Non-tax deductible amortisation of goodwill and impairment
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Adjustment for overseas earnings
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Adjustments to tax charge in respect of prior periods
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Short term timing difference leading to an increase (decrease) in taxation
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
Page 29
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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On acquisition of subsidiaries
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Foreign exchange movement
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Foreign exchange movement
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Page 30
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
14.Intangible assets (continued)
Page 31
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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L/Term Leasehold Property
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Acquisition of subsidiary
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Charge for the year on owned assets
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An impairment loss of £919,985 is recognised in Adminstrative expenses within the Statement of Income and Retained Earnings. This is as a result of a property disposal post year end, and a revaluation of the remaining freehold property carried out by Chartered Surveyors, J E Shepherd.
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Page 32
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
|
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Investments in associates
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On acquisition of subsidiaries
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Direct subsidiary undertakings
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The following were subsidiary undertakings of the Company:
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Insights Learning & Development Limited
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Learning solutions to businesses
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Insights Coaching Limited
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Page 33
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
16.Fixed asset investments (continued)
|
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Indirect Subsidiary undertakings
|
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The following were subsidiary undertakings of the Company:
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Insights North America, Inc
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Learning solutions to businesses
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Insights Learning & Development Limited
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Learning solutions to businesses
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Learning solutions to businesses
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Insights Group Deutschland GmbH
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Learning solutions to businesses
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Learning solutions to businesses
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Learning solutions to businesses
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Insights Learning & Development (UK) Limited
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Insights Learning & Development (EMEA) Limited
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Insights Learning & Development (Quebec) Limited
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Learning solutions to businesses
|
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Insights Learning & Development (Singapore) PTE Limited
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Learning solutions to businesses
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Insights Poland SP. Z.O.O.
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Learning solutions to businesses
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Learning solutions to businesses
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Learning solutions to businesses
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Insightsworld Learning Ireland Limited
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Learning solutions to businesses
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Learning solutions to businesses
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Insights Discovery Espana SL
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Learning solutions to businesses
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Insights Canada West Limited
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Learning solutions to businesses
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Insights Learning & Development B.V TE Overveen
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Learning solutions to businesses
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Insights Learning & Development (Atlantic) Limited
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Learning solutions to businesses
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Insights Learning & Development Limited
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Learning solutions to businesses
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OY Insights Systems Finland Limited
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Learning solutions to businesses
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Page 34
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
16.Fixed asset investments (continued)
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Investments in subsidiary companies
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Raw materials and consumables
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The difference between purchase price or production cost of stocks and their replacement cost is not material.
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Prepayments and accrued income
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Page 35
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Payments received on account
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income (see note 27)
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Creditors: Amounts falling due after more than one year
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The bank loans are secured in favour of the Royal Bank of Scotland. They have a standard security over the premises at Terra Nova, 3 Explorer Road, Dundee. In addition, there is also a bond and floating charge over the whole assets of the subsidiary, Insights Learning & Development Limited.
A loan of £898,104 was received from the Royal Bank of Scotland in February 2015. The loan is repayable over 5 years in monthly instalments at an interest rate of 1.95% over LIBOR. During the year,
this loan was repayed in full.
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Page 36
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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The bank loans are secured in favour of the Royal Bank of Scotland. They have a standard security over the premises at Terra Nova, 3 Explorer Road, Dundee. In addition, there is also a bond and floating charge over the whole assets of the subsidiary, Insights Learning & Development Limited.
A loan of £898,104 was received from the Royal Bank of Scotland in February 2015. The loan is repayable over 5 years in monthly instalments at an interest rate of 1.95% over LIBOR. During the year,
this loan was repayed in full.
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Page 37
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at amortised cost
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Financial assets measured at amortised cost comprise cash at bank and in hand and trade and other debtors.
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Financial liabilities measured at amortised cost comprise bank overdrafts and bank loans, trade and other creditors, amounts owed to group undertakings and accruals and deferred income.
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Charged to profit or loss
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Accelerated capital allowances
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Page 38
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
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Shares classified as equity
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Allotted, called up and fully paid
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126,500 ordinary shares of £1 each
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Capital redemption reserve
Relates to the company buy back of 2 ordinary shares in previous years.
Foreign exchange reserve
The profit & loss account includes net exchange differences arising on translation of foreign operations.
The movement in the year amounted to a credit of £1,170,550 (2016 - £252,259) with the net position to
date being a credit of £1,049,749
Profit & loss account
The profit & loss account includes all current and prior period retained profits and losses.
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Within the company, an EMI Scheme has been designed to grant members of the management team of
the group with an option to buy shares at a future date. These shares can be sold back to the Company
so that the management team receive an immediate return.
The directors use their judgment to determine whether the key terms of the EMI Scheme will be met and
provide for an expected pay out.
As at 31 March 2017, the directors are of the opinion that a number of the key terms will be met and so
have recognised an accrual for the expected pay out amounting to £2,013,597.
In addition, during the year to 31 March 2012, the board of the The Insights Group Limited agreed to the
adoption of an Incentivisation Scheme which is a cash-settled share-based payment scheme within the.
subsidiary, Insights Learning & Development Limited.
The scheme awarded participants at the date of vesting their relevant share of the total scheme value.
The scheme matured in 2014 and the award value was agreed at £1,280,000, with an opening balance of
£298,469 at 1 April 2016. During the year awards of £46,704 were made resulting in a balance of awards
outstanding at the year end amounting to £251,765.
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Page 39
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
One of the subsidiaries, Insights Learning & Development Limited, operates a defined contributions
pension scheme. The assets of the scheme are held separately from those of that company in an
independently administered fund. The pension cost charge represents contributions payable by the
company to the fund and amounted to £693,119 (2016 - £590,384). Contributions totalling £57,198 (2016 -
£136,341) were payable to the fund at the reporting date.
Other pension costs incurred by the group during the year amounted to £50,372 (2016 - £26,895).
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Commitments under operating leases
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At 31 March 2017 the Group and the Company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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Related party transactions
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The group has taken advantage of the FRS102 exemption to disclose transactions with wholly owned
subsidiaries.
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Transactions with associates
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Page 40
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
|
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Post balance sheet events
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On 29 June 2017 The Insights Group Limited acquired DOGFI.SH Mobile Ltd, a cutting-edge enterprise mobility specialist working with some of the world’s most successful companies.
The acquisition enhanced the capabilities of the Group, with DOGFI.SH sitting alongside Insights Group’s existing global people development company, Insights Learning and Development Ltd. Both companies operate at arm’s length within the Group with each company continuing to support its existing and growing customer base.
DOGFI.SH has been an important strategic technology partner for Insights Learning and Development (ILD) for over five years. By bringing this business within the Group, it reduces risk and establishes a vital source of technology expertise. It also demonstrates the company’s commitment to put technology at the heart of its offering to customers all around the globe.
To accommodate the acquisitions of the co-owned business and the acquired Dogfish entities, a new company structure was developed. This involved the following changes to our corporate structure and share ownership:
• Insights Business Holdings was created on 24th April 2017. Insights Business Holdings is 100%
owned by Insights Group Limited. Insights Group Limited transferred 100% ownership of Insights
Learning and Development Limited and Dogfish Mobile Limited to Insights Business Holdings on
20th December 2017.
• Dogfish Mobile Limited has a 100% ownership of Dogfi.sh Mobile India Private Limited.
• We are in the process of dissolving Dogfish Mobile Overseas Limited.
Post year-end, the Group has transitioned its banking to HSBC Bank PLC. A facilities agreement is in place that includes the following funds. Agreement A £2m loan. Agreement B €4.6m loan and agreement C is a £3m revolving credit facility. These funds have been used to acquire Dogfish Mobile Limited and the remainder of the Groups co-owned businesses.
Subsequent to 31 March 2017, the company has concluded numerous acquisitions of jointly-owned
companies across Europe and Canada, seeking to increase the Groups ownerships to 100%. The driver
for doing so is to fully deploy the Global Sales Strategy, the strategy being to maximise the potential of our
global and Regional Clients and allow for effective global coverage.
Page 41
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THE INSIGHTS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
|
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Insights Learning Ireland Limited
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Insights Learning & Development Limited
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Insights Learning & Development B.V.
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Insights Learning & Development International (EMEA) Limited
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Insights Danmark ApS & Insights Sverige AB
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Insights Learning & Development International (EMEA) Limited
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Insights Learning & Development (Atlantic) Limited
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Insights Learning & Development (Canada) Limited
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Insights Learning & Development Limited
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Insights Learning & Development (Canada) Limited
|
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Insights Discovery Espana, SL
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Insights Learning & Development (UK) Limited
|
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Insights Learning & Development (Canada West) Limited
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Insights Learning & Development (Canada) Limited
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Page 42
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